Recently, the National Labor Relations Board (“NLRB”) announced a settlement it “secured” which required a company to rescind certain work rules and pay two discharged employees $297,000. Of note, the workers were not discharged for violating the alleged unlawful work rules. In addition, the workplace was not unionized and no union organizing activity had occurred.

A review of the underlying facts suggests nothing more than a typical employment dispute. A furniture seller acquired a new facility and implemented its own policies and practices. Two employees (including a Shift Manager) took issue with those policies and practices and repeatedly violated company policy through insubordinate and other behavior (e.g., using offensive and inappropriate language in customers’ presence). The company-employee friction culminated when one of the employees said the owner was “high” for implementing the new policies. As a result, the company discharged the employees.

The discharged employees subsequently filed an unfair labor practice charge. Among other things, the employees alleged they had expressed safety concerns by claiming the owner was “high.” As part of its investigation, the NLRB obtained the company’s employment policies. The Board then concluded that certain policies unlawfully prohibited employees from discussing their working conditions. Those policies included: a previously rescinded wage disclosure policy (which inadvertently had been left in the new hire packet); an IT policy regarding use of email systems and company equipment; and policy language regarding use of the company’s confidential information and intellectual property. Notably, the company did not claim the employees violated the policies nor did any discussion of the policies occur in connection with the employees’ discharge. In fact, the company had not recently disciplined or discharged any employees for violating these policies. Nonetheless, the Board pursued the perceived National Labor Relations Act violations against the company, ultimately filing a complaint and seeing the matter proceed to a hearing before the parties settled.

The Board’s aggressive approach in this matter highlights the importance of ensuring all employers maintain properly updated employee handbooks and policies. This holds true regardless of whether a workplace is unionized or whether organizing activity is underway. 

If you have questions about this matter, your employee handbook/policies, or other Labor and Employment issues, please do not hesitate to contact Andrew Cleves or another member of the Frantz Ward Data Labor and Employment Practice Group.

On April 1, 2024, a new final rule was published which significantly revises OSHA’s longstanding regulations regarding an employee’s right to choose a representative to accompany parties during an OSHA’s onsite inspection and increases the likelihood of union access to non-union workplaces.

As outlined in Section 8 of the Occupational Safety and Health Act, employees and employers have the right to choose a representative to participate during OSHA’s physical inspection of the workplace, which may result from employee complaints, emphasis programs, and situations (like serious workplace injuries) that rank high on OSHA’s list of inspection priorities. This physical inspection process, which follows the opening conference, is commonly referred to as the “walkaround.” After judicial challenge to an earlier attempt made by the Obama Administration to affect this change informally through a guidance letter, the Biden Administration recently completed OSHA’s formal rulemaking process.

Under the new final rule, employees are now permitted to bring non-employee third parties on OSHA walkarounds if these individuals are “reasonably necessary to the conduct of an effective and through physical inspection of the workplace by virtue of their knowledge, skills, or experience.”  OSHA guidance indicates that reasons for a non-employee third party representative may include language barriers or technical or practical knowledge or experience about the processes and hazards present in the workplace that the OSHA compliance officer may not have. Not surprisingly, the final rule gives the OSHA compliance officer discretion to determine whether an employee’s choice of a non-employee third party is necessary.

In addition to expecting OSHA compliance officers to be extremely deferential to employee’s choice of representative, employers should also anticipate confidentiality and trade secret disagreements, as well as attempts by community and union organizers to gain access to non-union workplaces and (vice versa) attempts by employees to introduce a union presence in their non-unionized workplaces.

Employers should contact experienced OSHA defense counsel to immediately discuss the implications of OSHA’s new rule and strategies regarding when and how to dispute qualifications of a proposed third-party employee representative and to deny access to their workplace.

