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Ohio Supreme Court Clarifies Ohio's Intentional Tort Statute

Posted on Wed, Dec 19, 2012 @ 01:39 PM

by Jack B. Harrison Jack B. Harrison

In Hewitt v. L.E. Myers (Slip Opinion No. 2012-Ohio-5317, syllabus), the Ohio Supreme Court recently held that an employee's failure to use or failure to require an employee to wear personal protective equipment does not constitute an intentional or deliberate removal of an equipment safety guard under Ohio's intentional tort statute. 

Historically, Ohio law has created very limited exceptions to the statutory worker’s compensation scheme.  One such exception is that the statute allows an injured employee to pursue an intentional tort claim in a situation where an employer acted "with the intent to injure another or with the belief that the injury was substantially certain to occur."  Ohio Rev. Code Ann. § 2745.01(A).  While "intent to injure" is generally very difficult to prove, the statute creates a rebuttable presumption of an intentional injury when an employee can prove "[d]eliberate removal by an employer of an equipment safety guard.”  Ohio Rev. Code Ann. § 2745.01(C).

Hewitt involved a plaintiff who worked as an apprentice lineman for L.E. Myers Company, an electrical-utility construction contractor.  On the day the employee was injured, he was replacing old electrical power lines, while working from an elevated bucket truck.  Although he was required to use protective rubber gloves and sleeves that day, he chose not to do so.  His rationale for making this choice was that another lineman allegedly told him the protective gear was unnecessary as the lines were de-energized.  However, the lines were actually live and the employee received an electric shock that resulted in severe burns.

The employee applied for and received workers' compensation benefits under the Ohio statutory scheme.  He also sued his employer, alleging a workplace intentional tort claim. At trial, the jury returned a verdict of nearly $600,000 in the employee's favor.  The jury concluded that the employer deliberately removed an equipment safety guard – the protective gloves and sleeves – and such deliberate removal amounted to an intent to injure under the statute.  The court of appeals affirmed the jury verdict, and the employer appealed the case to the Ohio Supreme Court.

The Supreme Court then reversed the rulings of the lower courts, adopting a stricter interpretation of the intentional tort statute.  The court narrowly defined "equipment safety guard" as "a device designed to shield the operator from exposure to or injury by a dangerous aspect of the equipment."  The court also narrowly defined "deliberate removal" of an equipment safety guard to mean the "deliberate decision to lift, push aside, take off, or otherwise eliminate that guard." Consistent with these definitions, the Supreme Court concluded that "equipment safety guard" did not encompass generic safety-related items such as personal protective equipment.  The court further found that an employer's failure to train or instruct an employee on a safety procedure does not constitute the "deliberate removal" of an "equipment safety guard" under the statute.

The Supreme Court’s decision in Hewitt should provide some relief to Ohio employers.  The Supreme Court’s much stricter interpretation of the "equipment safety guard" provision of the statute should curb intentional tort lawsuits that had previously arisen under the statutory rebuttable presumption.  However, even given this ruling, prudent employers should continue to place an emphasis on workplace safety, so as to minimize their workers' compensation costs, regardless of whether those costs are incurred within the statutory system or within the courts.

Tags: Ohio Supreme Court, Intentional Tort, Workers' Compensation

"Supervisor" Re-Defined?

Posted on Mon, Dec 17, 2012 @ 08:36 AM

by Jack B. HarrisonJack B. Harrison

U.S. Supreme Court now has an opportunity to expand the definition of “supervisor” in a Title VII Hostile Work Environment Context


On November 26, 2012, the U.S. Supreme Court heard oral argument in Vance v. Ball State University, No. 11-556.  Vance presents the Court with the question of whether to adopt, for Title VII purposes, the broad, employee friendly definition of supervisor applied by the Second, Fourth, and Ninth Circuit Courts of Appeals or whether to adopt the more narrow, employer friendly definition that has been employed by the First, Seventh and Eighth Circuit Courts of Appeals.  The Second, Fourth, and Ninth Circuits have defined a “supervisor” as any employee who “directs and oversees” another employee’s daily work, while the First, Seventh, and Eighth Circuits have defined a “supervisor” as only those employees who have the power to “hire, fire, demote, promote, transfer, or discipline” another employee.

In Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, the Court had previously held that employers are liable for a sex-based hostile work environment carried out by the victim’s supervisor.  Where the harasser is not a supervisor but only a co-worker, the employer is not liable unless it is found negligent in its handling of the victim’s complaint.   Thus, the question of who is defined as a supervisor has become critical in a Title VII hostile work environment context.

Facts of Vance

In Vance, Maetta Vance, a catering assistant, claimed that Saundra Davis, a catering specialist, had made her work environment stressful through physical acts and racial harassment.   According to Vance, the harassment included racial epithets, references to the Ku Klux Klan, and veiled threats of physical harm. Vance sued her employer, Ball State University, for workplace harassment by a supervisor. Vance asserted that Davis was a supervisor by virtue of the fact that she assigned a daily list of work-related tasks to Vance.  Ball State asserted that Davis was not Vance’s supervisor, because she did not have the power to “hire, fire, demote, promote, transfer, or discipline” Vance.  Vance urged the Court to adopt the standard set by the Circuits that define a supervisor broadly to include employees with authority to “direct and oversee” another employee’s daily work.

Procedural History

The District Court granted summary judgment in favor of Ball State.  The Court of Appeals for the Seventh Circuit affirmed, determining that Davis was not Vance’s supervisor because Davis did not have the power to hire, fire, demote, promote, transfer, or discipline Vance.  Additionally, both lower courts found Ball State had an adequate system in place for reporting and investigating claims of harassment under Title VII and, therefore, the University could not be found negligent.  Because of the conflict in the circuit courts described above, the Supreme Court granted review.

Potential Importance of Court’s Decision

If the Court adopts the broader standard of who is a “supervisor” for Title VII purposes and concludes that a “supervisor” is anyone with authority to “direct and oversee” an employee’s daily work, employers could see increased findings of liability for hostile work environment claims.  Additionally, if this were to be the Court’s ultimate determination, employers might want to rethink not only their training programs but also the job responsibilities of workers with quasi-leadership roles.

It is anticipated that Vance should be decided by June.  Once a decision is issued, we will provide an update on the Court’s ruling.  In the meantime, prudent employers should be cautious regarding how “supervisor” type duties are assigned within a workforce of employees who generally would be deemed non-supervisory.

Tags: Labor & Employment, Hostile Work Environment, Harassment

Wills vs Trust: Which is Better and Why?

Posted on Tue, Dec 11, 2012 @ 12:04 PM

Hans M. Zimmerby Hans M. Zimmer

As an attorney working in the estate planning field for the past 25 years, I usually get asked the very basic question: should I just do a simple will or is a trust better for my estate plan? The answer to this question is never just “yes”, never just “no”, and before the question can be answered, a detailed review of each client’s situation is necessary. In addition, before the question can be answered, a short review of what a will is (and isn’t) and what a trust is (and isn’t) is useful.

What is a will?

In its simplest form, a will is a written document signed by the testator (the person making out the will) and under Ohio law, witnessed by 2 individuals not related to the testator. The will gives direction as to who is to receive your property at the time of your death. The will also appoints an executor who is the person you provide with the authority to administer your estate after your death. In the event you have minor children, the will can also appoint guardians for your children. A will is revocable (can be changed) at any time prior to your death and only becomes effective at the time of your death. Court action is required to “probate” the will, which means to appoint the executor and/or guardian and to issue court orders directing the disposition of your property in the manner stated in your will. All probate court records are available to the public.

What is a trust?

In its simplest form, a trust is a written document that provides for both lifetime and after-death directions as to the management and distribution of your assets. During your lifetime, you act as your own trustee with full control over your assets and the trust document will provide for a successor trustee to manage the trust in the event of your death or disability. Court action is not required to appoint a successor trustee, to manage your property during your lifetime or after your death and none of your financial information ever becomes a public record, before or after your death.

