Firing to Bar Pension May Not Be Age Bias, Court Says : Ruling: Worker must show that dismissal is not caused by other factors. A different law protects retirement benefits.
The Supreme Court made it harder Tuesday for workers to show that they have been victims of age bias, ruling that an employer who fires an older worker to avoid paying a pension does not necessarily violate the federal law against age discrimination.
To win damages for age bias, the worker must show that his age itself caused him to be dismissed, the court said, rather than some related factor such as his pension rights, seniority or high salary.
If a worker can show he was fired to save paying his pension, he can bring suit under a separate 1974 federal law that protects pension rights, the court said.
The decision reversed a $1.1-million jury verdict in favor of a 62-year-old Massachusetts man who was dismissed a few weeks before he became eligible for a pension. He was replaced by a 35-year-old.
A federal appeals court in Boston upheld the verdict on grounds that the dismissal demonstrated an age bias.
The high court disagreed. “Because age and years of service are analytically distinct . . . it is incorrect to say that a decision based on years of service is necessarily ‘age-based,’ ” Justice Sandra Day O’Connor wrote in the 9-0 ruling.
“For example, it cannot be true that an employer who fires an older black worker because the worker is black thereby violates the Age Discrimination in Employment Act of 1967,” she said, although such a firing would violate other federal civil rights laws.
In the case (Hazen Paper Co. vs. Walter Biggins, 91-1600), the jury awarded $565,000 in damages to the fired worker on grounds that he was a victim of age discrimination. In addition, because it concluded that the employer’s violation of the law was willful, it doubled the damages to $1.1 million.
The two owners of the paper company said they fired Biggins not because of his age or his pension but because he was helping his son set up a business to compete with them.
The justices sent the case back to the appeals court in Boston, giving the lower court a chance to see whether the record contains true evidence of age discrimination.
Attorneys for workers and employers all found something to like in the court’s decision.
Mona Zeiberg, an attorney for the U.S. Chamber of Commerce, praised the decision as “an important clarification of the law . . . that will greatly benefit employers.
“It makes clear that the (Age Discrimination in Employment Act) protects against discrimination based on age, not something that looks like age,” she said.
But Cathy Ventrell-Monsees, an attorney for the American Assn. of Retired Persons, praised the ruling and said that its language will help bias victims win double damages from employers.
In a second part of her opinion, O’Connor stressed that victims of age bias can win double damages if an employer knew or should have known that his or her actions violated the law against age discrimination. Some federal courts have refused to award the double damages authorized by the law except when the employer’s conduct was “outrageous.”
“Some of the conservative (lower) courts have gone too far and refused to award double damages in cases where employers knowingly violated the law,” Ventrell-Monsees said. “This law is 25 years old and you would think that employers know it’s out there.”
In another case, the court gave the newspaper industry an important tax victory, ruling that a paper may take a depreciation deduction for its subscribers, just as businesses are permitted to depreciate machinery or inventory.
On a 5-4 vote, the justices said that “paid subscribers” can be considered an asset because they are likely to remain steady customers of the business. The court’s opinion in the case (Newark Morning Ledger vs. United States, 91-1135), was written by Justice Harry A. Blackmun and joined by Justices John Paul Stevens, O’Connor, Anthony M. Kennedy and Clarence Thomas.
