In a recent decision, Nini v. Mercer County Community College, the Supreme Court of New Jersey held that refusing to renew the employment contracts of employees over the age of 70 constituted a violation of New Jersey’s state anti-discrimination statute, the Law Against Discrimination (NJ LAD).   

In Nini, the plaintiff was a contract employee of Mercer County Community College who had been advised, after 26 years of employment, that her contract would not be renewed.  At the time, she was over the age of 70.  Around the time of the non-renewal, the plaintiff overheard supervisors express a desire to "get rid of old-timers and bring in new blood."  She filed suit for age discrimination under NJ LAD, which contains an exception to discrimination on the basis of age which allows an employer to refuse to “accept for employment” or to refuse to promote anyone over the age of 70.  In response to the plaintiff’s suit, the College argued that as the plaintiff’s employment contract had already expired, she became an applicant whom the College legally refused "to accept for employment".  The plaintiff countered that the nonrenewal of her contract after 26 years was effectively a termination, falling outside of the exception.

After initially observing that NJ LAD did not explicitly address the situation where an employment contract is not renewed, the Supreme Court ultimately held that the phrase "refusing to accept for employment" is limited to only initial hiring decisions and did not apply to a worker whose contract has not been renewed.  

Critical to the Supreme Court’s conclusion was that NJ LAD prohibits both terminations and forced retirements based upon age. The Supreme Court opined that to read the exception to permit the nonrenewal of a contract employee based upon age would undermine the remedial purposes of NJ LAD.  Furthermore, the Supreme Court noted that such an interpretation would create a potential loophole in the seamless coverage of the statute, permitting employers to place their aging employees under contract.

Looking to legislative history, the Supreme Court believed that the state legislature enacted the “over 70” exception to protect employers from being exposed to the financial and organizational costs incident to hiring and promotion where an employee has limited long-term prospects. Those interests would not be implicated in a situation of contract renewal, where the employee was already on the job, required no training, the organizational scheme was not impacted and the employee was performing satisfactorily.  Thus, the Supreme Court interpreted in the statute a specific intention by the state legislature to protect those employees over 70 who have a pre-existing relationship with the employer from being pushed out of the workforce based on age.

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