NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4329-12T3
SERGIO RODRIGUEZ,
Plaintiff-Appellant,
APPROVED FOR PUBLICATION
v.
June 19, 2014
RAYMOURS FURNITURE COMPANY, INC., APPELLATE DIVISION
a corporation, t/a RAYMOUR &
FLANIGAN,
Defendant-Respondent.
_________________________________
Argued March 18, 2014 – Decided June 19, 2014
Before Judges Messano, Rothstadt and Lisa.
On appeal from the Superior Court of New
Jersey, Law Division, Morris County, Docket
No. L-1922-11.
Alan L. Krumholz argued the cause for
appellant (Krumholz Dillon, P.A., attorneys;
Mr. Krumholz, on the briefs).
Edward T. Groh argued the cause for
respondent.
The opinion of the court was delivered by
LISA, J.A.D. (retired and temporarily assigned on recall).
The primary issue in this appeal is whether a contractual
provision, contained in an employment application, by which the
employee waives the two-year statute of limitations applicable
to claims against the employer and shortens the period for such
claims to six months, should be enforceable. The trial court
rejected the employee's unconscionability argument. The court
found that the provision was clear in its terms, was
conspicuously placed in the application form, and was reasonable
and not contrary to any public policy. Therefore, the court
concluded that the provision was enforceable. In a secondary
argument, plaintiff contended that a second application form he
completed, in conjunction with a promotion several years after
his initial hire, which did not contain the shortened limitation
period, constituted a novation and voided the initial contract.
The court rejected this argument, noting that a novation is
never presumed and finding nothing in the second application or
in the circumstances of its completion to suggest any intent to
void the provisions of the initial contract.
Because plaintiff filed his complaint nine months after his
alleged wrongful termination by defendant, the court granted
defendant's summary judgment motion and dismissed the complaint
as time-barred. On appeal, plaintiff makes the same arguments
before us as he made in the trial court. We agree with the
trial court's analysis and conclusions, and we affirm.
I.
In August 2007, plaintiff approached defendant, a retail
furniture company, seeking employment. The customer delivery
2 A-4329-12T3
manager gave plaintiff an application form, which he was asked
to complete and return. Plaintiff took the form home with him.
The form was written completely in the English language.
Plaintiff was born in 1971 in Argentina and, after obtaining an
eighth-grade education there, 1 he came to the United States in
1987 at about age sixteen. Plaintiff contends that his ability
to read or speak English is limited, although he had been living
in this country for twenty years at the time of this application
process.
Plaintiff completed the application form at home with the
assistance of a close friend who was fluent in English and who
translated the application from English to Spanish. According
to plaintiff, his friend translated "[o]nly the places where I
had to fill out." Plaintiff acknowledged that as his friend was
assisting him he had no questions about the application. The
next day, plaintiff returned the completed and signed form to
defendant, handing it to the same person from whom he had
received it. Plaintiff acknowledged that when he returned the
form he did not have any questions about it.
The application form is two pages in length. Toward the
bottom of the second page, immediately above the signature line,
there is an "Applicant's Statement" in the following form:
1
Plaintiff received a seventh-grade education, which is
equivalent to an eighth-grade education in the United States.
3 A-4329-12T3
Applicant's Statement – READ
CAREFULLY BEFORE SIGNING - IF YOU ARE
HIRED, THE FOLLOWING BECOMES PART OF
YOUR OFFICIAL EMPLOYMENT RECORD AND
PERSONNEL FILE.
I understand this employment application is
not a promise of an offer of employment. I
further understand that should I receive and
accept an offer of employment, my employment
does not constitute any form of contract,
implied or expressed, and such employment
will be terminable at will either by myself
or Raymour & Flanigan upon notice of one
party to the other. My continued employment
would be dependent on satisfactory
performance and continued need for my
services as determined by Raymour & Flanigan.
I authorize investigation of all statements
contained in this application. I understand
that misrepresentation or omission of facts
called for are grounds for a refusal to
offer employment or a cause of dismissal if
hired.
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.
I WAIVE TRIAL BY JURY IN ANY LITIGATION
ARISING OUT OF, OR RELATING TO, MY
EMPLOYMENT WITH RAYMOUR & FLANIGAN,
INCLUDING CLAIMS OF WRONGFUL OR RETALIATORY
DISCIPLINE OR DISCHARGE; CLAIMS OF AGE,
SEXUAL, SEXUAL ORIENTATION, RELIGIOUS,
PREGNANCY OR RACIAL DISCRIMINATION; CLAIMS
UNDER TITLE VII OF THE CIVIL RIGHTS ACT,
TITLE IX, AMERICANS WITH DISABILITIES ACT,
AGE DISCRIMINATION IN EMPLOYMENT ACT,
EMPLOYEE RETIREMENT INCOME SECURITY ACT,
4 A-4329-12T3
FAIR LABOR STANDARDS ACT, AND ALL OTHER
APPLICABLE NON-DISCRIMINATION, EMPLOYMENT OR
WAGE AND HOUR STATUTES.
