Ohio Supreme Court: Negligent Hiring and Supervision Claims Are Not Dependent on Underlying Civil or Criminal Judgment and Are Subject to Two Year Limitations Period.

This morning, the Ohio Supreme Court unanimously addressed the evidence necessary to prove a claim that the defendant employer negligently hired and supervised an employee who the plaintiff had never sued, had never been held civilly liable for the alleged wrongdoing and had never been found guilty of any crime. Evans v. Akron Gen. Med. Ctr., Slip Opinion No. 2020-Ohio-5535.   While refusing to address all of the necessary elements of a negligent supervision or hiring claim, the Court held that “a plaintiff need not show that an employee has been adjudicated civilly liable or has been found guilty of a crime by a court in order for the plaintiff to maintain a negligent hiring, retention, or supervision claim against an employer.”  In other words, “a plaintiff must establish that an employee committed a wrong recognized as a tort or crime in the state of Ohio, and not that the wrong has been proven to be tortious or criminal in a court proceeding.” Furthermore, the plaintiff also need not file the negligent hiring/supervision claim within the limitations period for the underlying wrongful action.   The two-year limitations period for negligent hiring and supervision does not shift based on the underlying wrongful act.

According to the Court’s opinion, the plaintiff brought suit against the defendant employer alleging that one of its physicians had sexually assaulted her after she had been administered a narcotic.  She had never sued the physician and the criminal investigation did not result in any charges being brought.    She did not file suit until the one-year intentional tort limitations had run against the physician.  The trial court granted the employer summary judgment based on the plaintiff’s failure to establish criminal or civil liability against the employee physician.   While the appellate court disagreed that a civil or criminal judgment on the underlying misconduct was necessary, it still held that the plaintiff must file the action within the limitations period for the underlying wrongful act.

The Court found that its prior precedent had focused on whether the underlying alleged misconduct was even unlawful and whether the employer owed an independent duty.  “A negligent hiring, retention, or supervision action is a direct claim against an employer, based on an employee’s conduct that the law regards as wrongful that would not have occurred but for the employer’s failure to properly hire, supervise, or retain the employee.”  Because there were disputed questions of fact as to whether the employee physician in this case had engaged in the alleged misconduct and the plaintiff was not required to first prove that the physician employee had been found either civilly or criminally liable, summary judgment was inappropriate on that basis. 

The Court also rejected the alternative appellate holding: that the plaintiff’s lawsuit was untimely because she filed suit within the two-years required for negligence, but not within the one-year limitations period for the underlying intentional tort of sexual assault.  “The employee must be shown to have committed an act that is legally wrongful, irrespective of whether he or she has been or can be held legally accountable. We see no reason to conclude that the statute of limitations for a negligent hiring, supervision, or retention claim is affected by the statute of limitations governing the underlying legally wrongful conduct of the employee.” 

Moreover, in the trial court, neither AGMC nor Evans disputed the term of the statute of limitations for a negligent hiring, supervision, or retention claim. The court of appeals relied on R.C. 2305.10 in determining that the applicable statute of limitations is two years. 2018-Ohio-3031 at ¶ 9. Because Evans’s claim is directly against AGMC for its negligent hiring, supervision, or retention, it makes little sense for us to establish a statute of limitations that shifts depending on the facts of the employee’s underlying tort or crime instead of deferring to R.C. 2305.10(A).

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 Permits Limitations Periods for R.C. 4112 Claims to Be Shortened in Job Application

 Last week, the Ohio Court of Appeals enforced a shortened limitations period of six months contained in a job application to bar state law claims for hostile work environment, sex discrimination and invasion of privacy brought against the plaintiff’s former employer and co-workers.  Fayak v. Univ. Hosps., 2020-Ohio-5512. The Court found that parties may shorten the limitations periods of state law claims, including those under R.C. 4112.  While the Sixth Circuit last year in Logan v. MGM Grand Detroit Casino, 939 F.3d 824 (6^th Cir. 2019) had found such contractually shortened limitations periods outside arbitration agreements to be barred by Title VII and federal law is typically applied to similar R.C. 4112 claims, the  Logan Court also noted that the limitations periods for other federal claims, like Section 1981 and ERISA, could be shortened by contract because those claims borrow from state law.  Accordingly, because the plaintiff had not filed suit for more than six months after the last allegedly discriminatory or harassing act, all of her claims were barred by the contractual limitations period. 

