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Friday, July 1, 2016

NJ Supreme Court Prohibits Employers from Shortening Statute of Limitations for NJLAD

New Jersey employers’ attempts to radically shorten the filing deadlines for discrimination lawsuits under the state statute have been thwarted by a recent NJ Supreme Court decision. Employment applications sometimes contain clauses that a dispute between the employer and the employee arising out of the employment will have a statute of limitations to file a lawsuit that shortens the two-year limitations period mandated under the New Jersey Law Against Discrimination( NJLAD). These contractual type clauses often limit the time an employee has to file an NJLAD claim to a period as short as six months. Whether an individual employer can so contractually bind an employee to give ups his rights to file a discrimination lawsuit under the NJLAD for the full two-year period, which period was intended by the NJ Legislature, is an issue that has been in the courts for several years. 

Finally on June 15, 2016,  the Supreme Court of New Jersey reversed two lower courts, and held that private contractual agreements, such as those that are found in employment applications,  cannot shorten the two-year statute of limitations to file a lawsuit under the NJLAD.  

In Rodriguez v. Raymours Furniture Company, Inc., No. A-27-14, 074603 (N.J. June 15, 2016) the Court addressed whether the Law Against Discrimination, N.J.S.A. 10:5-1 to -49, which was established to fulfill a public interest purpose, can be contravened by private agreement.

The Court reasoned that shortening the two-year statue of limitations was contrary to the public policy underlying the statute. The Court's opinion was limited to lawsuits brought under the NJLAD, but there has been speculation whether the prohibition against shortening the statute of limitations for NJLAD cases, may be applied as to other types of employments disputes, but only time will tell. 

Unfortunately for employee-plaintiffs who have discrimination claims, the Rodriguez Decision is only partially favorable to employees,  however, because the Court in the same decision did not deny enforcing mandatory  "arbitration clauses" appearing in employment applications. The author of this blog,  Hope A. Lang, Esq., has successfully represented Plaintiffs in NJLAD claims both in Court,  and obtaining successful settlement in alternative dispute forums where the employees did have such arbitration clauses in their employment applications.

In the Rodriguez case, the plaintiff, Sergio Rodriguez, in August 2007, applied for a job with defendant Raymours Furniture  Company, Inc. The job application contained a section on the last page which applicants were instructed to read carefully before signing. A portion of that section read, in capital and bold letters, 

"I AGREE THAT  ANY CLAIM OR LAWSUIT RELATING TO MY SERVICE WITH RAYMOUR & FLANIGAN MUST BE FILED NO MORE THAN SIX (6) MONTHS AFTER THE DATE OF THE EMPLOYMENT ACTION THAT IS THE SUBJECT OF THE CLAIM OR LAWSUIT.  I WAIVE ANY STATUTE OF LIMITATIONS TO THE CONTRARY." 

The Plaintiff,  Sergio Rodriguez, signed the employment application,  returned it to the employer, and he was hired in  mid-September 2007 as a helper in an at-will employee position. In November 2008, the employer transferred him to another location and promoted him to a driver. The Plaintiff injured his knee in a work-related accident during a furniture delivery early in April 2010. Plaintiff ceased working shortly after his injury. Plaintiff underwent surgery and  physical therapy for his knee injury during the summer of 2010 and was cleared to return  to light-duty work effective September 14, 2010 for a period of  two weeks.  On October 1, 2010, Raymours Furniture  Company terminated the Plaintiff, two days after he returned to full-duty work. 

Although the employer gave him the reason that he was terminated was due to a company-wide reduction in force, Plaintiff asserted that others with less seniority or distinguishing features were retained.

On July 5, 2011, nearly seven months after his termination, Plaintiff filed a lawsuit against Defendant in Superior Court, alleging, in part, illegal employment discrimination based on actual or perceived disability, in violation of the New Jersey Law Against Discrimination. The Defendant employer moved for summary judgment based on the waiver of the two-year statute of limitation provision that was in the employment application that Plaintiff  had signed in August 2007.

The Defendant asserted that Plaintiff's lawsuit was filed beyond the agreed upon six-month limitations period. Plaintiff argued that the provision was a contract of adhesion and  unconscionable because he had to sign it in order to apply for the job and therefore it was unenforceable. The trial court granted summary judgment to Defendant,  finding that the provision was clear and unambiguous, and that the contractual shortening of the limitations period was neither unreasonable nor against public policy.

Plaintiff appealed, and the Appellate Division in  Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305 (App. Div. 2014)  affirmed the lower court. Although the Appellate panel found that the employment application amounted to a contract of adhesion, it determined that it was enforceable in light of its clear, unambiguous language and the ample time Plaintiff had to review it.  The Appellate panel further held that, absent a controlling prohibitory statute, parties may modify a  statute of limitations. The Supreme Court granted Plaintiff's petition for certification. The Supreme Court disagreed with the lower two courts as to whether an employer can shorten the statute of limitations under NJLAD and held that a private agreement that frustrates the New Jersey Law Against Discrimination’s public purpose mission by shortening the two-year limitations period for private NJLAD claims cannot be enforced.

Therefore the waiver provision of the two-year statute of limitations in the application for employment is unenforceable. The Court noted that its decision is rooted in the unique importance of NJLAD and the necessity for its effective enforcement and that at least two other states have deemed similar provisions contrary to public policy.

Although the Court's holding was not derived from the Plaintiff's unconscionability argument, it added that courts may refuse to enforce unconscionable contracts or discrete contract provisions.

In Rodriguez v. Raymours Furniture Company, Inc., because the provision at question was contained within an employment application and one in which the plaintiff could not bargain, the contract was contained an indicia of procedural unconscionability. The Court reasoned that further analysis requires consideration of several other factors, including whether the public interests of furthering the goals of the NJLAD would be affected by the contract, and that the Court reaches the same outcome based on the anti-discrimination public policy concerns expressed in the NJLAD. 

If you experienced employment discrimination or retaliation in employment and you signed an employment application that may have contained a clause that attempts to thwart your right to file a lawsuit or stating that all disputes that arise out of the employment relationship shall be resolved in arbitration or some other alternative dispute forum, contact Hope A. Lang, Attorney at Law, today for a free consultation.


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