Faillace v. Port Authority of New York and New Jersey

• Decision Date: 02 July 1987
• Citation: 517 N.Y.S.2d 941,130 A.D.2d 34
• Parties: Ralph A. FAILLACE, Plaintiff-Appellant, v. The PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 941

517 N.Y.S.2d 941

130 A.D.2d 34

Ralph A. FAILLACE, Plaintiff-Appellant, v. The PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendant-Respondent.

Supreme Court, Appellate Division,

First Department.

July 2, 1987.

Eleanor Jackson Piel, New York City, for plaintiff-appellant.

Anne M. Tannenbaum, of counsel (Arthur P. Berg and James Begley, with her on brief, Patrick J. Falvey, New York City, attorney) for defendant-respondent.

Before MURPHY, P.J., and ROSS, ASCH, ROSENBERGER and ELLERIN, JJ.

ROSS, Justice.

The plaintiff, Mr. Ralph A. Faillace (Mr. Faillace), in this action for wrongful discharge, appeals from the dismissal of his amended complaint, which he brought against The Port Authority of New York and New Jersey (PA), alleging that he was wrongfully discharged.

In 1921, the PA was created, as a bi-state public authority, "by compact between ... States and approved by Congress as required by the United States Constitution (L.1921, ch. 154, § 1; N.J.S.A., § 32:1-1 et seq.; 42 U.S.Stat. 174; U.S. Const., art. I, § 10, subd. 3) ..." (Matter of Agesen v. Catherwood, 26 N.Y.2d 521, 524, 311 N.Y.S.2d 886, 260 N.E.2d 525 (1970)) The purpose of the PA is to develop public transportation, terminal, and other facilities of commerce within the legislatively defined Port District. Currently, as a result of the 1921 Compact and subsequently enacted bi-state legislation, the PA's facilities include four airports, two heliports, four interstate bridges, two interstate tunnels, the interstate Port Authority Trans-Hudson Railroad (PATH), two bus terminals, seven marine terminals, two truck terminals and the World Trade Center.

Mr. Faillace entered the employ of the PA in December 1967, when he was hired, as a Professional/Managerial employee, at the Middle Management Level B-7 of Real Estate Agent II, to work in the Real Estate Department. At the time he became a PA employee, Mr. Faillace was approximately thirty-five years of age, held a Bachelor of Business Administration Degree in Real Estate and a Master of Business Administration Degree in Finance, and had seventeen years of finance and real estate experience in private industry.

Thereafter, when the PA's Real Estate Department was abolished in 1974, Mr. Faillace was carried as an excess employee, until he was reassigned to another permanent position, as a Senior Property Representative, in the PA's Management Services Department. Subsequently, in 1979, Mr. Faillace's position in the Management Services Department was abolished, and, as a result, he was reassigned to a position, as a Senior Property Representative, B-7 level, in the Development & Rentals Division of the PA's World Trade Department. He held this authorized, budgeted, permanent position in the World Trade Department, from July 1979 to October 1980.

Our examination of the record indicates that, while Mr. Faillace was working in the World Trade Department, his PA supervisors, beginning in the Spring of 1980, and continually thereafter, advised him of their dissatisfaction with the manner in which he performed his duties. Some time in or about September 1980, these supervisors decided to implement the relevant PA procedures, pursuant to PA Instructions (PAI) 20-1.11, entitled "REMOVAL OF UNCLASSIFIED AND PROFESSIONAL AND MANAGERIAL EMPLOYEES", to terminate Mr. Faillace's employment, because of his unsatisfactory job performance.

After our review of the record and legal authority, we find that employment of individuals at the PA is governed by the procedures adopted by the PA's Board of Commissioners (Board) and their designees, since Article XIV of the 1921 Compact creating the PA states, in pertinent part, "the port authority ... may appoint such officers and employees as it may require for the performance of its duties, and shall fix and determine their qualifications and duties ..." (McK.Unconsol.Laws § 6415 ). Effective February 13, 1969, the PA Board approved an amendment to General Resolution 76, wherein they provided that the employment of Professional/Managerial employees, such as Mr. Faillace, could be terminated for any cause or reason. Applying the provisions of Article XIV of the 1921 Compact to PA General Resolution 76, we find that General Resolution 76 is a legislative act that does not confer any rights on Professional/Managerial employees, which are protected by the Contract Clause (Article I, § 10, clause 1) of the Constitution of the United States (Note: see in this connection Dodge v. Board of Education of the City of Chicago, et al., 302 U.S. 74, 58 S.Ct. 98, 82 L.Ed. 57 (1937); Cook v. City of Binghamton, 48 N.Y.2d 323, 330-331, 422 N.Y.S.2d 919, 398 N.E.2d 525 (1979); and, Spina v. Consolidated Police, etc., Pension Fund Com., 41 N.J. 391, 400, 197 A.2d 169 (1964)).

