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                       SUPREME COURT OF THE UNITED STATES

                                    --------
                                   No. 91-1600
                                    --------

                    HAZEN PAPER COMPANY, ET AL., PETITIONERS
                              v. WALTER F. BIGGINS                              ___

                       ON WRIT OF CERTIORARI TO THE UNITED
                      STATES COURT OF APPEALS FOR THE FIRST
                                     CIRCUIT

                                [April 20, 1993]

  JUSTICE O'CONNOR delivered the opinion of the Court.

  In this case we clarify the standards for liability and liquidated damages
under the Age Discrimination in Employment Act of 1967 (ADEA), 81 Stat. 602, as
amended, 29 U. S. C. S621 et seq.                          _______
                                        I
  Petitioner Hazen Paper Company manufactures coated, laminated, and printed
paper and paperboard.  The company is owned and operated by two cousins,
petitioners Robert Hazen and Thomas N. Hazen.  The Hazens hired respondent
Walter F. Biggins as their technical director in 1977.  They fired him in 1986,
when he was 62 years old.
  Respondent brought suit against petitioners in the United States District
Court for the District of Massachusetts, alleging a violation of the ADEA.  He
claimed that age had been a determinative factor in petitioners' decision to
fire him.  Petitioners contested this claim, asserting instead that respondent
had been fired for doing business with competitors of Hazen Paper.  The case was
tried before a jury, which rendered a verdict for respondent on his ADEA claim
and also found violations of the Employee Retirement Income Security Act of 1974
(ERISA), 88 Stat. 895, S510, 29 U. S. C. S 1140, and state law.  On the ADEA
count, the jury specifically found that                                91-1600 - OPINION

2                          HAZEN PAPER CO. v. BIGGINS                                          ____

petitioners "willfully" violated the statute.  Under S7(b) of the ADEA, 29
U. S. C. S626(b), a "willful" violation gives rise to liquidated damages.
  Petitioners moved for judgment notwithstanding the verdict.  The District
Court granted the motion with respect to a state-law claim and the finding of
"willfulness" but otherwise denied it.  An appeal ensued.  953 F. 2d 1405 (CA1
1992).  The United States Court of Appeals for the First Circuit affirmed
judgment for respondent on both the ADEA and ERISA counts, and reversed judgment
notwithstanding the verdict for petitioners as to "willfulness."
  In affirming the judgments of liability, the Court of Appeals relied heavily
on the evidence that petitioners had fired respondent in order to prevent his
pension benefits from vesting.  That evidence, as construed most favorably to
respondent by the court, showed that the Hazen Paper pension plan had a 10-year
vesting period and that respondent would have reached the 10-year mark had he
worked "a few more weeks" after being fired.  Id., at 1411.  There was also                                              ___
testimony that petitioners had offered to retain respondent as a consultant to
Hazen Paper, in which capacity he would not have been entitled to receive
pension benefits.  Id., at 1412.  The Court of Appeals found this evidence of                   ___
pension interference to be sufficient for ERISA liability, id., at 1416, and                                                           ___
also gave it considerable emphasis in upholding ADEA liability.  After
summarizing all the testimony tending to show age discrimination, the court
stated:

     "Based on the foregoing evidence, the jury could reasonably have found that
   Thomas Hazen decided to fire [respondent] before his pension rights vested
   and used the confidentiality agreement [that petitioners had asked respondent
   to sign] as a means to that end.  The jury could also have reasonably found
   that age was inextricably intertwined with the decision to fire [respondent].
   If it were not for [respondent's] age,                                91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                          3                                          ____

   sixty-two, his pension rights would not have been within a hairbreadth of
   vesting.  [Respondent] was fifty-two years old when he was hired; his pension
   rights vested in ten years."  Id., at 1412.                                 ___

  As to the issue of "willfulness" under S7(b) of the ADEA, the Court of Appeals
adopted and applied the definition set out in Trans World Airlines, Inc. v.                                              __________________________
Thurston, 469 U. S. 111 (1985).  In Thurston, we held that the airline's________                            ________
facially discriminatory job-transfer policy was not a "willful" ADEA violation
because the airline neither "knew [nor] showed reckless disregard for the matter
of whether" the policy contravened the statute.  Id., at 128 (internal quotation                                                 ___
marks omitted).  The Court of Appeals found sufficient evidence to satisfy the
Thurston standard, and ordered that respondent be awarded liquidated damages________
equal to and in addition to the underlying damages of $419,454.38.  953 F. 2d,
at 1415-1416.
  We granted certiorari to decide two questions.  505 U. S. ___ (1992).  First,
does an employer's interference with the vesting of pension benefits violate the
ADEA?  Second, does the Thurston standard for liquidated damages apply to the                        ________
case where the predicate ADEA violation is not a formal, facially discriminatory
policy, as in Thurston, but rather an informal decision by the employer that was              ________
motivated by the employee's age?

