In an article published in the January 30, 2012 edition of The New Jersey Law Journal, Bertone Piccini employment attorney David H. Ganz wrote about whether employers could shorten the statute of limitations in employment cases, and if so, how they could that. On June 19, 2014, New Jersey’s Appellate Division weighed in on that very subject. In Rodriguez v. Raymours Furniture Company, a for-publication decision, the appellate court held that a provision in an employment application, in which the employee waived the two-year statute of limitations applicable to claims against the employer and shortened the period for such claims to six months, was enforceable.
In Rodriguez, the plaintiff (Rodriguez) was presented with an employment application. Before the signature line was a statement, in bold-faced large print, advising the applicant to read carefully before signing, as what followed became part of the official employment record and personnel file. The final two paragraphs after that statement were completely capitalized. The first contained an agreement that (i) any claim relating to the applicant’s service with the company must be filed no more than six months after the date of the challenged action and (ii) the applicant waives any statute of limitations to the contrary. The second contained the applicant’s agreement to waive a jury trial.
Approximately nine months after Rodriguez’s employment was terminated during a reduction-in-force, he filed a lawsuit, claiming he was discharged in retaliation for having filed a workers’ compensation claim and was discriminated against based in disability, in violation of the New Jersey Law Against Discrimination (NJLAD). The trial court granted the company’s motion for summary judgment, finding that Rodriguez’s complaint was time-barred. He appealed, arguing that the shortened limitation period was unconscionable.
In its analysis, the Appellate Division considered principles of procedural and substantive unconscionability. Regarding the former, the court found that while the employment application was non-negotiable and therefore, a contract of adhesion, that did not make it per se unenforceable. In fact, the Appellate Division held for a number of reasons that the level of procedural unconscionability was “by no means overwhelming” and was “minimal.” First, was the provision’s placement: it was not buried in a large volume of documents but was conspicuously placed in a two-page application, set apart by bold, oversized print and capital lettering above the signature line. Second, the terminology was “clear and uncomplicated.” Third, Rodriguez was not pressured to complete and sign the application quickly; instead he was allowed to take the application home and complete it as his leisure.
Turning to its substantive unconscionability analysis, the Appellate Division considered four factors: the subject matter of the contract; the parties’ relative bargaining positions; the degree of economic compulsion motivating the adhering party; and the public interests affected by the contract. None, according to the court, weighed in favor of Rodriguez. The Appellate Division held that a shortened limitations period was a valid and legitimate subject to be included in an employment contract and refused to find that a six month period was unreasonable, especially in light of the six-month statutory time frame to file an administration claim for a NJLAD violation. The appellate court also found that although the company was in a superior bargaining position, it did not hold a monopoly on the type of jobs for which Rodriguez applied. It further found that Rodriguez was under no compulsion to proceed with the application if he was dissatisfied with any of the employment terms.
As to the third factor, the court remarked that while anyone in search of a job was under some level of economic compulsion, Rodriguez had presented no evidence that his circumstances were more egregious than any other applicant. Finally, the Appellate Division determined that there was no adverse effect on public policy or public interests. While New Jersey has a strong public policy reflected in various laws protecting workers’ rights, the court held that public policy was not harmed by a contractually agreed-upon, shortened limitations period, where that period was reasonable. In the circumstances presented, the Appellate Division ruled that six months was reasonable.
This issue may not be over just yet. The New Jersey Law Journal is reporting that Rodriguez’s attorney is preparing a petition for the case to be heard by the New Jersey Supreme Court.
The Appellate Division’s decision in Rodriguez may be found by clicking here.