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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.
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