Shortening Of Statute Of Limitations By Agreement Contained In Employment Application Deemed Enforceable

In a decision that affects every employer and employee in the state, the New Jersey Appellate Division has held that a contractual provision contained in an employment application that shortens the statute of limitations for employment claims to six months is enforceable. In Rodriguez v. Raymour & Flanigan, Docket No. A-4329-12T3 (App. Div. June 19, 2014), the Court upheld the following provision, which was contained in the employment application signed by Sergio Rodriguez, who was eventually hired as a delivery helper:

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.”

Rodriguez was later terminated as part of a company-wide reduction in force, but he filed a wrongful termination suit claiming that he was terminated in retaliation for having filed a workers’ compensation claim, and that he was discriminated against based upon disability in violation of New Jersey’s Law Against Discrimination (“LAD”).  Because he filed his complaint nine months after his termination, the trial court dismissed the complaint as untimely based upon the agreement to shorten the limitations period contained in the employment application.  On appeal, the dismissal of the complaint was upheld.

 The Appellate Division cited numerous cases from other jurisdictions that have held that “in the absence of a controlling statue to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such a contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself shall be a reasonable period.”  The court noted that under LAD, a party claiming discrimination can bring a claim by either filing a lawsuit within two years of the alleged unfair practice or by filing an administrative claim with the New Jersey Division on Civil Rights.  Administrative claims must be filed within 180 days.  Accordingly, the court held that since there was no statute that prohibited the shortening of the statute of limitations, no public policy was violated by agreeing to shorten the two-year limitations period to six months.

The court also rejected the argument that the agreement was unconscionable because of the unequal bargaining power between an employer and a job applicant.  The court noted that similar arguments have been repeatedly rejected in the context of enforcing an agreement to arbitrate employment claims and waive the right to file suit.

Thus any employment claims that Rodriguez might have asserted against Raymour & Flanigan were deemed to be covered by the six-month statute of limitations,  the only exception being federal discrimination claims that are subject to the exclusive jurisdiction and exhaustion of administrative remedies requirements of the EEOC.

The import of this decision is obvious. Any employer who has ever been subjected to an employment-related claim made two, four or even six years after the fact, has experienced the difficulty and frustration in dealing with events so remote in time.  The Rodriguez case sends a clear and unambiguous message to every employer in New Jersey to amend and update all of their personnel policies so that the statute of limitations for employment-related claims is shortened to six months.