Ohio Supreme Court Recognizes Retaliatory Discharge Claim Before Employee Files Worker’s Compensation Claim

This morning, a majority of the Ohio Supreme Court agreed that an employee who reports a workplace accident to management is protected from retaliatory discharge by Ohio Revised Code § 4123.90 as soon as the report is made even though he has not yet formally initiated a worker's compensation claim or testified in a worker's compensation proceeding. Sutton v. Tomco Machining, Inc., Slip Opinion No. 2011-Ohio-2723. "Ohio recognizes 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." In Sutton, the employee was injured while disassembling a chop saw as part of his job and immediately reported the accident and injury to the employer's president. Within an hour, he was discharged without any explanation (although he was assured that it was not because of his performance, compliance with rules or work ethic).

A few months after being terminated, the employee filed suit alleging both a statutory violation of O.R.C. §4123.90 and a tort for wrongful discharge in violation of public policy. He alleged that he was terminated immediately after the accident in order to prevent him from claiming employment status when he initiated a formal worker's compensation claim. The employer moved dismiss/judgment on the pleadings, which was granted by the trial court. The Court of Appeals affirmed in part and reversed in part. It concluded that there was no valid statutory claim because the employee had been fired before he initiated a worker's compensation claim. However, it also concluded that his termination was in violation of the public policy reflected in the same statute. In confronting this issue, the Supreme Court noted:

R.C. 4123.90 provides: "No employer shall discharge, demote, reassign, or take any punitive action against any employee because the employee filed a claim or instituted, pursued or testified in any proceedings under the workers' compensation act for an injury or occupational disease which occurred in the course of and arising out of his employment with that employer."

{¶ 14} 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.

Interestingly, the Court had previously rejected a similar claim before it recognized the wrongful discharge in violation of public policy exception to the employment at will doctrine:

Although we have never before directly addressed whether the public policy underlying R.C. 4123.90 protects such employees, we have addressed whether the statute itself protected a similarly situated employee. In Bryant v. Dayton Casket Co. (1982), 69 Ohio St.2d 367, 23 O.O.3d 341, 433 N.E.2d 142, we addressed whether an employee's expression of an intent to pursue a workers' compensation claim was sufficient to satisfy R.C. 4123.90's requirement that an employee "institute" or "pursue" a proceeding and whether the employee was therefore protected by the statute against retaliation. Id. at 370. The relevant facts are that the employee, Bryant, cut his finger with a saw during his second day of employment with Dayton Casket Company, informed someone within the company of the injury, and was thereafter fired. Id. at 368. At the time of his dismissal, no workers' compensation proceedings had actually been pursued or instituted. Id. at 369. The employee sued and alleged that his firing was in retaliation for his pursuit of a workers' compensation claim. Id. at 368. He argued that his informing someone within the company of the injury was sufficient to satisfy the R.C. 4123.90 requirement that he pursue a claim. Id. at 370. We held that a mere expression of an intention to pursue a claim is not "pursuit" of a claim and, therefore, Bryant was not protected from retaliatory firing under the statute. (emphasis added).

However, since the 1982 decision, the Court now recognizes exceptions to the employment at will doctrine, and also found room to fix gaps in legislation when it determined that the gap was not intended to create an absurd result:

We find 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 antiretaliation provision, which is "to enable employees to freely exercise their rights without fear of retribution from their employers." Coolidge v. Riverdale Local School Dist., 100 Ohio St.3d 141, 2003-Ohio-5357, 797 N.E.2d 61, ¶ 43. The General Assembly certainly did not intend to create the foot race cautioned against in Roseborough, 10 Ohio St.3d at 143, 462 N.E.2d 384, which would effectively authorize retaliatory employment action and render any purported protection under the antiretaliation provision wholly illusory. Therefore, it is not the public policy of Ohio to permit retaliatory employment action against injured employees in the time between injury and filing, instituting, or pursuing workers' compensation claims. Rather, R.C. 4123.90 expresses a clear public policy prohibiting retaliatory employment action against injured employees, including injured employees who have not filed, instituted, or pursued a workers' compensation claim. (emphasis added).

That being said, the Court declined to permit employees who are unlawfully discharged in violation of the public policy reflected in O.R.C. §4123.90 to recover the same unlimited damages available to other wrongful discharge plaintiffs. Instead, the Court decided that because the General Assembly intended to limit the monetary recovery of successful plaintiffs under O.R.C. §4123.90, that public policy tort plaintiffs should similarly be restricted: "Accordingly, we hold that Ohio's public policy as established by the legislature is to limit remedies for retaliatory employment actions against injured employees to those listed in R.C. 4123.90." Otherwise, plaintiffs who were fired before they brought worker's compensation claims would recover more than plaintiffs who were fired after they initiated worker's compensation claims even though, ultimately, both plaintiffs were relying on O.R.C. §4123.90 as the basis for their recoveries.

