BNSF Ry. Co. v. U.S. Dep't of Labor Admin. Review Bd.

• Decision Date: 14 August 2017
• Docket Number: No. 16-3093,16-3093
• Citation: 867 F.3d 942
• Parties: BNSF RAILWAY COMPANY, Petitioner v. UNITED STATES DEPARTMENT OF LABOR ADMINISTRATIVE REVIEW BOARD, Respondent
• Court: U.S. Court of Appeals — Eighth Circuit

867 F.3d 942

BNSF RAILWAY COMPANY, Petitioner

v.UNITED STATES DEPARTMENT OF LABOR ADMINISTRATIVE REVIEW BOARD, Respondent

No. 16-3093

United States Court of Appeals, Eighth Circuit.

Submitted: April 7, 2017

Filed: August 14, 2017

Counsel who presented argument on behalf of the petitioner was Jacqueline M. Holmes, of Washington, DC. Also appearing on the brief for petitioner was Nikki L. McArthur of Washington, DC.

Counsel who filed a brief and presented argument on behalf of the respondent was Rachel Goldberg, of Washington, DC.

Before WOLLMAN and LOKEN, Circuit Judges, and NELSON,¹ District Judge.

LOKEN, Circuit Judge.

The Federal Rail Safety Act (FRSA) prohibits a rail carrier from retaliating against an employee for reporting "a work-related personal injury." 49 U.S.C. § 20109(a)(4). On August 30, 2007, Clyde Carter, Jr. injured his shoulder and neck while working as a carman at BNSF Railway Company's yard in Kansas City, Kansas. Carter immediately reported the injury to BNSF. The following year, he filed a Federal Employers' Liability Act (FELA) damage action, alleging that BNSF's negligence caused his injury. BNSF's discovery in defending the FELA lawsuit included a July 2009 deposition of Carter. In January 2012, as trial approached, BNSF Manager Bryan Thompson reviewed discovery materials provided by BNSF's attorneys. He discovered discrepancies between Carter's deposition testimony and information provided on his employment application and medical questionnaire submitted to BNSF in 2005. Thompson initiated a disciplinary investigation into potentially dishonest statements. Later, BNSF opened a second disciplinary investigation to determine if Carter signed a false statement that he arrived at work on time on February 5, 2012.

The investigations culminated in two "on-property" evidentiary hearings before BNSF General Foreman Charles Sherrill. Carter was represented by two union representatives. After the hearings, hearing officer Sherrill found that Carter committed both dishonesty violations and recommended discipline in accordance with BNSF's Policy for Employee Performance Accountability (PEPA). Phillip McNaul, field superintendent of Kansas operations, submitted the hearing records and Sherrill's findings to Joseph Heenan, a Director of Labor Relations in Texas, whose responsibilities included ensuring company-wide disciplinary consistency. Heenan reviewed the record, concluded there was substantial evidence supporting Sherrill's findings, and recommended that Carter be terminated for dishonesty, a "stand alone" violation that may result in dismissal without regard to the employee's prior disciplinary history. Senior management approved Heenan's recommendation. BNSF terminated Carter in two letters dated April 5 and April 16, 2012.

Following termination, Carter filed an FRSA complaint with the Department of Labor, alleging that BNSF initiated the investigations leading to his dismissal in retaliation for Carter reporting the August 2007 work-related injury. The Occupational Safety and Health Administration initially reviews FRSA retaliation complaints. See 29 C.F.R. § 1982.104. OSHA dismissed Carter's complaint, finding he committed the violations, and BNSF proved by clear and convincing evidence that "other employees who had not engaged in protected activity have been dismissed from service for dishonesty." Carter filed objections. See 29 C.F.R. § 1982.106. After an evidentiary hearing, an Administrative Law Judge (ALJ) found that BNSF violated 49 U.S.C. § 20109(a)(4) and awarded reinstatement, back pay, attorneys' fees, and $50,000 punitive damages. BNSF filed an administrative appeal. The Secretary's Administrative Review Board (ARB) affirmed the ALJ.

BNSF petitions for review of the ARB's order, which is the final agency action. See 49 U.S.C. § 20109(d)(4) ; 29 C.F.R. § 1982.110(d). Our review of FRSA retaliation orders conforms to Administrative Procedure Act standards. See 49 U.S.C. § 20109(d)(4). We set aside agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accord with law." 5 U.S.C. § 706(2)(A) ; see GoJet Airlines, LLC v. FAA , 743 F.3d 1168, 1170 (8th Cir. 2014). We review the agency's legal conclusions de novo , giving deference to its "reasonable interpretation" of the statute. Pattison Sand Co. v. Fed. Mine Safety & Health Review Comm'n , 688 F.3d 507, 512 (8th Cir. 2012). We review factual findings for substantial evidence on the record as a whole, considering evidence that both supports and detracts from the ALJ's decision. Mercier v. U.S. Dep't of Labor , 850 F.3d 382, 388 (8th Cir. 2017). Here, we conclude the ARB's order may not be upheld because the ALJ erred in interpreting and applying the FRSA and failed to make findings of fact that are critical to a decision applying the proper legal standard. Accordingly, we reverse the ARB's order and remand.

