Tolling Agreements in NJ Employment Disputes: Pausing the Clock Without Filing a Lawsuit

Employment disputes are governed by filing deadlines that continue to run while the parties investigate the facts or exchange information. This creates pressure to file a lawsuit before meaningful settlement discussions have taken place. 

A tolling agreement stops the legal clock from running, preserving claims while the parties continue addressing the dispute outside of court.

Employment disputes don’t always move on the same timeline as filing deadlines. As our attorneys at Brandon J. Broderick assess these cases, it’s not uncommon to see situations where the parties need more time to gather records and discuss a potential resolution. A tolling agreement can provide that time without sacrificing important legal rights. 

This article explains how tolling agreements work, why parties use them, what terms commonly appear in these agreements, and when to consult an employment lawyer in New Jersey.

Understanding Tolling Agreements in New Jersey Employment Cases

A tolling agreement is a written contract between a potential plaintiff and a potential defendant. It pauses the clock on the statute of limitations for an agreed period. The worker agrees not to file a lawsuit during that period. In return, the employer agrees not to argue later that the filing deadline expired during the pause. 

Whatever time was left on the clock when the agreement was signed stays on the clock after the agreement ends. The pause itself doesn't count against the deadline.

These agreements are common in employment cases. Settlement discussions are often the reason, as the parties may want additional time to negotiate before deciding whether litigation is necessary. 

Internal HR investigations create the same need when an employer wants to look into a complaint before defending a lawsuit. Workers use the time to collect wage records, personnel files, and witness statements. 

Severance negotiations can be a reason for tolling agreements. Employees need additional time to review a proposed release of claims and determine what rights they may be giving up. A lawsuit remains possible even after a severance agreement has been signed, depending on the agreement's language and the claims involved.

Other proceedings can create timing challenges as well, including workers' compensation matters and agency investigations. In some cases, the parties are also navigating questions about an employee's return to work after an injury. 

Both sides have a reason to consider these agreements. Workers gain time to think the claim through, talk to counsel, gather evidence, and decide whether litigation makes sense. Employers gain time to investigate, evaluate exposure, and negotiate without the public record of a filed lawsuit. Costs stay lower on both sides because formal litigation hasn't started yet.

A tolling agreement isn't a settlement and doesn’t require either side to give up its position. A claim still exists when it ends. It’s different from garden leave or other post-employment arrangements that address compensation or employment status after separation. An employer keeps every other argument it would have had if the lawsuit were filed directly.

When Pausing the Statute of Limitations Matters in New Jersey

The reason tolling agreements come up so often in New Jersey employment cases is that the deadlines vary wildly across different claims. Some are short, some are forgiving, and a single worker often has several different clocks running at the same time.

Deadlines in New Jersey include:

• New Jersey Law Against Discrimination (NJLAD): two years from the discriminatory act when filed directly in court; 180 days when filed administratively with the NJ Division on Civil Rights
• Conscientious Employee Protection Act (CEPA), the state's whistleblower statute: one year from the date of the adverse employment action
• Pierce v. Ortho Pharmaceutical common-law wrongful discharge claims: two years
• New Jersey Wage Payment Law and New Jersey Family Leave Act: two years
• Federal Family and Medical Leave Act and Federal Fair Labor Standards Act: two years; three years for willful violations
• Title VII, ADA, and ADEA federal claims: 300 days to file a charge with the EEOC; lawsuit within 90 days of receiving a right-to-sue notice
• Breach of employment contract: six years

The timing issues are most noticeable in Conscientious Employee Protection Act cases. As we evaluate whistleblower claims, the one-year statute of limitations is one of the first deadlines our legal team looks at. The law is designed to encourage employees to report concerns and pursue claims without significant delay. 

A workplace dispute may support both discrimination and whistleblower claims, yet the deadlines do not always run on the same schedule. Because CEPA generally has a shorter filing period, tolling agreements are useful while the parties evaluate the claims. This can be especially important when concerns were first raised through anonymous reporting channels, and the facts are still being developed. 

