New Jersey Employers Can Now Contractually Shorten Limitations Periods For Employee Lawsuits And Set Other Procedural Terms For Resolving Disputes

On June 19, 2014, the Appellate Division of the Superior Court of New Jersey affirmed an employer's right to control the manner for resolving employment disputes, including permitting an employer to shorten the applicable statute of limitations for state law wrongful termination claims, such as claims under the NJLAD, to six months.

In Rodriguez v. Raymours Furniture Company, Inc., No. A-4329-12T3 (N.J. Super. App. Div. June 19, 2014), a discharged employee brought claims for disability discrimination in violation of the New Jersey Law Against Discrimination (NJLAD) and retaliation for filing a workers compensation claim in violation of common law nine months after he was terminated. While the statutory limitations period for both of these claims is two years, the employer had included language in the employment application shortening the limitations period to six months.

The two-page application contained the following language in all capitals, just above the signature:

I AGREE THAT ANY CLAIM OR LAWSUIT RELATING TO MY SERVICE WITH [THE DEFENDANT] 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 signed and dated the application and he was subsequently hired. Based on these facts, the employer argued that the plaintiff's claims should be dismissed because he previously agreed to and failed to meet a six-month limitations period. The court agreed.

Rejecting the plaintiff's public policy argument, the court noted that it is already established law that jury waivers and arbitration agreements are enforceable in the employment context, despite the effect of economic pressure on an employee seeking a job on relative bargaining power. See e.g., Young v. Prudential Ins. Co. of Am., Inc., 297 N.J. Super. 605 (App. Div. 1997); Martindale v. Sandvik Inc., 173 N.J. 76 (2002). Accordingly, there was no basis to disallow a...