According to the Court’s opinion, the plaintiff began working in December 2013 and began an extended medical leave of absence in April 2015.  She claimed to have suffered from sex discrimination and harassment from her hire until she began the extended medical leave and this caused her great anxiety and panic attacks, etc.   Her physician’s statement only covered her absence until July 2015, but she never returned to work or provided medical support for a continued medical leave.  She did not allege any discriminatory or harassing conduct after April 2015.  In June 2016, she was finally terminated based on an unapproved absence after failing to satisfy requests for updated medical information supporting her continued need to be off work.  She initially filed suit against just her employer in September 2016, but voluntarily dismissed it and refiled again in February 2017, this time adding several co-workers as defendants.   Her job application contained the following waiver:

“I agree that any claim or lawsuits relating to my service with University Hospitals or any of its subsidiaries or affiliates must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary.” The employment application was submitted with her typewritten name, which represented her electronic signature according to the application.

The Court rejected the plaintiff’s argument that the shortened limitation was unenforceable under the Logan decision because Ohio courts generally follow federal precedent interpreting Title VII.

Under Ohio law, it has been held that “[g]enerally, in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, as between the parties, the time for bringing an action on such contract to a period less than that prescribed in a general statute of limitations provided that the shorter period shall be a reasonable one.” . . . Further, a shortened limitations period contained in an application for employment can bar claims that are untimely filed. . . . As the defendants argue, courts have held that a six month contractual limitations period is enforceable for employment-related claims and is not inherently unreasonable.

The Court found that the Logan court only rejected the shortened limitations period for Title VII claims based on a nationwide policy favoring uniform federal limitations periods that are self-contained within the Title VII statute and this issue did not apply to state law claims or to federal claims which borrow state-law limitations periods, such as with claims brought under Section 1981, or ERISA.  “As stated in Logan, i[i]n situations where only a general limitation period applied, such as ERISA and § 1981, we have allowed the limitation period to be contractually altered.’”  The Logan court also was influenced by the fact that the limitations period for Title VII claims was contained within the statute and was essentially a substantive right that could not be prospectively waived.  This made it more similar to the FLSA and less like other federal rights which borrowed from state law.  Finally, the Logan Court limited to arbitration clauses the Morrison v. Circuit City Stores, Inc., 317 F.3d 646 (6th Cir. 2003) (en banc) case which had tacitly approved a one-year shortened limitations period.

The Court also refused to consider whether the plaintiff in fact accepted the shortened limitations period in her job application because she did not raise that argument before the trial court.  In any event, the Court found that other courts had found 6- months to be reasonable and to have enforced similar provisions in other job applications.

The plaintiff failed to allege any unlawful conduct occurred after she began her extended medical leave of absence in April 2015.  She produced no evidence disputing the lawful reason for her termination for being on an unapproved leave of absence.  Accordingly, the Court found that the limitations period began to run no later than her April 2015 medical leave even though she never filed suit for 14 months.

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 Limits Classified Employees to Civil Service Commissions to Redress Civil Service Statutory Rights

 Last month, the Ohio Supreme Court reversed the Court of Appeals and held that Ohio law does not permit classified employees to challenge allegedly unlawful reductions in pay in a private lawsuit because the exclusive remedy is an appeal to the applicable civil service commission.  Binder v. Cuyahoga Cty., Slip Op. 2020-Ohio-5126.  In ordering a dismissal of the class action lawsuits, the Court concluded “R.C. 124.34 does not allow a civil service employee to file an action in common pleas court to vindicate alleged violations of the statute by an appointing authority.” Yet although the plaintiffs failed to state a claim for relief, the Court also concluded that the common pleas court still possessed subject matter jurisdiction over the claims because the statutory scheme had not explicitly divested the courts of such jurisdiction.

Following the County’s adoption of a new form of government, an ordinance adopted a uniform workweek and paid lunch break (i.e., 40 hours and 1 hour), while maintaining salary levels.  This apparently disadvantaged employees who had previously worked only 35 hours/week and received 30 minutes for lunch.  Accordingly, class action lawsuits were filed challenging the ordinance and change in working conditions under O.R.C. § 124.34.   The County moved to dismiss on the ground, among other things, that their exclusive remedy was in the civil service system and did not permit class actions. 

