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Michigan Court Upholds Right to Pursue FRSA Cases in Federal Court

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In a recent case in the U.S. District Court for the Eastern District of Michigan, the court denied Grand Trunk Railroad’s Motion to Dismiss, holding that a plaintiff may pursue a Federal Railroad Safety Act (FRSA) whistleblower retaliation claim in federal court, even after he has pursued the same claim administratively with the Department of Labor. The court held that pursuing remedies in both venues did not constitute bad faith on the part of the complainant, did not present a res judicata (claim preclusion) issue, and did not violate the due process rights of the defendant railroad. This case is important because it affirms the options available to a whistleblower to fully adjudicate claims of unlawful retaliation.

In Wagner v. Grand Trunk Railroad, No. 15-10635, 2016 WL 1161351 (E.D. Mich. Mar. 23, 2016), Jacob Wagner brought a FRSA complaint against Grand Trunk, claiming that it subjected him to a retaliatory disciplinary investigation and suspension because he reported a workplace injury. OSHA’s investigation found in favor of Wagner, and Grand Trunk filed objections and requested a hearing before a Department of Labor Administrative Law Judge. The ALJ found against Wagner.

Wagner then appealed to the DOL’s Administrative Review Board.  Several days later, Wagner filed a notice of his intent to file suit in federal court under the so-called “kick-out” provision of FRSA. Grand Trunk filed a motion to dismiss, in which it claimed that Wagner had waived his right to pursue the case in federal court based on a comment from his attorney, that Wagner had acted in bad faith, that Wagner’s federal court claim was barred under the doctrine of res judicata, and that the kick-out provision was an unconstitutional violation of its due process rights.

The District Court for the Eastern District of Michigan held that Wagner had not waived his right to exercise the kick-out option, as the only evidence of this alleged waiver was an offhand comment by Wagner’s attorney, in chambers, that Wagner had “chosen his venue.” Further, the court held that there was no evidence of bad faith on Wagner’s part, as the only alleged act of bad faith was that he continued to pursue administrative litigation with the intention of later going to federal court. Judge Berg noted that no other court had ever found such actions by a plaintiff to constitute “bad faith” within the meaning of FRSA.

The court also noted that res judicata, which bars a claim from being litigated again after a final judgment has been entered on the claim, is a common law doctrine which Congress can displace by statute, as it did with FRSA when it authorized a complainant to seek de novo review from a federal court.  And the court held that Grand Trunk would not be deprived of due process, as the burdens of litigation would fall on both Wagner and Grand Trunk, Grand Trunk would have ample opportunity to defend itself, and that no fundamental right of Grand Trunk had been violated. Finally, the court noted that FRSA is one of many whistleblower statutes, including Sarbanes-Oxley and the Energy Reorganization Act, which provide whistleblowers the right to seek de novo review of DOL rulings in federal court.

This case is important because it succinctly describes the rationale behind allowing whistleblowers access to both the administrative process and federal courts in order to adjudicate their claims. Additionally, this case explains that access to both administrative adjudication and federal courts ultimately serves the purpose of whistleblower protection statutes – to provide whistleblowers with meaningful protection when they speak out about safety violations or other matters of public concern.

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