It would be nonsensical to acknowledge a tort in violation of public policy but fail to tailor the remedies in conformance with that public policy. We therefore hold that the remedies available for wrongful discharge in violation of the public policy against retaliatory employment actions as expressed in R.C. 4123.90 are limited to those listed in R.C. 4123.90.

For these reasons, we recognize a common-law tort claim for wrongful discharge in violation of public policy when an injured employee suffers retaliatory employment action after an injury but before he or she files, institutes, or pursues a workers' compensation claim. To establish causation, a plaintiff who alleges wrongful discharge in violation of public policy as expressed in R.C. 4123.90 must prove that the adverse employment action was retaliatory, which requires proof of a nexus between the adverse employment action and the potential workers' compensation claim. We further hold that the remedies available for the tort are limited to those provided by R.C. 4123.90.

Three justices dissented.

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.

It’s Baaaackkk! Dohme Again Makes it to Oral Arguments Before Ohio Supreme Court

Yesterday was déjà vu all over again at the Ohio Supreme Court as the Dohme case had its second appearance before the Court in oral argument. As previously reported here in February 2008, “the Ohio Supreme Court heard oral argument about whether public policy wrongful discharge claims should be recognized when the employee did not “blow the whistle” to either a government agency or management about safety concerns, but rather, complained to a private sector insurance auditor about his paranoia of being set up to be fired in a document of fire alarm inspections.”

A law school classmate, Todd Penny, again argued the case for the employer. According to the 2007 opinion of the Montgomery County Court of Appeals, the employer’s insurance company was conducting a risk assessment in connection with developing a price quote. As had been done in the past, the employer informed staff about the inspection and directed that only certain designated employees were to communicate with the insurance company employee. (It later explained that this was to ensure that the insurance company only received information from staff who were up to date with accurate information). There was some confusion about one of the employer’s staff not coming to work that day, however, and the plaintiff ultimately greeted the insurance representative and spoke to him about a missing report which he believed would be blamed on him. The employer pointed out that the plaintiff never mentioned any safety concerns to the insurance company employee. During oral argument, it was explained that the plaintiff then told another employee at the employer that he had told the insurance employee about the missing report so that he could not be blamed for its disappearance. The plaintiff was then terminated for violating a work directive.

The Court of Appeals concluded that even though the plaintiff did not specifically mention a concern with workplace place safety to the insurance representative, the issue raised related to workplace safety. It also found inherently suspicious the employer’s direction to limit communication with the insurance representative. However, Justice O’Connor was troubled by this “leap” and suggested that it might be suspicious if only the plaintiff had been directed to not communicate with the insurance representative.

The plaintiff’s attorney attempted to argue that evidence of causation cannot be limited to simply this single conversation with the insurance representative, but argued that the Court should look back at the plaintiff’s history – going back to 2001 -- of being perceived as a safety troublemaker. Justice Lanzinger then asked how long an employee should be protected after engaging in protected whistleblowing. In response, his attorney admitted that it would typically be no more than 6 months, but that it would be longer in this case in light of the protracted disputes over fire safety at the plant.

In short, the employer argued that this case should be dismissed on summary judgment because (1) the plaintiff never mentioned a concern with workplace safety to the insurance representative (but only a concern with workplace paranoia) and (2) never complained to a government agency or internal management about any safety concerns. Otherwise, the possibility exists that an employee would be able to claim whistleblower protection just by mentioning an issue to a spouse, neighbor, drinking buddy, etc. This time around, the Court did not seem to entertain the same acceptance of the plaintiff’s case.

As mentioned, the case was previously argued before the Supreme Court, which remanded it for lack of a final and appealable order (in that the plaintiff had attempted to create an appealable order by voluntarily dismissing without prejudice a overtime wage claim). On remand, the plaintiff dismissed that claim with prejudice and the trial court reinstated his prior summary judgment in favor of the employer. Without writing a new opinion, the Court of Appeals, again, reversed and the employer, again, appealed to the Supreme Court.

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.

Unanimous Supreme Court Limits Recovery of Attorney Fees to be Paid to Prevailing Party Defendant Who Defended Frivolous Claims

Yesterday, a unanimous United States Supreme Court held that prevailing defendants who are entitled under 42 U.S.C. § 1988 to recover attorney fees which were incurred in successfully defending against frivolous claims are only entitled to recover fees if they prove that they would not have incurred the fees "but for" the frivolous claim. Fox v. Vice, No. 10-114 (2011). "[A] court may grant reasonable fees to the defendant in this circumstance, but only for costs that the defendant would not have incurred but for the frivolous claims." In other words, "[t]he dispositive question is not whether attorney costs at all relate to a non-frivolous claim, but whether the costs would have been incurred in the absence of the frivolous allegation." The Court admonished trial courts that fee disputes should not result in second major litigation because the goal is only to obtain "rough justice," not auditing perfection. Therefore, it is unlikely that the defendant who prevailed in getting every federal claim dismissed will be entitled to attorney fees if the same evidence and legal work was necessary to defend against non-frivolous state law claims over which the court refused to extend jurisdiction. Because §1988 also permits prevailing defendants to recover attorney fees for frivolous federal employment claims, this decision is of interest to employers.

