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Jacobs v. New Jersey State Highway Authority

Decided: July 1, 1968.

WILLIAM T. JACOBS, PLAINTIFF-APPELLANT,
v.
NEW JERSEY STATE HIGHWAY AUTHORITY, GARDEN STATE PARKWAY, D. LOUIS TONTI, EXECUTIVE DIRECTOR, AND SYLVESTER C. SMITH, CHAIRMAN, DEFENDANTS-RESPONDENTS



Goldmann, Kilkenny and Carton. The opinion of the court was delivered by Carton, J.A.D.

Carton

The issue in this case is the power of the New Jersey State Highway Authority to adopt a regulation requiring its employees to retire at age 65. Appellant Jacobs, having been forced to retire pursuant to this administrative mandate, filed a complaint in the Chancery Division on August 14, 1967. The cause was transferred to this court in accordance with R.R. 1:27 D.

Jacobs was employed by the Authority on September 2, 1954 and, as required by law, joined the Public Employees' Retirement System effective February 2, 1955. On October 30, 1964 the Authority notified its employees by letter that it had adopted

"* * * a Retirement Policy which provides that all Authority employees shall retire upon attaining age 65 effective January 1, 1965, with the understanding that the Personnel Committee upon application of a department or Staff Division Head may extend the retirement date of an employee with the approval of the Executive Director."

The letter notice alluded to a Public Employees' Retirement System requirement permitting employees to retire at age 60, and making retirement compulsory at 70. The letter also noted: "In 1955 the Public Employees' Retirement System was integrated with the Federal Social Security System which generally provides for retirement at ages 62 to 65."

Since Jacobs would attain the age of 65 on April 15, 1965, he was due to retire on that date. In the fall of 1964, however, his retirement date was extended for one year "in order to train a replacement" for him. Jacobs later requested an additional extension but this request was denied and his retirement from service became effective on April 15, 1966. This proceeding followed.

Appellant here assails the power of the Authority to adopt the retirement policy it did. He predicates his attack upon the absence of a grant of such power in the New Jersey Highway Authority Act (N.J.S.A. 27:12 B -1 et seq.) and the asserted interdiction of such action in the Public Employees' Retirement Act (N.J.S.A. 43:15 A -1 et seq.).

The Authority's position is that although the Public Employees' Retirement Act governs the pension rights of Authority employees (N.J.S.A. 43:15 A -73), it does not affect the Authority's autonomy over the employment of its personnel, the terms of that employment or its termination. The Authority bases its power to adopt a retirement policy free from outside restraint upon N.J.S.A. 27:12 B -5, which provides that the Authority shall have the power, among others:

"(q) To * * * employ such * * * employees and agents as the Authority deems advisable and as may be necessary in its judgment; to fix their compensation; and to promote and discharge such officers, employees and agents; all without regard to the provisions of Title 11 of the Revised Statutes [Civil Service Act] * * *."

It is clear that by this provision the Legislature has conferred upon the Authority very broad and sweeping powers relating to its personnel. Thus, the Authority is empowered to hire such employees "as the Authority deems advisable and as may be necessary in its judgment" (emphasis added). No limitation is imposed upon the power to "fix their compensation" or "to promote and discharge" such employees.

Underscoring the autonomy granted the Authority by the Legislature in dealing with its ...


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