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Why Ohio Employers Will Embrace the New “Employment Law Uniformity Act”

E-mployment Alert

Smart Summary

  • Ohio’s landmark HB 352 is set to recalibrate a number of court decisions that were deemed favorable to employee claimants and will align state laws with federal counterparts.
  • Key provisions include updates to supervisor/manager liability, age discrimination claims, statutes of limitation, non-economic and punitive damage limits, dual actions, and affirmative employer defenses.
  • The bill was signed by Governor DeWine on January 12 and becomes effective on or before April 13.

The coronavirus has devastated businesses and families across Ohio in 2020, so businesses are in need of some good news right about now. That good news came late on December 22 when the Ohio Senate passed HB 352, significantly reforming Ohio’s employment laws.

For more than 20 years, the business community has been asking lawmakers to address a list of what it perceives to be bad Ohio Supreme Court cases dating back to the early 1990s. Kegler Brown’s labor and employment law practice team has been at the forefront of helping craft and lobby for these changes since the first bill was drafted in 1999. The main reforms contained in the Act are numerous.

  • Eliminates manager/supervisor liability, but retains an employer’s vicarious liability for employment discrimination claims.
  • Improves Ohio’s workplace discrimination laws by allowing for timely, fair, and efficient resolution of claims for both employers and employees.
  • Increases uniformity with federal law to allow for better predictability in employment discrimination lawsuits while maintaining robust protections for employees.
  • Reduces costs to employers by eliminating the need for businesses to maintain six years’ worth of employee records.
  • Provides affirmative defenses for employers that have robust protections and policies for handling claims of harassment.
  • Eliminates employers’ having to defend claims before the Ohio Civil Rights Commission and in civil court simultaneously.
  • Codifies limitations on non-economic and punitive damages for employment discrimination claims.

Overview of Key Provisions

Individual Supervisor Liability
HB 352 removes individual manager/supervisor liability, but retains an employer’s vicarious liability for discriminatory actions. Until the Ohio Supreme Court decided the Genaro v. Cent. Transport, Inc. case in 1999, manager/supervisor liability did not exist. In fact, federal law does not permit individual liability (see Wathen v. GE, decided in 1997) and Ohio is among a minority of states that permit it.

Of course, the Ohio Supreme Court eliminated individual supervisor liability for public employers in 2014 with the decision in Hauser v. Dayton Police Department. Supervisors and managers, whether working for an Ohio public or private employer, need to be able to exercise their best professional judgment when making employment decisions without fear of being individually liable when acting in the interest of their employer.

Two-Year Statute of Limitation
For more than 20 years, Ohio has maintained the longest statute of limitations in the nation for filing employment discrimination claims. The Ohio Supreme Court set a six-year timeframe for filing such claims in the Cosgrove v. Williamsburg of Cincinnati Management Company, Inc. case decided in 1994. But, in deciding the Cosgrove case, the Court directed the General Assembly to clarify the statute of limitations.

HB 352 requires a charge to be filed with the Ohio Civil Rights Commission (OCRC) within 2 years after the alleged unlawful discriminatory practice relating to employment was committed. This effectively extends Ohio’s statute of limitations for filing charges with the OCRC from 180 days to two years for all charges. By way of comparison, the statute of limitations to file a charge with the Equal Employment Opportunity Commission (EEOC) is 300 days. In addition, many other states require a one- or two-year statute of limitation for filing an employment discrimination claim.

The bill also requires lawsuits based on federal anti-discrimination laws (other than claims brought under Section 1981 of the Civil Rights Act of 1866), be brought within two years after the cause of action accrues.

Dual Actions
HB 352 requires plaintiffs to first file state claims with the OCRC and aligns Ohio’s discrimination laws with Title VII. If signed, the legislation will provide the OCRC with the ability to track the number and type of allegations of discrimination occurring in Ohio – something presently unavailable due to the ability to simply file an employment discrimination claim into a court of common pleas around the state.

The administrative exhaustion requirement also aids employers that want to expeditiously handle any issues that arise. Presently in Ohio, the first time an employer may become aware of an allegation of discrimination may be when a plaintiff files a civil suit in court, which could be 5 or 6 years after the incident occurred. The new requirement sets forth a procedure that recommends the employee first report any allegation directly to the employer to address any violations, then to the administrative agency (EEOC or OCRC) for exhaustion of remedies, then to court if other remedies have failed. This process and these timeframes are fair to both employers and employees.

Affirmative Defense
In an effort to incentivize employers to implement robust protections and policies for handling claims of harassment, HB 352 codifies the “Faragher-Ellerth” affirmative defense that exists in federal law. The affirmative defense provides employers with protection against hostile work environment claims when the employer can show that it had anti-harassment policies and complaint procedures in place and the employee failed to take advantage of these policies and procedures.

Specifically, HB 352 grants an employer the ability to raise an affirmative defense in hostile work environment harassment claims if it can prove all of the following:

  • the employer had an effective harassment policy;
  • the employer properly educated employees about the policy and complaint procedures;
  • the employer exercised reasonable care to prevent or promptly correct the harassing behavior; and
  • the complainant failed to take advantage of any preventative or corrective opportunities. 

Consistent with federal law, the bill provides exceptions in the event a complainant can prove that taking preventative or corrective action would have failed or would have been futile. Also, the affirmative defense cannot be used when the alleged unlawful discriminatory action resulted in adverse, tangible employment action against the complainant, such as failure to promote, firing, or demotion. 

Age Discrimination
Presently under Ohio law, a plaintiff over the age of 40 has multiple avenues to pursue an age discrimination claim. This varying treatment for age discrimination creates unnecessary complications and confusion because each statute has different available remedies and procedural requirements. Current law treats discrimination based upon age differently than all other protected classes by allowing these multiple avenues.

HB 352 unifies age discrimination claims with all other types of employment discrimination, bringing much-needed clarity to age discrimination claims. Likewise, claims filed seeking injunctive relief will happen exclusively under ORC 4112.14 or ORC 4112.02(A), and the choice will remain with the plaintiff as to which statute they want to use to pursue their claim. If the plaintiff pursues only injunctive relief, he or she will file the claim under RC 4112.052.

Limitations on Non-Economic and Punitive Damages
HB 352 codifies non-economic and punitive damage limitations already applied in employment actions by courts today. The caps referenced in state law today are more favorable to claimant employees than those prescribed by the federal Civil Rights Act of 1991, capping such benefits for small employers (with more than 14, but fewer than 101 employees) around $50,000 and larger employers (with more than 500 employees) around $300,000.

Effective Date
Governor Mike DeWine signed HB 352 on Tuesday, January 12, 2021. Therefore, the provisions outlined above will become law 90 days after his signature (April 12, 2021).

Every employment law should strike the right balance between employee rights and employer obligations. When the pendulum swings too far toward employee rights, as it did in the 1990s with several Ohio Supreme Court decisions, balance must be brought back to the system. HB 352 strikes an appropriate balance between employers and employees.

Please contact the Kegler Brown Labor & Employment practice team for assistance navigating local, state, federal and international employment laws.

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