What evidence is required to prove compensatory damages in a whistleblower retaliation case?

Most of the whistleblower retaliation statutes adjudicated at the DOL, including the SOX whistleblower protection provision, authorize compensatory damages. Two recent decisions, one from the Eighth Circuit and the other from the ARB, indicate that a whistleblower can obtain substantial compensatory damages based solely on their testimony. As documented in an article titled WHISTLEBLOWER RETALIATION CHECKLIST: A NEW INSTRUMENT FOR IDENTIFYING RETALIATORY TACTICS AND THEIR PSYCHOSOCIAL IMPACTS AFTER AN EMPLOYEE DISCLOSES WORKPLACE WRONGDOING, workplace retaliation can inflict significant trauma on whistleblowers.

In Maverick Transportation v. U.S. Department of Labor, the Eighth Circuit affirmed an ARB decision holding that Maverick Transportation (“Maverick”), a trucking company, had retaliated against Albert Brian Canter, one of its drivers, for refusing to drive a truck that he believed was unsafe. Maverick Transp., LLC v. U.S. Dep’t of Labor, Admin. Review Bd., 739 F.3d 1149, 1157 (8th Cir. 2014). The truck in question had a chaffing brake hose and leaked steering fluid, conditions that substantially increased the likelihood of a catastrophic failure of the service brakes.

Canter sued Maverick under the whistleblower protection provision of the Surface Transportation Assistance Act (“STAA”), which protects truck drivers who refuse to drive due to a reasonable apprehension that a vehicle is unsafe and may cause serious injury to the driver or the public. The ALJ awarded Canter $75,000 in compensatory damages for emotional distress, despite the fact that Canter offered no corroborating expert testimony. See ALJ Case No. 2009-STA-054 (ARB Oct. 28, 2010). In doing so, the ALJ noted that “the ARB has awarded damages for emotional and mental distress where the claims were unsupported by medical evidence.” Id. at 15. The opinion indicates that Canter’s testimony regarding his emotional distress was compelling:

Canter lost his appetite and experienced suicidal thoughts so severe that, on one occasion, he put a pistol to his head; as he started to pull the trigger, he moved his head out of the way and put a bullet hole through the ceiling and roof.
Canter’s receipt of debt-collection notices and calls from collection agencies caused him great distress.
Canter’s checking accounts were closed due to insufficient funds, and he owed bank fees and charges for overdrafts.
Canter was forced to vacate his home in Alabama and move in with his sister in Colorado in July 2008.
Canter could not visit his stepchildren because he could not afford to travel.

Id.

Maverick appealed to the ARB, which affirmed the ALJ’s determinations “as supported by substantial evidence and prevailing law.” ARB Case No. 11-012, 2012 WL 2588598, at *4 (ARB June 27, 2012). In petitioning the Eighth Circuit for review, Maverick argued that the award of compensatory damages for emotional distress was excessive because it was supported only by Canter’s testimony. The Eighth Circuit denied Maverick’s petition for review, noting that “[a] plaintiff’s own testimony can be sufficient for a finding of emotional distress, and medical evidence is not necessary.” 739 F.3d at 1157 (quoting Christensen v. Titan Distribution, Inc., 481 F.3d 1085, 1097 (8th Cir. 2007)). The Eighth Circuit also suggested that the ARB properly awarded compensatory damages based on the severity of the injuries, rather than on the type of evidence used to prove those injuries. See id. at 1157–58.

The ARB also recently affirmed a substantial award of compensatory damages based solely on a whistleblower’s testimony. In Fink v. R&L Transfer, Inc., the ARB affirmed the ALJ’s award of $100,000 in compensatory damages and $50,000 in punitive damages to a truck driver who was terminated for refusing to drive in unsafe winter weather. Fink v. R&L Transfer, Inc., ARB Case No. 13-018 (ARB Mar. 19, 2014). In awarding compensatory damages, the ALJ relied on Fink’s testimony that, among other harms:

he had to seek public assistance to pay basic living expenses;
his family ultimately lost its home;
he had to borrow money from family members; and
he had difficulty sleeping, wondering how he would be able to support his family.