Ohio employers with plans to enforce non-compete agreements may have to think again in light of a recent Ohio Appellate Court decision. In Kross Acquisition Co. v. Groundworks Ohio, 2024-Ohio-592, the Court of Appeals upheld a lower court’s refusal to enforce an agreement barring a former Kross employee from competing against Kross and soliciting its customers. The lower court reached this decision even though the employee admittedly went to work for a competitor and took on job duties and a sales territory that directly overlapped with those he had at Kross. The basis for the court’s refusal to enforce the agreement was that the agreement was overly broad because it barred the employee from working anywhere in Ohio and Kentucky, though his sales territory at Kross only covered portions of those states.

The Kross case is particularly notable because the lower court could have modified the agreement and enforced a narrower scope of restrictions. For example, the court could have enforced the agreement to the extent it barred the employee from competing against Kross in his former Kross sales territory. Though this type of rewriting agreements – or “blue penciling” – is something that Ohio courts customarily do, the lower court refused to so and simply found the agreement unenforceable as a whole. On review, the Court of Appeals agreed, finding that the bedrock case in Ohio for evaluating non-compete agreements, Raimonde v. Van Blerah, did not require blue penciling.  Rather, a court can simply void the restrictions if there are too many factors and considerations necessary to easily rewrite the agreement.

The decision is significant because it gives trial courts the leeway to simply refuse to enforce agreements they consider unreasonable, rather than rewriting them.  The case serves as a stark reminder that it is paramount, when preparing non-compete and non-solicitation restrictions, to carefully consider the legitimate business interests a company is trying to protect, and to closely marry the restrictions to those interests.   

For more information on these best practices on restrictive covenants, contact Chris Koehler or any other member of the Frantz Ward Labor & Employment Law Practice Group.

On March 5, 2024, in State ex rel. Dillon v. Indus. Comm., Slip Opinion No. 2024-Ohio-744, the Supreme Court of Ohio overruled its prior authority in State ex rel. Russell v. Indus Comm., 82 Ohio St.3d 516 (1998), which has been the law of the land since 1998, holding that the Industrial Commission of Ohio (“ICO”) can find that a claimant has reached a level of maximum medical improvement (“MMI”) and terminate temporary total disability (“TTD”) on the date in which an independent medical exam (“IME”) physician renders a finding of MMI, prior to the date of a hearing. In addition, an employer can recoup the TTD paid to the claimant between the date of the physician’s MMI finding and the date of the ICO hearing. Prior to this decision, under the Russell case, TTD was required to be paid through the date of the ICO hearing if there was conflicting medical evidence as to the claimant’s MMI status and the claimant’s treating physician continued to certify TTD.

In Dillon, the claimant sustained a work-related injury on April 2, 2019 and the Bureau of Workers’ Compensation (“BWC”) allowed the claim for a lumbar strain/sprain. The Employer filed an appeal and the issue was heard before a district hearing officer (“DHO”) of the ICO who allowed the claim for lumbar strain/sprain, denied various additional conditions and awarded the payment of TTD. The claimant appealed the denial of the additional conditions and the employer obtained an IME which was performed on August 8, 2019. The IME doctor opined that claimant had reached a level of MMI. The claimant’s appeal was addressed by a staff hearing officer (“SHO”) at a hearing on October 28, 2019, who relied upon the employer’s IME to affirm the allowance of lumbar strain/sprain, deny the additional conditions, find that claimant had reached MMI and retroactively terminate TTD effective August 8, 2019, the date of the employer’s IME. The BWC sought recoupment of the TTD paid to claimant after the August 8, 2019 MMI finding. The BWC issued an overpayment order and the claimant filed an appeal to same. The issue proceeded to the ICO where the recoupment was deemed appropriate. The claimant filed an action in the Tenth District Court of Appeals, requesting a writ of mandamus to compel the ICO to vacate the order that declared an overpayment of TTD and to issue a new order dissolving the overpayment.  In support of her argument that recoupment was not warranted, Dillon relied on the Russell case which concluded that the appropriate date on which to terminate disputed TTD is the date of the ICO hearing, and the ICO may not declare an overpayment for TTD received by the claimant before that date. The Tenth District Court of Appeals denied the claimant’s writ of mandamus finding that the recoupment was proper under R.C. 4123.511 (K). The court reasoned that as Dillon’s request was for an initial period of TTD, it was distinguishable from the Russell case as that case involved the termination of ongoing TTD.

