Opinion ID: 741821
Heading Depth: 2
Heading Rank: 1

Heading: Willfulness of the ADEA Violation

Text: 11 In Hazen Paper Co. v. Biggins, 507 U.S. 604, 617, 113 S.Ct. 1701, 1709, 123 L.Ed.2d 338 (1993), the Supreme Court held that a willful violation of the ADEA would be shown where the defendant knew or showed reckless disregard for the matter of whether its conduct was prohibited. In so holding, the Court recognized the continuing vitality of the definition of willfulness adopted in TWA, Inc. v. Thurston, 469 U.S. 111, 126-27, 105 S.Ct. 613, 623-24, 83 L.Ed.2d 523 (1985). Thurston held that this interpretation of willful was consistent with the meaning derived from other criminal and civil statutes. Id.; see, e.g., United States v. Illinois Central R.R. Co., 303 U.S. 239, 242-43, 58 S.Ct. 533, 534-35, 82 L.Ed. 773 (1938) (holding that willfulness is to be defined as a disregard for the governing statute and an indifference to its requirements). 12 Pape argues that there has been no showing of willfulness in this matter, claiming that there is no proof that Brown's comments were uttered in the context of the decision to terminate Waters. Moreover, Pape contends that even if they were, those comments neither prove that Brown was aware of the ADEA nor support an inference that he knew of the potential applicability of the Act. 13 However, Pape's claims of ignorance are belied by the evidence in this case. After Brown terminated Waters, both he and Pape's personnel director, Lee Wood, appear to have made attempts to conceal evidence of any wrongdoing by offering pretextual reasons for the termination. Not only did they put forward two different sets of reasons for Waters' termination, but the EEOC presented evidence that called into question the veracity of both explanations. The jury was entitled to credit the EEOC's evidence, which supported a conclusion that the discrepant (and perhaps, incredible) responses proffered by Brown and Wood were unsuccessful attempts to mask a statutory violation. Indeed, this apparent subterfuge certainly suggests that both Brown and Wood were aware of Pape's potential liability for Waters' termination. 14 Moreover, in Cassino v. Reichhold Chems., Inc., 817 F.2d 1338, 1348 (9th Cir.1987), cert. denied, 484 U.S. 1047, 108 S.Ct. 785, 98 L.Ed.2d 870 (1988), we held that [w]illfulness may be shown by circumstantial evidence, including statistical evidence and discriminatory statements. The district court in this matter attempted to distinguish Cassino by suggesting that in that case there was evidence, in addition to age-related comments, from which an inference of knowledge or reckless disregard could be drawn. The Cassino holding, however, was not premised on the notion that discriminatory statements must be accompanied by other circumstantial evidence in order to support a finding of willfulness. Rather, we merely looked to whether the jury's finding of willfulness was supported by substantial evidence. Id. Like the discriminatory statements at issue in Cassino, the age-related comments in this matter not only were uttered by a decisionmaker, but also were made in the context of an attempt to displace Waters from his current job. A reasonable juror could conclude that Brown's statements to Hill demonstrated clearly that Brown considered Waters unfit for his current position because of his age, and that he attempted to facilitate his removal from his position on that basis. 15 It should be pointed out, however, that in holding that circumstantial evidence may be used to prove willfulness, the Cassino court cited Kelly v. American Standard, 640 F.2d 974, 981 (9th Cir.1981), where we held that willfulness was to be gauged by a knowing and voluntary standard, and that this voluntariness could be demonstrated by statistical evidence or discriminatory statements. The Kelly test did not require that the ADEA violator have knowledge of implications under the Act; nor did it require reckless disregard of the Act's provisions. Kelly's knowing and voluntary standard was, of course, overruled by Thurston. Nonetheless, Thurston does not address the question of whether circumstantial evidence properly may play a role in establishing recklessness. 16 The factors that the Court identified as relevant to an analysis of willfulness in Hazen Paper and Thurston support the use of circumstantial evidence. See Hazen Paper, 507 U.S. at 616, 113 S.Ct. at 1709 (If an employer incorrectly but in good faith and nonrecklessly believes that the statute permits a particular age-based decision, then liquidated damages should not be imposed.); Thurston, 469 U.S. at 129, 105 S.Ct. at 625 (The record makes clear that TWA officials acted reasonably and in good faith in attempting to determine whether their plans would violate the ADEA.); see also Baker v. Delta Air Lines, Inc., 6 F.3d 632, 644-45 (9th Cir.1993) (overturning the jury's finding of willfulness because Delta's reliance on legal advice as to compliance with the ADEA constituted good faith). Because the willful/nonwillful distinction rests on whether the action was undertaken in good faith, circumstantial evidence clearly is relevant to the jury's determination. Indeed, the circumstantial evidence of bad faith in this case provides strong support for the jury's verdict that Pape's actions were in fact willful. See EEOC v. Watergate at Landmark Condominium, 24 F.3d 635, 641 (4th Cir.1994) (holding that where age is shown to be an undisclosed factor motivating the employer, a willful finding is supported, and stating that the employee need not provide direct evidence of the employer's motivation) (citations omitted). 