The United States First Circuit Court of Appeal in Boston upheld a ruling against Pan Am Railways, Inc., that the company retaliated against an employee seeking damages over a workplace injury.

According to an opinion filed by the court, Pan Am was required to pay $250,000 in punitive damages to a former employee, Jason Raye, who was injured on the job at the Waterville rail yard after he stepped on a pile of railroad ties. According to the opinion, Raye, a Waterville-area man, thought the pile was a workplace hazard and reported it to his manager, Dwynn Williams, in October 2011. The pile was not removed, and Raye later stepped off a train onto the same pile and badly sprained his ankle.

Reached on Monday evening, Raye declined to comment. Representatives from Pan Am could not be reached.

Raye missed a day of work as a result of his injury, at which point Pan Am was required to report Raye’s injury and its cause to the Federal Railroad Administration. Raye was served a notice of hearing, alleging he had violated a safety rule by not observing ground conditions. Raye had testified he had stepped down safely, but nonetheless fell on the loose pile of ties.

Raye then retained a lawyer, who drafted and submitted a typed complaint to the Occupational Safety and Health Administration. According to the opinion, the complaint was consistent with Raye’s testimony, aside from a discrepancy in the description of the fall. Raye testified that after he rolled his ankle he caught himself and sat down on the ground, while the typed complaint stated he fell hard to the ground. Pan Am called those two different statements a “major discrepancy,” and brought another set of disciplinary charges against him, threatening him with firing for providing “false statements” about his injury.

In another hearing, Raye said his lawyer had typed the statement’s contents and he had not been aware of them. Pan Am sent Raye a second notice of a hearing that listed charges against him and threatened him with termination. According to the opinion, “OSHA and the (administrative law judge) would later find that retaliation against Raye for filing the initial OSHA complaint was a contributing factor in Pan Am’s decision to bring new charges.”

Raye’s lawyer amended the OSHA complaint to include allegations that the charges from Pan Am amounted to retaliation against Raye for having filed the initial complaint.

OSHA later rejected Raye’s claim that Pan Am had retaliated against him for reporting his injury or for reporting a safety hazard, stating that the company had “provided clear and convincing evidence that it would have reprimanded” Raye if it had observed the incident even without resulting injury. However, OSHA agreed that Pan Am had unlawfully retaliated against Raye by bringing the second set of charges against him after he filed the original complaint. According to the court document, Pan Am had “not provided clear and convincing evidence … that it would have taken the same adverse action even if (Raye) had not engaged in protected activity.”

An administrative law judge rejected Pan Am’s defense and awarded $250,000 in punitive damages, the maximum amount that the Federal Railroad Safety Act allows. The judge also awarded Raye $10,000 for emotional distress. The Department of Labor’s Administrative Review Board affirmed the decision.

The First Circuit denied Pan Am’s petition for review, holding that the administrative law judge did not make a mistake in rejecting Pan Am’s defense that it would have charged Raye with dishonesty even absent his protected activity and there was no abuse of discretion in the administrative law judge’s punitive damages award.

The appeals court said there was “substantial evidence” to support the administrative law judge’s conclusion that Pan Am “overstated the significance of the discrepancy” in Raye’s accounts of the injury and that Pan Am appeared to have “a corporate culture more focused on retaliation than on safety.” In fact, the judge had found that 99 percent of the injuries to Pan Am employees that required a report to the railway administration led to the company filing disciplinary charges against the worker.

The Portland Press Herald contributed to this story.

Colin Ellis — 861-9253

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Twitter: @colinoellis