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Jacobs v. New Jersey State Highway Authority

Decided: July 14, 1969.


For reversal and remandment -- Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Francis, J.


The issue here is the propriety of the action taken by the New Jersey State Highway Authority in forcing plaintiffs Jacobs and Ewing, two of its employees, to retire, Jacobs at age 66 years and Ewing at 65 I/2 years. This was done pursuant to a department regulation issued on October 30, 1964. On that date all employees were notified that the Authority Commissioners had adopted "a retirement policy [to become effective January 1, 1965] which provides that all Authority employees shall retire upon attaining age 65." The regulation authorized the Personnel Committee upon application of a department or Staff Division Head to extend the retirement date of an employee with the approval of the Executive Director of the Authority.

Ewing became an employee of the Authority on August 16, 1954, Jacobs on September 2, 1954. This was 10 years before promulgation of the retirement rule. Ewing reached 65 years of age on April 5, 1967, and following the grant of a six months' extension of employment, he was retired "in accordance with the policies of the Authority." Jacobs became

65 years of age on April 15, 1965, but his retirement was delayed for one year "in order to train a replacement" for him. He applied for an additional extension but it was denied; his forced retirement from service became effective on April 15, 1966 at age 66 years. Upon retirement Ewing and Jacobs, having been contributing members of the Public Employees Retirement System (PERS), N.J.S.A. 43:15 A -1 et seq., began to receive pension payments based upon the service credits each had accumulated therein.

After considerable time had elapsed Jacobs instituted this proceeding attacking his compulsory retirement as illegal and seeking an order restoring him to employment. The attack was and is based upon the contention that under PERS, N.J.S.A. 43:15 A -47, which he contends is controlling with respect to retirement from public employment, retirement is voluntary between age 60 years and 70 years and only becomes mandatory at age 70 years.

The suit was brought in the Superior Court, Chancery Division, but since it was properly cognizable in the Appellate Division under R.R. 4:88-8, it was transferred there for determination. See R.R. 1:27D(a). We pause to note that the suit was begun long after expiration of the time limit fixed for such actions by R.R. 1:3-1(b) or any extensions thereof under R.R. 1:27B(d). As a result, the Authority moved to dismiss, but in view of the importance of the public question involved, the Appellate Division felt there should be a decision on the merits. Consequently the motion was denied. This Court likewise is of the view that the meritorious issue should be resolved.

The Appellate Division concluded that the Authority was empowered by N.J.S.A. 27:12B-5(q) of its creating act N.J.S.A. 27:12B-1 et seq. governing the appointment of its employees, to adopt the general mandatory retirement policy which was applied to Jacobs. It therefore affirmed the order requiring him to retire. The Attorney General moved to intervene on behalf of the Board of Trustees of the Public Employees Retirement System, and also filed a petition for

certification. Both applications were granted. Prior to argument Ewing, whose situation is the same as that of Jacobs, asked leave to intervene. The motion was granted and the matters presented at the same time.

The New Jersey State Highway Authority was created by N.J.S.A. 27:12B-1 et seq. Section 5 (q) thereof confers power on it

"To appoint such additional officers * * * and employ such consulting engineers, attorneys, accountants, construction and financial experts, superintendents, managers and other 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."

Thus the Authority was given broad power to hire, promote and discharge employees free of the restraints imposed by the Civil Service Act, Title 11, N.J.S.A. Accordingly its employees cannot acquire tenure, and are ordinarily subject to discharge without the benefit of charges, hearing thereon and establishment of good cause.

It may be noted that although the statute speaks of hiring, promotion and discharge, no mention of "retirement" appears in any of its various sections. Retirement from employment has a connotation different from discharge. The former ordinarily signifies voluntary withdrawal, the latter compulsory dismissal. See Brown v. Little, Brown & Co., 269 Mass. 102, 168 N.E. 521, 66 A.L.R. 1284 (1929); People ex rel. Tims v. Bingham, 166 N.Y.S. 28 (Sup. Ct. Spec. Term 1906). The statute neither contains provision for the establishment of an individual pension fund for Authority employees, nor any reference whatever to pension benefits for them. Since the absence of a pension plan for public employees in these modern times would ...

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