Id. In affirming the award of $50,000 in punitive damages, the ARB stated that “[a]n award of punitive damages may be warranted where there has been ‘reckless or callous disregard for the plaintiff’s rights, as well as intentional violations of federal law.’” Id. (citation omitted).

In addition to obtaining large compensatory damages awards at trial that are affirmed on appeal, some whistleblowers are obtaining substantial compensatory damages awards from OSHA. For example, in September 2013, OSHA issued an order requiring Clean Diesel Technologies, Inc., to pay $1.9 million to its former chief financial officer, who was fired for warning the board of directors about ethical and financial concerns raised by a proposed merger. In addition to awarding $486,000 in lost wages, bonuses, stock options, and severance pay, OSHA awarded the complainant more than $1.4 million in compensatory damages for pain and suffering, damage to career and professional reputation, and lost 401(k) employer matches and expenses.

Some of the federal whistleblower protection laws authorize an award of uncapped compensatory damages, including the following:

Taxpayer First Act (protecting whistleblowing about tax fraud or tax underpayment)
Whistleblower Protection Act (protecting whistleblowers in the federal government)
False Claims Act and NDAA (protecting whistleblowers working for federal contractors)
Energy Reorganization Act (protecting disclosures about nuclear safety or violations of Nuclear Regulatory Commission rules)
Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (protecting disclosures about aviation safety)
Surface Transportation Assistance Act (protecting whistleblower disclosures in the trucking industry about commercial motor vehicle safety)
Consumer Financial Protection Act (protecting disclosures concerning consumer financial protection)
Anti-Money Laundering Whistleblower Protection Law (protecting disclosures about violations of the Bank Secrecy Act)
Federal Railroad Safety Act (protecting disclosures about rail safety and security)
National Transit Systems Security Act (protecting transit employees from retaliation for disclosing a hazardous safety or security condition)
Consumer Product Safety Improvement Act (protecting disclosures about consumer product safety)
Food Safety Modernization Act (FSMA) (protecting disclosures about food safety)

Recent jury verdicts indicate that compensatory damages can be substantial, and can even exceed one million dollars. See our tips to maximize your recovery in a whistleblower retaliation case.

The following are some recent jury verdicts in SOX whistleblower cases:

Whistleblower Awarded $1.6M in Compensatory Damages in Retaliation Case

In a unanimous opinion in Bailets v. Pennsylvania Turnpike Commission, the Pennsylvania Supreme Court affirmed an award of $1.6 million in non-economic damages in a whistleblower retaliation case. Bailets was fired for disclosing irregularities in the bidding process that favored a particular contractor, and poor performance by that contractor.

At trial, Bailets testified about the emotional toll of being fired for whistleblowing, including humiliation, sleepless nights, and the embarrassment of using an unemployment card to purchase groceries. In addition, Bailets testified about the pain of not being able to provide for thirteen-year-old triplet daughters and having to explain to them that he lost his job.

In particular, Bailets recalled the times he broke down crying due to anxiety about securing comparable work and the guilt he felt about having subjected his family to economic hardship. Specifically, “he said that . . . maybe he should never have notified his employers of these things that were going wrong[,]” because if “he hadn’t done that, . . . he would still be there.”

On appeal, the court rejected PTC’s assertion that the award of $1.6 million in non-economic damages was excessive and unsupported by the evidence, and PTC’s argument that Bailets’ emotional distress is “typical of anyone’s experience while between jobs.” The court pointed out that Bailets became unemployed as a result of PTC’s intentional retaliation against him for exposing wrongdoing, which caused him to “ruminate[] endlessly, wondering whether he had done the right thing given his resulting dire financial predicament and its impact on his family.” That type of emotional distress is not commonplace among persons suffering unemployment. The court then deferred to the trial court’s determination of non-economic damages and did not find any abuse of discretion to warrant setting aside the trial court’s refusal of a remittitur.

Damages and Remedies in Sarbanes-Oxley Whistleblower Cases

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