NJ Court Rules Employer Cannot Shorten SOL for Discrimination Claims

We are pleased to write that the New Jersey Supreme Court ruled, last week, that the two-year statute of limitations for filing a discrimination claim under the NJ Law Against Discrimination (“LAD”) couldn’t be shortened by an employer seeking to insert a clause in an employment agreement or contract.

The case arose when Raymours Furniture Co., fired an employee, Sergio Rodriguez who had signed a job application which stated, in capital letters, that he agreed “that any claim or lawsuit relating to [his] service with Raymour & Flanigan must be filed no more than six moths 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.” Mr. Rodriguez claimed that Raymour & Flanigan wrongfully terminated him on account of his disability and in retaliation for filing a workers’ compensation claim. He sued under the LAD nine months after he was fired. Both a trial judge and the Appellate Division ruled that the lawsuit was time-barred, even though New Jersey law allows a plaintiff two years to bring such an action.

The Supreme Court disagreed with the lower courts. The Court noted that the “contractual shortening of the LAD’s two-year limitations period for a private action is contrary to the public policy expressed in the LAD.” The Court noted the unequal bargaining power of the potential employer and employee. Clearly, mandating that the employee agree to a shorter statute of limitations in an employment application before they can be hired is, by definition a contract of adhesion. Although some employers may argue that two-years is too long of a time period to hold an employer responsible for defending an action for discrimination – where documents may have disappeared, key witnesses have left the company and the memories of decision-makers have faded – it is not for a private employer to alter a statutory limitation period by contract. We believe that this could only be done, after careful consideration by the legislature.