Ohio Supreme Court Finds Arbitration Clause Did Not Clearly Cover Intentional Tort Claim Without Specific Reference

Last week, the Ohio Supreme Court affirmed the denial of a motion to compel arbitration of an employee’s intentional tort workplace injury claim based on the arbitration clause of a collective bargaining agreement which did not specifically mention intentional tort claims or the intentional tort statute in the list of employment statutory claims which were covered.   Sinley v. Safety Controls Technology, Inc., Slip Opinion No. 2022-Ohio-4153.  The Court concluded that “while arbitration is generally favored in most contracts, there is no presumption of arbitrability of an individual employee’s claims under an arbitration clause contained in a collective-bargaining agreement.”  It also held that “[t]o compel arbitration against a union employee, the claim at issue must have been clearly and unmistakably waived in the arbitration provisions in the collective-bargaining agreement governing the parties” and to “be clear and unmistakable, the claim must be included either by statute or specific cause of action in the arbitration provision of the collective-bargaining agreement.”  It was insufficient that the clause explicitly applied “to any alleged violation of laws or statutes by the  . . . Company, as alleged by an employee, including without limitation” a list of particular statutes when the intentional tort statute was not one of those listed.

According to the Court’s opinion, the plaintiff employee claimed to have been intentionally injured with the removal of certain safety precautions and his supervisor’s testing the equipment while he was working on it.  When he filed suit against the employer, manufacturer, safety consultant and others, the employer moved to compel arbitration based on the applicable collective bargaining agreement whose arbitration clause covered a number of individual statutory claims, including employment discrimination and workers compensation retaliation, etc.  However, the clause did not specifically mention general torts or the intentional tort statute.

The Court agreed that such claims could be arbitrable if they were covered by the relevant arbitration clause.  While it would be better to cite the specific statute, it is sufficient to describe the types of claims which are covered.

In this case, the arbitration clause explicitly provided that it would apply to all statutory claims against the employer, “including without limitation” a list of various employment-related statutes.  However, the Court’s majority rejected that this could be interpreted to include intentional tort claims:

[I]f the parties intended for the nonexhaustive list to be taken to include all statutory causes of actions generally, then the provision becomes just that, a general clause requiring arbitration of all possible violations of laws or statutes. . . . .

We do not find that an arbitration provision in a collective[1]bargaining agreement must cover every possible, conceivable federal and state law claim in order for the language to constitute a clear and unmistakable waiver. But the body of case law presented by the parties and amici curiae on both sides demonstrates that some specific reference to the claim at issue is required. And while expressly including the specific statute when a right or claim is created by one leaves no question as to whether the parties intended to waive such a claim, doing so may not always be practical or necessary. But for a waiver to be clear and unmistakable, it must identify the claim either by statute or cause of action. Having no reference whatsoever to intentional-tort claims, the CBA here cannot be used to compel Sinley to arbitrate such claims.

The dissent focused on an earlier party of the arbitration clause which further clarified that the scope was to cover all employment-related claims, except for workers’ compensation: ““any employment-related controversy or dispute arising between the parties to [the] Agreement, or between an employee and the parties to [the] Agreement as to the interpretation or application of the terms and provisions of [the] Agreement, or as to the violation of any employment-related laws or statutes (except workers’ compensation matters).”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Issues Two Interesting Employment Decisions

This month the Ohio Supreme Court issued two decisions of interest to Central Ohio employers.  First, this morning, the Court ruled that the Unemployment Compensation Board of Review did not err in denying coverage to a claimant who had deferred 62% of her income to her flexible spending account because her remaining income was below the $213/week threshold required to qualify for unemployment benefits. Bernard v. Unemp. Comp. Rev. Comm., Slip Opinion No. 2013-Ohio-3121.   In a case last week, the Court affirmed the denial of summary judgment to an employer which had claimed that political subdivision immunity protected it from an intentional tort claim for failing to supervise. Vacha v. N. Ridgeville, Slip Opinion No. 2013-Ohio-3020.

