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Court Rules that Damages for Humiliation, Mental Anguish Recoverable in Whistleblower Cases

In March of 2018, the Pennsylvania Supreme Court handed down a much-anticipated ruling in Bailets v. Pennsylvania Turnpike Commission, unanimously ruling that noneconomic damages like humiliation and mental anguish are recoverable for whistleblowers who are determined to have been harmed in violation of Pennsylvania’s whistleblower law.

In Bailets, an employee with ten years of service for the Pennsylvania Turnpike Commission, Ralph M. Bailets, was fired after he made several complaints of wrongdoing regarding the formation of contracts with contractors, as well as waste. He was warned to “tread lightly” and not to “make waves,” lest his job be in jeopardy. Bailets continued to voice his concerns and was terminated shortly before the Thanksgiving holiday in 2008. In seeking damages for humiliation and mental anguish, Bailets testified the emotional impact of losing his PTC employment was “devastating, humiliating, painful, very demeaning, and very difficult emotionally.”

In coming to the conclusion that Bailets could recover for this emotional damage and in granting an additional $1.6 million for these damages, the court grappled with the issue of whether the Pennsylvania General Assembly intended to include recovery for humiliation and mental anguish when it permitted the remedy of “actual damages” in the whistleblower statute. In analyzing the legislative intent of the General Assembly, the Supreme Court looked to the context in which the phrase “actual damages” appears in the whistleblower law and determined that if the term “actual damages” was limited to only economic losses, the phrase would be “practically superfluous,” and ignore “the long-held understanding that actual damages are synonymous with compensatory damages which, of course, include damages for actual loss.” Lastly, the court acknowledged a previous decision and ruled that “a whistleblower must be put in no worse a position for having reported the wrongdoing.”

Consider in Bailets that the Commission laid off fourteen other employees at the same time as the plaintiff in a self-described organizational-wide effort to reduce expenses. Despite this fact and despite the fact that the plaintiff’s claims of emotional harm were based entirely on subjective evidence, the court found that he had been terminated for blowing the whistle and then doubled his recovery after finding that emotional damages were compensable in whistleblower cases.

After observing the relative ease with which the plaintiff was able to double his recovery in Bailets, carriers, customers, brokers, and shippers alike need to be wary of those employees with the potential to make claims under state or STAA whistleblower laws and be proactive in an attempt to prevent them all together. If you think you or your company may be facing a potential whistleblower claim, contact Steve Setliff at (804) 377-1261 or ssetliff@setlifflaw.com to walk you through the process of defending the claims step by step.