Bailets v. Pennsylvania Turnpike Commission – Pennsylvania Supreme Court Strengthens Pennsylvania’s Whistleblower Law for Whistleblower Plaintiffs

by Fisher Phillips
Contact

The Pennsylvania Supreme Court (the “Supreme Court”) has taken the “whistleblowers be made whole” purpose of the Pennsylvania Whistleblower Law, 43 P.S. §§1421-1428, (the “PAWL”) to the next level in its March 27, 2018 decision in Bailets v. Pennsylvania Turnpike Commission, No. 126-2016, ___ A.3d ____, 2018 WL 1516785 (Pa. 2018).

In an issue of first impression in Pennsylvania, the Supreme Court found that non-economic damages for items such as embarrassment, humiliation, loss of reputation, and mental anguish are available to successful plaintiffs under the PAWL. Even more, the Supreme Court found that a $1.6 million award for the plaintiff’s non-economic damages was not excessive. The Bailets opinion emphasizes the PAWL’s remedial purpose of protecting employees who inform authorities of wrongdoing and putting the employee “in no worse a position for having exposed the wrongdoing.”

Case Background

The Pennsylvania Turnpike Commission (“PTC”) terminated the employment of plaintiff Ralph M. Bailets, former Manager of Financial Systems and Reporting, after Bailets worked there for ten years. Bailets’ primary job responsibility was to ensure PTC’s financial reports were produced accurately and in a timely fashion. In reviewing submissions in response to requests for proposals, Bailets voiced concerns to his immediate supervisor that one of the bidders for the contract, Ciber, Inc. (“Ciber”), had an unfair advantage over the other bidders. Despite having submitted the highest bid, Ciber was awarded the $53.8 million contract.

After Ciber received the substantial contract, Bailets reported to his manager Ciber’s significant poor performance issues. Bailets also reported the issues to his colleague, Nikolaus H. Grieshaber, who acknowledged that Ciber was “politically connected within the PTC hierarchy, and warned Bailets to tread lightly in his complaints about Ciber.” Shortly after making these statements, Grieshaber became PTC’s Chief Financial Officer and almost immediately sent the COO an email stating he has “a lot of misgivings about” Bailets and that PTC needed to “keep a short leash on him.” Ciber was awarded another substantial contract and Bailets continued to complain regarding Ciber’s deficiencies. PTC terminated Bailets’ employment (along with fourteen other employees) citing to elimination of his position due to budgetary reasons. Bailets was immediately escorted from the building with his belongings in hand.

Legal Analysis

Bailets filed a complaint in the Commonwealth Court (the “trial court”), alleging a single claim of retaliation under the PAWL. The trial court granted PTC’s motion for summary judgment. Bailets appealed and the case was remanded back to the trial court for further proceedings, noting that Bailets’ complaint clearly presented prima facie evidence of violations of the PAWL. After a four-day bench trial, the trial court found that Bailets’ termination violated the PAWL and awarded Bailets $1.6 million in economic damages and $1.6 million in non-economic damages, for a total of $3.2 million. Adhering to the “no worse a position” theory, the trial court concluded that “[w]ithout compensation for harm to his reputation, humiliation and mental anguish, Bailets would be in a far worse position for having reported the wrongdoing.” The trial court also highlighted that other jurisdictions with similar whistleblower protection law have determined that non-economic damages are recoverable.

PTC appealed and the Supreme Court was faced with answering two questions: (1) whether noneconomic damages are recoverable under the PAWL; and (2) whether the $1.6 million noneconomic damages award was excessive.

With respect to the first issue, the Supreme Court analyzed the statutory meaning of “actual damages” in section 1425 of the PAWL. After reviewing the arguments from both parties, the Supreme Court determined:

Given the overriding purpose of the [PAWL] and our determination a whistleblower must be put in no worse a position for having reported the wrongdoing, we cannot view the phrase ‘actual damages’ as excluding damages for such items of loss as humiliation, embarrassment and mental anguish because if no recovery for such items of loss are available, a whistleblower cannot be made whole. Similarly, in viewing the consequences of a particular interpretation, any construction which limits the phrase ‘actual damages’ to economic losses leaves whistleblowers uncompensated for any non-economic harms they might suffer as a result of their decision to expose the wrongdoing of their employers, harms which lie completely outside such items as loss of pay and benefits.  

With this significant holding, the Supreme Court then moved to the second question of whether the trial court’s $1.6 million award of noneconomic damages was excessive. Among PTC’s arguments, PTC argued that the trial court awarded Bailets such a high award of noneconomic damages as a way of getting around the fact that punitive damages are not available under the PAWL, citing to a footnote in the trial court’s opinion, and that Bailets did not present any medical evidence. The Supreme Court was not convinced by these arguments. The Supreme Court noted that PTC “clearly minimizes the level, duration and extent of Bailets’ non-economic injuries.” With respect to PTC’s argument that Bailets’ “emotional state mirrored those of any person who might find himself unemployed,” the Supreme Court took the opportunity to reiterate the wrongdoing that PTC engaged in and noted that PTC “quite misses the point that Bailets became unemployed as a result of PTC’s intentional retaliation against him for exposing wrongdoing, a turn of events about which Bailets ruminated endlessly, wondering whether he had done the right thing given his resulting dire financial predicament and its impact on his family.” The Supreme Court concluded that the trial court made a “legitimate inference from the evidence presented at trial.”

Takeaways for Employers

The Bailets decision is a clear victory for whistleblower plaintiffs. Assessing damages for a PAWL claim are no longer easily quantified (e.g., back pay, front pay, fringe benefits, etc.) and the affordance of noneconomic damages makes it quite hard for an employer to ballpark its exposure. Moreover, these cases can be drawn out (almost ten years since the case was filed), and, as such, an attorney’s fees award, which is permitted by the PAWL, can be quite steep.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips
Contact
more
less

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.