Administrative Appeals Board Affirms Award of $890,000+ for Employer’s Violation of Seamans Protection Act

In the Matter of: John R. Loftus, Complainant, v. Horizon Lines, Inc., Respondent, and Matson Alaska, Inc., Successor-In-Interest, 2018 DOL Ad. Rev. Bd. LEXIS 23* (May 24, 2018) 

By: Shiena Marie Normand

John R. Loftus (Loftus) filed a complaint with the Occupational Safety and Health Administration (OSHA)  in June 2013, alleging that his employer Horizon Lines, (Horizon), discharged him in retaliation for making protected safety reports to the United States Coast Guard (Coast Guard) and the American Bureau of Shipping (ABS).Loftus alleges that his demotion violated the Seaman Protection Act (SPA), as reporting safety concerns and violations to the Coast Guard and the ABS are protected activities under the SPA. Loftus served as a Master or Captain for twenty years and served as the Captain of the Horizon Trader from April 2007-May 28, 2013.Loftus first reported what he believed to be safety violations onboard the Horizon Trader including repeated power box fires in October 2011. During this time, Loftus informed Horizon management by email of these activities. The Coast Guard investigated and inspected the Trader and condemned certain equipment. In August 2012, Loftus notified Horizon management that there existed unsafe conditions that violated internal policies and Coast Guard regulations. Horizon managers inspected the trader; and Loftus told them that if they did not contact the Coast Guard or ABS regarding the unsafe conditions, he would contact these agencies himself. Horizon did not contact the ABS, and after  its inspection, ABS gave Horizon thirty days to bring certain equipment into compliance. In February 2013, Loftus contacted an ABS inspector and expressed safety concerns; and ABS inspected the vessel. In April 2013, Loftus contacted the Coast Guard, ABS, and a Horizon manager to express a conflict in priorities regarding his duties. On May 28, 2013, Horizon informed Loftus that he would not be rejoining the ship as Master and was demoted due to his lack of good judgment and failure to require a Job Safety Analysis (JSA) in connection with a March 2013 incident at sea in which his First Mate sustained serious injuries. Horizon indicated that  it would place Loftus into a “Chief Mate’s position” if he completed certain training courses. Loftus filed a grievance seeking restoration of his employment as Captain, but the arbitrator ruled his demotion justified.In June 2013, Loftus filed a complaint with OSHA which dismissed the complaint; Loftus requested a formal hearing  which was held by a Department of Labor Administrative Law Judge (ALJ).On July 12, 2016, the ALJ issued a Decision and Order Awarding Damages, finding that Loftus established that “he engaged in protected activity and such activity was a contributing factor in Horizon’s decision to demote him in rank from Captain to First Mate.” *2. The ALJ also found that the demotion was a constructive discharge and Horizon had not established by clear and convincing evidence that it would have demoted Loftus absent his protected activity. Loftus was awarded $655,198.90 in back pay plus interest compounded daily; $10,000 in compensatory damages for emotional distress; $225,000 in punitive damages, and attorney fees. Horizon appealed to the Administrative Appeals Board (ARB) which affirmed the ALJ’s decision.