CSX Whistleblower’s 2d Cir. Case Is Chance to Apply New Standard

A former CSX Transportation Inc. train conductor will try to persuade a federal appeals court to revive his retaliation lawsuit in the wake of a new US Supreme Court standard making it easier for whistleblowers to prove their cases.

A three-judge panel of the US Court of Appeals for the Second Circuit is slated to hear oral arguments Friday over whether a district judge correctly found that Cody Ziparo couldn’t show that CSX intentionally fired him for reporting two supervisors whom he said pressured him to falsely boost production numbers in work logs in order to boost their chances at getting higher bonuses.

The case allows the Second Circuit to revisit its 2020 holding in Tompkins v. Metro-North Commuter Railroad Co. that “some evidence of retaliatory intent is a necessary component” of a whistleblower claim under the Federal Railroad Safety Act.

The oral arguments come exactly a month after the Supreme Court unanimously overturned a different Second Circuit order—which relied on Tompkins—that the Sarbanes-Oxley Act requires plaintiffs to meet that higher burden of proof to make a valid whistleblower retaliation claim.

The law, as the Supreme Court interpreted it, only requires an employee to show that their whistleblowing was a contributing factor in the employer’s decision to fire or otherwise discriminate against them. The decision implicates the FRSA and more than a dozen other federal laws with whistleblower language that mirrors Sarbanes-Oxley, legal scholars told Bloomberg Law.

The CSX case could be an early indicator of how lower courts will apply the Supreme Court’s new test for whistleblowers alleging retaliation.

Second Circuit Judges Robert Sack, William Nardini, and Myrna Pérez will hear the case.

Second Time on Appeal

Friday’s oral arguments mark Ziparo’s second time at the Second Circuit.

The conductor, who worked for CSX from 2006 until his termination in 2016, said the demands made by his supervisors created an unsafe work environment and caused him so much stress that he became unable to focus on his work. That violates the FRSA’s ban on retaliation against a worker who reports what they reasonably believe to be a “hazardous safety or security condition” that runs afoul of federal law and railway safety rules, he said.

The district judge determined there was no proof that Ziparo experienced any stressful condition. The hazardous condition he complained about, which was stress, isn’t protected under the FRSA’s whistleblower protection provisions, the judge said.

The appeals court in 2021 reversed the district judge’s dismissal, ruling that it’s not objectively unreasonable to conclude Ziparo’s report concerned safety or security.

A three-judge panel of the Second Circuit examined the meaning of the railway safety law’s protections for workers “reporting, in good faith, a hazardous safety or security condition.”

Complaints of stress and distracting work conditions may fall into the scope of these factors, it said. The FRSA doesn’t include a reasonableness requirement for reports made in good faith, and applying one would be inconsistent with its purpose to promote railway safety, the panel said.

The district court was instructed to address whether the alleged retaliation was causally related to Ziparo’s protected activity, and ultimately concluded it was not.

Dispute Over Reason

CSX argued that Ziparo was fired for his failure to realign a mainline switch, which the company said would’ve caused a catastrophic collision.

But in his appellate brief, Ziparo insisted that CSX illegally fired him for his protected activity, and that he repeatedly reported that his supervisors’ continued demands and threats of insubordination were causing him undue stress on the job.

“CSX cannot possibly establish that it consistently applied the switch rule to Ziparo when it terminated him,” the brief said, citing testimony from other employees that leaving a switch open on a mainline track isn’t always a termination-level offense.

Ziparo’s brief, which predates the Supreme Court decision, also urged the Second Circuit to reconsider its “retaliatory intent” standard for an FRSA claim.

Most of the federal appeals courts that have addressed the issue—including the Tenth, Ninth, Sixth, Fourth, Third, and First circuits—only require a plaintiff to demonstrate that their protected activity under the FRSA was a contributing factor to the adverse employment action they faced.

But CSX maintained that there’s no evidence that Ziparo’s termination was motivated by anything other than his failure to realign the mainline switch. Ziparo would’ve still been fired for this reason even if he hadn’t engaged in any protected activity, the company’s response brief said.

“If the switch is not returned to its normal position, a train traveling on the mainline could inadvertently divert into the industrial siding with potentially deadly results,” the brief said. “CSX has numerous rules in place to ensure that conductors return mainline switches to their normal position at the conclusion of switching operations.”

The argument that the Second Circuit should overrule Tompkins and replace it with a contributing factor test also lacks merit, CSX said.

“Ziparo has not offered any special justification for departing from the Court’s established retaliatory-intent and discriminatory-animus standard. Thus, the Court should decline Ziparo’s invitation to do so,” it said.

Darby Law Group LLC represent Ziparo. Baker & Hostetler LLP and Nixon Peabody LLP represent CSX.

The case is Ziparo v. CSX Transp. Inc., 2d Cir., No. 23-00262, oral argument scheduled 3/8/24.