Upon appeal, the Supreme Court of Ohio went a step further by overruling the Russell decision finding that it was contradicted by the language contained in R.C. 4123.56(A) which provides that “payment shall not be made for the period when….the employee has reached the maximum medical improvement.” The court explained that if a claimant is paid TTD after being found to have reached MMI by a physician, then the claimant has received benefits to which they are not entitled under R.C. 4123.56 (A), and those benefits may be reimbursed as an overpayment pursuant to R.C. 4123.511 (K).

This decision should have a significant impact on employers throughout the state of Ohio, as there is typically a delay between the date of an IME and the date the issue of MMI is adjudicated at an ICO hearing. Under Dillon, employers can now request that the ICO retroactively terminate the claimant’s TTD based on the date of an IME, rather than the date of an MMI hearing.

 Moreover, the ICO will need to revise its policy relating to termination of TTD as set forth in Memo D2 of the Adjudications Before the Industrial Commission and IC Resolution 98-1-04 which rely upon Russell.

 Frantz Ward will keep you apprised of all developments related to this case. If you have any questions regarding this decision, or any other workers’ compensation matter, please feel free to contact Maris McNamara or any member of Frantz Ward’s Workers’ Compensation Practice Group.

On February 27, Judge James Hendrix from the United States District Court for the Northern District of Texas ruled that the federal government cannot enforce the Pregnant Workers Fairness Act (“PWFA”) against the state of Texas as an employer.

The PWFA went into effect on June 27, 2023 and requires employers to make reasonable accommodations based on known limitations related to pregnancy, childbirth, or related medical conditions. In August 2023, the EEOC issued its proposed rule implementing the PWFA. Although the final rule was expected in December 2023, no final rule has been issued yet.

The PWFA was passed on December 23, 2022 as part of the Consolidated Appropriations Act of 2023 (the “Act”). In Tuesday’s decision, Judge Hendrix ruled that in passing the Act, Congress violated the U.S. Constitution’s Quorum Clause, which requires a majority of the members of Congress to be physically present for a vote. In order to have a quorum, 218 members of the House of Representatives must be physically present for a vote. However, on the day the Act was passed, only 205 members of the House cast their votes in person, while the rest of the members voted by proxy. Based upon this violation of the Quorum Clause, Judge Hendrix ruled that the federal government is permanently enjoined from enforcing the PWFA against the state of Texas.

The ruling is limited only to the application of the PWFA against the state of Texas. It does not apply to other aspects of the Act, to private employers in Texas or other states, or other state employers. Accordingly, despite this ruling, employers should continue to accommodate employees in accordance with the EEOC’s proposed regulations implementing the PWFA. However, it is likely that other states or entities will use this decision as precedent to seek injunctions on the PWFA in other jurisdictions.

The ruling will not go into effect until March 5th, to provide the federal government the opportunity to appeal the decision.

In a move that gave hope to many business groups, a federal judge in Texas temporarily blocked a controversial new National Labor Relations Board “joint employer” rule on February 22. The new rule, which had been set to take effect on February 26, is designed to make it easier for the NLRB to label businesses joint employers of each other’s workers. The NLRB could the use that label to hold both businesses responsible for each other’s unfair labor practices. The prospect of this has been especially worrisome to businesses that work with franchise and temporary staffing arrangements, since a franchisor could be responsible for unfair labor practices committed by a franchisee and a staffing company could be responsible for unfair labor practices committed by its client.

