In a decision that seems devoid of common sense, on June 1, the New Jersey Supreme Court held that refusing to renew the contracts of employees over the age of 70 based on their age violates the New Jersey Law Against Discrimination (NJLAD). The reason the decision lacks common sense is that the NJLAD specifically states that employers may refuse to “accept for employment” employees over the age of 70 (over-70 exception) without committing age discrimination. In issuing its ruling in Nini v. Mercer County Community College (pdf), the court held that the over 70 exception under the NJLAD is limited to initial hires and does not apply to the renewal of contracts for existing employees of that age.
The court specifically rejected Mercer County Community College’s argument that an employee with an existing contract stands in the same shoes as a job applicant when his or her employment contract expires. Rather, the court noted analogized, an existing employee with an employment contract to an existing at-will employee, not a job applicant. However, it is clear that an employee, regardless of age, would be unemployed the day the contract expired unless the contract were renewed. Unlike an employee-at-will who could be fired at any time with or without notice, an employee with a contract term has a precisely defined employment end date.
It is difficult to understand how an employee who is basically no longer employed as of the date of the contract expiration date, is not in fact more akin to a new applicant than an existing employee. Notwithstanding, it is clear that the New Jersey Supreme Court has managed to chip away at the over 70 exception and employers should be cautious when evaluating whether or not to renew the contract of an individual over the age of 70. Employers may also want to think twice about the length of any contracts of employment as they may not want to have renew a multiple-year contract for an employee who is already over the age of 70.