Hazen Paper Co v Biggins Case

Case Overview

• Case: Hazen Paper Company v. Biggins 507 U.S. 604 (1993)

• Delivered by: Justice O'Connor

• Key Focus: Clarification of liability and liquidated damages under the Age Discrimination in Employment Act (ADEA) of 1967.

Background of the Case

• Hazen Paper Company: Manufactures coated, laminated, and printed paper; owned by cousins Robert and Thomas Hazen.

• Walter F. Biggins: Hired as technical director in 1977; fired in 1986 at age 62.

• Legal Action: Biggins alleged age discrimination under ADEA; Hazen claimed he was fired for business reasons.

• Trial Outcome: Jury found for Biggins on ADEA claim and violations of Employee Retirement Income Security Act (ERISA) and state law.

Disparate Treatment Under ADEA

• Legal Question: Does an employer violate the ADEA by acting based on a factor that correlates with age (e.g., pension status, seniority)?

  • Examples include:

    • White v. Westinghouse Electric Co. (firing to prevent pension vesting)

    • Metz v. Transit Mix, Inc. (firing to save salary costs through seniority)

    • Contrasting decision in Williams v. General Motors Corp. (seniority unrelated to age discrimination).

Clarification of Disparate Treatment

• Determinants of Liability:

  • The employer's motivation must involve the protected trait (age) to establish a disparate treatment claim under ADEA.

  • Key point: Disparate treatment exists if age was a direct factor in the employer's decision.

• Prohibition of Age Stereotypes:

  • ADEA seeks to eliminate employment decisions based on stereotypes about older workers (e.g., belief that productivity declines with age).

• Evaluation Criteria:

  • Employers must assess employees on merits rather than age; age cannot serve as a proxy for capability.

Distinction Between Age and Years of Service

• Distinct Characteristics:

  • Age is analytically separate from years of service.

  • An older employee with substantial years might not always correlate with the negative stereotypes associated with older age.

• Illustrative Case:

  • Hazen Paper's pension plan benefits vest after 10 years; firing an older employee just because they are 'close to vesting' does not equal age discrimination.

  • Such a decision would not rely on age-related stereotypes, but rather reflect accurate judgment regarding pension eligibility.

Legal Implications

• Pension Benefits vs. Age Discrimination:

  • Employers can consider one factor without implying discrimination on another.

  • Actions that interfere with pension benefits based on an employee's years of service do not inherently violate the ADEA.

• ERISA vs. ADEA:

  • While actions against pension benefits fall under ERISA, they do not automatically mean ADEA violations, as the two laws serve different purposes.

• Dual Liability:

  • An employer may simultaneously face liability under both ERISA and ADEA if discrimination is evident based on both attributes.

• Not Addressed: The ruling does not cover cases where firing an employee prevents their pension from vesting purely based on age.