                                       II
                                        A
  The courts of appeals repeatedly have faced the question whether an employer
violates the ADEA by acting on the basis of a factor, such as an employee's
pension status or seniority, that is empirically correlated with age.  Compare
White v. Westinghouse Electric Co., 862 F. 2d 56, 62 (CA3 1988) (firing of older_____    _________________________
employee to prevent vesting of pension benefits violates ADEA); Metz v. Transit                                                                ____    _______
Mix, Inc.,_________                                91-1600 - OPINION

4                          HAZEN PAPER CO. v. BIGGINS                                          ____

828 F. 2d 1202 (CA7 1987) (firing of older employee to save salary costs result-
ing from seniority violates ADEA) with Williams v. General Motors Corp., 656                                       ________    ____________________
F. 2d 120, 130, n. 17 (CA5 1981) ("[S]eniority and age discrimination are
unrelated. . . . We state without equivocation that the seniority a given
plaintiff has accumulated entitles him to no better or worse treatment in an age
discrimination suit."), cert. denied, 455 U. S. 943 (1982); EEOC v. Clay                                                            ____    ____
Printing Co., 955 F. 2d 936, 942 (CA4 1992) (emphasizing distinction between____________
employee's age and years of service).  We now clarify that there is no disparate
treatment under the ADEA when the factor motivating the employer is some feature
other than the employee's age.
  We long have distinguished between "disparate treatment" and "disparate
impact" theories of employment discrimination.

     "`Disparate treatment' . . . is 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 charac-
   teristics.]  Proof of discriminatory motive is critical, although it can in
   some situations be inferred from the mere fact of differences in
   treatment. . . .
     "[C]laims that stress `disparate impact' [by contrast] 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.  Proof of discriminatory motive . . . is not
   required under a disparate-impact theory."  Teamsters v. United States, 431                                               _________    _____________
   U. S. 324, 335, n. 15 (1977) (citation omitted) (construing Title VII of
   Civil Rights Act of 1964).

The disparate treatment theory is of course available under the ADEA, as the
language of that statute makes clear.  "It shall be unlawful for an employer
. . . to fail or refuse to hire or to discharge any individual or other-                                91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                          5                                          ____

wise discriminate against any individual with respect to his compensation,
terms, conditions, or privileges of employment, because of such individual's                                                ____________________________
age."  29 U. S. C. S623(a)(1) (emphasis added).  See Thurston, supra, at___                                                  ________  ______
120-125 (affirming ADEA liability under disparate treatment theory).  By
contrast, we have never decided whether a disparate impact theory of liability
is available under the ADEA, see Markham v. Geller, 451 U. S. 945 (1981)                                 _______    ______
(REHNQUIST, J., dissenting from denial of certiorari), and we need not do so
here.  Respondent claims only that he received disparate treatment.
  In a disparate treatment case, liability depends on whether the protected
trait (under the ADEA, age) actually motivated the employer's decision.  See,
e.g., United States Postal Service Bd. of Governors v. Aikens, 460 U. S. 711____   _  _____________________________________________    ______
(1983); Texas Dept. of Community Affairs v. Burdine, 450 U. S. 248, 252-256        ________________________________    _______
(1981); Furnco Construction Corp. v. Waters, 438 U. S. 567, 576-578 (1978).  The        _________________________    ______
employer may have relied upon a formal, facially discriminatory policy requiring
adverse treatment of employees with that trait.  See, e.g., Thurston, supra;                                                      ____                                                         _  _______________
Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 702, 704-718 (1978). __________________________________    _______
Or the employer may have been motivated by the protected trait on an ad hoc,
informal basis.  See, e.g., Anderson v. Bessemer City, 470 U. S. 564 (1985);                      ____                         _  ________    _____________
Teamsters, supra, at 334-343.  Whatever the employer's decisionmaking process, a_________________
disparate treatment claim cannot succeed unless the employee's protected trait
actually played a role in that process and had a determinative influence on the
outcome.
  Disparate treatment, thus defined, captures the essence of what Congress
sought to prohibit in the ADEA.  It is the very essence of age discrimination
for an older employee to be fired because the employer believes that
productivity and competence decline with old age.  As we explained in EEOC v.                                                                      ____
Wyoming, 460 U. S. 226 (1983), Congress' promulgation of the ADEA was prompted_______
by its                                91-1600 - OPINION

