Decision against Matson in whistleblower case over Jones Act shipboard safety

by Michael Hansen, Hawaii Shippers Council, July 21, 2016 

Marine Log reported on July 20, 2016, in a news article, “Whistleblower captain fired by Horizon awarded $1 million,” that the now defunct Horizon Line Inc. covered up unsafe conditions on the Jones Act containership HORIZON TRADER (built 1973, now scrapped) employed in the Puerto Rico trade during 2013.

As Matson Inc. acquired Horizon in 2015 and retained Horizon’s Alaska service, the decision in the whistleblower case handed down on July 12, 2016, was against Matson Alaska Inc. as the successor company.

This case clearly demonstrates the fallacy of Jones Act industry claims that that safety on Jones Act ships is second to none in the world and a primary reason not to allow foreign built and foreign flag ships into domestic coastwise trades.

Key excerpts:

In a landmark Seaman's Protection Act decision, a U.S. Department of Labor Administrative Law Judge has awarded a former Horizon Lines master more than $1 million of damages after being fired in 2013 following his reporting of safety violations aboard his then command, the Horizon Trader.

In a decision in the case (John Loftus v. Horizon Lines, Inc. and Matson Alaska, Inc.) handed down on July 12, 2016, Administrative Law Judge Jonathan C. Calianos, writes:

"I find that Horizon violated Loftus's right to be free from retaliation under the SPA. See 46 U.S.C. § 2114(a). Loftus proved by a preponderance of the evidence that he engaged in protected activity in October of 2011, August of 2012, and February and April of 2013 by reporting and threatening to report to the USCG and ABS what he believed to be safety violations on the ship he sailed as Master. Further, I find that Horizon knew of Loftus's protected activity and that his protected' activity was a contributing factor in Horizon's decision to take adverse action against him. Horizon did not prove by clear and convincing evidence that it would have demoted Loftus absent his protected activity. Accordingly, I find that Loftus is entitled to $655,198.90 in back pay plus interest compounded on a daily basis, $10,000 in compensatory damages for emotional distress, $225,000 in punitive damages, and reasonable litigation costs including attorney fees."

After a March 2013 incident when Chief Mate Robert McCarthy, second in command of the Trader, was severely injured while performing a task on deck, the ruling finds that Horizon engaged in "machinations" in forming a disciplinary team and an investigation team to mask the true reasons for its actions—to discipline Loftus for his protected activity and used "smoke and mirrors" to justify the decision it had already reached.