BNSF Railway Co. v. United States Department of Labor ( 2016 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS March 7, 2016
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
BNSF RAILWAY COMPANY,
Petitioner,
v. No. 14-9602
UNITED STATES DEPARTMENT OF
LABOR, ADMINISTRATIVE REVIEW
BOARD,
Respondent.
_________________________
CHRISTOPHER CAIN,
Intervenor.
_________________________________
Petition for review from an Order of the
Department of Labor (except OSHA)
(LABR No. 13-006)
_________________________________
Stephen F. Fink, Thompson & Knight, Dallas, Texas (Bryan Neal; Micah R. Prude,
Thompson & Knight, LLP, Dallas, Texas, on the briefs), for Petitioner.
Sarah J. Starrett, Attorney (M. Patricia Smith, Solicitor of Labor, Jennifer S. Brand,
Associate Solicitor, William C. Lesser, Deputy Associate Solicitor, and Megan E.
Guenther, Counsel for Whistleblower Programs, with her on the brief), U. S. Department
of Labor, Washington, D.C., for Respondent.
Newton G. McCoy (Robert J. Friedman and C. Marshall Friedman, C. Marshall
Friedman, P.C., Saint Louis, Missouri, with him on the brief), St. Louis, Missouri, for
Intervenor.
_________________________________
Before KELLY, LUCERO, and PHILLIPS, Circuit Judges.
_________________________________
PHILLIPS, Circuit Judge.
_________________________________
BNSF Railway petitions for review of the Administrative Review Board’s (the
Board) decisions (1) affirming an Administrative Law Judge’s (ALJ) finding that
BNSF violated the Federal Railroad Safety Act (FRSA or the Act), 49 U.S.C.
§ 20109, when it fired BNSF employee Christopher Cain, and (2) the ALJ’s imposing
punitive damages for the violation. Exercising jurisdiction under 49 U.S.C.
§ 20109(d)(4) and § 42121(b)(4)(A), we deny the petition in part, grant it in part, and
remand to the Board for further proceedings.
BACKGROUND
In February 2006, BNSF hired Christopher Cain as a sheet-metal worker. He
worked primarily at BNSF’s Argentine Rail Yard in Kansas City, Kansas, but also
worked regularly at the Murray Rail Yard in Kansas City, Missouri. Cain drove
between the two rail yards in a BNSF-provided pickup truck about “4 days a week
for many months.” R. vol. I at 814. Paul Schakel, the Facility Supervisor, was Cain’s
direct foreman. Schakel reported to John Reppond, a general foreman, and Reppond
reported to Dennis Bossolono, the shop superintendent of the two rail yards.
In early January 2010, Cain felt chest pains and sought treatment at an
emergency room. Cain had a medical history of lung, chest, and respiratory problems.
2
A few days later he visited a doctor, who prescribed pain medication for his chest
pain.1
On January 27, 2010, when Cain was driving the BNSF pickup truck back to
the Argentine yard from the Murray yard, he rear-ended a produce truck stopped at a
red light. He later explained on scene to the investigating police officer that “his
brakes failed.” Id. At the scene, Cain wrote a brief account of the accident. Cain said
that he had stopped at a four-way intersection before driving toward the produce
truck, which was stopped at a red light. Cain said that as he approached the stopped
truck he pushed his brake pedal, which “didn’t feel [r]ight.” Id. at 756. Faced with
this problem, Cain said he swerved but still hit the back of the produce truck. Cain
was wearing his seat belt. Because the accident totaled the BNSF truck, another
BNSF employee got Cain and drove him back to the Argentine yard. The police
officer investigating the accident did not issue Cain a citation.
After arriving back at the Argentine yard that day, Cain filled out, signed, and
filed BNSF’s Employee Personal Injury/Occupational Illness Report (Report),
identifying as his injuries a skinned knuckle and a bruised knee. Cain never sought
medical treatment for those injuries. So that it can comply with its requirements
under the Act, BNSF requires its injured employees to complete this report and to
notify their supervisors of any treatment received for work-related injuries. As stated
1
Cain testified before the ALJ that he suffered a “chest wall strain” while
loading cows in a trailer. R. vol. I at 214. But Cain admitted that he “never talked to
anybody at work” about that incident. Id. at 204. The doctors Cain saw before the
accident told him that the chest-wall strain could have been from coughing or some
other illness.
3
in the Report, BNSF also requires that employees “promptly notify [their] supervisor
. . . if [the employees] experience any complications resulting from [the]
injury/illness.” Id. at 369.
During BNSF’s investigation, Cain claimed that he had been in shock when he
filled out the Report and had no memory of doing so. In support, Cain pointed to his
“shaky handwriting and one-word answers.” Id. at 815. The day after the accident,
Cain e-mailed supervisor Reppond to tell Reppond that Cain’s finger and knee were
fine, but that Cain would miss work that day because he had slept poorly and was
sore from coughing. Cain missed work the following day too, telling Reppond that he
was still coughing. Cain says that his chest pains worsened after the accident.
On February 17, 2010, Cain sought medical treatment at Dr. Scott Teeter’s
office where a nurse practitioner, Donnette Streeter, diagnosed a rib fracture and
excess fluid surrounding his lungs. In a medical report filed the next day, the nurse
practitioner described that the bruising on Cain’s chest was “probably from his
seatbelt.” Id. at 774. Although the nurse practitioner told Cain this, Cain testified that
he “wanted to know . . . what exactly was going on” before filing an updated Report
that listed possibly more significant injuries. Id. at 155. That same day, Cain called
Reppond to tell him that Cain needed the next two work days off to have excess fluid
drained from Cain’s lungs. Reppond asked Cain if this medical condition related to
the accident and noted later that “Cain was adamant that this had nothing to do with
his on duty automobile accident.” Id. at 391. On February 22, 2010, Cain completed a
“Medical Status Form,” where he wrote that he was going to have (and did have)
4
minor lung surgery the next day. Immediately upon Cain’s return to work after this
medical treatment, BNSF assigned him to work in the diesel service facility, which
Cain described as the “dirtiest, smokiest[, most] hideous place on the yard.” Id. at
164.
