Although stressing that it was all for freedom to contract, the New Jersey Supreme Court came out forcefully June 15 in support of the “public imperative in eradicating discrimination” by not allowing a contractual provision in an employment application to shorten the otherwise two-year statute of limitations in the New Jersey Law Against Discrimination to six months.
The case involved a worker whose first language was not English and who took the application home to have a neighbor translate it before he could fill it out. He was hired as a helper, eventually promoted to driver, and a couple of years later, injured his knee on the job, which required surgery and physical therapy. Two days after he returned to work full-time, he was fired in what the company said was a reduction in force. Not believing that was the case because others with less seniority were retained, the worker sued seven months later, claiming disability discrimination. Both the trial and appellate courts held that the statement in his job application waiving the statute of limitations in favor of a six-month limitations period was clear and unambiguous and was neither unreasonable nor against public policy.
It’s not just about you.
But the unanimous state supreme court wasn’t about to view this as a purely “private contractual agreement by which private parties contract to limit private claims by shortening the generally applicable statute of limitations.” Reversing, the court said that while the lawsuit was based on an employment relationship, “it is not a simple private claim.” Instead, the worker alleged an LAD violation—“a law designed for equal parts public and private purposes.”
It’s about a public interest.
In fact, the court gave a little history lesson, pointing out that the LAD was first enacted in 1945; it was an express exercise of the state’s police powers; it recognized nothing less than a civil right; and it “declared abhorrence to discrimination.” Plus, the state legislature further found that “because of discrimination, people suffer personal hardships, and the State suffers a grievous harm.” Among other things, the court also pointed to the LAD’s “huge incentive for employers to thoroughly investigate and respond effectively to internal complaints in order to limit or avoid liability for workplace discrimination.” In fact, the court said that “responsible employers are partners in the public interest work of eradicating discrimination.”
While the court cited other reasons for its decision (23 years of a court-supplied two-year statute of limitations for LAD claims, which the legislature had not disturbed; the dual-forum procedure for bringing claims either to the Division of Civil Rights within six months or in court within two years; and that a shortened limitations period could either foreclose meritorious claims or force lawyers to bring inadequately investigated, potentially nonmeritorious claims too quickly), the thrust of the court’s decision was premised on the public interest.
Public and private interests "cannot be divorced."
Said the court, “a contractual limitation on an individual’s right to pursue and eradicate discrimination of any form prohibited under the LAD is not simply shortening a limitations period for a private matter. If allowed to shorten the time for filing plaintiff’s LAD action, this contractual provision would curtail a claim designed to also further a public interest. As to the LAD, there is a marriage of interests that cannot be divorced."
A couple of other states (Kansas, California) have taken a similar public policy approach, but more have not, as cases from Kentucky, Michigan, New York, and Texas have found a six-month limitations period reasonable, and that’s all that was required. A federal district court in Utah went so far as to suggest that “protecting the integrity of the contractual process” provides a countervailing public policy. But to the unanimous New Jersey high court, which explicitly recognized that “there was no bargaining here” in an employment application that “plainly involved a contract of adhesion,” the public interest in eradicating discrimination was the far better policy to elevate.
The case is Rodriguez v. Raymours Furniture Co., Inc.