Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Francois v. Board of Trustees

August 23, 2010

MICHAEL B. FRANCOIS, PETITIONER-APPELLANT,
v.
BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM, DEFENDANT-RESPONDENT.



On appeal from the Board of Trustees, Public Employees' Retirement System, Docket No. 2-10-210689.

The opinion of the court was delivered by: Stern, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued: November 5, 2009

Before Judges Stern, Graves and J. N. Harris.

This is an appeal from a final administrative determination of the Board of Trustees (Board) of the Public Employees' Retirement System (PERS) denying petitioner Michael B. Francois service credit in PERS as an employee of the New Jersey Economic Development Authority (EDA) for the period from May 2003 to December 2005. During that period Francois served on "mobility assignment" as Director of the Real Estate Department of the Port Authority of New York and New Jersey (Port Authority). The Board adopted the initial decision of an Administrative Law Judge (ALJ), and denied the petition.*fn1 We reverse the final administrative determination, and remand for further proceedings.

Petitioner was loaned by the petitioner's employer to another government agency for reasons that presumably benefited the State of New Jersey; the agency informed the employee that his pension would not be impaired during the period of assignment, and the employer continued to pay his salary during that period. Petitioner cannot be penalized by being denied credit for the salary which he would have earned at the EDA if he had not accepted the mobility assignment. However, the differential in salary based on the higher amount petitioner earned at the Port Authority should not be creditable.

I.

Petitioner was born on March 20, 1950. He worked for the City of Plainfield, New Jersey, from February 26, 1975 to May 30, 1981, but apparently did not enter into PERS during that period. Petitioner became an employee of the EDA on June 8, 1981, and was then enrolled in PERS. During his tenure at the EDA, petitioner served as Assistant Director, then Director, and finally Managing Director of Real Estate.

In April 2003, Anthony R. Coscia, who had been chairman of the EDA since February 1992, was appointed chair of the Port Authority. Shortly after this appointment, Chairman Coscia told petitioner that the position of Director of Real Estate at the Port Authority was available, and because of petitioner's interest, suggested that petitioner "send him a bio or resume."

Petitioner was interviewed for the position by the Port Authority's Executive Director, Joseph J. Seymour, and other senior Port Authority staff. Petitioner testified that subsequently Chairman Coscia told petitioner that the Port Authority staff "felt the most appropriate way" for petitioner to "become involved or go to the Port Authority, would be a [m]obility [a]ssignment," and that such a mobility assignment would provide him with "the most flexibility." Petitioner testified that Chairman Coscia said that such an assignment "would probably be the best way to approach" the issue given the "potential changing function and responsibilities of the Real Estate Director at the Port Authority."

Petitioner testified that he was not "thinking about retiring" at the time. However, a few months previously he requested a quote from PERS for the amount it would cost to buy back his years of service at the City of Plainfield which he had not yet purchased. On January 10, 2003 petitioner was informed by the Purchase Section of PERS that the lump sum cost for purchasing his outstanding non-purchased months of service would be $44,802.75, or alternatively he could buy back the time with 120 monthly payments of $553.52 for a total of $66,422.40. On March 19, 2003 petitioner, who had previously bought back twelve months of credit, bought back the balance of his possible credit for his service for the City of Plainfield, which totaled sixty-three months.

The Port Authority, which had experience with mobility agreements, provided a draft agreement to Caren S. Franzini, Executive Director of the EDA. This draft agreement, which apparently was intended to be used by a New York State employee entering a mobility assignment at the Port Authority, contained a paragraph which provided that

[i]t is the Port Authority's intention that, subject to the provisions of New York's Retirement and Social Security Law, you may continue to accrue service credit with the New York State and Local Employees Retirement System (the System) for retirement purposes during the term of the assignment . . . [T]he Port Authority will take such action as may be necessary so that your benefits shall be equivalent to those to which you would have been entitled had you not accepted this assignment. In any event, the period of this assignment will be credited as Port Authority service.