Trust versus Will

Trusts have many advantages over wills but what can’t be overlooked is that trusts do involve more upfront cost. This is true simply because wills are far simpler and less time-consuming to draft. Trusts can save considerable expense and time after a person dies or becomes incapacitated that in nearly all situations more than makes up the added cost of the preparation of the trust. In addition to the cost involved, I like to ask 3 basic questions on the will versus trust issue:

Do you have minor children? If you do, I typically recommend a trust for several reasons:

Without a trust, any funds left to minor children must be placed into guardianship accounts for the benefit of your children. These funds can only be accessed by the guardian by presenting the court with a request to use funds and the court issuing an order allowing the use of the funds. This is true for any expense incurred by the guardian, no matter how reasonable it might seem. The guardian is also required to file an annual account with Probate Court summarizing all income and expenses.

Funds held in guardianship accounts must be disbursed to the minor children at age 18, no matter how large the amount of those funds may be. If you have any desire to keep funds set aside for paying for your child’s college or just want to see that your child makes it on his or her own before getting an inheritance, trusts are the only realistic option.

Funds held in guardianship accounts are subject to restrictions imposed by the Probate Court on permitted investments. Under Ohio law, guardianship funds can only be invested in CDs, money markets or other investments guaranteed not to lose principal. Stock and bond investments are not permitted.

Do you have any children, grandchildren or dependents with special needs?

If you have any individual who may inherit property from you who has special needs, i.e., is disabled, a trust is very appropriate. Many times, individuals with special needs receive government assistance in the form of Social Security Disability, Medicaid or other benefits. In the event those individuals receive an inheritance from you, the government benefits could be eliminated or reduced. Trusts can be structured such that any inheritance from you can still be used for your disabled child or grandchild’s benefit without jeopardizing any government benefits.

Will your estate be subject to estate tax at the federal level?

If the value of your estate exceeds the current threshold limit for the federal estate tax ($5,000,000 until December 31, 2012), the use of a trust with special estate tax planning provisions may be appropriate. The threshold level has changed frequently over the past several years and will change again at the end of this year to an as yet undetermined amount. Rumors have been circulating for figures anywhere between 1 million and 10 million but we will not have certainty on this until very late in 2012. My recommendation to clients has always been to worry about the family plan first, then look at the best way to structure a plan for tax planning. The right thing from the family perspective is the primary concern and a plan to avoid or minimize taxes can be structured to take into account most, if not all, family planning issues.

So what is best for you? I probably haven’t answered that question because as I said in the start of this article, the answer is not always “yes” and not always “no.” Your family and financial situation are the drivers of any decision in this area and what is right for one family will not be right for the next family. It is far beyond the scope of this article to address all the intricacies of wills and trusts, but I hope that this material gives you some information that allows you and your attorneys to make an educated decision on this important issue.

Tags: Trusts, Wills, Estate Tax, Guardianship

Three Areas to Watch Out for Related to Wage and Hour Laws

Posted on Mon, Dec 10, 2012 @ 01:31 PM

Jack B. Harrisonby Jack B. Harrison

Paying your employees for their time on the job should be a simple issue, but often it is not.  According to CNN Money: “Collective action lawsuits alleging wage and hour violations have risen 400 percent in the last 11 years.”  In 2011, there were more than 7,000 such lawsuits filed in federal court — a huge increase since the turn of the century.  These lawsuits involve workers who claim they did not get paid the full amount for all the hours they worked — either because they were improperly listed as ineligible for overtime, or because they simply never got the money for the work they put in.

Below are three wage and hour issues that should be on every employer’s radar screen:

