FELA – Compensation

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United States Supreme Court

Case Name: BNSF Railway Company v. Michael D. Loos

Case No.: 17-1042

Focus: FELA – Compensation

Respondent Michael Loos was injured while working at petitioner BNSF Railway Company’s railyard. Loos sued BNSF under the Federal Employers’ Liability Act (FELA), 35 Stat. 65, as amended, 45 U. S. C. §51 et seq., and gained a $126,212.78 jury verdict. Of that amount the jury ascribed $30,000 to wages lost during the time Loos was unable to work. BNSF moved for an offset against the judgment. The lost wages awarded Loos, BNSF asserted, constituted “compensation” taxable under the Railroad Retirement Tax Act (RRTA), 26 U. S. C. §3201 et seq. Therefore, BNSF urged, the railway was required to withhold a portion of the $30,000 attributable to lost wages to cover Loos’s share of RRTA taxes, which came to $3,765. The District Court and the Court of Appeals for the Eighth Circuit rejected the requested offset, holding that an award of damages compensating an injured railroad worker for lost wages is not taxable under the RRTA.

The question presented: Is a railroad’s payment to an employee for working time lost due to an on-the-job injury taxable “compensation” under the RRTA, 26 U. S. C. §3231(e)(1)? We granted review to resolve a division of opinion on the answer to that question. 584 U. S. ___ (2018). Compare Hance v. Norfolk S. R. Co., 571 F. 3d 511, 523 (CA6 2009) (“compensation” includes pay for time lost); Phillips v. Chicago Central & Pacific R. Co., 853 N. W. 2d 636, 650–651 (Iowa 2014) (agency reasonably interpreted “compensation” as including pay for time lost); Heckman v. Burlington N. Santa Fe R. Co., 286 Neb. 453, 463, 837 N. W. 2d 532, 540 (2013) (“compensation” includes pay for time lost), with 865 F. 3d 1106, 1117–1118 (CA8 2017) (case below) (“compensation” does not include pay for time lost); Mickey v. BNSF R. Co., 437 S. W. 3d 207, 218 (Mo. 2014) (“compensation” does not include FELA damages for lost wages). We now hold that an award compensating for lost wages is subject to taxation under the RRTA.

Reversed and remanded

Dissenting: GORSUCH, J., filed a dissenting opinion, in which THOMAS, J., joined.

Concurring:

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.