Pan Am Railways, Inc. v. United States Department of Labor
855 F.3d 29
| 1st Cir. | 2017Background
- Jason Raye, a Pan Am train conductor, reported a tripping hazard (pile of railroad ties) and later sprained his ankle stepping onto those ties; he missed a day of work which triggered an FRA-reportable injury.
- Pan Am held an initial disciplinary hearing and issued a formal reprimand for a safety-rule violation (failure to assure firm footing).
- Raye’s attorney filed an OSHA FRSA complaint alleging retaliation; the typed complaint stated Raye "fell hard to the ground," which differed from Raye’s earlier testimony that he had caught himself and sat down.
- Pan Am, after receiving the OSHA complaint, initiated a second disciplinary proceeding charging Raye with dishonesty and insubordination (threatening termination) without first asking Raye about the perceived discrepancy.
- OSHA found Pan Am unlawfully retaliated by bringing the second charges; an ALJ later, after a de novo hearing, found Raye’s protected activity was a contributing factor, rejected Pan Am’s clear-and-convincing affirmative defense, awarded $10,000 emotional-distress damages and $250,000 punitive damages (statutory maximum). The ARB affirmed; Pan Am’s petition for review was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pan Am proved by clear and convincing evidence it would have initiated the second disciplinary action absent Raye's OSHA complaint | Raye: the second charges were retaliatory and not justified by the alleged discrepancy | Pan Am: the discrepancy between accounts justified charges of dishonesty and an aggressive response even absent protected activity | Court: substantial evidence supported ALJ that Pan Am failed to meet its clear-and-convincing burden; comparator evidence was insufficient and excluded exhibits were harmless |
| Whether exclusion of certain comparator exhibits was an abuse of discretion | Raye: exclusion appropriate because exhibits lacked context and probative value | Pan Am: ALJ improperly excluded business/public records that would show consistent discipline for dishonesty | Court: No abuse; ALJ properly excluded for low probative value and any error was harmless |
| Whether the discrepancy in accounts alone satisfied Pan Am's burden | Raye: the discrepancy was overstated and Pan Am did not investigate informally before charging him | Pan Am: the accounts were irreconcilable, providing non-retaliatory motive | Held: ALJ reasonably discredited Pan Am’s explanation; mere discrepancy insufficient without credible proof that same action would have been taken |
| Whether $250,000 punitive damages were supported or excessive | Raye: punitive damages appropriate to punish/deter Pan Am’s culture of intimidation | Pan Am: award excessive and unsupported by record | Held: punitive damages warranted; ALJ’s statutory-maximum award not an abuse of discretion given evidence of willful retaliation and corporate conduct aimed at intimidating reporting employees |
Key Cases Cited
- Smith v. Wade, 461 U.S. 30 (punitive damages aim to punish and deter; standard for awarding punitive damages)
- Worcester v. Springfield Terminal Ry. Co., 827 F.3d 179 (First Circuit applying Smith standard in FRSA context)
- BNSF Ry. Co. v. U.S. Dep't of Labor, 816 F.3d 628 (Tenth Circuit applying Smith standard to FRSA whistleblower claims)
- Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424 (abuse-of-discretion review of punitive-damage sizing by appellate courts)
- R & B Transp., LLC v. U.S. Dep't of Labor, Admin. Review Bd., 618 F.3d 37 (standard of review for ALJ/ARB factual findings)
- Bath Iron Works Corp. v. U.S. Dep't of Labor, 336 F.3d 51 (deference to ALJ credibility and inference-drawing)