6                          HAZEN PAPER CO. v. BIGGINS                                          ____

concern that older workers were being deprived of employment on the basis of
inaccurate and stigmatizing stereotypes.

   "Although age discrimination rarely was based on the sort of animus
   motivating some other forms of discrimination, it was based in large part on
   stereotypes unsupported by objective fact . . . . Moreover, the available
   empirical evidence demonstrated that arbitrary age lines were in fact
   generally unfounded and that, as an overall matter, the performance of older
   workers was at least as good as that of younger workers."  Id., at 231.                                                              ___

Thus the ADEA commands that "employers are to evaluate [older] employees . . .
on their merits and not their age."  Western Air Lines, Inc. v. Criswell, 472                                     _______________________    ________
U. S. 400, 422 (1985).  The employer cannot rely on age as a proxy for an
employee's remaining characteristics, such as productivity, but must instead
focus on those factors directly.
  When the employer's decision is wholly motivated by factors other than age,                               __
the problem of inaccurate and stigmatizing stereotypes disappears.  This is true
even if the motivating factor is correlated with age, as pension status
typically is.  Pension plans typically provide that an employee's accrued
benefits will become nonforfeitable, or "vested," once the employee completes a
certain number of years of service with the employer.  See 1 J. Mamorsky,
Employee Benefits Law S5.03 (1992).  On average, an older employee has had more
years in the work force than a younger employee, and thus may well have
accumulated more years of service with a particular employer.  Yet an employee's
age is analytically distinct from his years of service.  An employee who is
younger than 40, and therefore outside the class of older workers as defined by
the ADEA, see 29 U. S. C. S631(a), may have worked for a particular employer
his entire career,                                91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                          7                                          ____

while an older worker may have been newly hired.  Because age and years of
service are analytically distinct, an employer can take account of one while
ignoring the other, and thus it is incorrect to say that a decision based on
years of service is necessarily "age-based."
   The instant case is illustrative.  Under the Hazen Paper pension plan, as
construed by the Court of Appeals, an employee's pension benefits vest after the
employee completes 10 years of service with the company.  Perhaps it is true
that older employees of Hazen Paper are more likely to be "close to vesting"
than younger employees.  Yet a decision by the company to fire an older employee
solely because he has nine-plus years of service and therefore is "close to
vesting" would not constitute discriminatory treatment on the basis of age.  The
prohibited stereotype ("Older employees are likely to be ___") would not have
figured in this decision, and the attendant stigma would not ensue.  The
decision would not be the result of an inaccurate and denigrating generalization
about age, but would rather represent an accurate judgment about the employee -                                         ________
that he indeed is "close to vesting."
  We do not mean to suggest that an employer lawfully could fire an employee in                                             ________
order to prevent his pension benefits from vesting.  Such conduct is actionable
under S510 of ERISA, as the Court of Appeals rightly found in affirming
judgment for respondent under that statute.  See Ingersoll-Rand Co. v.                                                 __________________
McClendon, 498 U. S. 133, 142-143 (1990).  But it would not, without more,_________
violate the ADEA.  That law requires the employer to ignore an employee's age
(absent a statutory exemption or defense); it does not specify further                                                               _______
characteristics that an employer must also ignore.  Although some language in
our prior decisions might be read to mean that an employer violates the ADEA
whenever its reason for firing an employee is improper in any respect, see                                                       ______________
McDonnell Douglas Corp. v. Green, 411 U. S. 792, 802 (1973) (creating proof_______________________    _____
frame-                                91-1600 - OPINION