On February 23, 2010, BNSF notified Cain that it was investigating whether
he had violated its rules by possibly driving poorly and causing the truck accident. In
particular, it investigated whether Cain had violated BNSF’s Mechanical Safety Rule
S-28.1.1: Maintaining a Safe Course (“In case of doubt or uncertainty, take the safe
course.”); Rule S-28.1.2: Alert and Attentive (“Employees must be careful to prevent
injuring themselves or others. They must be alert and attentive when performing their
duties and plan their work to avoid injury.”); and Rule S-28.6: Conduct (“Employees
must not be: (1) [c]areless of the safety of themselves or others, (2) [n]egligent, (3)
[i]nsubordinate, (4) [d]ishonest, (5) [i]mmoral, (6) [q]uarrelsome, or (7)
[d]iscourteous.”). R. vol. I at 555–56. BNSF advised Cain that he needed to attend a
hearing on this matter set for March 10, 2010. Cain and BNSF twice agreed to
postpone the hearing, ultimately until May 18, 2010.
On April 8, 2010, Cain saw Dr. Shantikumar Gandhi, who told Cain that the
truck collision had caused his chest and lung injuries. Later that day, Cain filed an
updated Report with BNSF about his January accident. As part of his doing so, he
encountered supervisors Reppond and Schakel, who discouraged him from filing the
updated Report. Cain later testified that Reppond told him that if he filed the updated
Report “this wasn’t going to go well for [you].” Id. at 902. Cain also testified that
5
Schakel urged him not to file the report, saying that doing so would hurt managers
and supervisors because BNSF would have to report the accident and injuries to the
Federal Railroad Administration (FRA).2 See 49 C.F.R. §§ 225.1, 225.19 (requiring
railroads to report any work-related accidents that result in medical treatment or
significant injury). Despite the opposition, Cain still filed the updated Report,
recounting his previous medical appointments and identifying three additional
injuries caused by the accident: a “Broken Rib [due] to Seat Belt Hitting Chest & No
Air Bag,” bleeding in the pleural cavity, and a collapsed lung. R. vol. I at 403.
On April 30, 2010, BNSF notified Cain that it also had begun investigating
whether he had violated company rules by the late reporting of his injuries and
medical treatment arising from the truck accident. On May 13, 2010, Cain attended
BNSF’s investigative meeting on this issue. On May 18, 2010, Cain attended BNSF’s
investigative meeting on the issues connected with his driving conduct leading up to
the truck accident.
On June 2, 2010, BNSF issued a written decision suspending Cain for 30 days
for violating its rules associated with safely driving its automobiles. In addition,
BNSF placed Cain on probation for three years, retroactive to the date of the
2
The ALJ fully credited Cain’s testimony about Reppond’s and Schakel’s
discouraging Cain from filing the updated Report. The Board accepted the ALJ’s
crediting Cain’s testimony about the supervisors’ statements and noted that BNSF did
not provide contrary evidence. BNSF does not dispute that the supervisors made the
statements, but it contends that the comments were “isolated and innocuous.” Pet’r’s
Opening Br. at 32.
6
accident, January 27, 2010. BNSF’s written decision noted that “[a]ny rules violation
during this probation period could result in further disciplinary action.” Id. at 563.
Only six days later, on June 8, 2010, BNSF terminated Cain’s employment for
Cain’s “fail[ing] to report to the proper manager that [he] had received medical
treatment related to [his] vehicle accident on January 27, 2010.” Id. at 565. As Cain
understood it, BNSF was basing his termination on his “not filing an injury report in
a timely manner.” Id. at 165. During his deposition, Reppond said that BNSF
dismissed Cain “for an accumulation of discipline events per our . . . guidelines.” Id.
at 799. Similarly, Bossolono stated that BNSF fired Cain “for accumulation of
discipline events with the latest one being failure to report that he had received
medical treatment for an on-duty injury.” Id. at 973. The ALJ found that “the
termination was for violation of probation, which had been applied retroactively to
the [accident].” Id. at 1122. BNSF objected to this finding before the Board but did
not argue why the ALJ erred in making that finding. BNSF does not challenge the
ALJ’s finding in the petition for review.
In November 2010, after Cain’s union unsuccessfully sought back wages under
the collective-bargaining agreement, Cain filed a complaint under FRSA with the
Occupational Safety and Health Administration (OSHA). In December 2011, an
OSHA regional administrator denied Cain’s claims under 49 U.S.C. § 20109. The
administrator concluded that Cain had not shown a prima facie case of retaliation
7
under FRSA.3 Specifically, the administrator concluded that even if Cain had
engaged in protected activity by filing the April 8 updated Report, that activity had
not been a contributing factor in BNSF’s firing Cain. The administrator rested this
conclusion on his view that BNSF had proffered legitimate, non-retaliatory reasons
for firing Cain.
