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

Case Study

JSale.

GB41- Employment Law

Professor Shawn Pattinson

1 Do you agree with the court that age and years of service are sufficiently distinct to allow for terminations based on years of service and to find no violation of the ADEA where the terminations result in a greater proportion of older workers being fired?
The Age Discrimination in Employment Act (the ADEA) forbids discrimination based on age by protecting individuals over the age of forty from “arbitrary” age discrimination. Congress passed the Age Discrimination in Employment Act to “promote employment of older persons based on their ability rather than age (29. U.S.C. 621b. 1990). In Hazen Paper Co. v. Biggins, the Supreme Court of the United States resolved a split in the circuit courts of appeals and held that an employer does not violate the Act when the employer makes a decision wholly motivated by factors other than age. In Hazen Paper, the employer terminated an employee to prevent the employee from vesting in his pension. Under the employer’s plan, the pension vested based upon the employee’s years of service and was not directly related to age. The Supreme Court rejected the plaintiff’s argument, holding that “age and years of service are analytically distinct” and that it is “incorrect to say that a decision based on years of service is necessarily ‘age-based (Hazen Paper Co. v. Biggins. 507 U.S. 604 (1993). The Supreme Court concluded that there is no disparate treatment under the ADEA when the factor motivating the employer is some feature other than the employee’s age.
The researcher does not agree with the court’s decision because the employer’s defense is pretextual, the true reason for the action is an underlying motivation (age discrimination) rather than the employee breaking a confidentiality agreement. The court created an exclusionary argument by seeking to disconnect years of service with an age related decision.
Nevertheless, this case would not have presented itself if the plaintiff, being fully vested in his retirement, would have access to his retirement funds and retired with the money he earned towards said benefit. The court ignores the employer acted in bad faith by firing the employee and preventing his from accessing his earned retirement funds.

2. Aren’t workers close to vesting more likely to be older workers? And, if so, then do you believe that an employer can use the category “close to vesting” to avoid liability under the ADEA?
For the common citizen it may be hard to separate the passing of time from age, there is the common held notion times goes forward and as it does, everyone gets older. Nevertheless, if a worker starts working in his early 20’s and retires after 20 years of service is it the same as a worker that starts working for a company in his early 30s and retires 20 years later?
It seems the court sought to get age and getting older out of the equation by breaking the relationship between years of service and actual age to rule out age discrimination. Directly connecting vesting to aging would open the door to protected status for those that get older, making them untouchable after they reach a certain age, further placing an insurmountable burden on the employer to be able to prove the decision to fire an employee is not related to his age.
There are two theories of proof in discrimination cases, including those based on age: (1) disparate treatment discrimination and (2) disparate impact discrimination. Disparate treatment has been described as “the most easily understood type of discrimination.” The employer simply treats some people less favorably than others because of their race, color, religion or other protected aspects (Bennet & Hartman. 2007). Disparate impact discrimination is much harder to prove due to the statistical analysis needed to justify the effect of the decision on a given population.
In Meacham v. Knolls atomic power laboratory (no. 06-1505) 461 f. 3d 134., the U.S. Supreme Court made it harder for employers to disprove this type of discrimination claim -- which is sometimes referred to as "negligent" or "unintended" discrimination. As the Court explained, under the federal Age Discrimination in Employment Act (ADEA), it is the employer's burden to affirmatively prove that any statistical disparate impact against older workers is actually the result of a "reasonable factor" not tied to age. Therefore the issue employers must take into consideration before firing older workers is to look ahead at the outcome of such decision before making it final and calculate if there is a large number of any one group being affected as this may stand out as a strong signal the policy was discriminatory.
This may be of little consolation to Mr. Biggs since Hazen Paper met the burden of proof by presenting a reason to fire Mr. Biggs that although correlated with age, does not represent on itself age discrimination by being “close to vesting”. The researcher would argue the “close to vesting” is an aggravating circumstance but this would force the court to make a decision as to how far or close to vesting is a justifiable reason to fire an employee in contrast to how unjustifiable it is to deprive someone of their retirement money. Although most retirement moneys are set aside so the employees may enjoy the benefit. The underlying issue here is whether or not Hazen paper has properly funded the retirement fund to provide Mr. Biggs with his vested funds upon retirement. Therefore using Mr. Biggs alleged breach of company information as a mere pretext to let Mr. Briggs go rather than facing the fact their retirement fund is underfunded an unable to reach its obligations.

3. If an employer did terminate a group of individuals on the basis of their being close to vesting with the intention of getting rid of older workers, what type of evidence would the employees/plaintiffs be able to use to prove the unlawful intent?
ADEA Burden of Proof Process establishes three phases to bring a challenge forward:
Phase 1: Challengers must establish a prima facie case by providing evidence of age discrimination by showing that:
• They are 40 years old or older
• They were qualified for the position in question
• They were victims of an unfavorable employment decision (e.g., not hired, promoted, fired)
• The organization favored an individual who was considerably younger than the challenger
Phase 2: Company must articulate that a legitimate, nondiscriminatory reason exists for their decision
Phase 3: The challenger proves that the organization's reason for their rejection is a pretext for discrimination (Digest of EEOC Law. 2002).

The Supreme Court treats age discrimination claims under the ADEA differently in the layoff context than it treats those claims for discrimination concerning the characteristics protected under Title VII such as race, color, creed, sex or national origin. Title VII cases, employers can rebut a plaintiff’s “prima facie” case that a layoff imposed a disparate impact on those of a certain race, color, creed, sex or national origin by showing that the challenged employment action was supported by a “business necessity.” Likewise, plaintiffs in Title VII cases can respond to the employer’s rebuttal by disproving “business necessity” with a showing that another practice would have achieved the same result for the employer at a comparable cost without the disparate impact that had in fact occurred.
The rules are different under the ADEA, the statute that protects older workers. Under the ADEA, it does not matter if there is a less harmful and equally effective alternative, and a business practice will not be found to be discriminatory on the basis of age just because the company could have accomplished the same task at the same cost in a manner that might not have disparately impacted older workers. All that matters under the ADEA is whether the method used by the company to determine whom to layoff was somehow “reasonable.”
The Supreme Court has essentially ruled that layoff criteria that disparately impacts older workers is not necessarily unreasonable, even when less harmful and equally effective and efficient alternatives may exist.

References:

Digest of EEOC Law. 2002. Office of Federal Operations. Retrieved from http://www.eeoc.gov/federal/digest/xiii-1.cfm

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

Meacham v. Knolls atomic power laboratory (no. 06-1505) 461 f. 3d 134