In the case of BNSF Railway Company v. Loos, the U.S. Supreme Court ruled that a railroad's payment to an employee for working time lost due to an on-the-job injury is taxable compensation under the Railroad Retirement Tax Act (RRTA). Michael Loos sued his employer, BNSF Railway Company, for negligence after he was injured at work and subsequently dismissed following disciplinary infractions. A jury awarded him damages which included pay for time off work as a result of his injury. The issue arose when BNSF sought to withhold taxes from this portion of the award under RRTA provisions treating "compensation" as subject to taxation - including pay for active service and paid absences from active service such as sick leave or vacation days. In a 7-2 decision, Justice Ginsburg delivered the opinion stating that these payments fall within RRTA’s definition of “compensation” because they are remuneration paid by employers “for services rendered.” Therefore, it affirmed that such awards should be taxed accordingly.

In the dissenting opinion for BNSF Railway Company v. Loos, Justice Gorsuch argued that the majority's interpretation of "compensation" under the Railroad Retirement Tax Act (RRTA) was too broad. He contended that Congress intended to tax only money paid to an employee for active service, not payments made due to legal obligations arising from personal injuries sustained during employment. The justice pointed out that other federal laws distinguish between wages and damages, with only the former being taxable. He also noted inconsistencies in how different types of awards are treated under RRTA if all were considered compensation as per majority’s view - some would be taxed while others wouldn't depending on whether they're linked directly to periods of absence from work or not which he found illogical and against congressional intent behind RRTA.