Employment Law Summer Recap 2014: Part 5 Of 11 – Old School’s Frank Ricard And Contractual Statute Of Limitations Provisions: I Don’t Know If We’ll Have Enough Time

"I told my wife I wouldn't drink tonight. Besides, I got a big day tomorrow. . . . Well, um, actually a pretty nice little Saturday, we're going to go to Home Depot. Yeah, buy some wallpaper; maybe get some flooring, stuff like that. Maybe Bed, Bath & Beyond, I don't know, I don't know if we'll have enough time." Frank Ricard, Old School (2003)

"As we have pointed out, in the absence of a statute to the contrary, parties are free to contractually limit the time within which an action may be brought, as long as the contractual time is reasonable and does not violate public policy. . . . Plaintiff was under no compulsion to pursue the application if he was dissatisfied with any of the terms of employment, including the shortened limitation period." Judge Joseph F. Lisa, Rodriguez v. Raymours Furniture Co., Inc. (N.J. App. Div. June 19, 2014)

One of these quotes has been repeated about 50 million times by engaged and married men. The other one was a famously funny line delivered by Will Ferrell in the movie Old School. Both of these quotes address time limitations related an individual's ability to perform an activity and we discuss them below.

For Frank Ricard, it was about completing some chores with the new wife. For the employee in the Raymour case, Sergio Rodriguez, it was about whether Raymour & Flannigan, a well-known furniture company with the world's most consistently bland commercials, could prevent him from suing the company six months after his claim accrued. For Frank Ricard, we'll never know if he would have had "enough time" to hit Bed Bath & Beyond since he decided to go "streaking" instead. For Mr. Rodriguez, we know that he didn't have "enough time" as the court refused to let him proceed with a discrimination lawsuit he brought outside the contractually-shortened six-month window.

As we blogged about this summer, this ruling is significant because it provides employers with a terrific way to limit their exposure to employment lawsuits. But to accomplish this (at least in New Jersey and about 25 other states that have enforced these contractual statute of limitations shorteners), employers should make sure that the applicant or employee clearly understands what's at stake. To do this, we recommend:

• Utilizing clear and simple wording in the application or agreement (with the text bolded, in ALL CAPS and/or in oversized font).
• Not burying the SOL provision in some large stack of on-boarding documents; instead put in a conspicuous spot in the agreement/application.
• Not pressuring the applicant or employee to sign it or to sign it quickly, including by making it a take it or leave it offer, and
• To be safe, consider a SOL window at least six months long and apply across all of your employment policies and agreements, including not just applications, but also employment agreements and arbitration agreements and similar documents, and apply it to all claims, not just employment claims. (Employers should note however, that this does not extend to claims (like federal discrimination claims) that require an employee to exhaust certain administrative remedies before filing a lawsuit.)

One more note: some may find it odd that Raymour chose to stick this provision in its employment application, which it required the applicant to sign, especially out of a fear that Raymour would accidentally create an employment contract. But courts have consistently found that no such contract exists where the same application includes a disclaimer that the application is merely promise that the employer will consider the individual for employment and not an agreement to employ the applicant.

Okay, enough about SOL provisions; I'm going back to watching the rest of Old School for the umpteenth time...

Look for Part 6 of 11 on Monday. For previous parts, click here.

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