8                          HAZEN PAPER CO. v. BIGGINS                                          ____

work applicable to ADEA) (employer must have "legitimate, nondiscriminatory
reason" for action against employee), this reading is obviously incorrect.  For
example, it cannot be true that an employer who fires an older black worker
because the worker is black thereby violates the ADEA.  The employee's race is
an improper reason, but it is improper under Title VII, not the ADEA.
 We do not preclude the possibility that an employer who targets employees with
a particular pension status on the assumption that these employees are likely to
be older thereby engages in age discrimination.  Pension status may be a proxy
for age, not in the sense that the ADEA makes the two factors equivalent, cf.
Metz, 828 F. 2d, at 1208 (using "proxy" to mean statutory equivalence), but in____
the sense that the employer may suppose a correlation between the two factors
and act accordingly.  Nor do we rule out the possibility of dual liability under
ERISA and the ADEA where the decision to fire the employee was motivated both by
the employee's age and by his pension status.  Finally, we do not consider the
special case where an employee is about to vest in pension benefits as a result
of his age, rather than years of service, see 1 Mamorsky, supra, at S5.02[2],       ___                                                ______
and the employer fires the employee in order to prevent vesting.  That case is
not presented here.  Our holding is simply that an employer does not violate the
ADEA just by interfering with an older employee's pension benefits that would
have vested by virtue of the employee's years of service.
  Besides the evidence of pension interference, the Court of Appeals cited some
additional evidentiary support for ADEA liability.  Although there was no direct
evidence of petitioners' motivation, except for two isolated comments by the
Hazens, the Court of Appeals did note the following indirect evidence:
Respondent was asked to sign a confidentiality agreement, even though no other
employee had been required to do so, and his replacement was a younger man who
was given a less onerous agreement.                                 91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                          9                                          ____

953 F. 2d, at 1411.  In the ordinary ADEA case, indirect evidence of this kind
may well suffice to support liability if the plaintiff also shows that the
employer's explanation for its decision - here, that respondent had been
disloyal to Hazen Paper by doing business with its competitors - is "`unworthy
of credence.'"  Aikens, 460 U. S., at 716 (quoting Burdine, 450 U. S., at 256).                 ______                             _______
But inferring age-motivation from the implausibility of the employer's
explanation may be problematic in cases where other unsavory motives, such as
pension interference, were present.  This issue is now before us in the Title
VII context, see Hicks v. St. Mary's Honor Center, 970 F. 2d 487 (CA8 1992),                 _____    _______________________
cert. granted, 506 U. S. ___ (1993), and we will not address it prematurely.  We
therefore remand the case for the Court of Appeals to reconsider whether the
jury had sufficient evidence to find an ADEA violation.

                                        B
  Because we remand for further proceedings, we also address the second question
upon which certiorari was granted: the meaning of "willful" in S7(b) of the
ADEA, which provides for liquidated damages in the case of a "willful"
violation.
  In Thurston, we thoroughly analyzed S7(b) and concluded that "a violation of     ________
the Act [would be] `willful' if the employer knew or showed reckless disregard
for the matter of whether its conduct was prohibited by the ADEA."  469 U. S.,
at 126 (internal quotation marks and ellipsis omitted).  We sifted through the
legislative history of S7(b), which had derived from S 16(a) of the Fair Labor
Standards Act (FLSA), 52 Stat. 1069, as amended, 29 U. S. C. S216(a), and
determined that the accepted judicial interpretation of S16(a) at the time of
the passage of the ADEA supported the "knowledge or reckless disregard"
standard.  See 469 U. S., at 126.  We found that this standard was consistent
with the meaning of "willful" in other criminal and civil statutes.  See id., at                                                                         ___
126-127.                                 91-1600 - OPINION

10                         HAZEN PAPER CO. v. BIGGINS                                          ____

Finally, we observed that Congress aimed to create a "two-tiered liability
scheme," under which some but not all ADEA violations would give rise to
liquidated damages.  We therefore rejected a broader definition of "willful"
providing for liquidated damages whenever the employer knew that the ADEA was
"in the picture."  See id., at 127-128.                       ___
  In McLaughlin v. Richland Shoe Co., 486 U. S. 128 (1988), a FLSA case, we     __________    _________________
reaffirmed the Thurston standard.  The question in Richland Shoe was whether the               ________                            _____________
limitations provision of the FLSA, creating a 3-year period for "willful"
violations, should be interpreted consistently with Thurston.  We answered that                                                    ________
question in the affirmative.

