Ohio Supreme Court Questions Genaro and Holds Individual Supervisors Are Entitled to Immunity From Most Discrimination Claims

Last week, the Ohio Supreme Court issued a second decision on Thursday addressing an employer’s respondeat superior liability.  In this second case, the Court concluded that the same statutory language from Ohio Revised Code § 4112.01(A) upon which it relied to impose individual supervisor liability in its 1999 decision in Genaro v. Cent. Transport, Inc., 84 Ohio St.3d 293, 1999-Ohio-353 was not sufficient to override political subdivision immunity for supervisors in Ohio Revised Code §2744.03(A)(6)(c). Hauser v. Dayton Police Dept., Slip Opinion No. 2014-Ohio-3636.  In Hauser, the plaintiff had alleged that she had suffered sexual discrimination from her employer and supervisor.   The supervisor moved for summary judgment on the grounds that he was immune under R.C.  §2744.03.  His motion was denied and this was affirmed on appeal with the courts concluding that: “an employee of a political subdivision is not entitled to immunity if a section of the Revised Code expressly imposes civil liability,” and, under Genaro,  “civil liability is expressly imposed upon managers or supervisors, such as Davis, under R.C. 4112.01(A)(2) for their individual violations of R.C. 4112.02(A).” The Supreme Court reversed on the grounds that the language in §4112.01(A)(2) existed only to impose vicarious liability on employers for their discriminatory actions and did not expressly override a government supervisor’s sovereign immunity.  “We underscore, however, that our conclusion is limited to the provisions dealing with “employer” discrimination [under] R.C. 4112.01(A)(2) and 4112.02(A). An individual political-subdivision employee still faces liability under other provisions of R.C. 4112.02 that expressly impose liability, including the aiding-and-abetting provision in R.C. 4112.02(J).”

The basis for the Court’s Hauser holding is that the statutory language in R.C. §4112.01(A)(2) was based on language in the National Labor Relations Act which the U.S. Supreme Court had previously held only established respondeat superior liability.  The Court also observed that the General Assembly knew how to establish individual liability because it had done so in a different provision of the Ohio Civil Rights Act at R.C. §4112.02(J) and (G):

If we were to conclude that the employer-discrimination provision in R.C. 4112.02(A) expressly imposes liability on employees, we would render the aiding-and-abetting provision in R.C. 4112.02(J) largely superfluous. That provision already holds individual employees liable for their participation in discriminatory practices. This context supports our determination that R.C. 4112.01(A)(1) and 4112.02(A) subject employers to vicarious liability and do not expressly impose liability on individual employees.

The Court also noted – as did the Genaro court – that the federal courts do not impose individual liability based on similar language in Title VII.  Moreover, the Ohio Civil Rights Act exempts smaller employers (with fewer than four employees) and that is inherently inconsistent with imposing individual liability. “Reading the statute to simultaneously exempt a small-business owner from liability yet impose liability on any individual working for a larger company obstructs this purpose. If a statute is susceptible to different meanings, we should favor the meaning that “furthers the legislative purpose” over the meaning that obstructs or hinders that purpose.”

In his dissent, Justice O’Neil observed that while he did not agree with the Court’s 1999 Genaro decision, he felt it controlled the outcome in this decision.  As reflected in the discussion of the Genaro decision below, I would have to agree.  This might have been as good of an opportunity as any to explicitly overrule Genaro, but that did not happen.

 In Genaro, the Supreme Court considered the respondeat liability argument it adopted today, but nonetheless ruled that individual liability existed based on public policy and the exact same language that the Court held today imposed only vicarious liability:

R.C. 4112.01(A)(2) defines “employer” as “any person employing four or more persons within the state, and any person acting directly or indirectly in the interest of an employer.” (Emphasis added.)  . . . It is clear that the R.C. 4112.01(A)(2) definition of “employer,” by its very terms, encompasses individual supervisors and managers whose conduct violates the provisions of R.C.  Chapter 4112.

                . . .

As previously set forth herein, R.C. 4112.01(A)(2) defines “employer” as “any person employing four or more persons within the state, * * * and any person acting directly or indirectly in the interest of an employer.” (Emphasis added.) In contrast, under Title VII, “employer” is defined as “a person engaged in an industry affecting commerce who has fifteen or more employees * * * and any agent of such a person.” (Emphasis added.) Section 2000e(b), Title 42, U.S. Code. The differing numerosity requirements and uses of agency terminology indicate that Title VII’s definition of “employer” is far less reaching than the encompassing language of R.C. 4112.01(A)(2). Without doubt, the language employed by the General Assembly with regard to R.C. 4112.01(A)(2) is much broader in scope than that employed by the analogous Title VII provision.

                . . .

