On June 19, 2014 the Superior Court of New Jersey Appellate Division decided Rodriguez v. Raymours Furniture Company, Inc., a corporation, t/a Raymour & Flanigan, Docket No. A-4329-12T3 (June 19, 2014). At issue in this case was “whether a contractual provision, contained in an employment application, by which the employee waives the two-year statute of limitations applicable to claims against the employer and shortens the period for such claims to six months, should be enforceable.” (Id. 1-2). In other words, could the employer modify the statutes of limitation an employee has to bring an action against the employer. This case was on appeal from the Trial Court, where the trial court ruled in favor of Raymour on a summary judgment motion, finding that an employer can modify the statutes of limitation for employee actions.
Facts of the Case
In August 2007 Sergio Rodriguez (“Rodriguez”) applied for a job with Raymour & Flanigan (“Raymour”). As part of the two-page application Rodriguez had to complete for the job was section titled “Applicant’s Statement.” Included in the Applicant’s Statement section was language modifying the amount of time Rodriguez would have to file certain claims or lawsuits against Raymour. The modified statutes of limitation allowed for less time to file a suit than those allowed by the legislature. Furthermore, the Applicant’s Statement also included language that the applicant waived the right to trial by jury for certain actions relating to Rodriguez’s employment.
In 2010 Rodriguez was promoted. As part of the promotion Rodriguez needed to complete a new application form. This new application did not include any of the Applicant’s Statement provisions of the first application modifying the statutes of limitation Rodriguez would have to file a suit against his employer.
On April 5, 2010 Rodriguez was injured on the job. The injured knee was surgically repaired on July 21, 2010. Rodriguez came back to light-duty work on September 14, 2010 and unrestricted work on September 28, 2010.
On October 1, 2010 Raymour had a company-wide reduction in force (“RIF”) and laid-off 102 workers. Included in this RIF was Rodriguez. Raymour claimed it was because Rodriguez had a sub-standard job performance. On July 5, 2011 Rodriguez filed a complaint claiming his firing was in retaliation for the workers’ compensation claim he filed against Raymour and that Raymour discriminated against him due to his disability, thus violation the Law Against Discrimination (“LAD”) N.J.S.A. 10:5-1 to -49. (Id. 6).
Procedural History
The case was first heard in the Superior Court of New Jersey, Morris County. Upon the completion of discovery, the Superior Court granted Raymour’s motion for summary judgment finding that Rodriguez was time-barred from filing the claim finding that Raymour was within its right to modify the statutes of limitation for employee actions. Following the entry of default judgment, Rodriguez appealed to the Appellate Division.
The Appellate Division’s Ruling
In writing for a unanimous appellate court, Judge Lisa upheld the Superior Court’s decision. First the court rejected Rodriguez’s argument that the contract was unconscionable, but did find that the contract was a contract of adhesion. But just because the application was an adhesion contract, it does not mean that the contract was unenforceable. In reviewing the shortening of the statutes of limitation, the court found “in the absence of a statute to the contrary, parties are free to contractually limit the time within which an action may be brought, as long as the contractual time is reasonable and does not violate public policy.” (Id. 23). This language allows for employers to modify statutes of limitation provided the modifications are reasonable.
What is Reasonable
In attempting to determine whether the six month time period was reasonable and did not violate public policy the court looked to the federal courts. While federal courts did not allow for a six-month limitation period for Equal Employment Opportunity Commission, “where administrative requirements are not present . . . courts have upheld six-month contractual provisions in employment contracts, deeming them reasonable.” (Id. 25). Furthermore, because the New Jersey Legislature established a six-month time frame for administrative LAD claims, it is not unconscionable for Raymour to do the same.
Conclusion
For now it appears that when using the right language, employers can contractually limit the time-frame employees have to bring suit against the employer. However, employers need to be wary of how much time they give employees to bring claims. The court has upheld six-months but it appears that this is the shortest time-frame that the court will find acceptable, especially as they looked to the six-month window allowed for EEOC claims as the basis for allowing the six-month window in this case. The plaintiff also petitioned the Supreme Court of New Jersey to hear an appeal of the Appellate Court’s opinion.
The Jayson Law Group LLC suggests that companies speak with an attorney to discuss this ruling and how they can modify their contracts to better protect the company’s interests.
Sources:
Rodriguez v. Raymours Furniture Company, Docket No. A-4329-12T3 (June 19, 2014)