RALPH M. BAILETS
PENNSYLVANIA TURNPIKE COMMISSION, ANTHONY Q. MAUN, (DIRECTOR OF ACCOUNTING), AND NIKOLAUS H. GRIESHABER, (CHIEF FINANCIAL OFFICER) APPEAL OF: PENNSYLVANIA TURNPIKE COMMISSION
ARGUED: November 29, 2017
from the Order of the Commonwealth Court at No. 265 MD 2009
dated December 1, 2016.
SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY,
a direct appeal by defendant/appellant Pennsylvania Turnpike
Commission ("PTC") from the Commonwealth
Court's order entering judgment on a $3.2 million verdict
in favor of plaintiff/appellee Ralph M. Bailets
("Bailets") following a non-jury trial of his
claims arising under the Whistleblower Law, 43 P.S.
§§1421-1428 ("Law"). The verdict included
$1.6 million in non-economic damages. PTC presents a question
of first impression in Pennsylvania: whether non-economic
damages for items such as embarrassment, humiliation, loss of
reputation and mental anguish are available to plaintiffs in
actions brought under the Law. Additionally, if non-economic
damages are authorized under the Law, PTC asks us to
determine whether the verdict amount was excessive in this
case. We conclude non-economic damages are available to
successful plaintiffs under the Law and the trial court did
not err or abuse its discretion in entering a verdict amount
of $1.6 million. Accordingly, we affirm the judgment.
was employed by PTC for ten years prior to his termination in
November 2008. He was the Manager of Financial Systems and
Reporting, responsible for a staff of programmers and
business analysts, and it was his duty, among other things,
to ensure PTC's financial reports were produced
accurately and in a timely fashion. Bailets reviewed
submissions in response to requests for proposals PTC issued
seeking bids for the creation and implementation of a
computerized financial reporting system. He voiced concern to
his immediate supervisor, Director of Accounting, Anthony Q.
Maun ("Maun"), that one of the bidders for the
implementation contract, Ciber, Inc. ("Ciber"), had
an unfair advantage over other vendors/bidders, because Ciber
had previously been awarded a $3.4 million contract to
identify the requirements upon which any implementation would
be based. In 2005, despite having submitted the highest bid,
Ciber was awarded a $53.8 million implementation contract.
Maun told Bailets not to make waves regarding Ciber or his
job would be in jeopardy.
Ciber secured the implementation contract, Bailets voiced
numerous complaints to Maun regarding Ciber's poor
performance, including high turnover and absenteeism of Ciber
consultants, testing failures, and lack of knowledge transfer
from Ciber consultants to PTC employees. In 2007, Bailets
reported to Maun that senior management should be informed
implementation problems were being caused by Ciber's
deficient performance, particularly in the area of knowledge
transfer, i.e., Ciber consultants failed to deliver
information to PTC employees regarding how the computerized
financial reporting system actually operated.
also complained about Ciber's performance to a co-worker,
Nikolaus H. Grieshaber ("Grieshaber"). Grieshaber
acknowledged Ciber was politically connected within the PTC
hierarchy, and warned Bailets to tread lightly in his
complaints about Ciber. The problems with implementation of
the system continued and by June 2008, the roll-out of the
system was three months behind schedule. In June 2008,
Grieshaber was promoted to the position of CFO, becoming
Maun's immediate superior. Shortly after his promotion,
Grieshaber sent an email to PTC's COO, George Hatalowich,
stating, among other things, that Grieshaber had "a lot
of misgivings about … Bailets[, ]" and that PTC
needed to "keep a short leash on him." Trial Ct.
Op., 10/6/16 at 9 (citing Trial Ex. 137). In July 2008,
Bailets was reassigned to the purchasing department. In
August 2008, Ciber was awarded an additional $19.7 million
contract to conduct knowledge transfer. Bailets continued to
complain to Maun regarding Ciber's deficiencies. On
November 20, 2008, PTC's Human Resources Director
informed Bailets his position was being eliminated for
budgetary reasons. Bailets was directed to immediately pack
his personal belongings and was escorted from the building.
he was terminated in retaliation for his reports of
wrongdoing and waste, Bailets filed a complaint in the
Commonwealth Court's original jurisdiction, alleging a
single claim under the Law against PTC. PTC filed a
motion for summary judgment claiming Bailets was terminated,
along with fourteen other employees, in an organization-wide
effort to reduce expenses. In an unreported single-judge
opinion, the court held the decision to terminate Bailets was
"a management discretionary action, motivated by
legitimate employer objectives[, ]" and granted summary
judgment in favor of PTC. Bailets v. Pa. Turnpike
Comm'n, No. 265 MD 2009, unpublished memorandum at
11 (Pa. Cmwlth. February 4, 2014). Bailets appealed and this
Court reversed, reasoning Bailets's complaint clearly
presented prima facie evidence of violations of the
Law which "at the very least created material issues of
fact to preclude the grant of summary judgment[, ]" and
remanded to the Commonwealth Court for further proceedings.
