The Administrative Review Board has handed down an important punitive damages decision that also shows how to eliminate a railroad’s affirmative defense. In Jason Raye v. Pan Am Railways, Inc., the Railroad charged the employee with making false statements in a Federal Rail Safety Act complaint filed with OSHA. Although Raye was never actually disciplined and lost no wages, the ALJ awarded him the statutory maximum of $250,000 in punitive damages. Here are the highlights:

How To Eliminate a Railroad’s Affirmative Defense

The ARB stressed that once an employee shows his protected activity contributed in whole or in part to the adverse action,

to avoid liability the railroad must prove by clear and convincing evidence that it would have taken the same action absent the employee’s protected activity. . . .Clear and convincing evidence is evidence indicating that the thing to be proved is highly probable or reasonably certain.

This means that

The lack of credible explanations from the employer makes the ALJ’s finding of causation that much stronger and effectively eliminates the employer’s ability to establish an affirmative defense.

Thus, all an employee need do to eliminate the railroad’s defense is to expose the falsity of the railroad’s explanation or demonstrate the lack of credible evidence supporting it.

When Punitive Damages Are Warranted

The ARB follows the United States Supreme Court’s standard for when an employer’s conduct triggers a punitive damages award, namely

where there has been reckless or callous disregard for the plaintiff’s rights, as well as intentional violations of federal law. The inquiry into whether punitive damages are warranted focuses on the employer’s state of mind, and thus does not require that the employer’s misconduct be egregious or outrageous.

The “requisite state of mind” is confirmed when a railroad consciously disregards an employee’s FRSA protected rights or intentionally interferes with the exercise of those rights. And although egregious or outrageous conduct by a railroad is not necessary to establish the requisite state of mind, its presence certainly supports an inference of the requisite state of mind.

The Amount of Punitive Damages

The ARB notes the purpose of punitive damages is to punish employer conduct that “calls for deterrence and punishment.” The amount to accomplish that purpose is up to the Judge’s discretion:

Punitive damages are not awarded as of right upon a finding of the requisite state of mind; rather, the question of whether to award punitive damages is in the ALJ’s discretion. . . . An ALJ’s task after determining that an award of punitive damages would be appropriate is to determine the amount necessary for punishment and deterrence, which is “a discretionary moral judgment.”

Finally, the ARB stresses that the FRSA’s “statutory limit on punitive damage awards” eases “any reluctance to award punitive damages where minimal or no compensatory damages have been awarded.”

In other words, it is perfectly appropriate to award the maximum statutory limit of $250,000 even in cases with little or no economic damages. And that was the case in Raye: Jason Raye was not actually disciplined and had no lost wages, yet the ARB upheld an award of $250,000 in punitive damages to punish the Railroad’s conduct and “to deter similar conduct in the future.”

Here is the full Decision in Raye v. Pan Am Railways, Inc. For more information on the whistleblower rights of railroad workers, go to the free Rail Whistleblower Library.