Ohio Appeals Court Awards Employee Damages When Employer Violated Written Contract By Decreasing His Pay Rate.

Last month, the Trumbull County Court of Appeals affirmed an award of $42,116.38 in damages plus interest to a former employee who sued for breach of a written contract when, upon the advice of its accountant and based on poor economic conditions, his former employer decreased the plaintiff’s salary below $75,000/year in breach of his employment agreement. Sloan v. Shafer Commercial & Indus. Servs. Inc., 2008-Ohio-4765. The employer had also decreased the salaries of the other officers and laid off employees at the same time. Although the plaintiff objected to the wage cut, he continued to work for the employer for another 33 months. The court rejected the employer’s various arguments that, among other things, the plaintiff waived his contractual rights by continuing to work at the reduced pay, that he was guilty of laches for waiting three years to file his claim, and that he should be estopped from challenging the wage cut three years later. In particular, the court found the employee did not waive his contractual rights by continuing to work after the pay cut. While the employer might have had a good argument that the contract had been mutually modified by the parties, the court refused to consider this argument on appeal because the employer failed to raise that argument before the trial court.


Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/11/2008/2008-ohio-4765.pdf.

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.

Sixth Circuit Reverses $1M Jury Verdict in ADA Case Because of Fraud on the Court by Plaintiff’s Counsel.

Yesterday, the Sixth Circuit reversed a million dollar jury verdict in favor of an ADA plaintiff who claimed that he had been fired on account of his Tourette’s syndrome. Okros v. Angelo Infrate Construction Co., No. 07-1455 (10/20/08). The key evidence in the case involved a telephone call which the plaintiff and his witnesses claimed involved the employer’s vice-president making derogatory comments about the plaintiff’s stuttering and firing him for that reason. The vice-president denied that any such telephone call happened, that he knew about the plaintiff’s alleged disability or that he had been fired in such a fashion. After the trial and jury verdict, the employer finally subpoenaed the plaintiff’s telephone records which proved that the plaintiff had never called the vice-president as he claimed, but rather, telephoned a union officer who presumably masqueraded as the vice-president for the benefit of the witnesses. Because the employer had failed to seek copies of the telephone records from AT&T during pre-trial discovery, the trial court and Court of Appeals refused to reverse the verdict on the basis of the newly discovered evidence (in that the evidence could have been discovered before the trial). However, because the plaintiff’s attorney had, among other things, claimed – presumably falsely – during the trial and discovery process that he had attempted to subpoena the same telephone records and had been told that they no longer existed, because the court and the employer’s counsel were entitled to rely on the honesty of plaintiff’s counsel – as an officer of the court – and because the false information prejudiced the employer’s defense, the Court of Appeals reversed the verdict on account of the fraud on the court perpetrated by plaintiff’s counsel.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/08a0628n-06.pdf.

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 Appeals Court: Use of Illegal Drugs Was Not Sufficiently Gross Misconduct to Disqualify Employee from Payment for Unused Vacation Pay.

Last month, the Ohio Court of Appeals for Summit County affirmed judgment in favor of a manager who was terminated for failing a drug test (for cocaine and marijuana) on his claim for payment of unused vacation pay under the employer’s policy. Lang v. Quality Mold, Inc., 2008-Ohio 4560. Under the employer’s policy, an employee could be paid for unused vacation pay when the employee was guilty of one instance of serious misconduct or incompetence, but was not entitled to be paid for unused vacation pay when terminated for gross misconduct. Neither the employee handbook nor any other written policies specified whether a positive drug test constituted gross misconduct or was merely serious misconduct. Accordingly, the trial court decided to construe the handbook against the employer (who drafted it) and considered court decisions construing the statutory standard under COBRA (which denies continued medical coverage when an employee is terminated for gross misconduct).

The Court ultimately determined that testing positive for illegal drugs was merely serious misconduct and not gross misconduct. In reaching this conclusion, the court disregarded the undisputed testimony of the Human Resources Director that the employer’s past practice was to deny payment for vacation pay to employees who were terminated for illegal drug use. It is also worth noting that COBRA does not define “gross misconduct,” but that some courts required the behavior to be extreme and outrageous, while other courts have found that it merely needed to be intentional. The court was influenced by the fact that there was no evidence that the terminated manager had been dealing drugs or that his job performance or attendance had been affected by use of illegal drugs.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-4560.pdf.

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.

Happy Anniversary To Me

It’s been one year since I began posting FYIs on this blogsite. I’ve appreciated feedback from my faithful readers and am somewhat amused by the number of my competitors who keep up with my blog. Feel free to drop me a line if there are topics which you feel that I am neglecting. Of course, not every post will be relevant to every reader, but I try to find those amusing or scary local cases which make for good conversation at work.

Ohio’s Minimum Wage to Increase to $7.30 on January 1, 2009.

Because Ohio’s minimum wage is part of the Ohio Constitution (and cannot be easily amended) and contains a provision for automatic increases in the minimum wage tied to the annual Consumer Price Index as of September 30, the Ohio Department of Commerce has announced that the minimum wage will increase to $7.30 on January 1 based on the CPI as of Tuesday, September 30, 2008. The minimum wage for tipped employees will increase to $3.65/hour.

Insomniacs can read the full announcement (along with how it will affect youth wages) at http://www.com.ohio.gov/laws/docs/laws_2009MinimumWage.pdf.