   "The word `willful' is widely used in the law, and, although it has not by
   any means been given a perfectly consistent interpretation, it is generally
   understood to refer to conduct that is not merely negligent.  The standard of
   willfulness that was adopted in Thurston - that the employer either knew or                                   ________
   showed reckless disregard for the matter of whether its conduct was
   prohibited by the statute - is surely a fair reading of the plain language of
   the Act."  486 U. S., at 133.

Once again we rejected the "in the picture standard" because it would "virtually
obliterat[e] any distinction between willful and nonwillful violations."  Id.,                                                                          ___
at 132-133.
  Surprisingly, the courts of appeals continue to be confused about the meaning
of the term "willful" in S7(b) of the ADEA.  A number of circuits have declined
to apply Thurston to what might be called an informal disparate treatment case -         ________
where age has entered into the employment decision on an ad hoc, informal basis
rather than through a formal policy.  At least one circuit refuses to impose
liquidated damages in such a case unless the employer's conduct was
"outrageous."  See, e.g., Lockhart                    ____                       _  ________                                91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                         11                                          ____

v. Westinghouse Credit Corp., 879 F. 2d 43, 57-58 (CA3 1989).  Another requires   _________________________
that the underlying evidence of liability be direct rather than circumstantial.
See, e.g., Neufeld v. Searle Laboratories, 884 F. 2d 335, 340 (CA8 1989).      ____        _  _______    ___________________
Still others have insisted that age be the "predominant" rather than simply a
determinative factor.  See, e.g., Spulak v. K Mart Corp., 894 F. 2d 1150, 1159                            ____                               _  ______    ____________
(CA10 1990); Schrand v. Federal Pacific Elec. Co., 851 F. 2d 152, 158 (CA6             _______    _________________________
1988).  The chief concern of these circuits has been that the application of
Thurston would defeat the two-tiered system of liability intended by Congress,________
because every employer that engages in informal age discrimination knows or
recklessly disregards the illegality of its conduct.
  We believe that this concern 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."  That definition must be applied here unless we overrule Thurston, or                                                                    ________
unless there is some inherent difference between this case and Thurston to cause                                                               ________
a shift in the meaning of the word "willful."
  As for the first possibility, petitioners have not persuaded us that Thurston                                                                       ________
was wrongly decided, let alone that we should depart from the rule of stare                                                                      _____
decisis.  The two-tiered liability principle was simply one interpretive 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.  It is not true that an employer who knowingly relies on age in
reaching its decision invariably commits a knowing or reckless violation of the
ADEA.  The ADEA is not an unqualified prohibition on the use of age in
employment decisions, but affords the employer a "bona fide occupational
qualification" defense, see 29 U. S. C. S623(f)(1), and exempts                                91-1600 - OPINION

12                         HAZEN PAPER CO. v. BIGGINS                                          ____

certain subject matters and persons, see, e.g., S 623(f)(2) (exemption for bona                                          ____                                             _
fide seniority systems and employee benefit plans); S631(c) (exemption for bona
fide executives and high policymakers).  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.  See Richland Shoe,                                                              _____________
supra, at 135, n. 13.  Indeed, in Thurston itself we upheld liability but______                            ________
reversed an award of liquidated damages because the employer "acted________
[nonrecklessly] and in good faith in attempting to determine whether [its] plan
would violate the ADEA."  469 U. S., at 129.
  Nor do we see how the instant case can be distinguished from Thurston,                                                               ________
assuming that petitioners did indeed fire respondent because of his age.  The
only distinction between Thurston and the case before us is the existence of                         ________
formal discrimination.  Age entered into the employment decision there through a
formal and publicized policy, and not as an undisclosed factor motivating the
employer on an ad hoc basis, which is what respondent alleges occurred here.
But surely an employer's reluctance to acknowledge its reliance on the forbidden
factor should not cut against imposing a penalty.  It would be a wholly circular                      _______
and self-defeating interpretation of the ADEA to hold that, in cases where an
employer more likely knows its conduct to be illegal, knowledge alone does not
suffice for liquidated damages.  We therefore reaffirm that the Thurston                                                                ________
definition of "willful" - that the employer either knew or showed reckless
disregard for the matter of whether its conduct was prohibited by the statute -
applies to all disparate treatment cases under the ADEA.  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.                                91-1600 - OPINION

                           HAZEN PAPER CO. v. BIGGINS                         13                                          ____

  The judgment of the Court of Appeals is vacated and the case is remanded for
further proceedings consistent with this opinion.
                                                                     So ordered.                                                                     ___________