Cain objected to the OSHA administrator’s findings. On review, an ALJ
concluded that Cain had demonstrated that BNSF had violated the Act, entitling him
to back wages.4 In reaching this result, the ALJ first accepted the parties’ stipulation
that Cain had engaged in a protected activity by filing a report with BNSF on the day
of the accident. From there, the ALJ found that, “once [Cain engaged] in protected
activity, [he] remain[ed] in status as long as subsequent events reasonably relate[d] to
the initial protected activity.” R. vol. I at 1118. Accordingly, the ALJ concluded that
Cain had engaged in protected activity by filing the April 8 updated Report.
The ALJ then turned to whether Cain’s protected activity had been a
“contributing factor” in BNSF’s decision to fire him. The ALJ concluded that Cain’s
3
The Act requires a plaintiff to “make[] a prima facie showing that any
behavior described [as a protected activity] was a contributing factor in the
unfavorable personnel action alleged in the complaint.” 49 U.S.C.
§ 42121(b)(2)(B)(i).
4
The ALJ addressed both Cain’s suspension and termination, finding that
BNSF “did not meet its burden to prove that but for the protected activity it would
have suspended [Cain].” R. vol. I at 1122. The Board reversed the ALJ’s suspension
conclusion, determining that BNSF established by clear and convincing evidence that
it would have suspended Cain for the accident even if Cain had not engaged in any
protected activity. Cain has not petitioned us to review the Board’s suspension
decision.
8
filing the updated Report was indeed a contributing factor in Cain’s firing “[b]ased
upon the common nexus of the accident in January and the sequence[] of events
surrounding [BNSF’s] investigation.” Id. at 1119. In addition, the ALJ concluded that
BNSF had retaliated against Cain for filing the updated Report by transferring Cain
to the diesel service facility.
The ALJ then considered whether BNSF could show, by clear and convincing
evidence, that it would have fired Cain even if he had not filed the updated Report.
See 49 U.S.C. § 42121(b)(2)(B)(ii). The ALJ concluded that BNSF had not met its
burden. The ALJ found that BNSF had not shown that Cain knew or should have
known before his filing the updated Report that the accident had caused his injuries
or aggravated any preexisting conditions. The ALJ also found that BNSF had offered
shifting explanations for terminating Cain’s employment.
With liability established, the ALJ turned to remedies. The ALJ awarded Cain
$10,511.05 in back wages (which the Board later reversed based on the parties’
stipulating that there were $5,780.52 in lost wages) and $1 in compensatory, nominal
damages “for pain and suffering,” despite Cain’s providing no evidence of pain and
suffering or of medical bills. R. vol. I at 1129. Next, the ALJ noted that the Act
allowed punitive damages up to a $250,000 cap. In considering the amount, if any, of
punitive damages to award, the ALJ first recited the Supreme Court’s three punitive-
damages guideposts: (1) “the degree of . . . reprehensibility or culpability” of the
defendant’s conduct, (2) “the relationship between the penalty and the harm to the
victim” that the defendant caused, and (3) the sanctions other courts imposed for
9
comparable misconduct. Id. (citing Cooper Indus., Inc. v. Leatherman Tool Grp.,
Inc., 523 U.S. 424, 434–35 (2001)); see State Farm Mut. Auto Ins. Co. v. Campbell,
538 U.S. 408, 418 (2003) (instructing courts to review punitive damages using the
three guideposts).
Addressing the reprehensibility of BNSF’s conduct, the ALJ found that
“several of [BNSF’s] management employees conspired to defeat [Cain’s] right to
submit a medical claim and deprive him of his job” and concluded that “the
assignment to the worst place in the yard [the diesel service facility] was wanton and
willful and an equivalent to an intentional tort.” R. vol. I at 1130. The ALJ also
considered cases with what it viewed as similar misconduct and concluded that “the
conspiracy to deny [Cain] his right to pursue his medical claim is as obnoxious” as
the behavior punished in those cases. Id. at 1131. For instance, the ALJ referenced a
case in which another ALJ had awarded $250,000 in punitive damages based on an
employer’s failing to disclose the exonerating results of an internal investigation
about a complainant whom the employer had transferred to a less desirable career
field and had subjected to a hostile work environment.5
BNSF appealed the ALJ’s decision to the Board. The Board agreed with the
ALJ that Cain had established a prima facie case of discrimination under 49 U.S.C.
§ 42121(b)(2)(B)(i).6 Specifically, the Board determined that Cain had shown that his
5
We do not see where in his order the ALJ applied the second guidepost.
6
The Board rejected BNSF’s argument that Cain had not engaged in protected
activity when he filed the updated Report. The Board concluded that substantial
10
filing the updated Report had been a “contributing factor” in his termination. In
particular, it concluded that Cain could satisfy his contributing-factor burden by
showing that his updated Report, “‘alone or in combination with other factors,’ tends
to affect in any way the employer’s decision or the adverse action taken.” R. vol. II at
1747 (quoting Henderson v. Wheeling & Lake Erie Ry., No. 11-013, 2012 WL
5818126, at *6 (Admin. Review Bd. Oct. 26, 2012)). Because the Board determined
that BNSF’s stated reason for terminating Cain—his failure to file a timely report—
“was directly linked to the amended injury report filed on April 8,” it concluded that
Cain’s report had been a contributing factor to BNSF’s decision to terminate him. Id.