Bailets v. Pa. Turnpike Comm'n, 123 A.3d 300,
309-10 (Pa. 2015).
four-day non-jury trial in the Commonwealth Court ensued in
May 2016 at which Bailets presented evidence in support of
his claim he was fired by PTC due to his reports of waste and
wrongdoing. With respect to evidence of economic damages,
Bailets presented the expert testimony of economist Andrew
Verzilli, who, among other things, testified the accumulation
of Bailets's past and future lost earnings resulting from
his termination amounted to an "overall loss of $1, 649,
316[.00]." N.T. 5/25/16 at 514. With respect to
non-economic damages, Bailets testified the emotional impact
of losing his PTC employment was "devastating[, ]"
"humiliating[, ]" "painful[, ]"
"very demeaning[, ]" and "very difficult
emotionally[, ]" which caused him "no end of
sleepless nights[.]" N.T. 5/23/16 at 190. Bailets
specifically testified to the humiliation he felt because of
the way he was fired - "being walked out of your
employer with a box in your hand and being escorted
out." Id. He further explained it was
"certainly humiliating to use an unemployment card at
[a] local grocery store" and testified he suffered
mental distress contemplating "paying basic bills,
repairs on an aging family van, [educational] expenses for my
three daughters[, ] . . . retirement savings, medical costs,
all of those things, you know, kept me awake many nights and
laid heavily on me." Id. at 190-91. Bailets
anguished over facing his father-in-law to inform him "I
was no longer a provider for his daughter and his
grandchildren." Id. at 190. He testified it was
painful to tell his thirteen-year-old triplet daughters he no
longer had a job and it "broke [his] heart" when
one of his daughters later apologized to him "for
needing new cleats because she outgrew them."
Id. at 194.
Ann Bailets testified her husband was terminated shortly
before the Thanksgiving holiday and "he was embarrassed
and humiliated about facing the members of my family . . .
and telling them . . . he no longer had a job." N.T.
5/25/16 at 536. Mrs. Bailets additionally testified her
husband initially took a minimum wage job as a driver at an
automobile dealership just to have "some income, "
and in hopes of making business contacts that might lead to a
better employment opportunity. Id. at 537-38.
However, he became "frustrated" by his lack of
success in securing adequate employment, and "he cried
on occasions because he began to wonder if he was ever going
to get a job." Id. at 538. Additionally, on a
number of occasions he expressed his "guilt[ ] for
putting our family through this." Id.
Specifically, "he said that . . . maybe he should never
have notified his employers of these things that were going
wrong[, ]" because if "he hadn't done that, . .
. he would still be there." Id. At the same
time, she testified he said he "wanted to be able to
look in the mirror" and "know that . . . he had
done what he thought was the right thing to do."
trial court concluded Bailets met his burden under the Law of
proving he made a good faith report of PTC's wrongdoing
and waste and PTC fired him in retaliation for making the
report. In determining the issue of damages, the court first
noted the Law permits the recovery of "actual damages,
" Trial Ct. Op. at 19, quoting 43 P.S.
§1425,  and accepted the testimony of
Bailets's forensic expert calculating his economic
damages at $1.6 million. The court observed "[t]he term
actual damages is not defined under the Law, " but noted
this Court has "made clear that actual damages include
not only economic but non-economic injuries such as
'impairment of reputation and standing in the community,
personal humiliation, and mental anguish and
suffering.'" Id. at 21, quoting Joseph
v. Scranton Times L.P., 129 A.3d 404, 429 (Pa. 2015)
(additional citation omitted). The court relied on
O'Rourke v. Dep't of Corrections, 778 A.2d
1194 (Pa. 2001), for the proposition the Law is remedial in
nature and must be liberally construed. The court reasoned
actual damages must include compensation for non-economic
damages because O'Rourke emphasized a
whistleblower must be put "in no worse a position for
having exposed the wrongdoing[.]" Trial Ct. Op. at 22,
citing O'Rourke, 778 A.2d at 1202. The court
concluded "[w]ithout compensation for harm to his
reputation, humiliation and mental anguish, Bailets would be
in a far worse position for having reported the
wrongdoing." Id. at 23 (footnote omitted). The
court also noted other jurisdictions with "similar, if
not identical, whistleblower protection laws[, ]" have
concluded non-economic damages are recoverable. Id.
at 22-23 citing Robertson County v. Wymola, 17
S.W.3d 334, 347 (Tex. Ct. App. 2000) (actual damages under
whistleblower law include damages for mental anguish).
assessing the value of Bailets's non-economic damages,
the trial court credited "the testimony of Bailets and
his wife" regarding the deep humiliation, anguish and
harm to reputation Bailets suffered as a result of his
termination. Trial Ct. Op. at 24. The court concluded,
"There is no doubt that [PTC's] wrongful termination
of Bailets had a profound effect on Bailets and caused a
major disruption to his life. Therefore, this court concludes
that for his non-economic actual damages, which include harm
to his reputation, humiliation, and mental anguish, Bailets
is entitled to an award equal to that of his economic
damages, or $1.6 million." Id. at 25.
filed a motion for post-trial relief seeking, alternatively,
judgment in its favor notwithstanding the verdict (n.o.v.), a
new trial, reduction in the amount of economic damages
(remittitur), and vacation or remittitur of the amount of
non-economic damages. Following the denial of its post-trial
motion and entry of judgment on the verdict, PTC appealed.
This Court granted oral argument limited to the following
issue, and affirmed the trial court's order in all other
Was the award of $1.6 million in non-economic damages proper
where the Whistleblower Law does not permit such damages and
where the amount of non-economic damages awarded was
arbitrary, excessive, and ...