Ohio Supreme Court to Rule on Definition of a Compensable Psychiatric Condition Under Ohio Workers’ Compensation Law

Armstrong v. Jurgenson, Case No. 2012-0244, is currently pending before the Ohio Supreme Court. Oral argument was held January 23, 2013. The case concerns a claimant who was diagnosed with sprain/strain injuries and post-traumatic stress disorder (PTSD) following a work related motor vehicle accident. The claimant was rear-ended and the driver of the other vehicle died at the scene. Claimant’s and the employer’s experts agree that claimant developed PTSD in response to the life-threatening nature of the accident and claimant’s observation of the fatally injured driver. In other words, claimant’s PTSD did not arise from the physical injuries claimant sustained in the accident, but rather, as a separate psychiatric condition that occurred contemporaneous to his physical injuries. The question for the Court to decide is whether claimant’s PTSD is a compensable psychiatric injury under Ohio Workers’ Compensation law.

In 2006, the General Assembly modified the definition of a compensable injury under Ohio Workers’ Compensation law. Revised Code 4123.01(C)(1) currently provides that a compensable injury does not include psychiatric conditions unless the conditions have “arisen from” a physical injury or occupational disease. In light of R.C. 4123.01(C)(1), the trial court and appellate court ruled that claimant’s PTSD is not compensable. The Second District Appellate Court explained that the psychiatric condition must have arisen from the injury, i.e., the fact that it occurred at the same time was not sufficient. Claimant argues that psychiatric conditions arising contemporaneous to physical injuries are compensable.

This case will give the Court its first opportunity to address the compensability of a psychiatric condition that occurred contemporaneously with a physical injury. It is also the first significant workers’ compensation issue that will be decided by the newly formulated Court. It will be interesting to see if the Court applies the statute as written and its “arisen from” standard, or if it will employ the more lenient “contemporaneous to” standard. An updated blog will be published once the Court’s decision is announced. Stay tuned.

Contact: Alexander Kipp

216.820.4204

akipp@ralaw.com

Dual Jurisdiction - Ohio Workers’ Compensation

Ohio Revised Code 4213.542 does not permit the filing of a workers’ compensation claim in Ohio if a claimant or the dependents involved in a workers’ compensation claim have been granted an allowed claim in another state. In Smiley v. Professional Staff Mgt. Inc., 2013-Ohio-139, the claimant was involved in a motor vehicle accident while in the performance of her job duties. The claimant worked for a property management company as a regional manager. The claimant was responsible for overseeing and managing properties in both Ohio and Indiana. The claimant’s employer was located in Indiana. The claimant resided in Ohio. The employer filed a claim for the claimant in Indiana. This claim was allowed and both medical bills and compensation were paid in this claim.

Later, the claimant filed a claim in Ohio. This claim was denied by the Industrial Commission of Ohio pursuant to ORC 4123.542. The claimant appealed the denial of this claim to Common Pleas Court who ruled that this denial was proper. The claimant then appealed this decision to the Court of Appeals who upheld this decision. It did not agree that this statute was unconstitutional as argued by the claimant and upheld the decision of the lower court.

To date, all challenges to ORC 4123.542 have been struck down. This case provides the precedence that this statute also applies even when the claimant does not file the claim in another state and this filing results in an allowed claim in that state.

Contact: Brian Tarian

614.723.2028

btarian@ralaw.com

Think You Purchased Assets “Free and Clear”? That’s Not Always the Case When it Comes to Liability for Violations of Federal Employment and Labor Laws

Generally, buyers of corporate assets intend to acquire the assets but not the liabilities of the seller. Whether or not a purchaser acquires such liabilities is an issue of successor liability. Most states limit successor liability to situations in which the seller expressly or implicitly agrees to assume responsibility for such liabilities. Thus, it is not uncommon to see asset purchase agreements that purport to disclaim any liability for the debts or liabilities of the seller. However, such disclaimers do not control when the liability arises under federal labor and employment laws.

The United States Court of Appeals for the Seventh Circuit recently addressed this issue in Teed v. Thomas & Betts Power Solutions, Case Nos. 12-2440, 12-3029, 2013 WL 1197861, clarifying the standard for successor liability under federal law. In Teed, the Court found that a purchaser of corporate assets was liable for the seller’s liabilities under the Fair Labor Standards Act (“FLSA”) for overtime pay violations even though the purchaser acquired the assets on the condition that such acquisition was “free and clear” of all liabilities. Although such disclaimer of successor liability would normally allow the purchaser to be off the hook for liabilities under state law, the Court in Teed held that such disclaimers do not control in situations where liability under federal employment and labor statutes like the FLSA is at issue.

Instead, the determination of whether a purchaser is liable for a seller’s violations of federal law, including wage/hour claims under the FLSA, depends on a consideration of the following factors:

•  Whether the purchaser had notice of the pending lawsuit/liability (If the purchaser has notice, this factor weighs in favor of successor liability on the theory that the purchase price was reduced to account for such liability);

•  Whether the seller would have been able to provide the relief sought in the lawsuit before the sale (If the answer is no, then this factor tends to weighs against successor liability on the grounds that recovery would be a “windfall” to plaintiffs);

•  Whether the seller could have provided relief after the sale (A seller’s inability to provide relief weighs in favor of successor liability because, without it, the plaintiff’s claim would be worthless);

•  Whether the successor can provide the relief sought; and

•  Whether there is continuity between the operations and the work force of the seller and the purchaser (If yes, then this factor weighs in favor of successor liability on the theory that nothing has really changed)

In Teed, the Court clarified that the default rule in most cases is to hold a purchaser liable in suits to enforce federal labor or employment laws, even when the purchaser disclaimed liability when it acquired the assets. In so holding, the Court explained that the imposition of successor liability is often necessary to achieve the statutory goals of federal labor and employment statutes because workers are generally unable to stop a corporate sale by their employer aimed at extinguishing the employer’s liability to them. In turn, a purchaser of corporate assets can be “compensated” for bearing the liability for such claims by reducing the purchase price for the assets it acquires.