Advancing to the next step set out in the statutory framework, the Board
agreed with the ALJ that BNSF had not met its burden to show by clear and
convincing evidence that it would have fired Cain absent his filing the updated
Report. See 49 U.S.C. §§ 20109(d)(2)(A)(i), 42121(b)(2)(B)(ii). In fact, the Board
found the opposite, noting that BNSF did not even allege that it “would have
terminated Cain’s employment absent his filing the report on April 8, 2010 . . . .” R.
vol. II at 1750. In addition, the Board noted that the “violation” of the retroactive
probationary term BNSF imposed as part of Cain’s suspension six days earlier
“would not have occurred in the absence of the April 8 report and BNSF does not
evidence supported the ALJ’s finding, interpreting the finding to mean that Cain’s
initial report and updated Report were “inextricably intertwined.” R. vol. II at 1746
n.8. BNSF does not challenge the Board’s protected-activity conclusion in its petition
for review.
11
offer an alternative reason that is not connected to the April 8 report for Cain’s
dismissal.” Id.
Despite finding BNSF in violation of the Act, the Board halved the punitive-
damages award to $125,000. In doing so, it first rejected BNSF’s argument—and the
ALJ’s approach—that the State Farm guideposts controlled the Board’s consideration
of punitive damages. Instead, the Board concluded that Congress had removed any
need for the guideposts analysis by authorizing punitive damages capped at
$250,000. But the Board agreed in part with BNSF that the ALJ erred in imposing the
maximum-available punitive-damages award. Although the Board agreed with the
ALJ’s conspiracy finding (noting that “a number of employees were involved with
the decision to retaliate against [Cain]”), the Board concluded that the ALJ erred in
awarding punitive damages for Cain’s reassignment to the diesel service facility. Id.
at 1752–53. The Board noted that Cain had never even argued that this job
assignment amounted to an adverse employment action. Because the “ALJ devoted
half of his summary analysis to his determination that BNSF must pay $250,000 in
punitive damages,” the Board reduced the punitive-damages award to $125,000. Id.
at 1753. BNSF timely filed a petition for review. See 49 U.S.C. § 20109(d)(4).
DISCUSSION
I. Standard of Review
We review the Administrative Review Board’s decisions under the
Administrative Procedure Act, 5 U.S.C. § 706. See 49 U.S.C. § 20109(d)(4); Hall v.
U.S. Dep’t of Labor, 476 F.3d 847, 850 (10th Cir. 2007). A “reviewing court shall
12
. . . hold unlawful and set aside agency action, findings, and conclusions found to
be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law” or “unsupported by substantial evidence.” 5 U.S.C. § 706. In reviewing
under the arbitrary-and-capricious standard, “we must engage in a substantial
inquiry.” Andalex Res., Inc. v. Mine Safety & Health Admin., 792 F.3d 1252, 1257
(10th Cir. 2015) (quotation marks omitted). “Yet our scope of review is narrow.” Id.
We must decide “whether the agency examined the relevant data and articulated a
rational connection between the facts found and the decision made.” Id. (quoting
Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1574 (10th Cir. 1994)).
To satisfy the substantial-evidence standard, an agency need rely only on
“such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.” Lax v. Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007) (quoting Hackett v.
Barnhart, 395 F.3d 1168, 1172 (10th Cir. 2005)). The standard “requires more than a
scintilla, but less than a preponderance.” Id. “[W]e ‘neither reweigh the evidence nor
substitute our judgment for that of the agency.’” Branum v. Barnhart, 385 F.3d 1268,
1270 (10th Cir. 2004) (quoting Casias v. Sec’y of Health & Human Servs., 933 F.2d
799, 800 (10th Cir. 1991)).
Ultimately, we review de novo the Board’s legal determinations, and we defer
to the ARB’s reasonable construction of applicable statutes. Trimmer v. U.S. Dep’t of
Labor, 174 F.3d 1098, 1102 (10th Cir. 1999). Our review is “very deferential to the
agency.” Ron Peterson Firearms, LLC v. Jones, 760 F.3d 1147, 1161 (10th Cir.
2014) (quoting Hillsdale Envtl. Loss Prevention, Inc. v. U.S. Army Corps of Eng’rs,
13
702 F.3d 1156, 1165 (10th Cir. 2012)). Further, “[a] presumption of validity attaches
to the agency action and the burden of proof rests with the parties who challenge it.”
Id. at 1162 (alteration in original) (quoting Hillsdale Envtl., 702 F.3d at 1165).
II. The Federal Railroad Safety Act
A railroad cannot discriminate against, suspend, or discharge an employee for
notifying or attempting to notify the railroad about an on-the-job injury or medical
treatment for that injury. 49 U.S.C. § 20109(a)(4); 29 C.F.R. § 1982.102(b). In
pursuing a claim under the Act, an employee has the burden to establish a prima facie
case, showing that the employee’s protected activity “was a contributing factor in the
unfavorable personnel action alleged in the complaint.” 49 U.S.C.
§ 42121(b)(2)(B)(i). Upon an employee’s doing so, the burden switches to the
employer to demonstrate “clear and convincing evidence that the employer would
have taken the same unfavorable personnel action in the absence of [the employee’s
protected activity].” Id. § 42121(b)(2)(B)(iv). The Act provides as remedies “all
relief necessary to make the employee whole,” including reinstatement, back wages
with interest, and compensatory and punitive damages Id. § 20109(e)(1); see id.
§ 20109(e)(2)–(3).
III. Federal Railroad Safety Act Violation
A. Contributing-Factor Standard
To establish a violation under FRSA, a complainant must show that the
protected activity was a “contributing factor” in the adverse employment action.
49 U.S.C. § 42121(b)(2)(B)(i). The Board defines a “contributing factor” as “any
14
factor, which alone or in combination with other factors, tends to affect in any way
the outcome of the decision.” Lockheed Martin Corp. v. Admin. Review Bd., U.S.
