Norfolk S. Ry. Co. v. United States Dep't of Labor

Decision Date02 December 2022
Docket Number21-3369
PartiesNORFOLK SOUTHERN RAILWAY COMPANY, Petitioner, v. UNITED STATES DEPARTMENT OF LABOR, ADMINISTRATIVE REVIEW BOARD, Respondent, SCOTTY LANCASTER, Intervenor.
CourtU.S. Court of Appeals — Sixth Circuit

NOT RECOMMENDED FOR PUBLICATION

ON PETITION FOR REVIEW FROM AN ORDER OF THE ADMINISTRATIVE REVIEW BOARD

Before: STRANCH, DONALD, and THAPAR, Circuit Judges.

STRANCH, J., delivered the opinion of the court in which DONALD, J., joined. THAPAR, J. (pp. 24-30), delivered a separate dissenting opinion.

OPINION

JANE B. STRANCH, CIRCUIT JUDGE.

Scotty Lancaster, a locomotive engineer for Norfolk Southern Railway Company (NSRC), was ultimately suspended without pay for 40 days after he raised concerns that an order from the Assistant Trainmaster would cause a violation of the Hours of Service Act. He submitted a complaint to the Occupational Safety and Health Administration (OSHA), claiming that NSRC violated the Federal Railway Safety Act's (FRSA) whistleblower provisions by disciplining him. OSHA initially dismissed the complaint. However, an Administrative Law Judge (ALJ) concluded that Lancaster's claim had merit, and, on appeal, the Administrative Review Board (ARB or the Board) affirmed that ruling. NSRC challenges the ARB's order. We DENY the petition for review.

I. BACKGROUND
A. Factual Background

On November 26, 2015, Lancaster was working with the conductor, Thomas Combs, on a "hot" locomotive (the term for a locomotive carrying valuable freight, making it a high priority delivery). While the train was stopped at the Shelbyville Mixing Center in Shelbyville, Kentucky, a third-shift utility worker reached his maximum allowable work hours for the day, and the first-shift utility worker had not yet arrived to take over. As a result, Combs and Lancaster delayed the freight train for approximately 45 minutes to wait for the utility worker to arrive.

Because the locomotive was "hot," the Division Superintendent, Carl Wilson, instructed Assistant Trainmaster Matthew Newcomb to personally observe the locomotive to ensure that there were no delays. When Newcomb noticed that the train was stopped for a long period of time, he became alarmed and boarded the train to speak with Lancaster and Combs. During the heated conversation, Newcomb told Lancaster and Combs that they should not have simply waited for the utility worker to arrive, but instead, should have performed the utility worker's tasks themselves. He instructed them to do so immediately to avoid further delay.

Fairly new to his role, Newcomb called his supervisor, Trainmaster Dominique Reese, to make sure that he did the right thing. Reese advised him to investigate the incident and obtain written statements from Combs and Lancaster. Newcomb returned to the train and told Combs and Lancaster that they would be "handled," meaning disciplined for delaying freight, but, to avoid any further delay, they were to continue working and deal with the problem later.

The next day, Combs and Lancaster began their shifts at 4:30 a.m. At about 4:15 p.m.- when Combs and Lancaster had 15 minutes remaining in their maximum 12-hour shift-Newcomb ordered them into his office and instructed them to write a statement describing the prior day's events. Both Combs and Lancaster told Newcomb that they were concerned that providing the statement could take more than 15 minutes and cause NSRC to violate the Hours of Service Act, which requires that a railroad refrain from allowing its employees "to remain or go on duty for a period in excess of 12 consecutive hours," 49 U.S.C. § 21103(a)(2). And, in any case, Newcomb was aware that Combs and Lancaster's hours of service deadline was coming up at 4:30 p.m.

Combs began work on the statement, but Lancaster requested permission to speak with his union representative before agreeing to complete the statement. Newcomb gave Lancaster permission to do so, and, at about 4:21 p.m., Lancaster stepped away to make the call to his union representative, Travis Cochrane. During their call, Lancaster explained his concern and asked if he needed a union representative to be physically present. Cochrane ultimately advised Lancaster to complete the statement. At 4:34 p.m., Lancaster returned to find that Newcomb had also stepped out and that Combs was still working on his statement, which he did not complete until 4:47 p.m., seventeen minutes beyond his permitted 12 hours of service.

