Hazen Paper Co. v. Biggins,
507 U.S. 604 (1993)

Plaintiff was fired when he was 62 years old, just weeks before his pension was to vest. He filed a lawsuit in federal court. The case was tried to a jury, who rendered a verdict for the Plaintiff. The jury specifically found that Hazen Paper willfully violated the ADEA. The district court, however, granted Hazen’s motion for judgment notwithstanding the verdict in regards to the finding of willfulness. The First Circuit affirmed the ADEA judgment for the Plaintiff and reversed the district court’s judgment on willfulness.

The Supreme Court took the case to decide two questions, the first of which was whether an employer’s interference with the vesting of pension benefits violates the ADEA. On that issue the Court took pains to note that the ADEA only protects people based on their age. The Court held that, when the employer’s decision to terminate an employee is based on factors other than age, then the problems that the ADEA was designed to prevent disappear. This is true, said the Court, even if the motivating factor is correlated with age, as pension status typically is. The Court held that a decision to fire someone based on pension or compensation concerns is not discriminatory treatment on the basis of age and is thus not a violation of the ADEA. Such a termination decision may, however, be a violation of the Employee Retirement Income Security Act of 1974. Furthermore, the Court noted that its holding was limited to situations where the adverse employment decision was based on a concern that a pension based on years of service was about to vest. The holding does not apply to the situation where an employer fires an employee because of a pension that vests as a result of age. The latter of the two scenarios is yet to come before the Court, so the Court has not ruled on whether such a termination would violate the ADEA.

The Court then moved on to the second issue it sought to address, which was to clarify the meaning of the phrase "willful violation" of the ADEA. The Court held that the Trans World Airlines "knowledge or reckless disregard" standard for imposing liquidated damages applies not only to violations which are formal, facially discriminatory policies, such as in Thurston, but also to informal decisions based on an employee’s age. The Court expressly reaffirmed that the Thurston definition of willfulness applies to all disparate treatment cases under the ADEA. Once a willful violation has been shown, the employee need not additionally demonstrate that the employer’s conduct was outrageous, or provide direct evidence of the employer’s motivation, or prove that age was the predominant, rather than a determinative, factor in the employment decision.

The Supreme Court in Biggins reversed the First Circuit and remanded the case for proceedings consistent with its opinion.

- Back to Supreme Court Cases -