Plaintiff affixed his signature and inserted the date
immediately below this statement. As depicted above, the
prefatory language is in bold-faced large print, and the final
two paragraphs, containing the shortened limitation period and
jury trial waiver, are completely capitalized.
About one week after submitting the application, a
representative of defendant contacted plaintiff and asked him to
submit to a drug screen. Plaintiff successfully completed it
and was hired as a helper 2 in mid-September 2007. The two-page
application form was the only document plaintiff completed in
connection with his hiring.
In 2010, defendant promoted plaintiff to the position of
3
driver, in which he would be the leader of a team making
furniture deliveries. Plaintiff acknowledged in his deposition
that in the new position he would be responsible for the team's
performance, he would be required to read the delivery manifests,
which were written in English, and he would need to communicate
with customers primarily in English.
2
Plaintiff's official title was "Customer Delivery Assistant."
3
The precise dates of plaintiff's application for the new
position, of his required road test and drug screening, and the
effective date of the promotion are unclear from the record.
5 A-4329-12T3
The driver's application form consists of four pages. It
requires the applicant to provide personal information,
employment history, and information regarding driving experience
and driving record. Plaintiff filled in the relevant
information and signed the form. This form does not contain any
provisions shortening the period during which an action against
the employer could be brought or waiving a jury trial.
On April 5, 2010, while delivering furniture to a
customer's home, plaintiff injured his knee. He was diagnosed
with a torn meniscus, necessitating a temporary absence from
work. The injury was surgically repaired on July 21, 2010.
Plaintiff was permitted to return to light-duty work on
September 14, 2010, and then to unrestricted work on September
28, 2010.
Three days later, on October 1, 2010, defendant instituted
a company-wide reduction in force (RIF), laying off a total of
102 workers, including plaintiff. According to defendant,
plaintiff was selected for the RIF because of sub-standard job
performance. According to plaintiff, in the complaint he filed
on July 5, 2011, he was terminated in retaliation for having
filed a workers' compensation claim and was discriminated
against based upon disability, in violation of the Law Against
Discrimination (LAD), N.J.S.A. 10:5-1 to -49.
6 A-4329-12T3
At the close of discovery, defendant moved for summary
judgment on various grounds, including that plaintiff's
complaint was time-barred. Because the trial court agreed with
that contention, it did not reach any of the other bases for
summary judgment.
In ruling on the motion, the court concluded that the
waiver provision in the initial application "is clear" and "is
clearly brought to the attention of anybody reading the document
because of the capital letters and large print." Citing Mirra v.
Holland America Line, 331 N.J. Super. 86 (App. Div. 2000), the
court stated that parties can validly enter into agreements to
limit the time within which lawsuits can be brought "provided
that it's a reasonable limitation, [and] does not violate public
policy." The court found no basis for a finding "that six
months is against any public policy or is an unreasonable time
within which to bring a claim about which one would know
immediately upon the event happening."
The court also rejected plaintiff's novation argument
regarding the driver's application. Citing Sixteenth Ward
Building and Loan Association v. Reliable Loan, 125 N.J. Eq. 340
(E. & A. 1939), the court noted the well-settled principle that
a novation is never presumed. The court then concluded that
there was nothing in either of the agreements and no evidence in
7 A-4329-12T3
the record to support a conclusion that the second application
was intended as a novation.
Accordingly, summary judgment was entered dismissing
plaintiff's complaint. This appeal followed.
II.
A.
The standard of review by which we must analyze the issues
before us is well-settled. Trial courts must grant summary
judgment "if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact challenged and that the moving party is
entitled to a judgment . . . as a matter of law." R. 4:46-2(c).
The appropriate inquiry must determine "'whether the evidence
presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail
as a matter of law.'" Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 533 (1995) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 251-52, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d
202, 214 (1986)). The court must review the evidence presented
"in the light most favorable to the non-moving party." Id. at
540.
8 A-4329-12T3
Our review of summary judgment orders is de novo, using the
same standard applied by trial courts. W.J.A. v. D.A., 210 N.J.
229, 237-38 (2012). We accord no special deference to the trial
court's assessment of the record, because the trial court's
decision amounts to a ruling on a question of law rather than a
determination of the credibility of testimony rendered in court.
