Employment and Labor Relations Lawyer & Attorney : Porter Wright's Employer Law Report : Employment Litigation, Non-Compete, Trade Secrets

On June 27, 2008, the Ohio Bureau of Workers’ Compensation (BWC) Board of Directors unanimously approved the first phase of a long-term plan that will transition to a new split experience rating method for calculating premium rates that is designed to cushion the premium blow that state-funded employers frequently receive as the result of a single costly workers' compensation claim. In addition, the plan will:

-- Gradually reduce the maximum group rating discount from 85 to 77%beginning July 1, 2009, with a 20% annual cap on premium rate increases caused by these discount reductions;

-- Cap premium increases at 100% for all employers, including those that have been removed from a group; and

-- Develop additional inducements for employers to manage costs and improve workplace safety.

According to the BWC's press release, the long-term plan proposes a gradual transition to the new experience rating method over three years. The first phase of the plan was approved with further study on the group rating rules and governance to be complete by 2009. Other aspects of the long-term plan, such as an additional discount reduction in 2010 and the rating transition in 2011 will be addressed after further testing and impact analysis are complete.

The plan looks to be a step in the right direction for Ohio's state-funded employers. At a minimum, the BWC expects that the changes ultimately will reduce base rates by 23 to 27%. Though it continues the recent reductions in the discounts associated with the group rating program, the plan should make it more difficult for employers to be removed from a group and, for those that are removed, less costly.

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The Supreme Court of Ohio recently invalidated a settlement agreement between an employer and an injured worker because the agreement failed to state a reason for the settlement. What makes this case particularly unsettling for Ohio employers is the fact that the settlement was entered into and approved by the Bureau of Workers’ Compensation (BWC) in 1997 – more than ten years ago.

Ohio’s workers’ compensation statute requires that all settlements be reviewed and approved by the BWC. Ohio law further states that all settlement applications “shall . . . clearly set forth the circumstances by reason of which the proposed settlement is deemed desirable.” R.C. § 4123.65. The employer in Wise v. Ryan learned these lessons the hard way.

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In a case alleging intentional tort and negligent hiring and retention, the Ohio Tenth District Court of Appeals held that the  employer was not liable when one employee attacked and assaulted a fellow employee at work. Weimerskirch v. Coakley, Case No. 07AP-952, (10th Dist. Franklin County, April 8, 2008). 

David Coakley worked as a mechanic for AMF Bowling Inc. On June 6, 2004, Gary Weimerskirch, an assistant manager at AMF, walked in on Coakley and his girlfriend just after they, apparently, had sexual relations. Unexpectedly, Coakley told Weimerskirch that he quit and  began to collect his personal effects from the work area. As Coakley took his belongings to his vehicle, which was parked behind the building, he spontaneously grabbed a two-by-four, ran toward Weimerskirch, and struck him on the head with the board. Weimerskirch filed a lawsuit against Coakley personally, and also against AMF for employer intentional tort and negligent hiring and retention. The trial court granted summary judgment for AMF, and Weimerskirch filed an appeal.

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On March 18, 2008, the Court of Appeals for the Seventh Appellate District struck down the portion of Ohio’s Tort Reform Act that created a heightened standard for employees bringing intentional tort claims against their employers. Specifically, Kaminski v. Metal & Wire Prods. Co., Case No. 07-CO-15 (7th Dist. March 18, 2008), was the first appellate decision addressing the constitutionality of this heightened standard, and it found the standard improper.

Normally, an employee who suffers a workplace injury cannot file a lawsuit but must, instead, seek compensation under Ohio’s workers’ compensation system. Proof that the employer’s conduct was intentional, however, allows the employee to go around the workers’ compensation system and file a lawsuit for damages. 

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The Ohio Supreme Court just paved the way for employers to recoup workers’ compensation benefits paid to employees who later recover money damages for their injuries from other sources. By endorsing such so-called subrogation rights, the Court provides employers with an important cost-control tool. Employers should, therefore, keep their eyes open for subrogation opportunities and act quickly to take advantage of them.

