On January 12, 2021, Governor Mike DeWine signed into law House Bill 352, the Employment Law Uniformity Act. The law becomes effective on April 13, 2021 and makes significant changes to Ohio’s framework for addressing workplace discrimination claims as codified in Ohio Revised Code Chapter 4112. In addition to clarifying a number of issues, the law also contains some significant substantive changes.
Elimination of Personal Liability for Supervisors and Managers
The first substantive change is the elimination of personal liability for supervisors and managers in most situations. In 1999, the Ohio Supreme Court in Genaro v. Central Transport, Inc., 84 Ohio St.3d 293, interpreted a prior version of the statute as allowing individual liability for managers and supervisors. This was in contrast with the federal anti-discrimination statutes, which do not provide for this type of individual liability. House Bill 352 amends Ohio Revised Code Section 4112.08 to specifically exclude individual liability, unless the supervisor, manager or other employee is the employer (i.e. a sole proprietorship), or the claim is one for retaliating against a person who has opposed an unlawful discriminatory practice in violation of Ohio Revised Code Section 4112.02(I) or the claim involves conduct designed to aid, abet, incite, compel or coerce an unlawful discriminatory practice in violation of Ohio Revised Code Section 4112.02(J).
Requirements that Claimants Exhaust Administrative Remedies
The second substantive change is the new requirement that claimants exhaust their administrative remedies through the Ohio Civil Rights Commission before filing a lawsuit in court. Previously, an individual had a choice between filing a charge of discrimination with the Ohio Civil Rights Commission or filing a lawsuit directly in court. Claimants are no longer allowed to seek damages in court without first going through the Ohio Civil Rights Commission. Under the new law, individuals who wish to pursue discrimination claims against their current or former employer must first file a charge of discrimination with the Ohio Civil Rights Commission. After 60 days, the employee can request a right to sue letter. Only upon receipt of the right to sue letter, or the passage of 45 days after a request for a right to sue letter without receiving one, can the employee bring a lawsuit in common pleas court.
If the claimant decides to keep their case in front of the Ohio Civil Rights Commission, the matter will proceed through eight basic stages: (1) the filing of the charge of discrimination; (2) initial alternative dispute resolution-i.e. mediation; (3) investigation; (4) the determination of whether there is probable cause to believe a violation has occurred; (5) informal conciliation if probable cause is found; (6) if informal conciliation is unsuccessful, the filing of an administrative complaint; (7) an administrative hearing; and (8) issuing an order following the hearing.
The new law makes a number of changes as to how these various stages work, however, the most significant deals with the investigation. Sixty days after the charge is filed, a claimant can request that the Ohio Civil Rights Commission cease its investigation and issue a right to sue letter, allowing the claim to be brought in court. The law also provides that if an employee gets a right to sue letter and pursues a claim in court, the Ohio Civil Rights Commission can intervene as a party if it is a matter of great public importance.
Statute of Limitations
The third substantive change involves how long an employee has to pursue a claim of discrimination. Prior to House Bill 352, the statute of limitations for bring a lawsuit was six years and the time limit for filing a charge of discrimination was six months. The new law reduces the statute of limitations for filing a lawsuit to two years, and extends the deadline for filing a charge of discrimination to two years. It also provides that while the matter is pending with the Ohio Civil Rights Commission after the filing of a charge of discrimination, the two year statute of limitations on the commencement of a lawsuit is tolled until the issuance of a right to sue letter. If the OCRC charge is filed less than 60 days before the time to file with the agency expires, the statute of limitations is tolled for an additional 60 days after the charge is no longer pending with the Ohio Civil Rights Commission.
Simplification of Age Discrimination Lawsuits
The last substantive change deals with age discrimination claims. Previously, there were multiple statutes addressing age discrimination. Each one had its own separate remedies, procedures and statute of limitations. The new law eliminates those multiple claims and provides that age discrimination claims will be handled in the same way as all of the other discrimination claims. This change greatly simplifies the law associated with age discrimination claims.
Affirmative Defense for Hostile Workplace Harassment Claims
The rest of the changes to the statute clarify various issues that had been litigated in court over the years. The first involves the codification of the affirmative defense available in hostile workplace harassment claims. In 1998, the United States Supreme Court, in analyzing harassment claims under the federal discrimination statutes, developed an affirmative defense available to employers in two landmark decisions, Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998). House Bill 352 codifies this affirmative defense, and makes it clear that it is applicable to harassment claims brought pursuant to Ohio’s statutory framework. The code will now provide that an employer may avoid vicarious liability for allegedly harassing conduct by a supervisor if it can prove that: (1) the employer exercised reasonable care to prevent or properly correct the sexually harassing behavior and (2) the employee alleging the hostile work environment unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer. The new law goes onto provide, however that this affirmative defense is not available if the supervisor’s harassment resulted in a tangible employment action, such as termination, demotion or reassignment to a significantly worse position. The codification of this affirmative defense reinforces the importance of having a clear and effective sexual harassment policy, and assuring that managers are trained on how to promptly and effectively respond to complaints of harassment.
Limits on Non-Economic and Punitive Damages
Several years ago, Ohio adopted tort reform, which included limitations on non-economic compensatory damages and punitive damages. House Bill 352 amends the definition of “tort action” so as to make it clear that these limitations are applicable to discrimination claims brought pursuant to Ohio Revised Code Chapter 4112.
While there are no limits on compensatory damages for plaintiff’s economic loss, such as lost wages and benefits, compensatory damages for a plaintiff’s non-economic losses, such as for emotional distress, cannot exceed the greater of either (1) $250,000.00 or (2) three times the plaintiff’s economic loss to a maximum of $350,000.00 for each plaintiff or a maximum of $500,000.00 for each occurrence forming a basis for the claim. With respect to punitive damages, unless a defendant committed the tort purposefully or knowingly, punitive damages are capped at two times the amount of compensatory damages or 10% of a small employer’s net worth, to a maximum of $350,000.00. A small employer is defined as one with less than 100 employees.
Finally, House Bill 352 provides that the procedures and remedies for unlawful discriminatory practices relating to employment contained in Ohio Revised Code Chapter 4112 are the exclusive remedy for discrimination in the employment context. Common law claims, such as wrongful discharge in violation of public policy, are no longer available for employees if the underlying conduct would be covered by Ohio Revised Code Chapter 4112.
All in all, House Bill 352 is a significant re-working of Ohio’s framework for dealing with discrimination in the workplace. For employers, one of the most significant impacts is likely going to be the elimination of direct lawsuits without first having to exhaust administrative remedies. Because the Ohio Civil Rights Commission offers alternative dispute resolution procedures to the parties as soon as the charge is received, employers will have an opportunity to mediate and attempt to resolve claims before being subjected to the cost and time of litigating the matter.
The biggest takeaway for employers in the short term, is to make sure the company has adopted an appropriate policy addressing harassment in the workplace and that all of its employees are trained in how to avoid harassment and handle claims if and when they are made.