# BNSF Railway Company v. Michael D. Loos

Note: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
BNSF RAILWAY CO. v. LOOS CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 17–1042. Argued November 6, 2018–Decided March 4, 2019
Respondent Michael Loos sued petitioner BNSF Railway Company under the Federal Employers’ Liability Act (FELA) for injuries he received while working at BNSF’s railyard. A jury awarded him $126,212.78, ascribing $30,000 of that amount to wages lost during the time Loos was unable to work. BNSF asserted that the lost wages constituted “compensation” taxable under the Railroad Retirement Tax Act (RRTA) and asked to withhold $3,765 of the $30,000 to cover Loos’s share of the RRTA taxes. The District Court and 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.
Held: A railroad’s payment to an employee for working time lost due to an on-the-job injury is taxable “compensation” under the RRTA. Pp. 2–14.
    (a) In 1937, Congress created a self-sustaining retirement benefits system for railroad workers. The RRTA funds the program by imposing a payroll tax on both railroads and their employees, referring to the railroad’s contribution as an “excise” tax, 26 U. S. C. §3221, and the employee’s share as an “income” tax, §3201. The Railroad Retirement Act (RRA) entitles railroad workers to various benefits. Taxes under the RRTA and benefits under the RRA are measured by the employee’s “compensation,” which both statutes define as “any form of money remuneration paid to an individual for services rendered as an employee.” §3231(e)(1); 45 U. S. C. §231(h)(1).
    The statutory foundation of the railroad retirement system mirrors that of the Social Security system. The Federal Insurance Contributions Act (FICA) taxes employers and employees to fund benefits distributed pursuant to the Social Security Act (SSA). Tax and benefit ​amounts are determined by the worker’s “wages,” the Social Security equivalent to “compensation.” Both the FICA and the SSA define “wages” employing language resembling the RRTA and the RRA definitions of “compensation.” The term “wages” means “all remuneration” for “any service, of whatever nature, performed… by an employee.” 26 U. S. C. §3121(a)–(b) (FICA); see 42 U. S. C. §§409(a), 410(a) (SSA). Pp. 2–4.
    (b) Given the textual similarity between the definitions of “compensation” and “wages,” the decisions on the meaning of “wages” in Social Security Bd. v. Nierotko, 327 U. S. 358, and United States v. Quality Stores, Inc., 572 U. S. 141, inform this Court’s comprehension of the RRTA term “compensation.” In Nierotko, the Court held that “wages” embraced pay for active service as well as pay received for periods of absence from active service, 327 U. S., at 366, and concluded that backpay for time lost due to “the employer’s wrong” counted as “wages,” id., at 364. In Quality Stores, the Court held that severance payments qualified as “wages” taxable under the FICA. 572 U. S., at 146–147. In line with these decisions, the Court holds that “compensation” under the RRTA encompasses not simply pay for active service but also pay for periods of absence from active service–provided that the remuneration in question stems from the “employer-employee relationship.” Nierotko, 327 U. S., at 366.
    Damages awarded under the FELA for lost wages fit comfortably within this definition. See BNSF R. Co. v. Tyrrell, 581 U. S. ___, ___. If a railroad negligently fails to maintain a safe railyard and a worker is injured as a result, the FELA requires the railroad to compensate the injured worker for working time lost due to the employer’s wrongdoing. FELA damages for lost wages, like backpay, are “compensation” taxable under the RRTA. Pp. 4–7.
    (c) The Eighth Circuit construed “compensation” for RRTA purposes to mean only pay for active service, but this reading cannot be reconciled with Nierotko and Quality Stores. In addition, the RRTA’s pinpointed exclusions for certain types of payments for time lost signal that nonexcluded pay for time lost remains RRTA-taxable “compensation.” Pp. 7–10.
    (d) Loos contends that “compensation” does not include payments made to compensate for an injury. This reading, however, is at odds with Nierotko, which held that “wages” included backpay awarded to redress “the loss of wages” occasioned by “the employer’s wrong.” 327 U. S., at 364.
    Loos also argues that the exclusion of personal injury damages from “gross income” for federal income tax purposes, see 26 U. S. C. §104(a)(2), should carry over to the RRTA’s tax on the “income” of railroad workers. The RRTA, however, uses the term “income” ​merely to distinguish the “income” tax on an employee from the matching “excise” tax on a railroad. Further, Congress specified not “gross income” but employee “compensation” as the tax base for RRTA taxes. Congress did not exclude personal injury damages from “compensation.” Pp. 10–14.
865 F. 3d 1106, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Roberts, C. J., and Breyer, Alito, Sotomayor, Kagan, and Kavanaugh, JJ., joined. Gorsuch, J., filed a dissenting opinion, in which Thomas, J., joined.
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
Public domainPublic domainfalsefalse