By Daniel Wiessner
Nov 25 - A U.S. appeals court on Tuesday revived a former CSX Transportation conductor's lawsuit claiming he was fired for refusing to falsify safety information, and in the process made it easier for whistleblowers to prevail in lawsuits against railroads.
A unanimous three-judge panel of the New York-based 2nd U.S. Circuit Court of Appeals said the U.S. Supreme Court's 2024 ruling in Murray v. UBS that adopted a lower bar for financial whistleblowers to win retaliation lawsuits also applies to claims brought under the Federal Railroad Safety Act.
The Supreme Court in the UBS case said the federal Sarbanes-Oxley Act, which bars retaliation for whistleblowing in the financial industry, does not require a showing of retaliatory motive. Writing for the 2nd Circuit on Tuesday, Circuit Judge Robert Sack said that SOX and the railroad safety law, which shields railroad workers from retaliation for reporting safety issues, both borrowed their language from a 1989 law that strengthened legal protections for federal employees who report fraud and waste.
"Because Murray construed the same framework ... its reasoning binds us here with equal force," Sack wrote, joined by Circuit Judges William Nardini and Myrna Perez.
The court overturned its own 2020 decision in a separate case that had required railroad workers to prove their employers acted with retaliatory intent when suing under the law, and revived, for a second time, Cody Ziparo's longrunning lawsuit. He alleged CSX fired him in 2016 after he complained to the company that he was being pressured on a nearly daily basis to falsely report that he had completed certain tasks.
CSX and lawyers for Ziparo did not immediately respond to requests for comment.
Ziparo in a 2017 lawsuit claimed two supervisors pressured him to mark tasks as complete in a CSX software program even when they had not been completed, in order to inflate performance metrics and the bonuses that depended on them. He said he was fired after refusing and reporting the issue to a company ethics hotline.
CSX has maintained that Ziparo was fired for failing to return a train switch to its proper position, a potentially deadly mistake.
A New York federal judge dismissed the case in 2020, finding that Ziparo had not engaged in protected activity under the railroad safety law. The 2nd Circuit reversed a year later. The court held that to be covered by the law, a worker must have a good-faith belief rather than be objectively certain that they are reporting unlawful conduct.
On remand, U.S. District Judge Glenn Suddaby again dismissed the case in 2023. Suddaby said that under the 2nd Circuit's 2020 ruling, which involved Metro North Railroad, Ziparo was required to show that CSX acted with a retaliatory motive, and he had not.
The 2nd Circuit on Tuesday reversed, citing the Supreme Court's UBS ruling and overruling its earlier decision. The court remanded the case to Suddaby for further proceedings.
The case is Ziparo v. CSX Transportation Inc, 2nd U.S. Circuit Court of Appeals, No. 23-262.
For Ziparo: Matthew Darby of Darby Law Group
For CSX: Joseph Devine of Baker & Hostetler
Read more:
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US Supreme Court in UBS case makes it easier for whistleblowers to win suits
(Reporting by Daniel Wiessner in Albany, New York)