The Court noted that plaintiffs who seek redress for statutory violations must first show that the statute provides the requested relief and right of action.   The applicable statute limits when an employee’s compensation may be reduced and the employee has the right to appeal the reduction to the applicable civil service commission within 10 days of receiving the written notice.   However, just as classified employees who are fired or suspended for five or more days can only appeal to the civil service commission instead of filing a lawsuit, classified employees whose pay is reduced can only challenge the reduction through the civil service system.  

While the statute establishes an administrative scheme in which an aggrieved employee can appeal a reduction in pay to the SPBR or the applicable civil-service commission, we see no language in R.C. 124.34, or elsewhere in R.C. Chapter 124, demonstrating the General Assembly’s intent to authorize a civil action in common pleas court for violations of the statute. Had the General Assembly intended to allow civil actions as an avenue of redress, it could have said so expressly, as it has in other instances.

That being said, although the courts did not have the authority under the relevant statutes to grant the requested relief, the Court also found that the common pleas court possessed subject matter jurisdiction over the claims because the statute did not divest the courts of jurisdiction.

With limited exceptions, R.C. 2305.01 grants the courts of common pleas subject-matter jurisdiction over “all civil cases in which the sum or matter in dispute exceeds the exclusive original jurisdiction of county courts.” Because of this general grant of jurisdiction, “a court of common pleas has jurisdiction over any case in which the matter in controversy exceeds the jurisdictional limit unless some statute takes that jurisdiction away.”

               . . . .

           By contrast, R.C. 124.34 does not contain any express statutory language removing common pleas courts’ general jurisdiction. . . .

               . . .

           While R.C. 124.34 does not divest common pleas courts of their general subject-matter jurisdiction, appellees’ claims here for declaratory relief and damages ultimately fail because R.C. 124.34 does not authorize that relief. Stated another way, appellees’ complaints do not present a jurisdictional defect, but rather a failure to state a claim for which relief can be granted.

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 Rejects Cat's Paw Theory for Discriminatory Job References in Hiring Cases

 Last month, the Sixth Circuit Court of Appeals affirmed an employer’s summary judgment on an age discrimination claim based on its failure to interview or hire an applicant with 30 years of experience, but who had poor job references.  Flowers v. WestRock Services, Inc., No. 20-1230 (6^th Cir. 2020).  The plaintiff admittedly could not satisfy certain qualifications for the job established in the job description and was not entitled to override the employer’s ability to establish its own job criteria.  The plaintiff also could not show pretext based on a generic, automated message about preferring more candidates who more closely matched the job requirements.  Interestingly, the Court held that the cat’s paw theory of discrimination did not apply to hiring decisions because the employer could not independently investigate the basis of a negative job reference from a prior employer. “If every reference comes with a federal duty to investigate, hiring will become exceedingly tedious, especially with the volume of applications submitted through today’s digital platforms.”

According to the Court’s opinion, the plaintiff had 30 years of pipefitting experience prior to his 2013 retirement.  He had been told about an open pipefitting position with the defendant employer, which required the ability to read blueprints, to select the type and size of appropriate pipe, and to weld, etc.  He applied online and did not reveal his age.  However, he was not interviewed when a former supervisor now working for the defendant employer reported on his poor work ethic and this was confirmed by another former supervisor contacted by the employer.  He was informed through an automated message that the employer had decided to pursue other candidates whose skills more closely matched the desired requirements and qualifications.   The employer apparently hired two temporary contractors at a higher billing rate.  After the plaintiff heard that a younger candidate with less pipefitting experience, but extensive welding experience, had been hired, this lawsuit followed.  

During his deposition, the plaintiff admitted that he was unable to read blueprints and lacked experience selecting the type and size of pipe appropriate for a job.  He also was not certified in welding because he did not like welding.  The successful candidate was an extremely experienced welder, but there is no discussion of whether he met the other qualifications.  Accordingly, the trial court granted the employer’s summary judgment motion because the plaintiff could not show that he was qualified for the position due to his failure to satisfy the basic requirements for the position.   The trial court also found it was common sense that the employer would prefer to interview a candidate about whom it knew nothing over a candidate with poor job references.