On May 13, 2003 EDA Executive Director Franzini sent a Memorandum of Understanding (MOU) to petitioner which set forth the terms of the agreement which the EDA was shortly to enter into with the Port Authority regarding petitioner's mobility assignment. Franzini wrote that the mobility assignment was "designed to further mutually beneficial outreach programs which promote stable and productive relations with other regional entities and enhance mutual business objectives while providing you with an opportunity to further your development and career goals." The memo further stated that during the term of the mobility assignment you will remain an EDA employee; except as outlined herein, you will continue to be subject to the rules and regulations governing all EDA employees, including the Code of Ethics and Financial Disclosure and the policies and procedures then in effect which apply to permanent professional and managerial EDA employees. Furthermore, your service with the Port Authority is to be subject to the applicable ethical standards of the Port Authority. During the term of this assignment and thereafter, you shall not provide to either the EDA or the Port Authority any confidential information relating to the other. During the term of this assignment, you may deal with substantive matters affecting the EDA or the Port Authority dealings with the EDA or otherwise affecting the EDA.

You are to report for work to offices assigned to you by the Port Authority and your work, performance, and attendance will be subject to supervision by the Port Authority. You will continue to report to the EDA at least one day a week, unless otherwise agreed to by the EDA director.

According to the MOU, petitioner's salary was to be $155,000, to be "funded by the Port Authority," but was to be "paid" to petitioner by the EDA. The term of the "assignment" was to be a maximum of a year, and "upon completion of this assignment" and "return to" petitioner's "EDA assignment," petitioner's salary was to decrease to $124,800, "as adjusted to reflect any merit increases" he "would have received during the term."

The MOU also contained provisions regarding "benefits coverage," "vehicle assignment," "time off" and "travel and incidental expenses." As to "service credit," the MOU specifically stated petitioner's pension status:

It is the EDA's intention that, subject to the provisions of New Jersey Law, you may continue to accrue service credit with the New Jersey State Pension System (the "System") for retirement purposes during the term of this assignment. Should need arise at retirement or otherwise, a calculation will be made to determine whether or not your pension rights as of the date thereof have been reduced as a result of this assignment, based on a formal determination obtained from the System. If so, the EDA will take such action as may be necessary so that your benefits shall be the equivalent to those to which you would have been entitled had you not accepted this assignment. In any event, the period of this assignment will be credited as EDA service. [(Emphasis added).]

On May 14, 2003 Port Authority Executive Director Seymour sent a letter to Franzini "confirm[ing] discussions in reference" to the "temporary assignment" of petitioner to serve as Director of the Port Authority Real Estate Department. Petitioner's mobility assignment was to begin on May 25, 2003 and was to last up to one year, though the assignment could be terminated "at any time on 15 days' notice" by the Port Authority, the EDA, or by petitioner. The Seymour letter further stated that it had been agreed that "the Port Authority will reimburse the EDA for the cost of salary and benefits . . . during this period, payable on invoices to be submitted by the EDA." The Port Authority agreed not to request that petitioner act "contrary to applicable provisions of the Port Authority's Code of Ethics and Financial Disclosure" and also agreed that petitioner's service would additionally be governed by the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 to 52:13D-28. Petitioner was also "expected to keep the EDA Executive Director advised of his activities and his progress during the course of his assignment, no less than every thirty days." Port Authority Executive Director Seymour explained that

The Port Authority and the EDA consider this assignment an opportunity for Mr. Francois to assist both agencies. In addition, the assignment will strengthen the relationship between Port Authority and EDA; develop professional and personal contacts which will serve both agencies well in the future; improve understanding and communications between the Port Authority and EDA; and enhance the goals of strengthening the region's economy.

The EDA had entered into a mobility assignment in the past with a private sector entity. In another instance the EDA and the New Jersey Department of Treasury entered into an agreement to share an employee. However, the mobility agreement between the EDA and the Port Authority regarding petitioner was the first which the EDA entered with a non-State of New Jersey agency.

During petitioner's time on the mobility assignment as the Director of Real Estate for the Port Authority he was responsible for managing and coordinating assorted real estate and leasing activities. Petitioner "engaged in very difficult negotiations" regarding the redevelopment of the World Trade Center. He also worked on the "Portfields Initiative," that redeveloped Brownfield sites within urban centers, in addition to other projects that directly benefited New Jersey.

Petitioner received his paycheck from the EDA during the mobility assignment. Throughout 2003 and early 2004 petitioner reported he was "working out of two offices," the EDA's office in Trenton "one or two days a week" and the remainder of the time at the Port Authority's office in Manhattan. Petitioner testified that by early 2004 it "became just to[o] overwhelming for me to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.