On appeal from a Final Determination of Division of Pensions, Department of Treasury.
Petrella, Dreier and Baime. The opinion of the court was delivered by Petrella, P.J.A.D.
The appeals we consider in this opinion involve challenges to the enforcement of early mandatory retirement provisions for law enforcement officers and firefighters who are enrolled in the Police and Firemen's Retirement System (P & FRS) or the Public Employees Retirement System (PERS).*fn1
The facts are not disputed in any of these appeals. All plaintiffs were advised by a February 19, 1987 directive issued by the Division of Pensions (Division) in the State Department of the Treasury, based on legal advice from the Attorney General, that they had to retire because they were over age 65. In the appeal brought by Edward Boylan and others, all of the plaintiffs serve as officers in various positions in police and fire departments. The plaintiffs include one police chief, four deputy chiefs, three police captains and one detective. They also include one fire chief, two battalion chiefs and two captains from fire departments. An additional plaintiff named in the complaint is one superintendent Nixon. Each plaintiff is between the age of 65 and 70 years and is a member of either the P & FRS or the PERS.
In the Comer appeal plaintiffs, paid fire chiefs in their respective municipalities, are between ages 65 and 70, and are members of the P & FRS. In the third appeal Beattie is a deputy fire chief who is 68 years of age. In the Fiorentino appeal the plaintiffs include a fire captain, the City of Ocean
City, a collective bargaining representative and Firemen's Mutual Benevolent Association, Local 27.
The plaintiffs in each of these matters, with the exception of the Beattie appeal, instituted suit seeking injunctive relief against the enforcement of the mandatory retirement requirement. The matters were transferred to the Appellate Division in three of the appeals on orders entered by the trial court. Beattie took a direct appeal to this court from the mandatory retirement directive issued by the Division of Pensions and sought and obtained injunctive relief pending disposition of the appeal.
We hold that supervisory law enforcement officers who are not directly involved in law enforcement and supervisory firefighters who are not directly and primarily involved in firefighting are not subject to the federal exception to the allowed mandatory retirement of certain law enforcement officers and firefighters authorized by the 1986 federal amendments to the Age Discrimination in Employment Act and its general prohibitions against age discrimination.
Although mandatory retirement, particularly for policemen and firemen, is not an unusual requirement, clouds of uncertainty arose as a result of competing concepts. On the one hand, employees and their unions through the collective bargaining process sought pension and retirement programs with greater benefits and the flexibility for earlier retirement. On the other hand, as life expectancies have grown, there has been concern expressed about refusals to hire people because of advancing age as well as forced early retirements. Out of this competition between employer and employee and old and young arose several other issues: the interest of some employees in early mandatory retirement for supervisors and people with greater seniority to create vacancies for younger people, as
well as objections to forced retirement based on age without a reasonable and bonafide occupational requirement.*fn2
New Jersey's Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (L.A.D.), and its amendments since its original adoption in 1945, illustrates the competing interests of the young and the old. N.J.S.A. 10:5-2.1 provides that:
Nothing contained in this act or in the act to which this is a supplement shall be construed to require or authorize any act prohibited by law . . . nor to prohibit the establishment and maintenance of bonafide occupational qualifications or the establishment and maintenance of apprenticeship requirements based upon a reasonable minimum age nor to prevent the termination or change of the employment of any person who in the opinion of his employer, reasonably arrived at, is unable to perform adequately his duties, nor to preclude discrimination among individuals on the basis of competence, performance, conduct or any other reasonable standard, nor to interfere with the operation of the terms or conditions and administration of any bonafide retirement, pension, employee benefit or insurance plan or program. [emphasis supplied.]
