The Administrative Review Board within the state Department of Labor has affirmed a $1.1 million award to a former ship captain who was constructively discharged after complaining about safety violations on his ship.
The whistleblower retaliation case pitted longtime Horizon Lines ship Captain John Loftus against his former employer, which has since been bought by Matson Alaska. Following a three-day trial in 2015, Administrative Law Judge Jonathan Calianos awarded the New Hampshire resident $650,000 in back pay with interest; $225,000 in punitive damages; $10,000 for emotional distress; and more than $200,000 in attorney fees and expenses. The Seaman’s Protection Act prohibits retaliation against any seaman who reports a work-related injury or who reports safety violations to the U.S. Coast Guard.
Administrative Appeals Judges Leonard Howie III and Joanne Royce Thursday upheld Calianos’ ruling in the wrongful-termination case.
The company has until July 23 to raise a challenge in the U.S. Court of Appeals for First Circuit in Boston.
Kevin Joyner, shareholder with Ogletree, Deakins, Nash, Smoak & Stewart in Raleigh, North Carolina, represents the shipping company. Joyner said Tuesday he’d have to first confer with his client on any possible appeal. He declined to discuss any aspect of the case, other than to say he’d be talking to the defendant about a potential challenge.
Matson Alaska spokesman Keoni Wagner Tuesday declined to comment, saying the case stemmed from Horizon Lines’ Puerto Rico operation, and had been in litigation since before Matson acquired Horizon in 2015.
Loftus was in maritime for more than 40 years and had been captain of the 813-foot-long container ship when he was constructively discharged, or involuntarily fired, in June 2013. He had made several whistleblower safety complaints to both the U.S. Coast Guard and its delegated inspection agency, the American Bureau of Shipping. In one instance in 2013, Loftus told ABS about alleged safety concerns, before the ship’s annual inspection, about manholes, special valves and fuel systems that didn’t work.
Eventually, the company, citing the injuries to a chief mate, demoted Loftus to chief mate, which is the ship’s second in command. At issue was an injury to Robert McCarthy, which the company said was Loftus’ fault since he was the captain. McCarthy sustained fractured ribs and back injuries from moving garbage containers on the deck.
“The injury to Mr. McCarthy was a red herring,” said Charlie Goetsch, Loftus’ New Haven-based attorney. “No captain has ever been demoted like that before in the long history of the company.”
Goetsch told the Connecticut Law Tribune Loftus had no choice but to decline the demotion to chief mate.
“He’d be doomed to failure in that position,” Goetsch said. “Once you are captain and then demoted to chief mate, you have no respect from the crew. They simply will not take you seriously because you were demoted.”
A solo practitioner, Goetsch has about 40 years of experience in whistleblower cases, but most have dealt with the railroad industry. This was his first time representing a ship captain, and he had a lot to study up on to get familiar with maritime culture.
“The most challenging part for me was learning about a whole new industry, which is the merchant marine heavy shipping industry,” Goetsch said. “I had to learn about the regulations that apply to the industry and the culture that prevailed in the workplace. Once I got over the initial hump of learning about a new industry, I felt comfortable and it was full speed ahead.”
Goetsch called the learning process “fascinating.”
“The general dynamic was very similar to the railroad industry, which has a history of having an abusive retaliatory workplace environment,” he said. “I found out that the [maritime] culture is that you do not even consider calling the Coast Guard because they know what will happen to them.”
Goetsch said he learned a lot about the process and the industry from his client.
“I was fortunate because John is a highly intelligent and well-educated man,” he said. “I used him as a resource.”
Goetsch relied on five experts to strengthen his case by confirming his client did the right thing by exposing the alleged safety violations. Those experts included former captains and former Coast Guard inspectors.
For his part, 69-year-old Loftus told the Connecticut Law Tribune Tuesday, “It’s not about me anymore, but about the seamen in general and other people not having to go through what I went through. I felt vindicated with the first ruling and ever more so with the second ruling.”
Loftus, who earned $313,000 annually, said he’d hoped to be a captain until he was 75 years old. He also said he’s not angry or bitter and will miss being on the ship and the camaraderie of his former colleagues.
The two appeal judges struck down all of the defense arguments. The company had argued it demoted Loftus solely because of McCarthy’s injury, and not because he questioned safety procedures.
“Upon review of the ALJ’s findings, we find no reversible error in his determination that Horizon failed to demonstrate by clear and convincing evidence that it would have demoted Loftus in the absence of his protected [whistleblower] activity,” the court ruled.