Ohio Supreme Court Changes VSSR Grandfather Rule

Kegler Brown Labor + Employee Relations Newsletter

The Ohio Supreme Court recently overruled a 1989 case, which had afforded Ohio employers some protection from the potentially devastating impact of a workers' compensation claim on an employer.

In addition to "regular" workers' compensation benefits, an injured employee may be eligible for an award for violation of specific safety requirements, a VSSR, if the injury was caused by the employer's failure to comply with specific safety requirements. Those requirements are generally contained within the Ohio Administrative Code. If the Industrial Commission finds the VSSR to be valid, the employer pays a dollar-for-dollar penalty that is a percentage of the amount of compensation paid under the claim at the maximum rate for an injury occurring that year.

In 1989, the Ohio Supreme Court decided the Ohio Mushroom case. In that case, the Court decided that "code applicability … is controlled by the date the machine in question was placed into service, not by the date of injury." We refer to this as a grandfather rule. Therefore, the employer could defend a VSSR application by looking to the Ohio Administrative Code that was in effect on the date the machine was placed into service. Generally speaking, the Code requirements were less stringent years ago than they are today. As a result, Ohio employers were able to avoid VSSR liability under many claims.

However, the Ohio Supreme Court changed the grandfather rule a few months ago. In the case of Arce v. Indus. Comm., the Supreme Court overruled its decision in the Ohio Mushroom case. It determined that the reasoning in Ohio Mushroom was flawed and, as a result, employee safety was compromised. The Court limited the application of the grandfather clause to "installations or constructions" rather than to all machines or devices covered by the Ohio Administrate Code safety requirements. For example, ladders, scaffolds, portable explosive fastening tools, hand tools and other motorized vehicles and equipment are not subject to the grandfather clause. As a result, the Commission will look to the specific safety requirement in effect on the date of injury for those types of equipment. On the other hand, installations and constructions will continue to be evaluated on the basis on the safety code requirements that were in effect at the date of installation or construction. In determining whether the grandfather rule applies, the Commission will evaluate the size, weight and mobility or immobility of the machine or equipment involved.

Ironically, while the claimant in the Arce case was able to accomplish the reversal of the Ohio Mushroom case, she still lost in her attempt to get a VSSR award. The Court determined that the machine she was working on when she was injured was an installation and, therefore, the grandfather rule applied.