See Manalapan Realty, L.P. v. Manalapan Twp. Comm., 140 N.J. 366,
378 (1995). Further, a trial court's interpretation of the
meaning of a contract is also a matter of law, subject to de
novo review. Fastenberg v. Prudential Ins. Co. of Am., 309 N.J.
Super. 415, 420 (App. Div. 1998).
B.
Plaintiff contends that the shortened limitation period in
the initial application is unconscionable and therefore
unenforceable. Generally, "[a] contract is unenforceable if its
terms are manifestly unfair or oppressive and are dictated by a
dominant party." Howard v. Diolosa, 241 N.J. Super. 222, 230
(App. Div.) (citing Kuzmiac v. Brookchester, 33 N.J. Super. 575
(App. Div. 1955)), certif. denied, 122 N.J. 414 (1990). A party
raising a claim of unconscionability has the burden of showing
"some over-reaching or imposition resulting from a bargaining
disparity between the parties, or such patent unfairness in the
terms of the contract that no reasonable [person] not acting
9 A-4329-12T3
under compulsion or out of necessity would accept them."
Rotwein v. Gen. Accident Grp., 103 N.J. Super. 406, 418 (Law Div.
1968). In the waiver context, "a party's waiver of statutory
rights 'must be clearly and unmistakably established, and
contractual language alleged to constitute a waiver will not be
read expansively.'" Garfinkel v. Morristown Obstetrics &
Gynecology Assocs., 168 N.J. 124, 132 (2001) (quoting Red Bank
Reg'l Educ. Ass'n v. Red Bank Reg'l High Sch. Bd. of Educ., 78
N.J. 122, 140 (1978)).
Unconscionability analysis requires consideration of two
factors –— procedural unconscionability and substantive uncon-
scionability. The former arises out of defects in the process
by which the contract was formed, and "'can include a variety of
inadequacies, such as age, literacy, lack of sophistication,
hidden or unduly complex contract terms, bargaining tactics, and
the particular setting existing during the contract formation
process.'" Muhammad v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1,
15 (2006) (quoting Sitogum Holdings, Inc. v. Ropes, 352 N.J.
Super. 555, 564-66 (Ch. Div. 2002)), cert. denied, 549 U.S. 1338,
127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). The latter
"generally involves harsh or unfair one-sided terms." Ibid.
Stated differently, substantive unconscionability "simply
suggests the exchange of obligations so one-sided as to shock
10 A-4329-12T3
the court's conscience." Sitogum Holdings, supra, 352 N.J.
Super. at 565 (citations omitted).
Generally, a "sliding scale" analysis is utilized in tandem,
considering the respective degrees of procedural and substantive
unconscionability found to exist. Muhammad, supra, 189 N.J. at
16 n.3 (citing Sitogum Holdings, supra, 352 N.J. Super. at 565-
66). Under this approach, overall unconscionability may be
found if there is a gross level in one category but only a
lesser level in the other. Sitogum Holdings, supra, 352 N.J.
Super. at 565-66.
In support of his unconscionability argument, plaintiff
first relies on the contention that the six-month limitation
period is embodied in a contract of adhesion. Although he can
point to no specific record evidence to support that this was a
take-it-or-leave-it form contract in which he had no ability to
negotiate any terms, plaintiff argues that it is obvious that
prospective employees for low-level jobs such as a furniture
delivery helper were indeed in that position.
Defendant argues that because plaintiff never asked any
questions about the application or attempted to negotiate the
disputed term (or any terms) he has failed to establish that the
terms were non-negotiable. Defendant relies on a case in which
a highly educated individual, experienced in the field of human
11 A-4329-12T3
resources, applied for the position of Benefits Administrator
and, in her discussions with the prospective employer during the
application process, did not attempt to alter any terms of the
employment application form and provided no evidence that the
employer would have refused to consider her if she did not agree
to the arbitration provision contained in the application form.
Martindale v. Sandvik, Inc., 173 N.J. 76, 91 (2002). On that
basis, the Court was "not persuaded that [the] plaintiff was
forced to sign an inflexible contract of adhesion in the
circumstances of her completion of the Application for
Employment." Ibid. Notwithstanding that determination, the
Court concluded that the result would be the same even if it was
a contract of adhesion in light of the facts of the case. Ibid.
We find defendant's argument unpersuasive. The case before
us is more akin to the circumstances in Muhammad, supra, 189 N.J.
at 18-19, in which the court recognized that "the gross
disparity in the relative bargaining positions of the parties
[was] self-evident from the nature of the payday loan contract
between a consumer and a financial entity." This led the court
to conclude that the agreement was "clearly a contract of
adhesion." Id. at 18. The circumstances in this case likewise
reflect a self-evident non-negotiable employment application
form. We accordingly deem this a contract of adhesion.