Dep’t of Labor, 717 F.3d 1121, 1136 (10th Cir. 2013) (emphasis in original) (quoting
Klopfenstein v. PCC Flow Techs. Holdings, Inc., No. 04-149, 2006 WL 3246904, at
*13 (Admin. Rev. Bd. May 31, 2006)); see Marano v. Dep’t of Justice, 2 F.3d 1137,
1140 (Fed. Cir. 1993) (stating that Congress “substantially reduc[ed] a
whistleblower’s burden to establish his case” when it enacted the contributing-factor
standard). This standard is “broad and forgiving” and “was intended to overrule
existing case law, which require[d] a whistleblower to prove that his protected
conduct was a ‘significant,’ ‘motivating,’ ‘substantial,’ or ‘predominant’ factor in a
personnel action in order to overturn that action.”7 Lockheed Martin, 717 F.3d at
1136 (quotation marks omitted) (quoting Klopfenstein, 2006 WL 3246904, at *13).
Accordingly, under the contributing-factor standard, we must decide whether
the agency abused its discretion in concluding that Cain’s filing the April 8 Report
was a factor that tended “to affect in any way” BNSF’s decision to terminate him. Id.
(emphasis in original) (quotation marks omitted). Ordinarily, to meet this standard,
an employee need only show “by preponderant evidence that the fact of, or the
content of, the protected disclosure was one of the factors that tended to affect in any
way the personnel action.”8 Marano, 2 F.3d at 1143. In other words, even if the
7
BNSF challenges only the Board’s interpretation of this standard.
8
The employee in Marano sought relief under the Whistleblower Protection
Act, 5 U.S.C. §§ 1201–1222. Like in FRSA, the Whistleblower Protection Act
requires an employee to show that a disclosure or a protected activity “was a
15
personnel action resulted not simply from the protected activity itself (filing a
report), but also from the content declared in the protected activity, the two parts are
“inextricably intertwined with the investigation,” meaning the protected activity was
a contributing factor to the personnel action. Id. So if the employer would not have
taken the adverse action without the protected activity, the employee’s protected
activity satisfies the contributing-factor standard.
But in our view, Cain’s case marks an exception to this rule. Unlike in
Marano, Cain’s updated Report contained information that he himself might have
violated company rules. We agree with BNSF that employees cannot immunize
themselves against wrongdoing by disclosing it in a protected-activity report. See id.
at 1142 n.5 (distinguishing the facts in Marano from “a situation in which an
employee in essence blew the whistle on his own misconduct in an effort to acquire
the [Whistleblower Protection Act’s] protection” and “doubt[ing] that the
[Whistleblower Protection Act] would protect such an individual from an agency’s
remedial actions”). Accordingly, under these circumstances, we require Cain to show
more than his updated Report’s loosely leading to his firing. Because BNSF contends
that it fired Cain for misconduct he revealed in his updated Report, Cain cannot
satisfy the contributing-factor standard merely by arguing that BNSF would not have
known of his delays in reporting his injuries absent his filing the updated Report.
contributing factor in the personnel action which was taken or is to be taken against”
the reporting employee. 5 U.S.C. § 1221(e)(1). If the employee establishes “that a
protected disclosure was a contributing factor,” the agency may avoid liability if it
“demonstrates by clear and convincing evidence that it would have taken the same
personnel action in the absence of such disclosure.” Id. § 1221(e)(2).
16
Fortunately for Cain, he established more. The ALJ identified and relied upon
substantial evidence supporting Cain’s position that his filing the updated Report was
a contributing factor in BNSF’s decision to fire him. For example, the ALJ noted the
temporal proximity between Cain’s filing the updated Report and his firing. In
addition, the ALJ considered the timing of the investigations—specifically, “the
investigation that led to the firing was initiated before the investigation of whether he
was responsible for the accident.” R. vol. I at 1119. And perhaps most importantly,
the ALJ found credible Cain’s account that his BNSF supervisors had discouraged
him from filing the updated Report and hinted darkly at unfavorable consequences if
he did so. Only after Cain filed the updated Report did BNSF begin investigating
(and ultimately fire) Cain for allegedly delaying the reporting of his full injuries
sustained in the accident. Based on this evidence, we conclude that Cain’s filing the
updated Report was a contributing factor in BNSF’s terminating his employment.
B. Clear and Convincing Evidence
BNSF next argues that the ALJ and the Board erred in requiring BNSF to show
that Cain’s termination “was not related” to Cain’s filing the April 8 Report. Pet’r’s
Opening Br. at 21. In response, the Department of Labor argues that BNSF did not
show “that it had a basis for the discipline that was independent of the protected
injury report and that it would have taken the same action for that reason.” Resp’t’s
Br. at 29 (citing Speegle v. Stone & Webster Constr., Inc., No. 14-079, 2014 WL
7507218 (Admin. Rev. Bd. Dec. 15, 2014)).
17
To defeat liability, BNSF must show, by clear and convincing evidence, that it
“would have taken the same unfavorable personnel action in the absence of [the
employee’s protected activity].” 49 U.S.C. § 42121(b)(2)(B)(ii). We conclude that, in
holding that BNSF failed to meet this burden, the ALJ and the Board did not act
arbitrarily and capriciously, and that substantial evidence supported their holdings. In
fact, we agree with the Board that the evidence points the other way.