Flowers’s failure to show he was “otherwise qualified” for the job of Journeyman Pipefitter dooms his claim. From the summary judgment record, Flowers has not demonstrated that his “qualifications are at least equivalent to the minimum objective criteria required for employment in the relevant field,” as set out in the job description. . . . Noting Flowers’s admission that he does not know how to select the size and type of pipes or read blueprints, two of the listed job requirements, and aware of Flowers’s disinterest in welding, another job duty, the district court held that Flowers failed to show he was otherwise qualified for the position. We see no error in that conclusion. Requiring a plaintiff to establish a prima facie case under the ADEA framework serves to eliminate the most common nondiscriminatory reasons for an employer’s action. . . .  One such reason is an applicant’s lack of qualifications. WestRock desired a pipefitter who could read blueprints and select pipes, and who also had an interest in welding. Flowers missed the mark in each respect, the first two by his own admission, and the third due to his lack of interest in welding as much as “seven days a week, twelve hours a day.”

Rather than challenging those conclusions, Flowers instead challenges the premise that these skills are necessary for the position. To his mind, pipefitters do not need to read blueprints, nor should they be required to make pipe selections. But as the one who creates the position in question, the employer largely enjoys the right to decide the qualifications it prefers in one who holds the position and, it follows, whether an applicant lacks the necessary knowledge or experience.. . . And given an employer’s superior knowledge of its workplace and industry, the employer’s stated job requirements will typically be the objective criteria by which we measure a fail-to-hire claim. . . . Who, after all, better understands the relevant field and the corresponding skills necessary to succeed than the employer? Not a federal court, one reason why we do not “substitute [our] judgment for that of management” when it comes to business decisions like setting necessary job qualifications.

The Court also agreed that the plaintiff could not show that the employer’s explanation was pretextual based on the poor job references he received.   The plaintiff did not and could not dispute that he had received poor job references.   He also failed to show that his age was a factor.  His age was never indicated on his job application, in any of the negative job references, and, even considering his 37 years of work experience, he could have been as young as 55 (instead of his actual age of 71).

The plaintiff could not show pretext on the basis that he passed the initial review of his application as “generally qualified” because it was undisputed that he received negative evaluations of his work ethic at the next stage.   The Court also refused to find pretext from the employer’s automated message that the employer was pursuing more qualified candidates instead of bluntly telling him that he had poor references.    (This part of the decision is confusing because it indicates that the employer did not in fact consider other, more qualified candidates, despite the factual summary indicating that a candidate with welding experience was hired).  

Accepting Flowers’s contention, moreover, seemingly would impute a legal duty on employers to reject applicants in blunt, precise terms. Some employers may have no objection to telling someone like Flowers that he was not hired because two people, including a prior coworker, thought he had a bad work ethic. Yet many others surely would prefer to respect social etiquette, avoiding hard truths when possible. Either way, certainly the ADEA does not require the former, nor does it suggest that the latter is evidence of age discrimination.

The Court also found that the plaintiff failed to show that the negative references were insufficient to justify the hiring decision because the plaintiff did not show that any other candidates were considered with similarly poor references.

Flowers says there are three such WestRock employees. Yet of the three, WestRock provided evidence that one was hired before Flowers applied, and another was already employed by the company before being moved into a pipefitting apprenticeship. And as to the third, Flowers provides no evidence that the employee received negative references or lacked required skills as did Flowers.

As a final salvo, Flowers invokes an economic rationality argument to justify his age claim. Noting that WestRock paid two contractor pipefitters substantially more than he would have been paid as an employee, Flowers paints this purported “irrational economic decision” as evidence of age discrimination. True, in some circumstances we may consider the reasonableness of an employer’s decision to the extent it explains whether an employer’s proffered reason for an employment action was its actual motivation. Wexler, 317 F.3d at 576. Whether WestRock relied on temporary contractors, however, has little bearing on whether the company was motivated by the negative references.

Finally, the Court rejected the plaintiff’s attempt to prove discrimination through a cat’s paw theory.  Indeed, the Court found that the cat’s paw theory should not apply in hiring decisions because HR could never independently investigate whether a prior employer held a discriminatory animus.  In any event, the Court found that the plaintiff failed to show that the individuals – inside and outside the employer – held an age bias against him when they recommended against hiring him.

Cat’s Paw.  Failing on these fronts, Flowers embraces a novel understanding of what has come to be known as the “cat’s paw” theory of discrimination. The customary application of that theory involves a supervisor who “performs an act motivated by [prohibited] animus that is intended by the supervisor to cause [the formal decisionmaker to take] an adverse employment action.” Staub v. Proctor Hosp., 562 U.S. 411, 422 (2011). Where a supervisor engages in that type of conduct, and where the supervisor’s “act is a proximate cause of the ultimate employment action, then the employer is liable.” Id. This theory of liability serves to prevent the ultimate decisionmaker—for example, a middle manager—from being a shield for a supervisor’s discriminatory intent.