12 A-4329-12T3
Plaintiff argues that because this was a contract of
adhesion it was per se unenforceable against the adhering party.
This argument is unsupported by any authority. Indeed, "[t]he
determination that a contract is one of adhesion . . . 'is the
beginning, not the end, of the inquiry' into whether a contract,
or any specific term therein, should be deemed unenforceable
based on policy considerations." Muhammad, supra, 189 N.J. at
15 (quoting Rudbart v. N. Jersey Dist. Water Supply Comm'n, 127
N.J. 344, 354, cert. denied, 506 U.S. 871, 113 S. Ct. 203, 121 L.
Ed. 2d 145 (1992)).
Plaintiff next argues that because the courts of this State
have determined that the appropriate statute of limitations for
LAD claims and for common law claims of retaliatory discharge
for filing a workers' compensation claim is two years, see
Montells v. Haynes, 133 N.J. 282, 286 (1993); Labree v. Mobile
Oil Corp., 300 N.J. Super. 234, 242 (App. Div. 1997), the two
year limitation period provided by N.J.S.A. 2A:14-2 cannot be
modified by agreement. Well-settled law is to the contrary.
Long ago, the United States Supreme court held that
it is well established that, in the absence
of a controlling statute to the contrary, a
provision in a contract may validly limit,
between the parties, the time for bringing
an action on such a contract to a period
less than that prescribed in the general
statute of limitations, provided that the
13 A-4329-12T3
shorter period itself shall be a reasonable
period.
[Order of United Comm. Travelers of Am. v.
Wolfe, 331 U.S. 586, 608, 67 S. Ct. 1355,
1365, 91 L. Ed. 1687, 1700 (1947).]
New Jersey courts have followed this principle. See, e.g.,
Eagle Fire Prot. Corp. v. First Indem. of Am. Ins. Co., 145 N.J.
345, 354-63 (1996) (upholding a one-year limitation period in a
surety bond, which modified the six-year limitation period
provided by statute); Mirra, supra, 331 N.J. Super. at 90
(rejecting the plaintiff's argument that the parties could not
contract for a limited filing period under the New Jersey
Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, because the
limitation was reasonable, and neither the CFA nor New Jersey's
general statute of limitations restricted the ability of the
parties to shorten the period in which claims could be filed);
A.J. Tenwood Assocs. v. Orange Senior Citizens Hous. Co., 200
N.J. Super. 515, 523-25 (App. Div.) (holding that a one-year
limitation period in a construction contract barred the
plaintiff from bringing a claim, notwithstanding the ordinary
six-year statutory limitation for such actions under N.J.S.A.
2A:14-1), certif. denied, 101 N.J. 325 (1985); see also Weinroth
v. N.J. Mfrs. Ass'n Fire Ins. Co., 117 N.J.L. 436, 438-39 (E. &
A. 1936); Ribeira & Lourenco Concrete Constr., Inc. v. Jackson
Health Care Assocs., 231 N.J. Super. 16, 22-23 (App. Div.
14 A-4329-12T3
1989); Staehle v. Am. Employers' Ins. Co., 103 N.J. Super. 152,
154 (App. Div. 1968).
Plaintiff refines his argument on this point, urging us to
judicially impose a prohibition on agreements shortening
limitation periods specifically in employment contracts. He
points to various legislative enactments in New Jersey, such as
the LAD, the Conscientious Employee Protection Act (CEPA),
N.J.S.A. 34:19-1 to -14, and the Family Leave Act, N.J.S.A.
34:11B-1 to -16, as evidence of a strong public policy to
protect workers' rights.
This argument asks us to intrude upon the prerogative of
the Legislature. None of these enactments impose a ban on
contractually reducing a limitation period. The Legislature is
presumably aware of the long-established case law allowing
contractual reductions that are reasonable and not contrary to
public policy, where not statutorily prohibited. Yet, it has
not acted.
Our role is to determine whether, considering the factual
circumstances in a particular case, the shortened limitation
period is reasonable and does not contravene public policy.
Indeed, our Legislature has set different limitation periods for
different employee actions. See, e.g., the one-year statute of
limitations for CEPA claims, N.J.S.A. 34:19-5, as opposed to the
15 A-4329-12T3
two-year limitation period for LAD lawsuits. And, as we will
further discuss, under a choice-of-remedies provision in the LAD,
N.J.S.A. 10:5-13, a party claiming discrimination in violation
of the LAD may choose to pursue an administrative remedy rather
than filing a lawsuit, in which case he or she must file a claim
with the Division on Civil Rights (DCR) within 180 days.