On April 8, 2010, after his doctor visit, Cain told his supervisors that the
accident had caused his chest injuries. Again, as credited by the ALJ and the Board,
the supervisors tried to dissuade Cain from filing an updated Report.9 When Cain told
Reppond that Cain needed to amend Cain’s Report, Reppond prophetically told Cain
that if Cain filed the updated Report, “this is not going to go well for [you].” R. vol. I
at 689. Cain also testified that Schakel urged him not to file the report, saying that
“filing the amended report was going to hurt ‘everybody’s safety . . . and safety
chances, this was going to be reportable, it was going to be announced in lineups and
this was going to hurt the managers and supervision also because it was an FRA
reportable injury because it was lost time.’” Id. at 1128 (alteration in original)
(quoting id. at 904); see 49 C.F.R. §§ 225.1, 225.19 (requiring railroads to report any
work-related accidents that result in medical treatment or significant injury). The ALJ
found Cain was “credible that both Mr. Reppond and Mr. Schakel exhibited animus
to influence [Cain] not to make a second filing.” R. vol. I at 1128.
9
In its petition for review, BNSF acknowledges that the supervisors made the
statements but argues that they were innocuous and isolated.
18
By warning Cain that things would not go well for him if he filed the updated
Report, Reppond was impliedly telling Cain that if Cain did not file the report, things
would go well (or at least better) for Cain. In view of this, we cannot see how BNSF
can maintain that it would have fired Cain had he not filed the updated Report. The
supervisors’ statements directly undermine any such argument. That alone is a
sufficient basis to affirm the ALJ’s and the Board’s decision. Cf. Araujo v. N.J.
Transit Rail Operations, Inc., 708 F.3d 152, 163 (3d Cir. 2013) (describing Araujo’s
case as less than overwhelming and noting that he had not “proffered any evidence
that [the railway] dissuaded him from reporting his injury or expressed animus at him
for doing so”).
Other findings buttress this result. For instance, the ALJ found that BNSF was
well aware early on that Cain may have suffered additional injuries in the automobile
accident and yet had taken no action against him until he filed his updated Report.
Specifically, the ALJ noted that “there is no doubt that there had been discussions
about [Cain’s] medical condition soon after the January 27 filing.” R. vol. I at 1125.
Based on this, the ALJ found that BNSF “was placed on inquiry notice when [Cain]
took leave without pay for medical reasons [on January 28 and 29].” Id. As earlier
stated, Reppond asked Cain directly upon Cain’s requesting the two days’ leave
whether it was connected with the accident. At the very least, this puts BNSF in a
position where it could hardly express much surprise to learn later that those
injuries—requiring draining fluid from around the lung—were in fact related to the
19
accident. Only when Cain filed the updated Report over his supervisors’ protests did
BNSF investigate and terminate Cain for failure to timely report his injuries.
In addition, in finding that BNSF had not met its burden to show by clear and
convincing evidence that it would have fired Cain even if he had not filed the
updated Report, the ALJ noted that the BNSF personnel had not even agreed about
who had fired Cain. From these “inconsistencies” and BNSF’s “shifting explanations
for the adverse personnel action, [which] in itself may be sufficient to provide
evidence of pretext,” the ALJ ruled that BNSF had not met its required statutory
showing. Id. at 1127.
Finally, both the ALJ and the Board noted that BNSF had not presented
evidence that it had fired any employees with similar violations. For instance,
although Shop Superintendent Bossolono testified that other injured employees had
told management about accidents and medical treatment, neither he nor any other
BNSF manager testified about firing even a single employee who had failed to timely
report them. See Consolidated Rail Corp. v. U.S. Dep’t of Labor, 567 F. App’x 334,
339 (6th Cir. 2014) (unpublished) (concluding that the railroad did not meet
§ 42121(b)(2)(B)(ii) because the railroad had “failed to provide any evidence of
disciplinary action taken as a result of” the protected activity).
For all of these reasons, we affirm the ALJ’s and the Board’s holding that Cain
met his prima facie case and that BNSF failed to counter this with clear and
convincing evidence that it would have fired Cain had it known of his delayed
reporting before he filed his updated Report.
20
IV. Punitive Damages
BNSF also argues that the Board imposed an unlawful and unconstitutional
punitive-damages award. First, BNSF asserts that the facts do not support any
punitive-damages award. Second, BNSF argues that the punitive-damages award
violates due process.
In affirming a partial award of punitive damages, the Board relied on its own
precedent, which directs review of an ALJ’s punitive-damages award to determine
“whether the ALJ properly determined that punitive damages were warranted” and
then “whether the amount awarded is sustainable.” Youngermann v. United Parcel
Serv., Inc., No. 11-056, 2013 WL 1182311, at *3 (Admin. Review Bd. Feb. 27,
2013). We address each part of the Board’s review in turn as well as BNSF’s
constitutional argument.
A. Awarding Any Punitive Damages
BNSF argues that substantial evidence did not support the Board’s decision to
affirm even the reduced punitive-damages award. In reviewing the ALJ’s decision to
award punitive damages, the Board considered whether BNSF had acted with a
“reckless or callous disregard for the plaintiff’s rights, as well as intentional
violations of federal law.” R. vol. II at 1751 (quoting Youngermann, 2013 WL
1182311, at *3); cf. Searles v. Van Bebber, 251 F.3d 869, 879 (10th Cir. 2001)
(stating that punitive damages in a 42 U.S.C. § 1983 lawsuit are available only for
conduct that is “shown to be motivated by evil motive or intent, or when it involves
21
reckless or callous indifference to the federally protected rights of others” (quoting
Smith v. Wade, 461 U.S. 30, 56 (1983))).
