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K&D Group protested the BWC decision and ultimately filed a lawsuit challenging the BWC’s successor finding, which ultimately made its way to the Supreme Court. The Supreme Court concluded that for the BWC to transfer an experience rating from a predecessor employer to a successor employer, there "must be a transfer of business in whole or in part and the successor employer must be the successor in interest." Previously, the Supreme Court had defined a successor employer as a "transferee of a business in whole or in part."

In this case, the Supreme Court found that there was absolutely no evidence that Mid-America transferred the business of managing the apartment complex to K&D Group, as the contract was between two other entities, K&D Enterprises and Fame-Midamco. Further, the Supreme Court specifically stated that the fact that K&D Group hired some of the former employees of Mid-America, assumed management of the apartment leases, and coded its employees under the same job classification code as Mid-America was not sufficient to demonstrate that Mid-America transferred its business operation to K&D Group. The Court found that K&D's mere agreement to assume management of the existing apartment complex did not create a successor relationship.

The Supreme Court's ruling provides guidance for a purchasing company. However, as before, the BWC may issue a new rule circumventing this decision. It remains vital to evaluate the workers' compensation history of a selling company as part of any due diligence when purchasing the assets of another company, in whole or in part. If the selling company is penalty-rated, it may be wise to take that into consideration in arriving at a purchase price or to create a mechanism to recoup payments made for inherited workers' compensation claims.
 

L.E. Myers argued that “an equipment safety guard” means a safety device attached to a machine intended to guard against injury and that “deliberate removal” occurs when an employer makes a decision to eliminate that guard from the machine. Hewitt, on the other hand, argued that a safety guard is any safety-related item that serves as a barrier between the employee and danger. Hewitt also argued that the “removal” of a safety guard could be established by evidence that the employer failed to train or instruct an employee on a safety procedure. A minority of Ohio courts of appeal supported Hewitt’s view of the statute.

The Court agreed with L.E. Myers and the majority of Ohio courts of appeal. The Court looked to the ordinary meaning of the words used in the statute and the Ohio legislature’s narrow view of the intentional tort statute. The Court looked for guidance in its recent decision in Kaminski v. Metal & Wire Prods. Co., which held that the statute required specific intent to injure to set forth an intentional tort claim. The Court held that “an equipment safety guard” is “‘a device that is designed to shield the operator from exposure to or injury by a dangerous aspect of the equipment.’” An employee claiming that his employer removed a safety guard must establish that the employer made a deliberate decision to “lift, push aside, take off, or otherwise eliminate” the safety guard. The Court held that protective gloves and sleeves are “personal protective items”—not equipment safety guards. An employee’s failure to use them or an employer’s failure to require that an employee use them does not constitute the deliberate removal of an equipment safety guard. Finally, the Court held that an employer's failure to train or instruct an employee on a safety procedure does not constitute the deliberate removal of an equipment safety guard.

The Hewitt decision represents one more in a line of cases from the Ohio Supreme Court that appropriately narrows the intentional tort exception to workers’ compensation immunity to reflect the compromise that workers' compensation laws were designed to implement. While employers certainly should celebrate this favorable decision, they still of course should continue to strive to make their workplaces as safe as possible, not only because it helps avoid costly workers' compensation claims and potential OSHA fines, but because it is the right thing to do.

Sutton sent a letter to Tomco that informed it of his intention to file a claim under Ohio's workers' compensation retaliation statute, O.R.C. §4123.90 and filed suit within the statutory time periods for doing so. Sutton's complaint also included a tort claim for wrongful discharge in violation of public policy.

As noted in the Supreme Court's decision:

R.C. 4123.90 does not expressly prohibit retaliation against injured employees who have not yet filed, instituted, or pursued a workers’ compensation claim. But it does expressly prohibit retaliation against injured workers who have filed, instituted, or pursued a workers’ compensation claim. Essentially, a gap exists in the language of the statute for conduct that occurs between the time immediately following injury and the time in which a claim is filed, instituted, or pursued. Sutton’s firing occurred in that gap. The parties disagree as to whether the public policy underlying R.C. 4123.90 justifies the creation of an exception to the employment-at-will doctrine to protect such employees.

