Employers Can’t Limit an Employee’s Timeframe to Bring a Discrimination Claim in New Jersey

June 20, 2016Alerts Labor & Employment Alert

On June 15, 2016, the New Jersey Supreme Court curtailed the ability of an employer to privately contract with an employee with respect to the timeframe to bring an employment-related discrimination claim. In Rodriguez v. Raymours Furniture Company, Inc., New Jersey’s highest court unanimously held that a private agreement which shortened the length of time an employee could bring a discrimination claim contravened public policy and was unenforceable under the New Jersey Law Against Discrimination (NJLAD).

By way of relevant background, the NJLAD prohibits discrimination in the terms and conditions of employment. Included within the NJLAD’s protected categories are race, sex, national origin, age, sexual orientation, religion and disability. Notably, in 1993, the Supreme Court determined that a two-year statute of limitations would apply to NJLAD claims.

At issue in the case was a provision in Defendant Raymours Furniture Company, Inc. t/a Raymour & Flanigan (Raymours) employment application which read, in pertinent part:

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.

In August 2007, Plaintiff Rodriguez applied for a job with Raymours whereby he signed an application that contained the above-cited provision. In April 2010, Rodriguez was injured in a work-related accident. During the summer of 2010, Rodriguez underwent surgery and physical therapy for his injury. In September 2010, Rodriguez returned to work on light-duty status; however, shortly thereafter, Rodriguez was terminated as part of a company-wide reduction in force (RIF). Rodriguez contended that the RIF was not the real reason for his termination because employees with less seniority or distinguishing features were retained.

On July 5, 2011, approximately seven months after his termination, Rodriguez filed a complaint in Superior Court, wherein he alleged, among other things, that Raymours discriminated against him on the basis of an actual or perceived disability in violation of the NJLAD.

On appeal, the Supreme Court overturned the lower courts’ rulings that the parties were free to contract and that the contractual shortening of the statute of limitations was neither unreasonable nor against public policy. In particular, the justices noted that the lower courts failed to evaluate the broad right to contract within the context of the NJLAD’s public policy concern of eradicating discrimination.

In a battle of private vs. public interests, the high court emphasized that private interests are intertwined with the public interests furthered by the NJLAD. Specifically, the justices noted that the NJLAD was enacted not only to protect the civil rights of an individual, but “also to protect the public’s strong interest in a discrimination-free workplace.” The court further reasoned that the right of freedom to contract is not without qualification—it must be evaluated in light of public policy.

Additionally, the justices highlighted that contractually shortening the limitations period frustrated the statutory scheme which permits a person to proceed administratively (within six months) or judicially (within two years). Therefore, any limitation of that scheme, according to the court, was not solely a private matter; indeed, it could curtail a claim designed to further a public interest.

The justices did acknowledge that an individual may still contractually agree to submit a NJLAD claim to alternative dispute resolution, like arbitration. However, the court noted that the underlining contract would still be scrutinized with respect to the protection of substantive rights.

In light of the court’s decision, employers will need to reexamine their employment materials (e.g., employment applications, handbooks, employment contracts) and ascertain whether these documents contain provisions which could be interpreted as contractually shortening the limitations period of employment discrimination claims under the NJLAD.

For more information about this alert or if you have any questions or concerns, please contact Micah Craft at 973.548.3310 or [email protected] any member of Fox Rothschild’s Labor & Employment Department.