As we previously detailed here, a New Jersey appellate court recently held that parties may contractually agree to shorten the applicable statute of limitations for state law wrongful termination claims. New York employers, however, need not fret: an appellate court decision from early 2013 reached the same conclusion.
The New York decision – captioned Hunt v. Raymour & Flanigan – involved the same employer and employment application as the New Jersey proceeding (Rodriguez v. Raymours Furniture Co., Inc.). As in Rodriguez, plaintiff Thomas Hunt signed an employment application providing that “any claim or lawsuit relating to [his] 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.” The application further provided that Hunt waived “any statute of limitations to the contrary.”
Hunt was eventually discharged in February 2011. More than six months after his termination, Hunt sued for unlawful discrimination and retaliation under both the New York State and City Human Rights Laws. Raymour & Flanigan moved to dismiss, as it did in Rodriguez, on the grounds that the claims were time-barred by the contractually-shortened statute of limitations recited in the employment application.
Reversing the trial court’s decision, the Appellate Division (Second Department) agreed with Raymour & Flanigan and dismissed the action, specifically holding that “[t]he parties to a contract may agree to limit the period of time within which an action must be commenced to a period shorter than that provided by the applicable statute of limitations. Absent proof that the contract is one of adhesion or the product of overreaching, or that [the] altered period is unreasonably short, the abbreviated period of limitation will be enforced.” Unlike Rodriguez, however, the Appellate Division did not address the effect of the abbreviated limitations period on employment claims asserted under federal law (because Hunt did not assert such claims).
How Does This Affect My Company?
Unless and until the State’s highest court, the Court of Appeals, takes up the issue, Hunt remains good law in New York (at least in the Second Department (i.e., Richmond, Kings, Queens, Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam counties)). Given the increased volume of employment litigation, employers should continue to evaluate contractual provisions that may assist in controlling the costs associated with defending such claims. Like arbitration provisions and jury waivers, reducing certain limitations periods is a tool that employers should consider.