Why it matters: A recent decision from a New Jersey appellate court demonstrates the importance of establishing a clear termination date to trigger the start of the statute of limitations on a former employee’s subsequent lawsuit. Although all of the employer’s records pointed to the same date of termination, the employee in the suit claimed he was not told he was fired until several days later and actually showed up for work. The appellate court reversed summary judgment for the employer, holding that a material issue of fact existed about the actual date of termination. With the employer now facing continuing legal action – and additional costs – the case provides a clear example of the importance of a termination letter to establish a termination date and avoid unnecessary litigation.

Detailed Discussion

Brian Rabb worked as a stock supervisor at the retail store Children’s Place. On August 26, 2011, Rabb filed suit alleging that he was wrongfully terminated after complaining of racial discrimination in the workplace. An African American, Rabb alleged he was subjected to racially offensive comments and jokes before he was fired on August 28 – just getting his suit in under the two-year statute of limitations of New Jersey’s discrimination law.

The retailer filed a motion for summary judgment in response, arguing that Rabb’s suit was time-barred. His actual date of termination was August 20, the employer said, and therefore the complaint was filed too late. Children’s Place pointed to Rabb’s time sheet, which showed that Rabb’s last day of work was August 20 and that his last paycheck reflected hours worked up to August 20. In addition, his job history report lists August 20 as his last day of work, and the company hired his replacement on August 25.

Rabb argued that he reported to work on August 28 and was questioned by the store manager about a prior incident on the register; he was then fired and told to leave the premises.

Based upon the employment records, a trial court judge granted summary judgment for Children’s Place, finding Rabb’s complaint untimely.

But in an unpublished opinion, the New Jersey Court of Appeals reversed.

Too many questions remained to end the suit without discovery, the court said. “Discovery would afford plaintiff the opportunity to review Children’s Place employment records and other relevant corporate documents that relate to the claim regarding his termination date, and hence, the triggering event of the statute of limitations,” the panel wrote. “Based on the early posture of this case, we conclude that summary judgment and dismissal of the complaint with prejudice was premature.”

The court also refused to accept the employer’s position that the last day the plaintiff was paid triggered the statute of limitations. “Children’s Place’s reliance on plaintiff’s last day of pay as the triggering event may be inapposite, as a matter of law, with our focus on the date that plaintiff is actually harmed by defendant’s conduct,” the court said, which could be August 29, the date Rabb claimed he was informed of his termination.

Without additional facts and a more developed record, “we cannot discern when or if plaintiff was harmed by Children’s Place, or whether the last day of pay truly represents the date plaintiff was terminated,” the panel concluded.

To read the decision in Rabb v. Children’s Place, click here.