We disagree with BNSF and conclude that substantial evidence supported the
punitive-damages award. As noted, the ALJ found credible Cain’s testimony about
Schakel’s and Reppond’s efforts to keep him from filing the updated Report. In
particular, we note Reppond’s telling Cain, upon learning that he intended to file the
updated Report, that “this is not going to go well for [you]” if he filed the Report. R.
vol. I at 689. And we also rely upon Schakel’s discouraging Cain from filing the
report because doing so would hurt managers and supervisors because BNSF would
have to report these injuries (and that the accident caused them) to the FRA.
We disagree with BNSF that Reppond’s and Schakel’s comments to Cain were
“innocuous” because Cain still filed his updated Report. Pet’r’s Opening Br. at 32.
As we understand BNSF, it contends that it cannot be responsible for its supervisors
discouraging workers from filing injury reports unless the workers succumbed to the
pressure. This approach would measure the reprehensibility of BNSF’s conduct in
discouraging Cain from filing the injury report by Cain’s resolve in not yielding to
BNSF’s reprehensible conduct. We reject that approach. In view of the ALJ’s
findings of fact and credibility, we conclude that substantial evidence supported the
ALJ’s decision to award punitive damages.
B. The Amount of Punitive Damages
22
The second part of the Board’s analysis is whether the amount of punitive
damages is sustainable. Youngermann, 2013 WL 1182311, at *3. The Board
disagreed with the ALJ that BNSF’s reassigning Cain to the diesel service facility
justified awarding the maximum amount of punitive damages, noting that Cain did
not allege the reassignment as an adverse personnel action. Accordingly, the Board
reduced the punitive-damages award by half, from $250,000 to $125,000, since the
“ALJ devoted half of his summary analysis” to the reassignment issue. R. vol. II at
1753.
We conclude that the Board acted arbitrarily and capriciously when it halved
the punitive-damages award simply because it concluded that the ALJ had erred in
half of his analysis. In evaluating the Board’s approach, we confine our review to
ascertaining “whether the agency examined the relevant data and articulated a
satisfactory explanation for its decision, including a rational connection between the
facts found and the decision made.” Colo. Wild v. U.S. Forest Serv., 435 F.3d 1204,
1213 (10th Cir. 2006). And we conclude that the Board’s half-for-half approach fails
this standard. On remand, the Board must explain why the available facts support the
amount of punitive damages it awards. See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (stating that a reviewing court
should not attempt to make up for an agency’s insufficient explanation and that the
agency should articulate its own satisfactory explanation for its action); Lockheed
Martin, 717 F.3d at 1138–39 (remanding to the Board in part to delineate the
amounts of back wages, medical expenses, and attorneys’ fees).
23
C. The Constitutionality of the Punitive-Damages Award
BNSF also contends that the Board’s reduced punitive-damages award is
unconstitutional under the Fourteenth Amendment’s Due Process Clause for failure
to review the punitive-damages award under the State Farm guideposts. In response,
the Department of Labor argues that the Board need not consider the guideposts
because the Act provides a statutory cap for punitive damages that ensures railroads
receive fair notice of potential punitive-damages awards.
We agree with BNSF and hold that the Board must use the State Farm
guideposts to evaluate the constitutionality of punitive damages awarded under
49 U.S.C. § 20109(e)(3). “Agencies, like courts, must follow Supreme Court
decisions . . . .” Cherokee Nation v. Norton, 389 F.3d 1074, 1087 (10th Cir. 2004).
Agencies must do so “even if the agency believes that the Court was wrong.” Id. at
1084. We have used the guideposts to evaluate the constitutionality of punitive
damages awarded under 42 U.S.C. § 1981a, which caps both punitive and
compensatory damages at $300,000. See Deters v. Equifax Credit Info. Servs., Inc.,
202 F.3d 1262, 1272 (10th Cir. 2000).
To satisfy due process, “[o]ne must receive fair notice both that certain
conduct will subject him to punishment, and the possible severity of the punishment
that may be imposed.” Id. Courts use the guideposts in assessing whether a defendant
received this fair notice. Id.; see BMW of N. Am. v. Gore, 517 U.S. 559, 574 (1996)
(using the guideposts to determine whether BMW received “adequate notice of the
magnitude of the sanction”). The first and “most important indicium of the
24
reasonableness of a punitive damages award is the degree of reprehensibility of the
defendant’s conduct.” State Farm, 538 U.S. at 419. Second, courts consider “the
disparity between the actual or potential harm suffered by the plaintiff and the
punitive damages award.” Id. at 418. Finally, courts consider “the difference between
the punitive damages awarded by the jury and the civil penalties authorized or
imposed in comparable cases.” Id.
The Department of Labor argues that the Board and we need not use the
guideposts because § 20109 itself provides fair notice and sufficient guidance. We
agree that the “landscape of our review is different” in this statutory context. Arizona
v. ASARCO LLC, 773 F.3d 1050, 1055 (9th Cir. 2014) (en banc). When a court or
agency awards punitive damages under a statute, “the rigid application of the . . .
guideposts is less necessary or appropriate” because, through the statute, “the
legislature has spoken explicitly on the proper scope of punitive damages.” Id. at
1056. But the agency must use the guideposts, which are still helpful in evaluating
fair notice under this different landscape. The Board should also use the statute to aid
its less rigid review with the guideposts in its analysis of punitive damages under
§ 20109.
We did just that in Deters when we used § 1981a’s punitive-damages terms
within our guideposts analysis. For the reprehensibility guidepost, we used § 1981a’s
plain language both as evidence of fair notice and to conclude that the defendant’s
reprehensibility satisfied that language. Deters, 202 F.3d at 1272. For the ratio
guidepost, we upheld a punitive-to-actual-damages ratio of 59:1 and acknowledged
25
that punitive damages are available under Title VII “even in the total absence of
compensatory damages.”10 Id. at 1273. And for the comparable-awards guidepost, we
noted that § 1981a authorizes up to $300,000 in combined punitive and compensatory
damages and upheld a combined $300,000 award because it did not “shock the
judicial conscience.” Id.; see 42 U.S.C. § 1981a(b)(3).
