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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

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