If you are a New Jersey employer, an extra step in your application process could limit future legal claims by your employees. A 2014 decision by New Jersey’s appeals court has the potential to make it more difficult for workers to sue their employers. Specifically, if the employer utilizes a specific waiver in the application process, the employer can limit the time period in which employees may bring claims.
In today’s post we will cover the background and ramifications of this ruling on New Jersey employers.
New Jersey is widely known for being progressive in its development and implementation of employment laws favorable to employees. Due to this favorable nature, attorneys representing employees typically look to file in state court as opposed to federal court to ensure their clients receive the protection and application of New Jersey’s laws. Likewise, many attorneys who defend employers will tell you they prefer to be in federal court as federal law is perceived to be more favorable to employers.
This past summer, however, the Appellate Division of the State of New Jersey dealt employees what could be, if utilized by employers correctly, a major obstacle in filing and sustaining an adverse employment action against their employers in New Jersey. For the first time, a New Jersey Appellate Court ruled employers could reasonably shorten the time period in which an applicant/employee may bring an adverse employment action against an employer through the use of a waiver executed during the application process, subject to certain limitations. This came as a shock to many in the legal profession as the state courts are known to be very protective of employees.
In Rodriguez v. Raymour Flanigan,[1] the applicant/employee signed a waiver reducing the statute of limitations to six months. The subject waiver was entitled “Applicant’s Statement” (in bold, with oversized lettering). The document stated, in pertinent parts:
Applicant’s Statement – READ CAREFULLY BEFORE SIGNING – IF YOU ARE HIRED, THE FOLLOWING BECOMES PART OF YOUR OFFICIAL EMPLOYMENT RECORD AND PERSONNEL FILE
…
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 EMPLOYMENT ACTION THAT IS THE SUBJECT OF THE CLAIM OR LAWSUIT. I WAIVE ANY STATUTE OF LIMITATIONS TO THE CONTRARY.
Years after signing the waiver, the applicant/employee was terminated as a result of a purported reduction in force. Nine months after the termination, the applicant/employee filed a lawsuit against Raymour & Flanigan alleging disability discrimination under the New Jersey Law Against Discrimination and retaliation for filing a worker’s compensation claim.
As a result of the valid waiver executed during the application process, the Law Division of the Superior Court of New Jersey dismissed the applicant/employee’s claims as time barred and the Appellate Division affirmed. Specifically, because the waiver only permitted employment claims to be filed within six months of the event giving rise to the claim(s) and the applicant/employee filed the lawsuit nine months after his termination, his claims were deemed to be out of time.
Thus, employers are now permitted to seek an applicant/employee’s knowing and voluntary waiver of the statute of limitations in matters involving employment actions in New Jersey. This is groundbreaking news for employers seeking to limit their exposure to employment-related lawsuits. This ruling has the potential to provide employers with a potent weapon to combat lawsuits brought by former and current disgruntled and litigious applicants/employees.
The following are examples of the effect of the above-described waiver:
- No waiver executed: A former employee wishes to institute litigation against an employer based on allegations that s/he was terminated because of her/his race, religion, disability, and gender. Under the New Jersey Law Against Discrimination this employee has two years to bring a claim against her/his employer.
- Waiver Executed: Same scenario as above, however, this time the employer had the employee execute a legally proper waiver of statute of limitations reducing to six months the time period in which the employee could file a claim under the New Jersey Law Against Discrimination against the employer . This is a 75% reduction of the time period permitted under the law.
When reviewing a waiver, such as the one described in this article, it is important to keep in mind certain aspects of the court’s decision and ask the following questions:
1) Is the waiver a free-standing document?
2) Is the language clear and uncomplicated?
3) Is the print conspicuous (i.e. bold oversized print and capital letters)?
4) Does it allow the applicant/employee time to read over the waiver?
5) Does it allow for any questions the applicant/employee may have?
6) Was the waiver executed freely and voluntarily?
7) Is the statute of limitations reduced to no less than at least six months?
8) Is it written in a language in which the applicant/employee is fluent?
It is, however, important to note that claims for administrative remedies (i.e. EEOC complaints), employers are not permitted to reduce the statute of limitations.
Finally, you should be aware that on Dec. 5, 2014, the Plaintiff’s appeal to allow the New Jersey Supreme Court to hear the matter was granted. The Supreme Court has yet to issue a decision on the matter. However, as it stands now, the above described waiver is enforceable.
[1] Rodriguez v. Raymours Furniture Company, Inc., a corporation, t/a Raymour & Flanigan, 436 N.J.Super. 305 (App.Div. 2014)).
