Shortening Time to Sue Can Be Permissible

Employment law and the litigation that so often follows, or even occurs during the employer/employee relationship, is constantly evolving as each side tries to get the upper hand on the other. In June, 2014, the New Jersey Appellate Division decided to uphold a lower court ruling in which an employment application contained a provision shortening the time period in which an employee could sue the employer from two years to six months. The job applicant and eventual employee filed suit, under the Law Against Discrimination, nine months after his termination and thus, well within the statute of limitations, but he was outside of the six month period that he had purportedly agreed to when he accepted employment.
The Supreme Court of New Jersey has now accepted Certification and will review, for itself, the case of Rodriguez v. Raymours Funiture Co., which, if left as is, can have wide spreadrepercussionsintheemployer/employee relationship. The Appellate Division heard arguments on a multitude of theories for why the shortening of the time period was improper including, public policy; that the contract was one of adhesion; that the clause was unconscionable and thus unenforceable and a variety of other theories. While the Appellate Division concluded that this was essentially a contract of adhesion, that factor, in and of itself, could not serve to invalidate the clause, which was in bold-faced large print, not buried within the document, was clear and unambiguous and where no pressure to sign without reading it was exerted.

As in other contract provisions, the ordinary pressures faced by an employee to sign in order to be employed in the first place was not enough to find unconscionability either procedurally or substantively. Ultimately, despite the fact that the New Jersey Legislature has mandated a two year statute of limitations to bring a claim under the Law Against Discrimination, a contractually agreed upon shortening of that period, can be reasonable. There is no time set for the Supreme Court to rule on the matter but we will follow the case and advise in a future legal update or website blog.

Darrell M. Felsenstein is a Partner at WJ&L who heads our Litigation Department and specializes in Employment Law and Liquor License Law.

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