In Bernard, the employee was terminated from her position and filed for unemployment compensation.  However, the ODJFS found that she had only earned $125/week in taxable wages in the prior 20 weeks, making her ineligible.  She appealed the denial of benefits on the grounds that she had deferred $900/month to her FSA in the employer’s cafeteria plan.  The relevant statute provides that all compensation should be considered, except for payments made on behalf of an employee to a cafeteria benefit plan. 26 U.S.C. § 3306(b)(5)(G).  While the statute is ambiguous, the UCBR’s interpretation was reasonable, and therefore, must be affirmed. The Court also rejected the employee’s argument that the statute was required to be construed in her favor in light of the UCRB’s reasonable interpretation.

In Vacha, the plaintiff was raped by a co-worker who had been hired at the behest of the town’s mayor and who had been the delinquent-child support paying father of two of the mayor’s grandchildren.  While he did not have a felony criminal record, he had been convicted of domestic violence and disorderly conduct.  The city did not conduct any criminal background check.   The plaintiff filed suit alleging, among other things, negligent hiring/supervision and the intentional tort of acting “intentionally with willful, wanton disregard for the safety of others, in selecting, supervising or otherwise controlling” the now-convicted rapist.  The City alleged that it was immune from suit under Ohio Revised Code §2744.02. The statute, however, does not apply to “[c]ivil actions by an employee * * * against his political subdivision relative to any matter that arises out of the employment relationship between the employee and the political subdivision.” (Emphasis added.) R.C. 2744.09(B).”  While the City argued that an intentional tort does not arise out of the employment relationship, the Court had subsequently held otherwise in Sampson v. Cuyahoga Metro. Hous. Auth., 131 Ohio St.3d 418, 2012-Ohio-570:

 

1.       When an employee of a political subdivision brings a civil action against the political subdivision alleging an intentional tort, that civil action may qualify as a “matter that arises out of the employment relationship” within the meaning of R.C. 2744.09(B).

2.       An employee’s action against his or her political subdivision employer arises out of the employment relationship between the employee and the political subdivision within the meaning of R.C. 2744.09(B) if there is a causal connection or a causal relationship between the claims raised by the employee and the employment relationship.

The Court then turned to whether the plaintiff’s intentional tort in this case came within the types of claims recognized in §2744.09(B):

To resolve the discretionary appeal here, Sampson requires consideration of whether there is a causal connection or causal relationship between Vacha’s intentional-tort claim and her employment relationship. If there is, then Vacha’s claim arises out of the employment relationship and the city may not claim political-subdivision immunity. If, on the other hand, there is no causal connection or causal relationship, then the city may be entitled to immunity under R.C. Chapter 2744.

While the rape might have been unrelated to the employment relationship, her claim related to the City’s alleged misconduct in how it hired and supervised the rapist. “It is a causal connection or causal relationship between that alleged conduct and [the plaintiff’s] employment relationship that governs the applicability of R.C. 2744.09(B) here. While this case does not present the clear causal relationship that existed in Sampson (where the employer had the employee-plaintiff arrested at work), “[a] plaintiff need only establish a genuine issue of material fact as to whether the plaintiff’s claims are causally related or causally connected to the employment relationship to survive summary judgment.”

 

Neither the trial court nor the court of appeals, however, considered whether the particular evidence in this case established a genuine issue of material fact as to whether there is a causal connection or a causal relationship between North Ridgeville’s selection, supervision, and control of Ralston, and Vacha’s employment relationship with the city. We decline to make that determination in the first instance.

Nonetheless, because the employer failed to show that “is entitled to political-subdivision immunity on Vacha’s employer-intentional-tort claim as a matter of law,” the denial was summary judgment was affirmed. 

 NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Double Double Toil and Trouble: When Workplace Violence, Workers’ Compensation, & Immunities Collide

Last week, the Ohio Court of Appeals issued a decision involving the collision of a violent workplace rape, workers compensation, sovereign immunity and waiver. Vacha v. North Ridgeville, 2011-Ohio-2446. According to the decision, the plaintiff employee was violently raped by a coworker at the defendant city's wastewater treatment plant. Because she suffered both physical and psychological injuries, she applied for and was awarded permanent total disability benefits through Ohio workers' compensation system. She later filed suit for civil damages and asserted claims for negligent and reckless hiring and supervision of the rapist, vicarious liability and an employer intentional tort. The City argued in moving for summary judgment that it could not be liable for civil damages to an employee who prevailed on a workers' compensation claim. It also argued that it was protected by sovereign immunity provided to political subdivisions. Finally, it argued that the plaintiff could not show that it had committed an intentional tort (to avoid workers compensation immunity). The Court agreed with most of the City's arguments, but sent the case back to the trial court because political subdivisions were not immune from all employer intentional tort claims and the City had failed to raise one of its arguments before the trial court.

The City's first argument was that the plaintiff's sole remedy was the workers' compensation system. Although purely psychological injuries are not compensable through workers' compensation, the plaintiff suffered both physical and emotional damages from the rape and was awarded total disability benefits. Therefore, the court decisions permitting plaintiffs to pursue negligent/reckless hiring/supervision claims were distinguishable because the plaintiffs in those cases – unlike the plaintiff in this case -- were not eligible to receive workers compensation benefits and, thus, were not subject to the exclusive workers' compensation remedy. As the Court noted,

R.C. 4123.74 provides that employers who are in full compliance with their obligation to pay workers' compensation premiums "shall not be liable to respond in damages" for "any injury *** received or contracted by any employee in the course of or arising out of his employment[.]" The statute is a codification of the principle set forth in Section 35, Article II of the Ohio Constitution that workers' compensation benefits will be an employee's exclusive remedy against her employer for workplace injuries and provides, in part:

"Such compensation shall be in lieu of all other rights to *** damages, for such *** injuries *** and any employer who pays the premium or compensation provided by law *** shall not be liable to respond in damages at common law or by statute for such *** injuries[.]"

The Court ultimately concluded that "if an employee's "injury" is compensable within the workers' compensation system, the employer is consequently immune from a civil action by the employee for negligently or recklessly causing the injury."

Conversely, if an employee's "injury" does qualify for workers' compensation coverage, that remedy is exclusive and the employer is immune from civil action liability arising out of an allegation that the employer was negligent or reckless in causing the employee's injury. That is the only reasonable interpretation of the language of R.C. 4123.74 and 4123.01(C) and any other interpretation would be unfair to the employer in the overall balance of competing interests in the workers' compensation system.

Nonetheless, the workers' compensation immunity does not apply to employer intentional torts. The trial court found that there were disputed issues of material fact concerning the intentional tort claim which could not be resolved on summary judgment. On appeal, the City argued that the more stringent employer intentional tort standard of R.C. § 2745.01 should apply to bar the plaintiff's claims. However, the City had not raised that argument before the trial court – probably because the statute's constitutionality was being challenged – and, thus, had impliedly waived that argument.

Finally, the City argued that it was entitled to sovereign immunity under R.C. § 2744.02 because none of the plaintiff's claims arose within any of the exceptions to that statute. In response, the plaintiff correctly pointed out that "R.C. 2744.09(B) explicitly provides that R.C. Chapter 2744 political subdivision tort immunity does not apply to "[c]ivil actions by an employee *** against his political subdivision relative to any matter that arises out of the employment relationship between the employee and the political subdivision[.]" However, the city contended that employer intentional tort actions are not "civil actions" within the meaning of the immunity statute. The majority of the Court was not impressed and found that an employer intentional tort claim could come within the political subdivision sovereign immunity statute. (However, one judge dissented and concluded that political subdivisions are immune from employer intentional tort claims).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.