17 Moreover, the jury's verdict is not undermined simply because the same evidence supported its finding that Waters was terminated on the basis of age and its determination of willfulness. The degree of recklessness with which the ADEA violation was committed, and the underlying violation itself, may each be the subject of a separate and independent inquiry even when the same evidence is used. At least one court has held that the two-tiered scheme demands separate evidence: In Dreyer v. Arco Chem. Co., 801 F.2d 651, 657 (3d Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1348, 94 L.Ed.2d 519 (1987), the Third Circuit concluded that because of the need to seek a standard for willfulness that distinguishes between a violation, which is almost always intentional, and a willful violation, and to avoid basing an award of liquidated damages on evidence that ... merely duplicate[s] that needed for the compensatory damages, plaintiffs would be required to introduce additional evidence of outrageous conduct. Id. at 658. 18 This additional evidence test, however, was among a number of post-Thurston doctrines rejected in Hazen Paper. 507 U.S. at 617, 113 S.Ct. at 1709 (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.) Also singled out for criticism by the Hazen Paper Court was the test for willfulness advanced by the Eight Circuit in Neufeld v. Searle Labs., 884 F.2d 335, 340 (8th Cir.1989). The Neufeld court held that if there is direct evidence--more than just an inference from say, an arguably pretextual justification--of age-based animus, the trier of fact may properly find willfulness. Id. The Hazen Paper Court's rejection of the Neufeld model suggests that willfulness may be demonstrated even when the evidence of the underlying violation is merely circumstantial. To conclude that this does not, by extension, authorize the use of circumstantial evidence to prove willfulness, one must posit a situation in which a plaintiff relies upon circumstantial evidence to prove the underlying violation, but is somehow able to avail herself of direct evidence to prove willfulness. We have great difficulty conceiving of such a case. 19 We would also point out that in rejecting the Neufeld test, and the other variations on the willfulness inquiry adopted by post-Thurston courts, the Hazen Paper Court emphasized that it was not the issue of whether the challenged conduct could fit neatly within the two-tiered model that was to control the inquiry into whether liquidated damages were appropriate: We believe that [the concern of other circuits with preserving the two-tiered system of liability] is misplaced. The ADEA does not provide for liquidated damages 'where consistent with the principle of a two-tiered liability scheme.' It provides for liquidated damages where the violation was 'willful.'  507 U.S. at 616, 113 S.Ct. at 1710. See also Brown v. Stites Concrete, Inc., 994 F.2d 553, 560 (8th Cir.1993) (en banc) (The Supreme Court has clarified that the concern for ensuring a two-tiered liability scheme is 'misplaced' and that the focus should strictly be on whether the employer's actions were in willful violation of the ADEA as provided in the statute.). Indeed, while the analysis of whether discriminatory conduct was willful may be aided significantly by reliance upon the two-tiered scheme, compliance with that scheme should not be the starting point for making the willfulness determination: The two-tiered liability principle was simply one interpretative tool among several that we used in Thurston to decide what Congress meant by the word 'willful,' and in any event we continue to believe that the 'knowledge or reckless disregard' standard will create two tiers of liability across the range of ADEA cases. Hazen Paper, 507 U.S. at 616, 113 S.Ct. at 1710. Accordingly, it is not the degree of resemblance to the two-tiered model which is to serve as the first step in making the willfulness determination; rather, it is the question of recklessness--the resolution of which necessarily will give rise to a two-tiered inquiry--which should control. 20 Thus, we think that allowing plaintiffs to make a showing of willfulness using the same evidence that was used to establish the underlying ADEA violation will not eliminate the vitality of the two-tiered scheme, as the evidence in question would be put toward two different ends. The first point of inquiry would be whether or not the evidence at issue served to prove that the challenged action was taken for impermissible, age-related reasons, while the second would look to whether that evidence demonstrated that the employer knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA. Hazen Paper, 507 U.S. at 614, 113 S.Ct. at 1708. In many cases, the evidence may prove an impermissible age-related decision, but may not be indicative of willfulness. In this case, the jury found that the EEOC prevailed on both prongs. 21 We hold that there was sufficient evidence of willfulness to support the jury's verdict, and we reverse the district court's partial grant of judgment as a matter of law in favor of Pape and its conditional grant of a new trial.