New Jersey Employers Can’t Set Time Limits for NJLAD Lawsuits

New Jersey Employers Can’t Set Time Limits for NJLAD Lawsuits

Under New Jersey’s statute of limitations, workers generally have two years to file an employment lawsuit under the New Jersey Law Against Discrimination (NJLAD). In a landmark decision, the Supreme Court of New Jersey recently held that employers can’t amend that deadline by contract.

Facts of the Employment Lawsuit

During the hiring process to become a delivery driver for Raymour Furniture Company, Inc. (Raymour), Plaintiff Sergio Rodriguez (Rodriguez) completed a two-page application form. Rodriguez completed the application with the assistance of a friend, as he contends his ability to read or speak English is limited.

The application stated in capital 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.” It also contained the following warning: “Read carefully before signing—if you are hired, the following becomes part of your official employment record and personnel file.”

After working for several years, Rodriguez was terminated during a company-wide reduction in force (RIF). While Raymour stated that the employment decision was performance-related, Rodriguez subsequently filed a wrongful termination suit under the NJLAD, alleging that he was terminated in retaliation for having filed a workers’ compensation claim and was discriminated against based upon disability.

In response, Raymour cited the six-month deadline for filing suit set forth in the application as grounds for dismissal. In response, Rodriguez argued that the shortened limitation period was unconscionable and therefore unenforceable. The trial court dismissed the suit, and the Appellate Division affirmed.

While the appeals court concluded 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 appeals court further held that, absent a controlling prohibitory statute, parties may modify a statute of limitations if the shortened time period is reasonable and does not violate public policy.

New Jersey Supreme Court’s Decision

The New Jersey Supreme Court reversed the Appellate Division’s decision in Rodriguez v. Raymour Furniture Company, Inc. It held that “a private agreement that frustrates the LAD’s public-purpose imperative by shortening the two-year limitations period for private LAD claims cannot be enforced.”

In reaching its decision, the state’s highest court focused on the public-interest purpose of the LAD, which “seeks unequivocally to eradicate discrimination against any of New Jersey’s inhabitants.” As Justice Jaynee LaVecchia further explained, “The challenged provision cannot be viewed as a private contractual agreement by which private parties contract to limit private claims by shortening the generally applicable statute of limitations for such action.”

With regard to the importance of the NJLAD two-year time period for filing suit and the consequence of shortening it, Justice LaVecchia wrote:

[A] shortening of that period undermines and thwarts the legislative scheme by effectively divesting the aggrieved party of the right to pursue an administrative remedy. Additionally, since claimants may not immediately be aware of their cognizable claims, shortening of the period will effectively eliminate claims and frustrate the public policy of uniformity and certainty. Conversely, the shortened period may also compel attorneys to file premature LAD actions. Finally, the two-year period also allows an employer the opportunity to protect itself and promote the eradication of discrimination by investigating and resolving complaints before an LAD claim is filed.

Although the court’s decision focused on the NJLAD, it noted that it would have also invalidated the employee agreement based on the issue of unconscionability. “[B]ecause the provision at question was contained within an employment application and plaintiff could not bargain, the contract was one of adhesion, containing indicia of procedural unconscionability,” the court held.

Message for New Jersey Employers

The New Jersey Supreme Court’s decision makes it clear that the statute of limitations under the NJLAD is two years and that time period cannot be amended by employers through a private agreement. Therefore, if any of your employment applications, contracts, or employee policies limit workers’ time to sue, they should be revised immediately.

With respect to NJLAD compliance, the decision highlights that the court is committed to advancing the policy objectives behind the law. Therefore, New Jersey employers should put themselves in the best position to defend a suit by properly documenting performance issues, conducting regular training regarding retaliation and harassment, and thoroughly investigating and documenting any claims of discrimination.