Similarly, the Legislature has set a limitation period under the
New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to
-43, of six months from the alleged unfair practice. N.J.S.A.
34:13A-5.4(c).
These limitation periods are traditionally legislative
determinations. The judicial role involves such functions as
interpretation of which statutory limitation provision applies
in cases of ambiguity, the development and application of
principles and doctrines to avoid injustices, such as equitable
tolling, the discovery rule, estoppel, and the continuing
violation doctrine, as well as a determination of whether any
contractual modification is reasonable and not contrary to
public policy.
We therefore decline plaintiff's invitation to impose a
judicial ban on the shortening of limitation periods for claims
by workers against their employers. Plaintiff's arguments in
this regard are better directed to the Legislature, which could
16 A-4329-12T3
consider, with input from all stakeholders and affected parties,
the advisability of such legislation, and which could consider
alternatives, such as specifying certain types of actions in
which to impose a ban or partial ban on modifications of the
statutory time frames, the procedures required to effectuate any
such contractual modifications, and other related issues. Our
role is to decide the case before us and determine whether an
injustice has been caused by an allegedly unconscionable
contract.
Plaintiff further argues that because the statutory right
being waived eliminates any forum in which to seek a remedy if
the contractual limitation period is missed, this case is
materially distinguishable from those allowing waivers of jury
trials and requiring arbitration proceedings in lieu of actions
in the courts. In the latter circumstances, plaintiff argues,
although a worker is limited as to the forum, he or she is
nevertheless left with a forum in which a fair adjudication can
be made.
This argument presupposes that an individual signing an
agreement is not aware of what is in it and therefore would not
know when his or her filing deadline would occur. We reject
this premise. An individual who signs an agreement is assumed
to have read it and understood its legal effect. Rudbart, supra,
17 A-4329-12T3
127 N.J. at 352-53 (citing Fivey v. Penn R.R., 67 N.J.L. 627,
632 (E. & A. 1902)). This principle applies even if a language
barrier is asserted. See Morales v. Sun Constructors, Inc., 541
F.3d 218, 221-23 (3d Cir. 2008) (rejecting the plaintiff's
contention that he should not be bound by an arbitration
agreement because it was drafted in English and he spoke only
Spanish).
Plaintiff also contends that allowing a six-month
limitation period for a LAD lawsuit would tend to have an
adverse impact on the alternate route legislatively allowed in
the LAD by N.J.S.A. 10:5-13. Under that section, an aggrieved
party can make a choice to pursue a civil action in court or
proceed by way of seeking a remedy in an administrative
proceeding in the DCR. The LAD also contains an exclusivity
provision, which provides that an administrative proceeding,
once commenced and while pending, shall be exclusive, and the
final determination in that proceeding shall exclude any other
action based on the same grievance of the individual concerned.
N.J.S.A. 10:5-27.
Plaintiff argues that an individual who files a
discrimination complaint with the DCR within the 180 day
statutory limitation period might be lulled into thinking there
is no hurry to see how the investigation and discussions in that
18 A-4329-12T3
proceeding are progressing, because, if later deemed
unsatisfactory, he or she can always withdraw the claim in the
DCR action and have it dismissed, after which he or she can
proceed with a lawsuit. Doing so might well be within two years,
but not within six months of the discriminatory act complained
of.
We reject this argument. Again, it assumes that a claimant
is aware of the two-year statutory limitation period, but is not
aware of the shortened period to which he or she contractually
agreed. The parties are charged with knowledge of the law and
with knowledge of contracts into which they have entered.
Further, we do not see how the statutory scheme allowing the
election of remedies would be impaired. It is the claimant's
choice whether to pursue either the more streamlined and less
expensive administrative route, or a civil lawsuit.
Plaintiff also contends that language in the "Applicant's
Statement," which states that, if employed, plaintiff's
"employment does not constitute any form of contract, implied or
expressed," either creates a fatal ambiguity in the contract or
should serve to estop defendant from attempting to enforce the
provision limiting the time within which a claim must be filed.
According to plaintiff, defendant cannot assert a contractual
right with respect to the shortened limitation provision while
19 A-4329-12T3
at the same time denying, within the text of the employment
application, that the document constitutes a contract.
We find this argument unpersuasive. The text creates no
ambiguity. It is clear from the full text of the sentence in
which the "does not constitute any form of contract" language
appears that the language pertains only to the fact that, if
hired, plaintiff's "employment will be terminable at will either
by [him] or [defendant] upon notice of one party to the other."