  1. Overtime and Minimum Wages—Over the past year, the U.S. Department of Labor (‘DOL’) has increased its enforcement nationwide, specifically directed at businesses that it deems ‘low wage’ employers, including restaurants.  For example, since 2006, the DOL’s Los Angeles office has found federal Fair Labor Standards Act violations at 72 percent of the restaurants it investigated, awarding more than $2.2 million in minimum and overtime wages owed to over 1400 workers.  When violations are discovered, investigators pursue corrective actions, including back wages, penalties, liquidated damages and possible litigation.
  2. Exempt Employees—According to the Fair Labor Standards Act (‘FLSA’), employees are to be categorized as either exempt or non-exempt. Exempt employees are paid a salary for all hours worked and do not receive overtime pay. Exempt employees must meet certain criteria under the FLSA to qualify as exempt based on the primary duties of the employee’s job and they must be paid on a salary basis. Non-exempt employees are generally paid on an hourly basis. They must be paid for all hours worked in a workweek and receive overtime pay if they work over forty hours in a workweek. Employers must ensure that their non-exempt employees are properly compensated for all hours worked, including all overtime hours worked.
  3. Unpaid Internships—As summer approaches, many employers are making plans to welcome summer interns.  For their part, interns often receive valuable experience and the opportunity to make connections that may lead to future employment. In short, internships are generally seen as a ‘win-win’ situation. Recently, however, a number of interns have sued their former employers, claiming that they should have been classified as employees for purposes of state and federal wage and hour laws. The plaintiffs in these cases – who were not paid while serving as interns – are seeking to recover wages for all hours worked, as well as any overtime due.  These actions have made it difficult for employers who wish to offer interns a valuable experience, while developing their own pool of potential future employees.

Because of increased enforcement and litigation in the wage and hour area, employers should be vigilant about reviewing their policies and employee classifications to ensure their compliance with federal and state laws.

Tags: Wage and Hour Laws, Overtime, Minimum Wages, Exempt Employees, Unpaid Internships

Put it in Reverse: Non-Compete Agreements Transferred in a Corporate Merger

Posted on Mon, Dec 03, 2012 @ 07:27 AM

by Jack B. HarrisonJack B. Harrison

In Short Order The Ohio Supreme Court Reverses Itself As To The  Enforceability of Non-Compete Agreements Transferred in A Corporate Merger

On October 11, 2012, the Ohio Supreme Court took the unusual step of reconsidering and reversing its own previous decision in the same case, Acordia of Ohio L.L.C. v. Fischel.  On May 24, 2012, in Acordia I, the Supreme Court held that an acquiring company in a merger could not enforce employee non-compete agreements as if it had stepped into the shoes of the acquired company where there was no clear contract language to that effect.  Then, after agreeing on July 25, 2012, to reconsideration in the case, the Court reversed its prior position, holding that, indeed, an acquiring company in a merger could enforce employee non-compete agreements as if it had stepped into the shoes of the acquired company even where there was no clear contract language to that effect.  The Court explained its reversal by stating that it had misread an earlier court decision regarding corporate mergers. Slip Opinion No. 2012-Ohio-4648 (“Acordia II”).

By a vote of 6-1, the Court held in Acordia II, that Acordia, the acquiring company, could enforce the non-compete agreements “as if it had stepped into each original contracting company’s shoes.” Importantly, the Court noted that “[t]he language in Acordia I stating that the [acquirer] could not enforce the employees’ noncompete agreements as if it had stepped into the original contracting company's shoes or that the agreements must contain 'successors and assigns' language in order for the [acquirer] to enforce the agreements was erroneous.”  The Court’s decision in Acordia II makes Ohio consistent with the majority of courts that have addressed whether non-compete agreements are enforceable by an acquirer.  Despite its ruling on the legal successorship issue, the Court still remanded the case to the trial court to determine the “reasonableness” of the non-compete agreements at issue.

Thus, while Acordia II did eliminate one potential issue of concern for a company when engaging in merger and acquisition due diligence, a prudent company and its counsel must also review relevant non-compete agreements to insure that they are properly drafted, so as to be viewed as reasonable, valid, and enforceable.  Additionally, companies should not conclude that the ruling in Acordia II necessarily would apply in an asset purchase transaction, where the “successors and assigns” language in the non-compete agreement itself likely will be of critical concern.

Business acquisitions can present challenges in the drafting of non-compete agreements that are designed to protect the value of the purchase.  Prudent employers should continually review such agreements with counsel, but particularly in the context of any acquisition or other business transactions.

Tags: Non-Compete Agreements, Ohio Supreme Court, Corporate Mergers