To prevail on his FRSA complaint, Carter must "prove, by a preponderance of the evidence, that ‘(i) he engaged in a protected activity; (ii) BNSF knew or suspected, actually or constructively, that he engaged in the protected activity; (iii) he suffered an adverse action; and (iv) the circumstances raise an inference that the protected activity was a contributing factor in the adverse action.’ " Gunderson v. BNSF Ry. , 850 F.3d 962, 968 (8th Cir. 2017), quoting Kuduk v. BNSF Ry. , 768 F.3d 786, 789 (8th Cir. 2014). If he meets that burden, BNSF may avoid liability if it "demonstrates, by clear and convincing evidence, that [it] would have taken the same unfavorable personnel action in the absence of [Carter's protected activity]." 49 U.S.C. § 42121(b)(2)(B)(ii). BNSF conceded the first three elements of Carter's affirmative case—that his prompt injury report was protected activity; BNSF had direct knowledge of this report; and Carter suffered adverse action when BNSF fired him. This left two issues for adjudication: whether Carter could prove the circumstances raised an inference that the injury report was a contributing factor in his termination, and if so, whether BNSF could prove that it would have fired Carter regardless of his protected activity. "A ‘contributing factor’ includes any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the [adverse] decision." Gunderson , 850 F.3d at 969 (quotation omitted).

An unusual aspect of this case is that Carter's protected injury report was made and known by his BNSF supervisors in August 2007, more than four years prior to the adverse action of BNSF investigating and terminating Carter for acts of dishonesty in 2005 and 2012 that were seemingly unrelated to his 2007 injury and injury report. In a retaliation case, "[a] gap in time between the protected activity and the adverse employment action weakens an inference of retaliatory motive." Wells v. SCI Mgmt., L.P. , 469 F.3d 697, 702 (8th Cir. 2006) (quotation omitted); see Clark Cty. Sch. Dist. v. Breeden , 532 U.S. 268, 274, 121 S.Ct. 1508, 149 L.Ed.2d 509 (2001) (per curiam) ("Action taken (as here) 20 months later suggests, by itself, no causality at all."); Gunderson , 850 F.3d at 969.

The ALJ nonetheless found that the injury report was a contributing factor by applying a "chain of events" theory of causation. The ALJ reasoned:

In establishing that a protected activity was a contributing factor ... it is not necessary to show that the employer was motivated by the activity or even give any significance to the activity.... [A]ll a complainant need do is show that the employer knew about the protected activity and the protected activity was a necessary link in a chain of events leading to the adverse activity.

* * * * *

Mr. Carter's workplace injury, and its report to his supervisors, set off a chain of events that led to his successful FELA suit against [BNSF], which encompassed Mr. Carter's deposition as part of discovery.... [I]t was during the discovery phase in the FELA lawsuit that the medical and other records used as a justification for firing Mr. Carter were discovered.... [T]emporal distance between the protected activity and the adverse action does not automatically ‘negate’ the contribution of the protected activity to the adverse action.

* * * * *

In this case, it is not possible to isolate Mr. Carter's ‘report’ of his 2007 workplace injury from the injury itself.... Indeed, the basis for discussing Mr. Carter's termination cannot be explained without also discussing his ‘report’ of his injury. There is nothing even close to a complete break in the chain of events, such that Mr. Carter's ‘report’ of his injury dropped out of the line of causation leading to his termination.

The ALJ's chain-of-events theory of causation is contrary to judicial precedent construing the causation element of an FRSA retaliation claim. As the Seventh Circuit explained in Koziara v. BNSF Ry. , to hold that protected activity is a "contributing factor" to an adverse action simply because it ultimately led to the employer's discovery of misconduct "is a further example of confusing a cause with a proximate cause. The plaintiff's having been born was an initiating event without which he would not exist, but obviously an event devoid of legal significance." 840 F.3d 873, 878 (7th Cir. 2016), cert. denied , ––– U.S. ––––, 137 S.Ct. 1449, 197 L.Ed.2d 650 (2017).² Of equal importance, the ALJ's ruling that BNSF's motive was irrelevant to the contributing factor inquiry is contrary to this court's controlling decisions:

As the [Supreme] Court explained in Staub , the essence of this intentional tort is "discriminatory animus." ... [T]he contributing factor that an employee must prove is intentional retaliation prompted by the employee engaging in protected activity.

Kuduk , 768 F.3d at 791, followed in Gunderson , 850 F.3d at 969. Absent sufficient evidence of intentional retaliation, a showing that protected activity initiated a series of events leading to an adverse action...