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Trucking Company Owner Personally Liable for Whistleblower Retaliation Claim

    Client Alerts
  • October 11, 2016

Recent amendments to the Surface Transportation Act include a new cause of action for employees of companies engaged in interstate transportation who allege that they were fired or had other adverse action taken against them because they complained about safety concerns. In a recent unpublished decision, the Sixth Circuit Court of Appeals concluded that the president and sole shareholder of a trucking company was personally liable for damages relating to termination of a driver who threatened to report the carrier to DOT for operating unsafe equipment.

In Smith v. Perez, the federal Department of Labor (which enforces the whistleblower provisions of the STA) filed an administrative claim against the carrier, its owner and her husband for allegedly terminating a driver when he refused to continue driving after being involved in an accident he attributed to unsafe equipment. He claimed that he told the president that she could replace the equipment or replace him, and that he intended to report the unsafe equipment to DOT. DOL filed suit after investigating the employee’s retaliation complaint, alleging that the carrier told the employee that it accepted his resignation from employment in light of his threats.

After a federal administrative law judge awarded the employee damages and attorney’s fees, the trucking company appealed. Among other grounds, it challenged the award of damages personally against the company’s owner and her husband. The Sixth Circuit confirmed that the STA’s whistleblower penalties apply to owners or supervisors of a carrier who retaliate against an employee who complains about safety conditions. The court did vacate the award against the owner’s husband on the basis that he only had tangential involvement with the business or the decision to terminate the driver’s employment.

This case cautions motor and other carriers that their corporate status will not protect owners and managers from personal liability for safety-related whistleblower retaliation claim. Any such claims should be treated seriously and investigated, with explicit warnings to supervisors about the federal prohibition against retaliation for making such complaints, whether internal or external.