Twice in the same week, Pan Am Railways has been slammed with the statutory max in Federal Rail Safety Act punitive damages: once from a federal jury expressing its outrage at Pan Am’s profoundly unsafe culture and again from a Judge whose excoriating decision describes that culture in damning detail.
The federal jury verdict came in the Jason Worcester case, described in this earlier post. Jason was terminated after reporting a hazardous safety condition. The district judge denied Pan Am’s summary judgment motion, and the trial was held in late June 2014. The trial shined a spotlight on Pan Am’s dark abusive culture, and the jury responded with a verdict awarding $150,000 in compensatory and $250,000 in punitive damages. With attorney fees into the six figures, the total cost to the Railroad will be over half a million.
After Jason Raye filed a FRSA complaint with OSHA, Pan Am used it to charge him with “providing false statements to a government agency” and subjected him to a disciplinary hearing. Raye filed another complaint based on FRSA subsection (a)(3)’s prohibition against retaliation for filing a FRSA complaint. OSHA ruled in Raye’s favor but Pan Am objected. After a trial, Administrative Law Judge Jonanthan A. Calianos issued a Decision and Order explaining why Pan Am’s culture mandates the award of maximum punitive damages.
Judge Calianos’ opinion in Jason Raye v. Pan Am Railways is a convenient primer on the standards for FRSA liability and damages. Here are some excerpts:
Burdens of Proof
“A preponderance of the evidence is the greater weight of the evidence, sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”
“The clear and convincing evidence standard is a higher burden than a preponderance of the evidence and the railroad must conclusively demonstrate that the thing to be proved is highly probable or reasonably certain”
Types of Evidence
“Direct evidence conclusively links the protected activity and the adverse action and does not rely upon inference”
“Circumstantial evidence may include:
–indications of pretext
–inconsistent application of a railroad’s policies
–a railroad’s shifting explanations for its actions
–antagonism or hostility toward an employee’s protected activity
–the falsity of a railroad’s explanation for the adverse action taken
–the railroad’s reasons are not worthy of credence
–a change in supervision’s attitude toward an employee after he or she engages in protected activity
“Circumstantial evidence must be weighed as a whole because a number of observations each of which supports a proposition only weakly can, when taken as a whole, provide strong support if all point in the same direction”
“If the protected activity and the adverse action are inextricably intertwined, there exists a presumptive inference of causation.”
“The protected activity and the adverse action are inextricably intertwined if the basis for the adverse action cannot be explained without discussing the protected activity.”
No medical testimony is required because “an employee’s credible testimony alone is sufficient to establish emotional distress.”
Evidence of emotional distress may include: “extreme stress, anxiety, sleeplessness, fatigue, loss of appetite, marital or family strain, loss of self esteem, depression, or nervous breakdown.”
“The severity of the adverse action should be considered in determining the amount of emotional damages to be awarded.”
“Punitive damages are appropriate for cases involving a railroad’s reckless or callous disregard of employee statutory rights, as well as for intentional violation of federal law.”
Factors to consider are “whether punitive damages are required to deter further violations of the statute and whether the illegal behavior reflected corporate policy.”
Factors to consider when determining the amount of punitive damages include “the sanctions imposed in other cases for comparable misconduct.”
Illustration of a Workplace Culture Mandating Maximum Punitive Damages
Here are excerpts from ALJ Calianos’ description of Pan Am Railways’ culture and why it mandates the maximum amount of punitive damages:
I find that Pan Am’s actions are an egregious, blatant, and willful act of retaliation. … The only rational explanation for bringing such baseless and serious charges against Raye following the filing of the FRSA complaint is that Pan Am utilized the process to intimidate and discourage protected activity, not only by Raye, but other employees … the fact that Raye was charged with such severe violations is sufficient alone to cause a serious chilling effect of dissuading employees from asserting their rights under the FRSA.
Pan Am fosters a workplace culture that discourages employees from reporting on the job injuries … When there is a reportable injury at Pan Am, 99% of the time formal charges are brought against the injured employee … No energy is expended and no investigation is conducted on what the railway may have done wrong when an injury occurs. The corporate mantra appears to be that if an injury occurs on the job, it must be the fault of the employee who was injured. The behavior of assigning blame to individual employees without a thorough examination of the underlying causes that lead to employee missteps is the exact type of behavior Congress was trying to prevent in enacting the FRSA.
So hats off to my colleagues Marc Wietzke (in Worcester) and Steve Fitzgerald (in Raye) for well-tried cases that advance the FRSA cause. The award of the $250,000 maximum in punitive damages is now routine, be it from federal juries or administrative law judges. Even in FRSA cases with minimal lost wages, railroads are looking at an economic cost in the half million dollar range by the time emotional distress, punitive damages, and attorney fees are added up. Here is a Summary of Rail Whistleblower Rights. For more information on the FRSA, go to the free Rail Whistleblower Library. For free automatic updates on FRSA matters, enter your email address in the Stay Connected box at this blog.