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. § 621 et seq.
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, § 510, 29 U. S. C. § 1140, ADEA and state law. On the count, the jury specifically found that petitioners "willfully" violated the statute. Under § 7(b) of the ADEA, 29 U. S. C. § 626(b), a "willful" violation gives rise to liquidated damages.
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:
We granted certiorari to decide two questions. 505 U.S. 1203 (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?
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., 828 F.2d 1202 (CA7 1987) (firing of older employee to save salary costs resulting 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
We long have distinguished between "disparate treatment" and "disparate impact" theories of employment discrimination.
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 otherwise 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. § 623(a)(1) (emphasis added). See Thurston, supra, at 120-125 (affirming ADEA
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 Constr. 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 and 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 concern that older workers were being deprived of employment on the basis of inaccurate and stigmatizing stereotypes.
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 § 5.03 (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. § 631(a), may have worked for a particular employer his entire career, 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
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 § 510 of ERISA, as the Court of Appeals rightly found in affirming judgment for respondent under that statute. See IngersollRand 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 framework 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
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. 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,
Because we remand for further proceedings, we also address the second question upon which certiorari was granted: the meaning of "willful" in § 7(b) of the ADEA, which provides for liquidated damages in the case of a "willful" violation.
In Thurston, we thoroughly analyzed § 7(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 § 7(b), which had derived from § 16(a) of the Fair Labor Standards Act of 1938 (FLSA), 52 Stat. 1069, as amended, 29 U. S. C. § 216(a), and determined that the accepted judicial interpretation of § 16(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. 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), an FLSA case, we reaffirmed the Thurston standard. The question in Richland Shoe was whether the limitations provision
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 § 7(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 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
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. § 623(f)(1), and exempts certain subject matters and persons, see, e. g., § 623(f)(2) (exemption for bona fide seniority systems and employee benefit plans); § 631(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.
The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.
Justice Kennedy, with whom The Chief Justice and Justice Thomas join, concurring.
I agree with the Court that the Court of Appeals placed improper reliance on respondent's evidence of pension interference and that the standard for determining willfulness announced in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985), applies to individual acts of age discrimination as
Briefs of amici curiae urging affirmance were filed for the American Association of Retired Persons by Steven S. Zaleznick and Cathy VentrellMonsees; and for the National Employment Lawyers Association by Paul H. Tobias.