These are two distinct terms, each dealing with a different
subject. One defines the applicant's at-will status if hired.
The other addresses the time frame within which the applicant,
if hired, must initiate claims or lawsuits against his employer.
We now address the relevant unconscionability factors.
Contracts of adhesion "invariably evidence some characteristics
of procedural unconscionability," and therefore "require[] a
careful fact-sensitive examination into substantive
unconscionability." Muhammad, supra, 189 N.J. at 16. In
Muhammad, the Court further noted that where a contract of
adhesion involves "overwhelming" procedural unconscionability,
those procedural factors must be analyzed further in a "sliding
scale" analysis along with the degree of any substantive
unconscionability. Id. at 16 n.3.
20 A-4329-12T3
The level of procedural unconscionability in this case is
by no means overwhelming. The disputed contract provision was
not buried in a large volume of documents. It was contained in
a two-page application and set forth very conspicuously in bold
oversized print and capital lettering, just above the
applicant's signature line. The terminology was clear and
uncomplicated. Plaintiff was put under no pressure to complete
and sign the application quickly. Indeed, he was permitted to
take it home and complete it at his leisure, which he did, with
the assistance of a friend who was more fluent than he in the
English language.
In the context of arbitration provisions in employment
contracts, the United States Supreme Court has held that "[m]ere
inequality in bargaining power . . . is not a sufficient reason
to hold that [such] agreements are never enforceable in the
employment context." Gilmer v. Interstate/Johnson Lane Corp.,
500 U.S. 20, 33, 111 S. Ct. 1647, 1655, 114 L. Ed. 2d 26, 41
(1991). Referring to Gilmer, we have held that "the Supreme
Court obviously contemplated avoidance of the arbitration clause
only upon circumstances substantially more egregious than the
ordinary economic pressure faced by every employee who needs the
job." Young v. Prudential Ins. Co. of Am., Inc., 297 N.J. Super.
605, 621 (App. Div. 1997). And, our Supreme Court has observed:
21 A-4329-12T3
Virtually every court that has considered
the adhesive effect of arbitration
provisions in employment applications or
employment agreements has upheld the
arbitration provision contained therein
despite potentially unequal bargaining power
between employer and employee. See
generally, Rosenberg v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 170 F.3d 1, 17
(1st Cir. 1999) (holding that absent showing
of fraud or oppressive conduct, arbitration
of plaintiff's age and gender discrimination
claims pursuant to arbitration provision
contained in Form U-4 was permissible);
Seus v. John Nuveen & Co., 146 F.3d 175, 184
(3d Cir. 1998), cert. denied, 525 U.S. 1139,
119 S. Ct. 1028, 143 L. Ed. 2d 38 (1999)
(rejecting argument that disparity in
bargaining power resulted in contract of
adhesion); Koveleskie [v. SBC Capital Mkts.,
Inc., 167 F.3d 361, 367 (7th Cir. 1999)]
(upholding employee's agreement to arbitrate
Title VII claim, noting that state law does
not void contracts based on unequal
bargaining power or contracts made on "take-
it-or-leave-it" basis); Nur v. KFC, USA,
Inc., 142 F. Supp. 2d 48, 51-52 (D.D.C. 2001)
(rejecting argument that arbitration
agreement contained in employment
application of restaurant's assistant
manager was unenforceable contract of
adhesion, where agreement was not unduly
burdensome, did not favor one party over
other, and provided that American
Arbitration Association and [Federal
Arbitration Act] rules apply to arbitration
proceeding).
[Martindale, supra, 173 N.J. at 90-91.]
Overall, the level of procedural unconscionability
attendant to the formation of this contract was minimal.
Therefore, the focus must be on whether the agreement is
22 A-4329-12T3
substantively unconscionable. Because this is a contract of
adhesion, the four factors identified in Rudbart must be
considered, namely, "[(1)] the subject matter of the contract,
[(2)] the parties' relative bargaining positions, [(3)] the
degree of economic compulsion motivating the 'adhering' party,
and [(4)] the public interests affected by the contract."
Muhammad, supra, 189 N.J. at 15-16 (quoting Rudbart, supra, 127
N.J. at 356). Weighing and balancing these factors leads us to
the conclusion that the six-month limitation period is not
substantively unconscionable.