New Jersey's enactments, discussed infra, were affected in various ways by developments with respect to the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (ADEA), which became effective in 1968, and which was the subject of subsequent conflicting amendments. The ADEA made findings that arbitrary discrimination in employment because of age "burdens commerce and the free flow of goods and commerce." 29 U.S.C. § 621(a)(4). It barred discrimination in hiring or discharge on the basis of age, except where there either was "a bonafide occupational qualification" (BFOQ), or a pension or retirement plan was not a subterfuge
to evade the purposes of the ADEA. 29 U.S.C. § 623(f)(1) and (2).
In 1974 the ADEA expanded its definition of the term "employer" to include "a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency. . . ." 29 U.S.C. § 630(b)(2). Nevertheless, the states, including New Jersey, did not feel the impact of the ADEA at that time. This law was not considered applicable to the states because of a Tenth Amendment question, or at least that was an unresolved question. While the issues were being challenged in various federal courts, federal firefighters and law enforcement personnel were essentially exempt from the coverage of the act by virtue of the federal Civil Service Laws. Cf. 5 U.S.C. § 8335(b) and 5 C.F.R. § 831.09 et seq. (regulations relating to 5 U.S.C. § 8335(b)).
In 1983 the United States Supreme Court decided EEOC v. Wyoming, 460 U.S. 226, 103 S. Ct. 1054, 75 L. Ed. 2d 18 (1983), which held that the extension of the ADEA to the states and local governments was not violative of the Tenth Amendment, but constituted a valid exercise of federal authority under the Commerce Clause. Essentially in response to that opinion then Attorney General Kimmelman issued a formal opinion which concluded that pension provisions for uniformed police officers and firefighters which required mandatory retirement prior to age 70 were unenforceable under the then effective provisions of the ADEA, unless it could be demonstrated that mandatory retirement ages were a bonafide occupational qualification. 5 Op.N.J.Att'y Gen. (1983).
The New Jersey Legislature then amended the L.A.D. in 1985 to provide in N.J.S.A. 10:5-2.1:
Nothing contained in this act or in P.L.1945, c. 169 (C. 10:5-1, et seq.) shall be construed to require or authorize any act prohibited by law . . . nor to interfere with the operation of the terms or conditions and administration of any bonafide retirement, pension, employee benefit or insurance plan or program, including any State or locally administered public retirement system, provided that
the provisions of those plans or programs are not used to establish an age for mandatory retirement. [emphasis supplied.]*fn3
Also in 1985 N.J.S.A. 10:5-12 was amended to provide:
It shall be unlawful employment practice, or, as the case may be, an unlawful discrimination:
a. For an employer, because of the race, creed, color, national origin, ancestry, age, marital status, sex or atypical hereditary cellular or blood trait of any individual, or because of the liability for service in the Armed Forces of the United States or the nationality of any individual, to refuse to hire or employ or to bar or to discharge or require to retire, unless justified by lawful considerations other than age, from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment; provided, however, it shall not be an unlawful employment practice to refuse to accept for employment an applicant who has received a notice of induction or orders to report for active duty in the armed forces; provided further that nothing herein contained shall be construed to bar an employer from refusing to accept for employment any person on the basis of sex in those certain circumstances where sex is a bonafide occupational qualification, reasonably necessary to the normal operation of the particular business or enterprise; provided further that nothing herein contained shall be construed to bar an employer from refusing to accept for employment or to promote any person over 70 years of age; . . . provided further that it shall not be an unlawful employment practice to require the retirement of any employee who for the two-year period immediately before retirement, is employed in a bona fide executive or a high policy-making position, if that employee is entitled to an immediate, non-forfeitable annual retirement benefit from a pension, profit sharing, savings or deferred retirement plan, or any combination of those plans, of the employer of that employee which equals in the aggregate at least $27,000.00; and provided further that an employer may restrict employment to citizens of the United States where such restriction is required by federal law or is otherwise necessary to protect the national interest.*fn4
In the same 1985 amendments N.J.S.A. 10:3-1 was amended to provide that except for certain categories of employees, no governmental employees
Excepted from this prohibition were certain categories of State employees, including, to the extent involved here, "a member of a police or fire department employed in the service of the State or ...