Beginning this week, Ohio will bring its employment discrimination laws more in line with federal law and the laws of other states. Here is what employers need to know about the changes.
Earlier this year, Governor Mike DeWine signed the Employment Law Uniformity Act, which, as the name implies, largely conforms Ohio employment discrimination law to existing federal law by (i) establishing new requirements before employees may file a lawsuit under state law, (ii) creating a shorter statute of limitation period for some claims, (iii) to a great extent, eliminating personal liability for managers and supervisors accused of wrongdoing, and (iv) creating a new cap on the amount of money juries may award to employees who prevail at trial.
Exhaustion of Administrative Remedies
Before filing a lawsuit under most federal employment discrimination laws, employees are required to exhaust their administrative remedies, which most often involves filing a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). However, prior to the passage of the Act, under Ohio law an employee could file a state-law discrimination claim without first filing a charge with the state’s EEOC equivalent, the Ohio Civil Rights Commission (OCRC). Under the new Act, a person alleging an unlawful discriminatory practice relating to employment must now first file a charge with the OCRC before filing a lawsuit. The charging party may file a lawsuit only after receiving permission from OCRC or, alternatively, forty-five days after requesting permission from OCRC.
What this means for employers: The new exhaustion requirement may trip up employees and their counsel who continue to file state law claims before filing with the OCRC. This could lead to claims being summarily dismissed by the courts, and if the improper filing extends beyond the new statute of limitations (see below), the claims would be forever barred. In addition, in many cases, the new requirement will allow the OCRC to weed out weak or meritless claims before they ever reach the court system. The increased presence of the OCRC in the initial stages of an employee’s claim may also expand utilization of the agency’s mediation program, increasing the likelihood of resolution of the issues without the need to resort to litigation.
In Genaro v. Central Transport, Inc, the Supreme Court of Ohio held that individual managers and supervisors could be held personally liable for employment discrimination under Ohio Civil Rights Law. The Act rejects this holding by expressly prohibiting any person from having a cause of action based on an unlawful discriminatory practice related to employment against a “supervisor, manager, or other employee of an employer”. The law provides a narrow exception where a supervisor or manager may be held personally liable for employment discrimination, which applies in circumstances where the individual manager or supervisor are themselves the employer. In these situations, and under pre-existing language like that which prohibits retaliation, the employee may have a cause of action against the individual manager or supervisor.
What this means for employers: This change will limit the options employees have when selecting the court in which to file their lawsuit – a process commonly known as “forum shopping”. Ohio law permits plaintiffs to file lawsuits in any county where a defendant resides or where the alleged wrongful conduct took place. Before the Act, many employees made the tactical decision to include claims against supervisors just so they could file a lawsuit in the county where the supervisor lived, as opposed to where the employee actually worked.
Employees also used supervisor liability as a shield against employers’ attempts to remove cases from state court, where there is a perceived advantage for employees. Federal law allows defendants to take cases filed in state court and move them to federal court if all opposing parties are from different states and there is sufficient money at stake in the lawsuit. By suing a supervisor who lives in the same state as the employee, employers lost this avenue to federal court.
Passage of the Act cuts off this type of forum shopping by employees. While attorneys representing employees will undoubtedly attempt to find new avenues to forum shop, the Act’s curtailment of supervisor liability is substantively and strategically a win for employers.
Shortened Statute of Limitations Period
Under Ohio’s previous employment discrimination law, an individual had six months from the alleged unlawful discriminatory act to file a charge with the OCRC or six years to file a state law claim in court. The Act unifies both limitations periods to a span of two years. Thus, an individual must file a charge with the OCRC and bring a civil action for unlawful employment discrimination within two years of the alleged discriminatory practices. Further, the statute of limitations is tolled while a charge based on the same allegedly discriminatory conduct is pending before the OCRC. If the OCRC charge is filed less than 60 days before the two-year period expires, the statute of limitations for the lawsuit is tolled for an additional 60 days after the charge is no longer pending with the agency.
What this means for employers: While employees have less time to file lawsuits, they have more time to file with the OCRC. The expansion of time to file with the OCRC presents another opportunity for employers to revisit whether to include language in employment applications, employment agreements, or handbook acknowledgement forms that limit the amount of time employees may file claims. Please see our recent article on the subject of contractual limitations for more information.
Lastly, the Act amends Ohio’s statutory provisions that limit recovery of non-economic and punitive damages to apply those limits to employment discrimination actions brought under the Act. Under the caps:
- Compensatory damages for economic loss are not limited;
- Compensatory damages for non-economic loss cannot exceed the greater of $250,000 or three times the amount of the plaintiff’s economic loss to a maximum of $350,000 for each plaintiff or $500,000 for each occurrence; and
- Punitive damages cannot exceed two times the amount of compensatory damages awarded to the plaintiff or 10% of a small employer’s or individual’s net worth when the alleged tort was committed, to a maximum of $350,000.
Under the statute, a “small employer” is one who does not employ more than 100 full-time employees or, if the employer is classified as being in the manufacturing sector by the North American classification system, no more than 500 full-time employees.
What this means for employers: The new caps allow employers to better analyze their exposure to potential claims. The caps also provide some leverage to employers in settlement negotiations, as the employee will be forced to justify outrageously high settlement demands that exceed the new caps.
Many of the discrepancies that existed between Ohio and federal law have been eliminated with the passage of ELUA. These developments will likely streamline the litigation of employment discrimination claims across Ohio, thus reducing the costs for all parties involved. Employers are encouraged to reach out to the attorneys at KWW to assist with any questions they may have as the new law takes effect. At KWW, your workforce is our priority.