As we have pointed out, in the absence of a statute to the
contrary, parties are free to contractually limit the time
within which an action may be brought, as long as the
contractual time is reasonable and does not violate public
policy. Although no New Jersey court has addressed this issue
in the employment context in a published opinion, courts that
have considered the issue have given widespread approval to
shortened periods comparable to the one in this case. Indeed,
the New York intermediate appellate court has approved the very
same waiver provision that is involved in this case, which was
contained in defendant's employment application completed by an
employee in New York. Hunt v. Raymour & Flanigan, 963 N.Y.S.2d
722, 723-24 (App. Div. 2013).
23 A-4329-12T3
In cases decided by various federal and state courts, a
distinction is made between federal claims that are subject to
the exclusive jurisdiction and exhaustion of administrative
remedies requirements through the United States Equal Employment
Opportunity Commission (EEOC), and non-EEOC claims. "Congress
created the EEOC and established an administrative procedure
under Title VII in order to provide the EEOC with 'an
opportunity to settle disputes through conference, conciliation,
and persuasion before the aggrieved party [is] permitted to file
a lawsuit.'" Lewis v. Harper Hosp., 241 F. Supp.2d 769, 771
(E.D. Mich. 2002) (quoting Occidental Life Ins. Co. of Cal. v.
EEOC, 432 U.S. 355, 368, 97 S. Ct. 2447, 2455, 53 L. Ed. 2d 402,
412 (1977)). A claimant must first file a charge with the EEOC,
which then investigates the charge to determine whether there is
reasonable cause to believe that the charge is true. Id. at
771-72. The EEOC is authorized to bring a civil action against
the responsible party or, if it finds reasonable cause but
chooses not to bring an action, it issues a "right to sue"
letter authorizing the individual claimant to sue. Ibid. If no
reasonable cause determination is made within 180 days after
filing with the EEOC, the claimant may request a right to sue
letter, and upon its issuance, file suit directly. Id. at 772.
While the case is pending in the EEOC, and during the 180 day
24 A-4329-12T3
period, at the least, the EEOC has exclusive jurisdiction, and
the individual is not authorized to file suit in his or her own
behalf. Ibid.
Therefore, for federal claims which are subject to initial
filing with the EEOC, courts have held that a six-month
contractual limitation period to file suit is unenforceable
because it would have the effect of abrogating a claimant's
ability to bring a claim and would therefore be contrary to the
public policy established for federal claims subject to EEOC
jurisdiction. Ibid.; see also Salisbury v. Art Van Furniture,
938 F. Supp. 435, 437-38 (W.D. Mich. 1996) ("With respect to the
[Americans with Disabilities Act, (ADA)] claim, the contractual
limitation certainly effected a 'practical abrogation' of the
right to file an ADA claim and is, therefore unreasonable[.]");
Scott v. Guardsmark Sec., 874 F. Supp. 117, 121 (D.S.C. 1995)
(rejecting a six-month contractual limitation period in an ADA
case because it was "abhorrent to public policy," "required an
employee to waive his or her federal protections," and "reduce[d]
the time limits to assert a federal cause of action").
However, where administrative exhaustion requirements are
not present, as in the case before us, courts have upheld six-
month contractual provisions in employment contracts, deeming
them reasonable. See, e.g., Thurman v. DaimlerChrysler, Inc.,
25 A-4329-12T3
397 F.3d 352, 358-59 (6th Cir. 2004) (affirming dismissal of the
plaintiff's state law claims and 42 U.S.C.A. §1981 claim based
on six-month limitation provision in employment application);
Soltani v. W. & S. Life Ins. Co., 258 F.3d 1038, 1044 (9th Cir.
2001) (upholding six-month contractual limitation period to bar
wrongful discharge claim); Taylor v. W. & S. Life Ins. Co., 966
F.2d 1188, 1206 (7th Cir. 1992) (six-month contractual
limitation period enforced as to non-EEOC claims); Myers v. W. &
S. Life Ins. Co., 849 F.2d 259 (6th Cir. 1988) (upholding the
six-month limitation period in employment contract for
plaintiff's disability discrimination claim based on state
statute); Ray v. FedEx Corporate Servs., Inc., 668 F. Supp.2d
1063, 1065-69 (W.D. Tenn. 2009) (six-month limitation period
upheld with respect to the plaintiff's federal age
discrimination claim); Badgett v. Fed. Express Corp., 378 F.
Supp.2d 613, 626 (M.D.N.C. 2005) (concluding that the
plaintiff's state law claims and non-EEOC federal claims were
subject to dismissal as time-bared under the six-month
contractual limitation period agreed to by the parties); Clark v.
