New Jersey Supreme Court Questions Enforceability of Contractual Time Limits on Employees’ Rights to Sue
On December 1, 2015, the New Jersey Supreme Court held argument in Sergio Rodriguez v. Raymours Furniture Co. Inc. The primary issue in this appeal is whether a contractual provision contained in an employment application that shortened New Jersey’s 2 year statute of limitations for discrimination claims to six months is enforceable. The trial court rejected the employee’s unconscionability argument. The court found that the provision was clear in its terms, was conspicuously placed in the application form, and was reasonable and not contrary to any public policy. The Appellate Division upheld the dismissal, and the Supreme Court of New Jersey will soon decide whether these types of contractual limits on employee lawsuits are enforceable in New Jersey.
Many speculated that the New Jersey Supreme Court decided to hear the case because it was concerned with the conspicuousness of the waiver in the defendant’s employment application. However, at oral argument, the New Jersey Supreme Court focused a lot of its questioning on whether contractual time limits on the right to sue employers undermines employees’ potential use of an administrative path for pursuing discrimination claims.
If upheld, employers should consider revising their contracts/applications to include similar limitations in the hopes of limiting liability in a State that is notoriously employee friendly.