In concluding that R.C. 4123.90 does express a clear public policy prohibiting retaliatory employment action against injured employees before they file a workers’ compensation claim or institute or pursue a workers’ compensation proceeding, the Court found that "the General Assembly did not intend to leave a gap in protection during which time employers are permitted to retaliate against employees who might pursue workers’ compensation benefits. The alternative
interpretation—that the legislature intentionally left the gap—is at odds with the basic purpose of the anti-retaliation provision, which is “to enable employees to freely exercise their rights without fear of retribution from their employers.”

Furthermore, the Court noted its belief that the General Assembly did not intend to create “a footrace, the winner being determined by what event occurs first—the firing of the employee or the filing of the claim with the bureau.” Therefore, the Court recognized a common-law tort claim for wrongful discharge in violation of public policy when an injured employee suffers retaliatory employment action after injury on the job but before the employee files a workers’ compensation claim or institutes or pursues a workers’ compensation proceeding.

The Court rejected Tomco's assertion that its 2007 decision in Bickers v. W. & S. Life Ins. Co., required rejection of Sutton's claim. The Court's syllabus in Bickers expressly stated that R.C. 4123.90 … provides the exclusive remedy for employees claiming termination in violation of rights conferred by the Workers’ Compensation Act." Instead of embracing its syllabus in Bickers, the Court limited Bickers to its factual context, which involved an employee who was terminated pursuant to an evenhanded no-fault attendance policy.

Because the Sutton case reached the Ohio Supreme Court based on the granting of a motion for judgment on the pleadings, the factual record has not yet been developed. Therefore, the Court cautioned that in order to prevail, Sutton would need to establish on remand that his discharge was retaliatory. As the Court noted:

Because a discharge could be for reasons other than those related to workers compensation, such as a reasonable suspicion that the injury was not job related, or a disregard by the employee for the employer’s safety rules, or an immediate need for a replacement employee, no presumption of retaliation arises from the fact that an employee is discharged soon after an injury. Rather, the retaliatory nature of the discharge and its nexus with workers compensation must be established by a preponderance of the evidence. To establish the overriding justification element, Sutton must prove that Tomco lacked an overriding business justification for firing him.

This language in the Court's opinion is interesting because it suggests, contrary to what we often see in retaliation cases, that the timing of a termination in proximity to the protected activity – in this case, the industrial injury – does not create any presumption of retaliation.

The Sutton decision does contain one favorable aspect for employers. Plaintiffs' lawyers historically have used the public policy wrongful discharge tort cause of action endorsed by Sutton to seek compensatory and punitive damages to piggy back on causes of action that ordinarily would not provide such damages. The remedies available under §4123.90 are limited to the traditional equitable remedies of reinstatement and backpay. The Sutton Court held that any action alleging a public policy wrongful discharge based on the workers' compensation statute would be limited to those remedies. Therefore, the limited remedies takes some of the sting out of this decision for employers.

Under the new provisions, when a claim is filed by an out-of-state employee, the Bureau of Workers’ Compensation will be required to determine whether the claimant could have also filed a claim in another state. (Interestingly, the statute does not address whether the employer must make this determination if the employer is self-insured.) If it is determined that the claimant could have filed in another state, the claimant will have 21 days to sign a waiver stating that he or she waives the ability to file a claim in the other state unless the Ohio claim is dismissed for reasons other than on the merits. Also, the law will prohibit an employee or the employee’s dependents from receiving compensation or benefits under Ohio’s workers’ compensation laws if he or she has received a decision on the merits of a similar claim in another state. If an employee receives compensation or benefits in both Ohio and another state, the law allows the Administrator or a self-insured employer to recover the amount of compensation and benefits paid to the claimant, along with any costs and attorneys’ fees incurred by the employer in contesting the Ohio claim.

The new law also allows employers to obtain extraterritorial coverage through an extraterritorial insurer or through the Administrator, so long as the employer submits written notice to the Administrator of its election of such coverage. For a comprehensive summary of the law, see the Ohio Legislative Service Commission’s Bill Analysis.