In its latest review of the Ohio legislature’s effort to provide subrogation rights to those who pay workers’ compensation benefits, the Ohio Supreme Court held that the subrogation statute finally passes constitutional muster. The Court reached its finding in Groch v. Gen. Motors Corp., after questions about the constitutionality of R.C. 4123.93 and 4123.931 were raised. The Groch Court held that the statutorily-authorized right of recovery by the administrator of workers’ compensation (in a state fund claim),  a self-insuring employer or a direct-payor employer for payments to workers’ compensation claimants does not violate the Takings, Due Process, Remedies, or Equal Protection Clauses of the Ohio Constitution.

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A recent appellate decision demonstrates the necessity for state-fund employers to retain legal counsel to protect their interests when a workers’ compensation claim is appealed to state court. In Smith v. Kaleal, 2007-Ohio-6560, (11th Dist. Lake County), the claimant, Christopher Smith, filed a workers’ compensation claim against his employer, Dan Kaleal, owner of All Occasion Limousine, Inc. Smith’s claim was denied administratively by the Industrial Commission of Ohio, and he filed a notice of appeal and complaint in the Lake County Court of Common Pleas naming both the Bureau of Workers’ Compensation (BWC) and Kaleal as defendants.  

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The Ohio Supreme Court recently decided State ex rel. Nerlinger v. AJR Enterp., Inc., 116 Ohio St. 3d 314, 2007-Ohio-6438, a potentially significant new workers’ compensation opinion that addresses the Industrial Commission’s ability to accept or reject affidavit testimony. The injured employee failed to appear for his allowance hearing before the IC, and his claim was denied. Fourteen months later, the employee – now represented by counsel – filed a motion for reconsideration, attaching an affidavit saying that he did not receive the hearing notice. The IC, without making any express findings about the credibility of the employee’s affidavit, found that the notices were “properly mailed to the correct address of the injured worker.” On review, the Ohio Supreme Court held that the IC was exclusively responsible for evaluating the weight and credibility of evidence and did not need to explain why an affidavit was unpersuasive. 

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In its Sunday, February 4, 2008, edition, the Columbus Dispatch reported that the Industrial Commission, "a forgotten corner of the state bureaucracy that deals with injured workers' claims," was experiencing an unusually large number of grievances filed by its OCSEA-represented employees. According to the article, the grievances cover a wide range of issues including personal ones, such as the denial of bereavement leave, to issues that more fundamentally address the Commission's claims handling process. As for the latter category, the article quotes a grievance from a union steward that suggests that the Commission has established "arbitrary quota[s]" that "sacrifice the quality of [Commission employees’] work product." The Commission's Executive Director, Patrick Gannon, is quoted in the article as stating that "labor-management issues everywhere do have an effect on productivity." The article, which does not suggest that hearing officer decisions have been impacted, notes that the OCSEA will meet with Mr. Gannon and Commission Chairman, Gary DiCeglio, on February 13th.   We will keep our eyes and ears open for any additional information that may become public.

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Even in the chaotic world of Ohio workers’ compensation, crime still doesn’t pay – at least not for one enterprising Ohio claimant. Finding that the sale of crack cocaine over a three-year timeframe amounted to an exchange of labor for pay over a sustained period, the Ohio Supreme Court upheld the Industrial Commission’s determination that an injured worker was not entitled to permanent total disability compensation.   In reaching this rather obvious conclusion in State ex rel. Lynch v. Indus. Comm., 2007-Ohio-6668, the Ohio Supreme Court rejected the injured worker’s inspired argument that his activity could not be considered sustained remunerative employment because it was illegal.  

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On December 20, 2007, the Supreme Court of Ohio released its decision in Bickers v. Western & Southern Life Insurance Company, which expressly limits the Court’s previous holding in Coolidge v. Riverdale Local School District. In Coolidge, the Supreme Court held that an employer could not terminate an employee who was receiving temporary total disability compensation on the basis of absenteeism or inability to work, when the absence or inability to work is directly related to an allowed medical condition in his or her workers’ compensation claim. 

As a result of the Coolidge decision, many Ohio employers were frustrated in their efforts to manage production needs because they could not terminate and replace employees who had been off work for significant periods of time. In addition, Ohio employers complained that the Coolidge decision created an incentive for employees to delay their return to work following injuries since their jobs were protected while they were out. The Bickers decision, which for the vast majority of situations overrules Coolidge, represents a key victory for Ohio employers.

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