United States: NJ Appellate Courts Permit Employers To Shorten Statute Of Limitations Period Through Employment Applications

A New Jersey Appellate Court recently held that a provision in an employment application shortening the statute of limitation from two years to six months was enforceable under New Jersey law. As a result, the employee's discrimination and retaliation claims that were filed nine months after his termination were dismissed. Subject to appeal, this decision encourages all employers to include similar provisions in their applications for employment.

In Rodriguez v. Raymours Furniture Co., the plaintiff sued his employer, alleging that he was fired in retaliation for filing a workers' compensation claim and because of discrimination based on his disability. The plaintiff filed his complaint nine months after his alleged wrongful termination by his employer. The statute of limitations for each claim is normally two years, and therefore the plaintiff appeared to have filed his claims on time. However, the employer argued that the plaintiff filed his lawsuit too late, relying on a provision contained in the Plaintiff's application for employment – part of which read:

Looking at the totality of the application language (the above is an excerpt of the entire application language that the Court considered), and the circumstances surrounding the applicant's signing of the application, the Rodriguez Court held that the language limiting the applicable statute of limitations to six months was enforceable. The Court stated that the language, its prominence, and circumstances regarding the signing of the application made it clear, conspicuous, reasonable, voluntary, and not contrary to public policy. In so holding, the Court upheld the lower court's dismissal of the plaintiff's complaint.

What Employers Should Do

As of the time of this posting, the Rodriguez decision is the law of New Jersey, and therefore, employers are encouraged to include waiver language in employment applications and contracts to shorten the statutes of limitation applicable to state employment actions. However, employers must take care to draft proper language and create an environment that will ensure enforcement and defend against claims of unconscionability, involuntariness, lack of clarity, and lack of consideration. Also, this holding applies only to state claims. It is not expected that federal courts will reverse decisions holding that the statute of limitations for certain federal claims, such as EEOC discrimination claims, cannot be shortened by agreement. Finally, this decision may be subject to further appeal or amendment to the law.

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