While Lancaster stepped out to talk to his union representative, Newcomb called Assistant Division Superintendent, Shannon Mason, to discuss what transpired. Mason instructed Newcomb to remove Lancaster from service. When Newcomb returned, Lancaster said that he was ready and willing to fill out the statement. Newcomb, in response, told Lancaster that he was being removed from service-effectively, a suspension without pay-pending an investigation for his refusal to provide the statement.

The removal from service triggered the formal disciplinary procedures set out in the collective bargaining agreement (CBA) that governed Lancaster's employment. Under the CBA, Lancaster is entitled to written notice of the alleged rule violation and a formal evidentiary hearing. On December 4, NSRC sent Lancaster a written notice, charging him with insubordination for failing to follow directions from Newcomb regarding the delay on November 26 and for conduct unbecoming for his interaction with Newcomb. A formal hearing took place on December 11 and 22. On January 5, 2016, the hearing officer issued his decision, finding Lancaster responsible for the charged violations and imposing a 40-day suspension, retroactive to his initial suspension imposed on November 27, 2015. As a result of the unpaid suspension, Lancaster lost a total of $12,599.51 in gross income.

B. Proceedings Below

On June 8, 2016, Lancaster submitted a complaint to OSHA, alleging that NSRC violated the whistleblower provision of the Railway Safety Act by discipling him in retaliation for refusing to violate the Hours of Service Act. Following an investigation, OSHA dismissed the complaint on November 6, 2017. OSHA's findings were sent only to Lancaster's attorney, and not to Lancaster himself.

On February 6, 2018, Lancaster filed objections to OSHA's dismissal and requested a hearing before an ALJ. NSRC moved to dismiss Lancaster's appeal as untimely. The ALJ denied that motion, reasoning that OSHA's regulations require it to send findings to both parties and counsel. Because Lancaster was never mailed the findings and NSRC did not claim any prejudice from the delay, the ALJ concluded that the time period for objections did not start to run until both parties and their counsel received OSHA's findings. So, the filing was timely. NSRC sought reconsideration and certification of an interlocutory appeal, which the ALJ denied.

On December 3 and 4, 2018, the ALJ held a hearing on the merits and issued a decision and order, finding that NSRC retaliated against Lancaster in violation of the FRSA. The ALJ found credible Lancaster's testimony that he made Newcomb aware of his concerns about exceeding his hours of service before initially refusing to complete the statement and requesting to speak to his union representative. The ALJ also noted that Newcomb knew, or should have known as a supervisor, that Lancaster's hours of service limit was approaching. And, based on Combs' testimony, the ALJ found it probable that completing the written statement would take more than 15 minutes. The ALJ concluded that it was "objectively reasonable for [Lancaster] to be uncertain whether he could finish the written statement demanded by Newcomb before 4:30 p.m." Because the Hours of Service requirement concerns railroad safety, the ALJ held that Lancaster's initial refusal to compose the written statement amounted to protected activity under the FRSA-an action in good faith to refuse to violate a federal law relating to railroad safety.

Having established that Lancaster engaged in protected activity, the ALJ found that Lancaster was disciplined in response: he was initially disciplined by immediate suspension, and following the hearing pursuant to the CBA, his discipline was finalized and specified to be a 40-day suspension. NSRC provided "no alternative theory" to show that it would have made the same decision in the absence of Lancaster's protected activity. Consequently, the ALJ found that NSRC violated the FRSA and awarded back pay, emotional distress damages, punitive damages, and litigation costs to Lancaster.

NSRC appealed the ALJ's decision to the ARB. The Board reviewed the case and issued a decision and order, affirming the ALJ's decision in its entirety. This appeal followed.

II. DISCUSSION

NSRC disputes several aspects of the Board's decision-the timeliness of Lancaster's initial complaint to OSHA and his objections to OSHA's investigative findings; the substantive merits of the retaliation claim; and the decision to award punitive damages. We address the arguments in turn.

A. Standard of Review

Review of the ARB's decision is governed by the Administrative Procedure Act (APA), 49 U.S.C. § 20109(d)(4). We review the ALJ's findings of fact-as affirmed by the Board-under a deferential standard, setting them aside only if they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law" or "unsupported by substantial evidence." 5 U.S.C § 706(2)(A), (E); Hoffman v. Solis, 636 F.3d 262, 268 (6th Cir. 2011). We review the Board's legal determinations de novo. See Bureau of Alcohol, Tobacco &Firearms v. Fed. Lab. Rel. Auth., 464 U.S. 89, 97 n.7 (1983). In reviewing legal determinations, however, the Court defers to the Board's interpretation of the statute to...

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