DaimlerChrysler Corp., 706 N.W.2d 471, 474 n.2 (Mich. App. 2005)
(upholding six-month contract limitation period that barred
plaintiff's age discrimination claim based on state statute for
which the statutory limitation period was three years, and
26 A-4329-12T3
commenting: "While we have much sympathy for the dissent's
argument that there ought to be limitations on an employer's
ability to contractually modify periods of limitations,
especially in the civil rights context, we believe such
limitations ought to be imposed by the Legislature, not the
judiciary."), appeal denied, 713 N.W.2d 779 (2006); Lewis, supra,
241 F.Supp.2d at 769, 771-74 (E.D. Mich. 2002) (enforcing six-
month limitation period in employment contract as to non-EEOC
claims, but not as to EEOC claims); Timko v. Oakwood Custom
Coating, Inc., 625 N.W.2d 101, 105-06 (Mich. App. 2001)
(affirming summary judgment dismissing the plaintiff's age
discrimination claim based on state law, holding that the
contractual six-month limitation period was reasonable).
We agree with the reasoning and conclusions reached in
these opinions. Plaintiff has cited no published opinion to the
contrary. As we have pointed out, six months is the statutory
time frame for filing an administrative claim for a LAD
violation. Such a filing represents a choice of remedies under
New Jersey's scheme. Because the Legislature has set six months
for this alternative route, we are hard pressed to judicially
declare that six months is an unreasonable, conscience-shocking
time period in which a claimant must choose the other available
route, a civil lawsuit. And, following the distinction we have
27 A-4329-12T3
highlighted between federal claims subject to EEOC jurisdiction
and exhaustion of those administrative remedies before a private
suit can be filed, and other non-EEOC claims (such as the one
before us) with no such prerequisite, we find nothing
unreasonable or contrary to New Jersey's public policy about a
six-month limitation for state law claims such as those brought
by plaintiff in this case.
Applying the four Rudbart factors, we conclude, as to the
first, that the subject matter of the contract in dispute, the
shortened limitation period, is a valid and legitimate subject
to be included in an employment contract, and has been
judicially recognized as such. As to the second factor,
although defendant was in a superior bargaining position, it did
not hold a monopoly on jobs of the type for which plaintiff was
applying. Plaintiff was under no compulsion to pursue the
application if he was dissatisfied with any of the terms of
employment, including the shortened limitation period. Rudbart,
supra, 127 N.J. at 356-57. This analysis also applies to the
third factor, the degree of economic compulsion motivating
plaintiff. As we have pointed out, anyone who needs a job is
under some level of economic compulsion, but plaintiff has
presented no evidence to suggest that his circumstances were any
28 A-4329-12T3
more egregious than those faced by any other applicant seeking
employment. Young, supra, 297 N.J. Super. at 621.
As to the fourth factor, the public interests affected by
the contract, for the reasons we have stated, we find no adverse
effect on public policy or public interests. We recognize that
New Jersey has a strong public policy, as evidenced by various
statutory enactments protecting the rights of workers and
prohibiting discrimination in the workplace. That public policy
is not harmed by a contractually agreed-upon shortened
limitation provision within which a worker can make a claim
against his or her employer if that shortened period is
reasonable. For the reasons we have discussed, six months is
reasonable in the circumstances presented. Accordingly,
plaintiff's suit against defendant was time-barred by the six
month provision.
C.
We summarily reject plaintiff's alternative argument that
the application he filed for his promotion to driver constituted
a novation that overrode and voided the initial application. To
constitute a novation, a new contact must exhibit a clear and
definite intention on the part of all parties that its purpose
is to supersede and eliminate a prior contact. Sixteenth Ward
Bldg. & Loan Ass'n, supra, 125 N.J. Eq. at 342-43. A novation
29 A-4329-12T3
is never presumed. Ibid. The burden of proving a novation lies
with the party alleging it. Id. at 345.
Applying the Brill standard, the motion record is devoid of
any evidence that would support a "clear and definite" showing
that the parties intended to extinguish the provisions of the
initial application. The initial application was for a new hire,
specifying certain terms of employment if hired, including his
or her at-will status and the shortened limitation period. The
second application was merely a means of obtaining further
information from plaintiff relevant to the new position to which
he was being promoted, a driver. It sought information about
his driving experience and driving record. His employment with
defendant was uninterrupted by this promotion.
Under these circumstances, the record is sufficiently "one-
sided" that a reasonable fact-finder could not find by clear and
definite evidence that both parties intended to create a new
contract. See Brill, supra, 142 N.J. at 529, 532.
Affirmed.
30 A-4329-12T3
Sergio Rodriguez v. Raymours Furniture Company, Inc.
Court: New Jersey Superior Court Appellate Division
Date filed: 2014-06-19
Citations: 436 N.J. Super. 305, 93 A.3d 760
Copy CitationsCombined Opinion