When in 1969, the PA Board amended General Resolution 76, the Board also directed the PA Executive Director to file procedures to effectuate the termination of the employment of Professional/Managerial employees. Those procedures, which were filed in 1969, were subsequently amended and incorporated in PAI 20-1.12 in 1970; and, thereafter, they were amended and incorporated in PAI 20-1.11, dated August 20, 1975.

PAI 20-1.11 provides, in pertinent part, that when a Professional/Managerial employee's Department Head sends a memorandum to the PA Executive Director, which recommends, based upon stated reasons, the termination of the employment of such employee, the Executive Director shall either reject that recommendation or forward it to the PA Personnel Director for processing. If the recommendation is sent to the Personnel Director, that person shall notify the employee in writing of the recommendation to remove him or her, including the reasons, and advise the employee that he or she may request, within fourteen days thereafter, an appearance before a Department Head, other than the Department Head, who made the recommendation. In the event that the employee requests an appearance before the independent Department Head, he or she may appear in person or by an authorized representative. At the proceeding before the independent Department Head, the basis of the recommended action will be explained, and the employee may personally or through an authorized representative, make a written or oral statement in response. Within ten days after such appearance, the independent Department Head shall submit a written report to the Executive Director, who shall then notify the employee in writing of his or her determination.

The PA's personnel manual, entitled: "Guide for Port Authority Personnel", has been examined by us, and we find that it does not in and of itself, confer any contract rights on employees to a specific type of hearing procedure, apart from that set forth supra, in PAI 20-1.11.

It is undisputed that Mr. Faillace's position of Senior Property Representative, which he held in the World Trade Department, was designated a Professional/Managerial position in the PA.

In October 1980 an agreement was negotiated between Mr. Faillace and representatives of the PA, which resulted in Mr. Faillace's supervisors ceasing their efforts to terminate him, pursuant to PAI 20-1.11, while he was given an opportunity to find a permanent position in a PA Department, other than the World Trade Department. The terms of this agreement are set forth in a memorandum, dated October 10, 1980, and Mr. Faillace signed it. Our examination of this signed memorandum indicates that Mr. Faillace, in exchange for receiving a six-month temporary assignment to the Regional Development Division of the Planning and Development Department of the PA, vacated his permanent position in the World Trade Department, waived his rights to an interview and hearing before discharge, under PAI 20-1.11, and promised to resign his employment with the PA, if he failed to obtain a permanent position within the PA in six months.

By the end of the six-month period, mentioned supra in the October 10, 1980 memorandum, Mr. Faillace had been unable to obtain permanent placement, either within or outside of the PA, and he did not submit his promised resignation from the PA. When this occurred, Mr. Faillace was advised by his PA supervisors that they would pursue their previously proposed recommendation to terminate him. However, again Mr. Faillace's PA supervisors ceased their efforts to terminate him, based upon another agreement negotiated between Mr. Faillace and them.

The terms of this second agreement are contained in a memorandum, dated May 1, 1981, and signed by Mr. Faillace. Our examination of this signed May memorandum indicates that Mr. Faillace, upon the basis of his being given another temporary assignment in the PA's Tunnels, Bridges and Terminals Department, submitted his unconditional and irrevocable resignation from the PA, which was to take effect February 19, 1982, if he was not successful in obtaining permanent employment in the PA by that date; and, in addition, Mr. Faillace once again specifically waived his rights under PAI 20-1.11. Furthermore, in this May memorandum, the PA agreed to make available to Mr. Faillace their outplacement services, if he desired to use same.

On January 20, 1982, as the termination date approached, Mr. Faillace sought to withdraw his previously submitted unconditional and irrevocable resignation, but this revocation was not accepted by the PA, and Mr. Faillace's employment with the PA was terminated on February 19, 1982, as provided in the May 1, 1981 memorandum, discussed supra.

Late in February 1982, by service of a summons and complaint, plaintiff Mr. Faillace commenced the instant action for wrongful discharge of an allegedly tenured employee against defendant PA. Thereafter, by leave of the Court, plaintiff served an amended complaint.

Plaintiff seeks in this amended complaint, which contains four causes of action, such relief as the setting aside of his letter of resignation,...