W.Va. high court affirms $2M judgment against CSX

Jessica M. Karmasek Jun. 8, 2012, 2:15pm


CHARLESTON, W.Va. (Legal Newsline) - The West Virginia Supreme Court of Appeals this week upheld a $2 million judgment against CSX in a lawsuit over the company's hostile work environment.

In its appeal to the Court, defendant CSX Transportation Inc. challenged an order entered Nov. 19, 2011 by the Boone County Circuit Court, denying its motion for post-trial relief.

The circuit court had ruled that plaintiff Angela Smith presented "sufficient evidence" to prove her hostile work environment claim; the jury was instructed correctly on the law of retaliatory discharge; and the evidence supported the jury's award of punitive damages.

The state's high court, in a per curiam opinion filed Thursday, concluded that the lower court did not err by denying the company's request for post-trial relief.

The case centers on comments made by and the behavior of one of CSX's trainmasters, E. Wesley Knick.

Smith, a yardmaster and then a trainmaster, alleged that Knick made disparaging comments about her sexual orientation -- the Court noted she is a lesbian -- and, later, threatened her following his removal by the company from his management position. CSX did not terminate Knick's employment, despite Smith's allegations against him.

In May 2008, Smith filed a complaint in Boone Circuit Court against CSX alleging sexual harassment, hostile work environment, constructive discharge, retaliation for her complaints of sexual harassment and negligent retentions of Knick.

A bifurcated, or split, jury trial was held.

The jury, finding in favor of Smith, awarded her $1,557,600 in compensatory damages.

With respective to punitive damages, it found the company's actions "malicious, oppressive, wanton, willful, reckless or with criminal indifference to civil obligations" and awarded Smith $500,000.

The Court, in its 48-page ruling, said it was the "cumulative effect" of Knick's misconduct -- which CSX compounded by its inaction -- that provided "sufficient facts" from which the jury could conclude that the sexual harassment endured by Smith was both severe and pervasive.

"To establish severity and pervasiveness, Ms. Smith demonstrated that Mr. Knick's derogatory comment and the ramifications from her reporting thereof resulted in her supervisors directing her to immediately leave her workplace because they feared reprisal from Mr. Knick's demotion and advising her to take a paid administrative leave," it wrote. "The fallout from this incident additionally required Ms. Smith to obtain psychiatric counseling and treatment and to take an extended medical leave of absence.

"Finally, when Ms. Smith expressed to her supervisors her discomfort, trepidation and outright fear at the prospect of having to serve as Mr. Knick's supervisor following his demotion and transfer to a locomotive engineer position within her supervisory territory, CSX's failure and refusal to accommodate her concerns forced Ms. Smith to resign her managerial position, transfer into a lower ranking job, accept a significant pay reduction, and relocate her residence simply to escape the hostile working environment created by Mr. Knick and perpetuated by CSX."

As to the amount of punitive damages, the Court said a reduction is "not warranted."

"Among the aggravating factors that justified a larger punitive damages award were the reprehensibility of CSX's conduct in promoting and perpetuating a hostile work environment due to its failure to adequately address Ms. Smith's report of sexual harassment; the psychological distress such an environment caused Ms. Smith; and the measures she, herself, had to take to ameliorate her discriminatory working conditions," it wrote.

The Court continued, "Also noteworthy are CSX's actions in this case that evidence its failure to appreciate the hostile workplace to which it subjected Ms. Smith such as CSX's decision to continue to employ Mr. Knick, despite its reported zero tolerance policy and in a position over which Ms. Smith would have been required to supervise his work performance; CSX's refusal to offer an amount in settlement of Ms. Smith's claims; and CSX's continued denials of wrongdoing in this case."

Chief Justice Menis Ketchum, the lone dissenter, said occasional vulgar banter "does not rise to the level of actionability until after there has been a significant accumulation of incidents."

"The plaintiff's hostile work environment claim consisted of one boorish comment that she overheard during a telephone call. This single comment falls far short of the 'significant accumulation' of offensive workplace conduct that Justice Cleckley discussed in Hanlon," he wrote.

"Aside from the single comment made over the telephone, the remaining incidents the plaintiff relied upon to support her hostile work environment claim occurred outside of the workplace. These incidents should not have been considered because doing so places an unfair and unmanageable duty on an employer to monitor its employees outside of the workplace."

A CSX spokesman told The Associated Press Thursday that the company was in the process of reviewing the Court's ruling.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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