Based on the foregoing, we believe that the clear and unambiguous language of R.C. 4112.01(A)(1) and (A)(2), as well as the salutary antidiscrimination purposes of R.C. Chapter 4112, and this court’s pronouncements in cases involving workplace discrimination, all evidence that individual supervisors and managers are  accountable for their own discriminatory conduct occurring in the workplace environment. Accordingly, we answer the certified question in the affirmative and hold that for purposes of R.C. Chapter 4112, a supervisor/manager may be held jointly and/or severally liable with her/his employer for discriminatory conduct of the supervisor/manager in violation of R.C. Chapter 4112.

In Hauser, the Court attempted to distinguish Genaro, but simply questioned its validity instead of overruling it:

The certified question in Genaro involved private-sector supervisors and managers, and it asked only whether such persons may be jointly and severally liable with an employer for conduct “in violation of R.C. Chapter 4112.” Id. at 293, 300. We did not address whether the employer-discrimination provision in R.C. 4112.02(A) “expressly imposed” civil liability on a political subdivision employee for purposes of the immunity exception in R.C. 2744.03(A)(6)(c). To be sure, our reasoning in this case calls the Genaro majority’s reasoning into question, particularly its basis for distinguishing the prevailing interpretation of Title VII. See Genaro at 299 (declaring R.C. 4112.01(A)(2)’s definition of employer to be “broader” than Title VII’s definition). But because Genaro did not squarely address the immunity question at issue here, it is not binding authority, and we need not apply Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, to decide whether we should overrule it.  (emphasis added).

In that the public-private distinction seems irrelevant to whether the statutory language in question exists to impose respondeat superior liability as the Court now holds or individual liability as the Genaro court held in 1999, it seems likely that the Court would overrule Genaro if a better opportunity presented itself.   The question now is whether trial and appellate courts will take that opportunity to put the question before the Court in light of the Court’s apparent invitation (above) to do so.

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.

Ohio Supreme Court: Courtesy Faculty Appointment Does Not Confer Sovereign Immunity

This morning, a unanimous Ohio Supreme Court rejected the sovereign immunity defense raised by a physician who held a courtesy clinical appointment by a state medical college and who permitted a medical student to observe the allegedly negligent medical procedure because the state college exercised no control over the physician. Engel v. Univ. of Toledo College of Medicine, Slip Opinion No. 2011-Ohio-3375. The Court focused on the volunteer nature of the clinical appointment, lack of formal employment relationship and fact that the physician was in private practice and had privileges only in a private hospital. Therefore, the plaintiff could not bring a medical malpractice claim against the medical college and was limited to the physician’s private malpractice insurance.

The original malpractice claim was brought in common pleas court against the physician arising out of two allegedly negligent surgeries performed by the physician. The physician held a courtesy clinical faculty appointment at the nearby state medical college and was being observed during the surgeries by a third-year medical student on a one-month rotation. In the malpractice lawsuit, the physician raised the defense of sovereign immunity under Ohio Revised Code § 9.86 because he had been acting as a clinical faculty instructor at the time of the challenged surgeries. While the trial court stayed the common pleas action, the plaintiff then filed a malpractice action in the Court of Claims against the medical college and also sought a declaration of the physician’s immunity. The Court of Claim confirmed the physician’s immunity and this was affirmed by the Franklin County Court of Appeals. The Supreme Court reversed.

Pursuant to O.R.C. § 9.86:

Except for civil actions that arise out of the operation of a motor vehicle and civil actions in which the state is the plaintiff, no officer or employee shall be liable in any civil action that arises under the law of this state for damage or injury caused in the performance of his duties, unless the officer’s or employee’s actions were manifestly outside the scope of his employment or official responsibilities, or unless the officer or employee acted with malicious purpose, in bad faith, or in a wanton or reckless manner.

A court’s analysis is generally focused on whether the defendant is an employee or officer and whether he or she was acting outside the scope of employment, etc. Whether an individual is a state employee is determined by reference to O.R.C. § 109.36, subsection (a) of which provides that a defendant is covered if he is “[a] person who, at the time a cause of action against the person arises, is serving in an elected or appointed office or position with the state or is employed by the state.”

Clearly, the physician was not elected or appointed to an office. However, prior decisions had not examined the employment status of physicians in any detail. The Court declined to announce a specific test for physicians, but stated that it would consider the following factors:
• The contractual relationship between the state and the individual;
• State control over the individual;
• Whether he received any tangible benefits from his courtesy appointment; and
• Whether the individual was paid by the state or affiliated entity.

In this case, the courtesy faculty appointment of the physician was unpaid, and there was no evidence that he had been hired or credentialed by the medical college. The medical college had no control over the private medical practice of the physician. While the courtesy faculty appointment subjected the physician to unspecified rules and policies of the college, he was not permitted to use his academic title in connection with any published research without the explicit and discretionary authority of the college department chair. The physician did not receive any office space or assigned staff or equipment, research projects, clinical privileges or lecturing responsibilities. Therefore, there were insufficient indications of an employment relationship with the state which was necessary to justify immunity.

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.