Federal regulators continue to encourage that type of reporting. In April 2025, the SEC awarded $6 million to whistleblowers whose information contributed to a successful enforcement action. 

Wage claims operate a little differently because each unpaid paycheck or wage violation carries its own limitations period. As time passes, older claims fall outside the recovery window. A tolling agreement helps preserve those earlier claims that might otherwise be lost. These timing issues are common in ongoing pay discrimination cases. 

The discovery rule and the continuing-violation doctrine extend some limitations periods independently. Those doctrines apply automatically. With a contract in place, the pause in the deadline is agreed upon in advance instead of depending on a later court ruling. It removes uncertainty.

How Pre-Suit Tolling Agreements Work in New Jersey Employment Disputes

Tolling agreements are contracts and are enforceable as such. That means a written agreement, signed by parties, with clear and definite terms that a court would interpret consistently. A verbal promise or a vague email exchange usually doesn't either.

The core terms contain:

• Identification of the parties: the worker, the corporate employer, and any individual supervisors, parent companies, successor entities, or affiliates the parties want covered
• A description of the underlying claims being tolled, with enough specificity to identify what is and isn't covered
• A specific start date and end date for the agreed period, expressed as calendar dates
• A clear statement that the statute of limitations is suspended for the duration
• A waiver of the right to assert a statute of limitations defense based on the passage of time during the tolling period
• Provisions for extension, modification, or early termination, with a requirement that any changes be in writing and signed by both parties
• A choice of law provision (New Jersey law, in NJ employment matters)
• A statement that the agreement is not an admission of liability or wrongdoing by either side
• Confidentiality terms, where the parties want to keep negotiations private

Most disputes over tolling agreements involve either timing or scope. In reviewing these contracts, our attorneys at Brandon J. Broderick examine the timeline first. A contract needs to be in place before the limitations period expires. 

Scope is important because the tolling agreement doesn’t extend to individual supervisors or related companies. New Jersey Law Against Discrimination and CEPA claims sometimes involve both the employer and individual decision-makers. The contract should clearly identify who is covered and which claims are being paused.

The same issue applies to the claims themselves. For example, an employee may report wage theft and later allege being fired. If the agreement pauses a wage claim but says nothing about a related retaliation claim, the retaliation deadline may continue running. 

Federal courts have recognized tolling agreements as enforceable contracts. In Department of Labor v. Preston, the Eleventh Circuit ruled that a voluntarily negotiated tolling agreement could waive a statute-of-limitations defense, even against the federal government. Similar reasoning has been applied to employment disputes when the agreement reflects the parties' intent.

The parties are also expected to act consistently with the agreement. A limitations defense raised elsewhere while the tolling agreement remains in effect can complicate matters.

When to Consider a Tolling Agreement Before a Filing Deadline Runs Out

For some employees, extra time can be valuable when important facts are still being gathered or settlement discussions remain ongoing. 

Common examples include ongoing investigations, approaching CEPA deadlines, active settlement negotiations, or situations where an employee is still working for the employer and hopes to resolve the dispute without immediately filing a public lawsuit.

A tolling agreement isn’t always beneficial. Workers should pay close attention to what claims are covered and whether important evidence could become harder to access during the delay. A short extension may not provide enough benefit to justify postponing the next steps.

Employers view these contracts differently. A pending restructuring, ownership change, government investigation, or ongoing settlement discussion creates a reason to pause the clock while the situation develops.

When reviewing a contract, the most important details are the dates, the claims being covered, and the parties included in the agreement. Vague language such as "until negotiations conclude" or "until the investigation is complete" can cause disagreements later. A specific end date, along with a requirement that any extension be made in writing, provides much more certainty.

Tolling agreements are used when a deadline is getting close. By the time they are discussed, the parties are working within a much shorter timeframe than they expected. 

For guidance on tolling agreements or filing deadlines, contact us today for a free consultation.