While this theory has been applied to purported discrimination against a company’s current employees, it is quite another thing to extend it to mere job applicants as well. Doing so would place a tremendous burden on human resources employees in culling through applications. After all, a disgruntled applicant could always allege that those employees did not do enough diligence in considering an applicant’s references, both positive and negative, and that one reference or another had some impermissible bias. If every reference comes with a federal duty to investigate, hiring will become exceedingly tedious, especially with the volume of applications submitted through today’s digital platforms. That is unlike the narrower focus of a cat’s paw claim asserted by a current employee or group of employees.

To the same end, whereas the relevant job history for a current employee is likely internal to the company, in the hiring context the relevant history will often lie with another employer. That makes those matters difficult to investigate. Nor, it bears emphasizing, should an employer be liable for the bias of an outsider. Take this case, for example, where one of the negative reviews of Flowers came not from a WestRock supervisor but rather from an employee of another company. While the cat’s paw theory might apply to root out supervisory employees who attempt to shield their discriminatory motives through an internal third-party, it makes little sense to apply that same theory to an allegedly impermissible motive that stems from one who does not even work for the company in question. In the district court’s words, extending the cat’s paw theory as Flowers urges is simply “beyond the pale.”

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: RIFs Can Be Accomplished Through Attrition and Do Not Require Layoffs

 Last week, a divided Ohio Supreme Court affirmed the dismissal of a mandamus action by a number of police officers who sought to be promoted to positions which had previously been abolished by the City Council upon the retirement of the prior incumbents.  State ex rel. Ohio Patrolmen’s Benevolent Assn. v. Warren, Slip Op. 2020-Ohio-5372.  The Court held that when the City Council had already reduced the headcounts for officers to be accomplished upon the next retirement to occur in those positions (i.e., through attrition), vacancies never occurred in those positions into which the next most senior officers could be promoted.  The Court distinguished a prior opinion which reached the opposite result because in this case the City Council reduced the headcounts and abolished the positions “on a prospective basis,” before the retirements and before the creation of a vacancy.  In other words, “[t]he statute does not say that reduction in the force can be accomplished only by layoffs.”

 According to the Court’s opinion, the City of Warren was subject to Ohio’s civil service statutes, including O.R.C. §§124.37 and 124.44.   In 2014, the City Council amended the authorized strength of the police force (in place since 1987) to reduce by one the number of captains, lieutenants and sergeants “through attrition.”  When the next captain and lieutenant retired in 2015 and 2016, their positions were not filled through promotion and were deemed abolished upon the retirement of the incumbents.   The plaintiffs filed a mandamus action because they were next in line to receive the promotions into the captain, lieutenant and sergeant positions.  Initially, the court found that the retirements created vacancies which first had to be filled before the positions could be abolished.  However, after stipulated facts were submitted on reconsideration, the court reversed and granted judgment on the pleadings to the City.  The officers appealed and a divided Supreme Court affirmed in a per curiam opinion.

 The civil service statutes require promotions, or civil service examinations, when a vacancy occurs.   When a position is abolished, the employee with the lowest seniority in that rank is demoted to the next lower rank, which then demotes the least senior employee of that rank and so on until the least senior officer is laid off.  The plaintiffs argued that positions cannot be abolished through attrition and can only be abolished after a vacancy created by a retirement is filled through promotion.  However, the Court of Appeals found “nothing in [R.C. 124.44 and 124.37] prohibit[s] the City from accomplishing a reduction in force by attrition” and that “attrition is the least disruptive means of all possible methods to reduce the force” inasmuch as “[n]o officer was laid off, and no officer needed to be demoted.”  In other words, “the present case involves ‘attrition’ in the sense of automatic abolishment upon the former officers’ retirement, preventing a vacancy from occurring in the first place.”   

The City pointed out that the “statute does not say that reduction in the force can be accomplished only by layoffs. . . . Nothing in the statute suggests that the appointing authority may not abolish a position unless it is simultaneously demoting someone from that position.”  Instead, the statutes merely point out the order of demotions (starting with the least senior employees) should an abolishment occur in a position held by an incumbent.   Further, the plaintiffs were arguing for the creation of a fiction by the promotion of individuals who would be almost immediately demoted with the abolishment of the position.  The Court agreed that “[o]nce the incumbent’s position has been validly disestablished, then a vacancy simply does not occur upon his retirement.”

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.