Similarly, 49 U.S.C. § 20109 can inform the Board’s guideposts analysis on
remand and in future cases. For the first guidepost, § 20109 provides some notice to a
railroad carrier about what conduct may subject it to punitive damages:
A railroad carrier . . . or an officer or employee of such a railroad
carrier[] may not discharge . . . or in any other way discriminate against
an employee if such discrimination is due, in whole or in part, to the
employee’s . . . notify[ing] or attempt[ing] to notify the railroad carrier
or the Secretary of Transportation of a work-related personal injury . . . .
49 U.S.C. § 20109(a)(4). And BNSF fully knew of the non-statutory standard that it
had used to assess the reprehensibility of railroads’ conduct: a “reckless or callous
disregard for the plaintiff’s rights, as well as intentional violations of federal law.” R.
vol. II at 1751 (quoting Youngermann, 2013 WL 1182311, at *3). To support its
award of punitive damages under § 20109(e)(3), the Board must set forth clear
findings about the degree of BNSF’s reprehensibility in firing Cain for his filing the
10
We analyzed the ratio in Deters under BMW, where the Supreme Court
stated that “[a] general concer[n] of reasonableness . . . properly enter[s] into the
constitutional calculus.” BMW, 517 U.S. at 583 (quoting TXO Prod. Corp. v. Alliance
Res. Corp., 509 U.S. 443, 458 (1993)). The Supreme Court’s caution against double-
digit ratios in State Farm likely calls Deters’s 59:1 ratio into question. See State
Farm, 538 U.S. at 425 (“[I]n practice, few awards exceeding a single-digit ratio
between punitive and compensatory damages, to a significant degree, will satisfy due
process.”).
26
updated Report. See Deters, 202 F.3d at 1272 (upholding the maximum-available
punitive-damages award because the jury heard evidence “that [the employer] had
repeated notice of severe and pervasive sexual harassment” and “offered [the
employee] legally indefensible reasons why the harassment should be overlooked”);
Abner v. Kan. City S. R.R. Co., 513 F.3d 154, 164–66 (5th Cir. 2008) (upholding a
punitive-damages award of $125,000 for eight plaintiffs—with only $1 in nominal
damages for each—because the plaintiffs presented extensive evidence of racial slurs
and other racially motivated derogatory behavior).
For the ratio guidepost, § 20109 caps punitive damages at $250,000. If the
agency awards large punitive damages and small compensatory damages, the ratio
between the two forms of damages may well reach double-digits. Indeed, that very
thing happened here, with the Board’s 21:1 ratio between the $125,000 in punitive
damages and the $5,780.52 in back wages. We take special note of this because “in
practice, few awards exceeding a single-digit ratio between punitive and
compensatory damages, to a significant degree, will satisfy due process.” State Farm,
538 U.S. at 425. Although we upheld a 59:1 ratio in Deters, a case with a statutory
cap on punitive (and compensatory) damages, State Farm’s later clarification of the
ratio guidepost means that we now consider the punitive-to-compensatory-damages
ratio differently than we did in Deters. But we continue to recognize that, even under
State Farm, higher ratios may well satisfy due process where “a particularly
egregious act has resulted in only a small amount of economic damages.” Id. (quoting
BMW, 517 U.S. at 582). Indeed, “there are no rigid benchmarks that a punitive
27
damages award may not surpass.” Haberman v. The Hartford Ins. Grp., 443 F.3d
1257, 1272 (10th Cir. 2006).
For the comparable-cases guidepost, we note that Congress has authorized the
maximum-available amount of punitive damages in FRSA cases: $250,000. On
remand, the Board can consider this statutorily authorized amount as well as its own
comparable cases awarding punitive damages in determining what amount of punitive
damages are justified.
The Department of Labor asks us to conclude that under the State Farm
guideposts, the Board’s punitive-damages award satisfies due process. BNSF
contends that the award does not satisfy due process and cannot survive review under
the guideposts, particularly given the double-digit punitive-to-compensatory-damages
ratio.
We decline to evaluate the punitive-damages award under the State Farm
guideposts in the first instance. “[W]hen a reviewing court concludes that an agency
invested with broad discretion to fashion remedies has apparently abused that
discretion . . . , remand to the agency for reconsideration, and not enlargement of the
agency order, is ordinarily the reviewing court’s proper course.” N.L.R.B. v. Food
Store Emps. Union, Local 347, 417 U.S. 1, 10 (1974). Indeed, “agencies should be
the primary decision makers over matters which Congress has vested in their
authority.” Mickeviciute v. I.N.S., 327 F.3d 1159, 1164 (10th Cir. 2003); see I.N.S. v.
Ventura, 537 U.S. 12, 14–17 (2002) (holding that the court of appeals should have
remanded the relevant question to the agency rather than decide the question itself).
28
On remand, the Board should consider whether the punitive-damages award satisfies
due process by using both § 20109 and the guideposts.
CONCLUSION
We deny BNSF’s petition for review in part insofar as the petition addresses
the FRSA violation and the finding supporting a punitive-damages award. We grant
the petition in part regarding the amount and the constitutionality of the punitive-
damages award and remand to the Board for further consideration. On remand, the
Board should provide a reasoned explanation for the punitive damages it awards and
then evaluate that award under the State Farm guideposts.
29