Limiting Employee Causes of Action in Employment Applications – by Joseph P. Kreoll

jkreollOn December 5, 2014, the New Jersey Supreme Court granted certification in Rodriquez v. Raymours Furniture Company, Inc., Docket No. A-4329-12T3. The issue presented is whether an employer can enforce a contractual provision in an employment application in which the employee waived the two-year statute of limitations applicable to claims against the employer, and shortened the period for such claims to six months. Regardless of how the Court decides this issue of first impression, the Court’s decision will have a significant impact on employers, employees, and employment law practitioners in New Jersey.

In Rodriguez, plaintiff applied to a retail furniture company for employment as a helper. Plaintiff was given an employment application that included a provision in bold letters that he was waiving the statute of limitations applicable to any claim he had against the employer, and that he agreed to be bound to a six-month statute of limitation. Plaintiff was later injured on his job, and after he was terminated as part of a company-wide reduction in force, filed a lawsuit against the employer in which he alleged that he was retaliated against for filing a workers’ compensation claim and because of his disability in violation of the New Jersey Law Against Discrimination

Since the plaintiff filed his lawsuit nine months after his employment termination, the trial court granted the employer’s motion for summary judgment based on the time limitation in the employment application. On appeal, the New Jersey Appellate Division affirmed. The Appellate Division began its analysis by finding that the employment application was a contract of adhesion given the disparity in the relative bargaining position of the parties. Rather than reject the employment application as per se void, however, the Appellate Division focused its attention on whether the employment application was procedurally or substantively unconscionable and determined that it was neither. In doing so, the Appellate Division noted that the time frame for filing an administrative claim for a LAD violation was six months, and therefore the Appellate Division was hard pressed to say that six months was an unconscionable contractual limitation on filing a lawsuit.

Regardless of how the Supreme Court ultimately decides the issues in Rodriguez, employers, employees and employment attorneys should immediately act to respond to the Supreme Court’s potential ruling. Employers seeking to limit their exposure should immediately evaluate their employment applications to determine whether they meet the criteria of Rodriguez, including conspicuousness and a six-month limitation on LAD actions. Employees and employment lawyers seeking to bring lawsuits for employment claims should consider doing so as soon as they are aware they have a claim or risk having their claims dismissed based on a contractually modified statute of limitations. The Supreme Court’s decision in Rodriguez will undoubtedly impact how employers and potential employees address their relationship.