Thus, it is clear that purchasers of corporate assets should consider the factors for successor liability on federal claims when vetting an asset purchase even though they intend to include a disclaimer of liability in the asset purchase agreement. If there is any doubt about potential exposure, such liabilities should be considered when evaluating the purchase price.

Contact: Emily Wilcheck

419.254-5260

ewilcheck@ralaw.com

OSHA States that Union Representatives Can Participate in Inspections of Non-Union Workplaces

In an interpretation letter released on April 5, 2013, OSHA stated that employees in a non-union facility may select a non-employee who is affiliated with a union to act as their representative during OSHA’s walk-around inspection of the employer’s worksite. OSHA issued the letter in response to a question from a health and safety specialist of the United Steelworkers Union.

By way of background, OSHA regulations provide that employees may designate a representative to accompany the OSHA compliance officer during the physical inspection of any workplace. The regulations recognize that in most cases the representative will be an employee of the employer. However, the compliance officer also has authority to permit a non-employee third party to be present during the inspection whenever it is “reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace.”

The new OSHA interpretation letter specifically recognizes that non-union employees may select a union representative to accompany the compliance officer during the inspection. OSHA reasoned that union representatives could make an important contribution to the inspection through their experience evaluating similar working conditions in different plants. OSHA also noted that workers in some situations may feel uncomfortable talking to a compliance officer without “the trusted presence of a representative of their choosing.” OSHA even went so far as to rescind an older interpretation letter that may have conflicted with its new position on this issue.

Clearly, non-union employers should be concerned about this policy, which may encourage union representatives to use OSHA as an organizing tool. The policy creates an opportunity for union representatives to make contact with non-union employees at their workplace and promote the benefits of organizing and collective bargaining. So, what can non-union employers do to keep employees from selecting a union representative to speak for them during an OSHA inspection? The safest course is to encourage employees to become actively involved in workplace safety issues. For example, employers can create a safety committee and invite employees to join the committee. Employees who are already involved in safety issues will be less likely to reach out to a union representative when an OSHA inspection occurs.

A legal battle is anticipated regarding OSHA’s new policy. In the meantime, Roetzel will keep you updated on new developments in this important issue.

Contact: Nathan Pangrace
216.615.4825
npangrace@ralaw.com

Workers’ Compensation: Injury to “Volunteer” is Not Compensable When No Employer Benefit Provided

On March 25, 2013, the Twelfth District Court of Appeals of Ohio decided the case of Margello v. Parachute & Special Advocates for Children, 2013-Ohio-1106. Jean M. Margello applied for workers’ compensation benefits after she claimed she sustained injuries in a fall while visiting a client’s home as a volunteer court-appointed special advocate. The Bureau of Workers’ Compensation (BWC) denied Ms. Margello benefits. She appealed to the Butler County Common Pleas Court, was denied again, and then further appealed.

In its review, the appeals court focused on the statutory definition of an “employee” under Ohio R.C. 4123.01 in regards to the facts of this case. Ms. Margello was a volunteer who argued that she was an “employee” eligible for benefits because “the organization received value from her volunteer services and exerted substantial control over its volunteers.” The appeals court, however, rejected that argument and held that Ms. Margello did not qualify as an “employee” for the purposes of workers’ compensation, as she received no compensation or benefits for her volunteer services. The court also focused on rulings in prior cases that “a determining factor in establishing whether an employee-employer relationship exists is a contract of hire, express or implied, oral or written.” Here, there was no obligation for Ms. Margello to be paid, and thus no contract for hire existed. The court also noted that she did not receive free services in exchange for the work that she performed. If she had, the appeals court hinted that this might have been a compensable claim.

Contact: Christopher Debski
330.849.6717
cdebski@ralaw.com

Roetzel Prevails in Ohio Sex Discrimination Case Covered in CCH Employment Law Daily

A recent case in which Roetzel Partner Karen Adinolfi prevailed was featured in the March 13, 2013 issue of CCH Employment Law Daily. The case, Inskeep v. Western Reserve Transit Authority, affirms a lower court’s judgment on the pleadings in favor of the employer with respect to an employee’s sexual orientation discrimination claim.

The Ohio Seventh District Court of Appeals rejected the employee’s argument that sexual orientation is included within the meaning of the term “sex” under Ohio’s employment discrimination statute. The court also affirmed dismissal of the negligent infliction of emotional distress (NIED) claim because the employee did not sufficiently plead it and his affidavit was properly disregarded.

Read the full text of the decision at: http://www.supremecourt.ohio.gov/rod/docs/pdf/7/2013/2013-ohio-897.pdf.

Contact: Karen Adinolfi

330.849.6773

kadinolfi@ralaw.com



Roetzel Partners Featured Speakers at Affordable Care Act Webinar

Roetzel Partners Doug Kennedy and Jon Secrest are the featured presenters for the webinar "Understanding the Affordable Care Act," sponsored by the Ohio Chamber of Commerce HR Academy. Further information about the webinar along with registration information is available at http://hracademyohio.com/understanding-the-affordable-care-act/



Jon Secrest



Contact: Jon Secrest
614.723.2029
jsecrest@ralaw.com



Doug Kennedy

Contact: Doug Kennedy
614.723.2004
dkennedy@ralaw.com