GB541

UNIT 4 CASE STUDY

Hazen Paper Co. vs. Biggins

Travis Dorso 5/22/2012

Walter Biggins was fired at 62 years old, just weeks before the pension was to vest. Biggins filed a lawsuit in federal court. The case was done to a jury, who rendered a verdict in favor of Biggins. The jury specifically found that Hazen Paper willfully violated the ADEA (Age Discrimination in Employment Act). However, the district court granted Hazens motion for judgment notwithstanding the verdict in regards to the finding of willfulness. The First Circuit affirmed the ADEA judgment for Biggins and reversed the district courts judgment on willfulness.

The Supreme Court took the case to decide two questions. The first of which was whether an employers 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 employers decision to terminate an employee is based on factors other than age, then the problems that the ADEA was designed to prevent disappear. 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. In turn, 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 employees 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 employers conduct was outrageous, or provide direct evidence of the employers motivation, or prove that age was the predominant, rather than a determinative, factor in the employment decision. In the end, The Supreme Court in reversed the First Circuit and remand the case for proceedings consistent with its opinion. The interference with pension benefits as it being an age discrimination issue appears to be a common discussion among the courts who have failed to come to agreement to recognize seniority being associated with age. Pension eligibility, however is determined with age. Termination based purely on age is a definite violation of the ADEA. The Supreme Court remanded this case allowing the district court to properly determine

Hazens motivation for firing Biggins. Whats interesting is that Biggins did not file a claim based on a disparate impact claim but a treatment claim under the ADEA. Regardless, the case did split the circuit court because a case of disparate impact had never been decided before.

Disparate treatment seems to be the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, etc. Proof of discriminatory motive is critical (EEOC)

In contrast, disparate impact rests not on motive but rather on the consequence of a particular practice. Claims that stress a disparate impact involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. In addition, proof of discriminatory motive is not required (EEOC) Conclusion In ones opinion, it is believed that the courts have had several opportunities to resolve the issue of the availability of a disparate claim under the ADEA. As dramatic as it may sound it may take Congress to revisit the ADEA to resolve the conflict by amending the statute to address the issue and dissolve the debate over the two theories within the ADEA.

REFERENCES

Bennett-Alexander, D. & Hartman, L. (2009). Employment law for business, 6th edition. New York, NY: McGraw-Hill/Irwin of McGraw-Hill Companies. http://www.eeoc.gov/laws/statutes/adea.cfm