Ivo is a partner in Obermayer’s Labor Relations & Employment Law Department. He focuses his practice on representing employers, including advising companies on how to handle employee issues, and defending employee claims...Read More by Author
New Jersey Court Upholds Use of Job Application to Shorten Statute of Limitations for Employment Claims
According to a recent decision from New Jersey’s intermediate appellate court, employers in New Jersey can now reduce the statute of limitations for employment claims by adding the appropriate language to their job applications. Employment claims in New Jersey are often brought under the New Jersey Law Against Discrimination (“NJLAD”), which allows for a private cause of action for harassment, discrimination and retaliation, and permits recovery for lost wages, emotional distress damages, attorneys’ fees, and punitive damages. The NJLAD has a two-year statute of limitations and does not require employees to file with an administrative agency before proceeding to court. Therefore, in New Jersey, it is not unusual for employees to file their employment claims just before the two-year statutory deadline. By the time discovery begins in the lawsuit, key witnesses may have left the organization and memories may have faded, making it more challenging to coordinate a defense. New Jersey employers may now be able to streamline these challenges at the outset of the employment relationship by shortening the time period for filing a lawsuit via waivers in employment applications.
The Rodriguez Decision
In Rodriguez v. Raymours Furniture Company, Inc., A-4329-12T3 (N.J. Super. Ct. App. Div. June 19, 2014), the plaintiff filed suit under the NJLAD, claiming that he was terminated in retaliation for filing a workers’ compensation claim, and discriminated against because of his disability in violation of the NJLAD. The lawsuit was filed nine months after the plaintiff’s termination, well within the 2-year statute of limitations applicable to both of the plaintiff’s claims. However, the Appellate Division upheld the dismissal of the plaintiff’s claim as untimely, based on the following language in an “Applicant’s Statement” contained in the plaintiff’s job application:
I AGREE THAT ANY CLAIM OR LAWSUIT RELATING TO MY SERVICE WITH RAYMOUR & FLANIGAN 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 Applicant’s Statement in Rodriguez was prefaced by the following statement in bold and capital letters: “READ CAREFULLY BEFORE SIGNING.” The employee signed and dated the job application immediately underneath the Applicant’s Statement.
On appeal, the court accepted the plaintiff’s argument that the language in the job application was a “take it or leave it” contract of adhesion, but nevertheless held that the language created an enforceable contract. The court observed that various other New Jersey courts have allowed the shortening of limitations periods via contract, provided that the shortened time period was reasonable. The court also rejected the plaintiff’s argument that the language in the job application was unconscionable, reasoning that the key provision was not “buried” in a large volume of documents, but was set forth in bold oversized print and capital lettering in a two-page job application, just above the applicant’s signature line. The language was clear, uncomplicated, and the plaintiff was permitted to take the application home and complete it with the help of a friend.
The court held that the six-month limitations period contained in the job application was reasonable, citing a variety of state and federal opinions upholding six-month limitations periods via contract. The court observed that the legislature had already chosen a six-month time period for the filing of administrative claims under the NJLAD with the NJ Division of Civil Rights. Finally, the court rejected the plaintiff’s argument that his subsequent application for a promotion voided the contract created by the initial application, because there was no evidence that the parties intended to void the prior agreement when the plaintiff applied for the new position.
The Rodriguez decision sets forth a useful roadmap for New Jersey employers who wish to reduce lawsuit risk by shortening the statute of limitations for employment claims. Employers should consider revising their employment applications in line with the Appellate Division’s guidance in Rodriguez as follows:
- Keep the employment application, and accompanying waiver language regarding the statute of limitations, as short as possible and in clear, simple language. If appropriate given the applicant pool, consider translating the waiver language into another language;
- Ensure that the shortened limitations period is reasonable. While Rodriguez did not explicitly rule that limitations periods shorter than 6 months are unenforceable, a limitations period of six months or longer is much more likely to be upheld;
- Use broad yet simple language encompassing all employment-related claims, similar to the language used by the employer in Rodriguez (“any claim or lawsuit related to my service”);
- Set the statute of limitations language apart from the rest of the job application by using bold type, larger font, underlining or similar formatting devices. The applicable language should appear immediately before the applicant signature line and date, and applicants should be clearly advised to read the language carefully; and
- Allow applicants ample time to complete the application, and give them the option to complete the application at home.