On June 16, 2016, the Supreme Court unanimously ruled that an employment agreement that shortened an employee’s time to file Law Against Discrimination (LAD) claims to six months ran contrary to public policy.
In Rodriguez v. Raymours Furniture Co., the employer, Raymours Furniture Co. (operating as Raymour & Flanigan), prepared an employment agreement that required applicants to agree that if hired by the company, any lawsuit arising out of their employment would be brought within six months of the cause of action accruing. This six month time period shortened the two-year statutory time period pursuant to the LAD.
The Plaintiff had been hired as a helper before being promoted to a driver. His initial employment application required that he agree to the following language:
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 THE EMPLOYMENT ACTION THAT IS THE SUBJECT OF THE CLAIM OR LAWSUIT. I WAIVE ANY STATUTE OF LIMITATIONS TO THE CONTRARY.
His promotion application did not include the same waiver of the statute of limitations period. After the promotion, the Plaintiff suffered a work-related injury. After being out of work, collecting workers compensation benefits, and having surgery, the Plaintiff returned to work. Shortly thereafter, Plaintiff was fired.
Seven months after his termination, Plaintiff filed a suit in the Superior Court claiming violation of the LAD based on discrimination for his perceived disability and retaliation for seeking workers’ compensation benefits. The trial court ruled in favor of the employer at summary judgment, finding that the Plaintiff’s claims were barred by the employment agreement terms that required he bring his claims within six months of the claims accruing. The trial court found that the language of the agreement was clear and unambiguous.
On appeal, the Appellate Division affirmed the trial court’s decision, finding that the language was clear and unambiguous and that the Plaintiff had sufficient time to review the agreement terms. The Appellate Division also reasoned that claims must be brought before the Division of Civil Rights (DCR) within six months and therefore said time period was not unreasonable.
The Supreme Court, however, unanimously reversed the Appellate Court’s findings. The Court found that the shortening of the two-year statute of limitations period of the LAD was a matter of public interest. Ultimately, the public interest in preventing and eliminating discrimination in the workplace would be undermined if an employer could shorten a private claim under the LAD. Furthermore, the Court found that contractually limited period could cause employees to miss potential claims against their employer and cause attorneys to prematurely file actions in order to preserve employees rights.
The ruling strengthens the LAD by eliminating the possibility of shortening an employee’s time to file a claim against his or her employer. The impact of the ruling has already extended to the legislature. On September 19, 2016, a bill was introduced that would codify the Supreme Court’s ruling in Rodriguez v. Raymours Furniture Co. The goal of the bill is to definitively set forth that the two-year statute of limitations period for LAD claims cannot be waived or shortened. It will be interesting the see the outcome of the proposed bill. For now, the Supreme Court’s decision serves as further confirmation of the two-year statute of limitations period.