In the Fox case, the dispute involved purported dirty tricks during an election for police chief. The plaintiff still won the election despite the criminal and tortuous behavior (which ultimately resulted in his opponent's conviction for extortion), but later filed suit for, among other things, defamation and violation of 42 U.S.C. §1983 against his opponent and the town. This lawsuit was removed to federal court, the §1983 claim was dismissed on summary judgment and the court declined to exercise jurisdiction over the state law claims (which could then be litigated in state court with the evidence gained during federal court discovery). The opponent then moved to for attorney fees under §1988 for prevailing on the federal §1983 claim. The Court awarded approximately $48,000 in fees to the defendant. The Court of Appeals affirmed.

The "American Rule" generally provides that each party pays its own attorney. However, Congress has abrogated that rule on occasion with attorney fee shifting statutes, including §1988. This statute permits prevailing parties, usually plaintiffs, to recover attorney fees when prevailing on federal claims. Plaintiffs recover on the theory that they are acting as private attorney generals to vindicate federal civil rights and prevailing "plaintiffs may receive fees under §1988 even if they are not victorious on every claim." Nonetheless, they may not recover fees incurred while pursuing unsuccessful claims. In turn, prevailing defendants are also entitled to attorney fees, but on more limited grounds. "Accordingly, §1988 authorizes a district court to award attorney's fees to a defendant "upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation." Because litigation is often messy and involves both frivolous and valid claims, it is possible that both parties could be entitled to reimbursement for attorney fees at the conclusion.

The issue in this case involves time spent defending five depositions that were taken where the evidence related to both the federal and the non-frivolous state law claims. The Court sought to avoid a windfall to the defendant merely because there was one frivolous claim brought in the suit. Therefore, it adopted a "but-for" test:

the "but-for" standard we require may in some cases allow compensation to a defendant for attorney work relating to both frivolous and non-frivolous claims. Suppose, for example, that a plaintiff asserts one frivolous and one non-frivolous claim, but that only the frivolous allegation can legally result in a damages award. If an attorney performs work useful to defending against both, but did so only because of the defendant's monetary exposure on the frivolous charge, a court may decide to shift fees. Or similarly, imagine that the frivolous claim enables removal of the case to federal court, which in turn drives up litigation expenses. Here too, our standard would permit awarding fees for work relevant to both claims in order to reflect the increased costs (if any) of the federal forum. And frivolous claims may increase the cost of defending a suit in ways that are not reflected in the number of hours billed. If a defendant could prove, for example, that a frivolous claim involved a specialized area that reasonably caused him to hire more expensive counsel for the entire case, then the court may reimburse the defendant for the increased marginal cost. As all these examples show, the dispositive question is not whether attorney costs at all relate to a non-frivolous claim, but whether the costs would have been incurred in the absence of the frivolous allegation. The answers to those inquiries will usually track each other, but when they diverge, it is the second that matters.

Thus, the case was remanded to determine whether the prevailing defendant was entitled to attorney fees where the frivolous and non-frivolous claims overlapped and were interrelated.

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

EEOC Settles Class Action Reverse Race Discrimination Lawsuit for $246.5K

On Friday, the EEOC announced that it was settling a class action reverse race discrimination lawsuit brought in federal court in Indianapolis, Indiana against a discount clothing retailer for $246.5K. According to the press release, "Dots' Merrillville, Ind., clothing store denied jobs on a systemic basis to white applicants since at least April 1, 2007. During that time, the EEOC contended, Dots regularly hired black entry-level applicants for sales positions, but excluded white applicants who were equally or better qualified." In addition,

The consent decree settling the suit provides that the settlement proceeds will be distributed to 32 class members. The decree also requires Dots to notify class members of open sales positions for a period of 18 months and to offer them interviews if they are still interested in employment with the company. Dots agreed to cease any further discrimination against white applicants and not to retaliate against applicants or employees who exercise their rights to complain about discrimination or assist in an investigation or discrimination-related proceeding. Dots will post a notice of non-discrimination at each of its facilities in Indiana and Illinois under its District 11 and train its managers and employees involved in the hiring process. Dots will also report on all hiring at its Merrillville location for a three-year period and will submit reports to EEOC detailing its compliance with the decree

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.