Under the NLRB’s new rule “two or more entities may be considered joint employers of a group of employees if each entity has an employment relationship with the employees, and if the entities share or codetermine one or more of the employees’ essential terms and conditions of employment.” The NLRB plans to apply the rule by examining whether two entities each have  authority to control one or more of the following for an employee or a group of employees:

  1. Wages, benefits, and other compensation;
  2. Hours of work and scheduling;
  3. The assignment of duties to be performed;
  4. The supervision of the performance of duties;
  5. Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. The tenure of employment, including hiring and discharge; and
  7. Working conditions related to the safety and health of employees.

The judge’s ruling this week did not permanently block the new NLRB joint employer rule, and it instead simply put it on hold until March 11 while the judge considers a lawsuit filed by the US Chamber of Commerce and other business groups. That lawsuit does seek to permanently block the new rule, and its fate remains uncertain. This is the second delay for the new rule, which was originally set to take effect on December 26. 2023.

The Labor and Employment Practice Group at Frantz Ward will continue to monitor this situation closely. If you have questions about this or other labor and employment law issues, contact Brian Kelly or another member of the group.

Approximately 21 states and several municipalities have enacted laws that prohibit inquiries by employers into the salary history of applicants.  These laws are based primarily on the arguments that: 1) salary history does not accurately reflect an applicant’s qualifications and capabilities, or the market standard for similar positions; 2) relying on the salary history of an applicant when making a job offer will perpetuate any prior disadvantages the applicant experienced in the job market; and 3) considering the salary history of an applicant disproportionately affects women and people of color, and potentially others, who historically have been underpaid due to discrimination.

On March 1, 2024, a new Salary Ban Law will go into effect in Columbus, Ohio, and serves as a reminder to employers that they need to check and be aware of any salary history laws that may exist in the cities and states where they have employees.  Employers also need to be mindful of any pay equity statutes and ordinances under federal, state or local law that require an employer to reveal a relevant pay scale to external applicants.

With respect to the Columbus law, it applies to all businesses that employ 15 or more people within the City of Columbus, and only applies to applicants for new employment and not current employees seeking a transfer or promotion with the business.  Additionally, applicants may voluntarily share their salary history with an employer in Columbus and, if they do so, the employer may discuss it with the applicant.

There are several exemptions that apply to the Columbus law in addition to that for internal applicants, such as positions where compensation is set by a collective bargaining agreement, and applicants for positions with the state and federal government offices in Columbus.

Any person or labor union can file a complaint alleging a violation of the Columbus law.  Complaints will be investigated by the Columbus Community Relations Commission, which can impose fines of $1,000 for a first offense, $2,500 for a second violation, and $5,000 for a third violation within a five-year period.  The Commission also can refer a complaint to the City Prosecutor for potential criminal prosecution.

Despite the restrictions in the Columbus law, it expressly allows, as do many of the other state and local salary ban laws, for employers to inform an applicant of the salary range for the relevant position, and also to discuss with the applicant their salary expectations.

If you have questions about the Columbus Salary Ban Law, or any Pay Equity Law, or a general labor or employment question, feel free to contact Joel Hlavaty or any member of Frantz Ward’s Labor & Employment Group.

On January 1, 2024, a new Occupational Safety and Health Administration (“OSHA”) Rule took effect: the Final Rule to Improve Tracking. OSHA has long required employers to track and maintain records regarding workplace injuries and illnesses. Since 2016, OSHA has implemented (under multiple Presidential Administrations) varying rules regarding electronic submission of Forms 300, 300A and 301.

Whereas former versions of the rule included a 250 employe threshold, OSHA’s new Rule expands application of the rule to more employers in high-risk industries in an effort to increase transparency and public access.

Effective January 1, covered employers with 100 or more employees in designated “high-risk industries” are now required to electronically submit both OSHA Forms 300 and 301 on an annual basis, as well as 300A Summaries. A list of the high-risk industries subject to the new requirement can be found at OSHA’s injury reporting website.

While most data submitted on employer Forms 300A, 300, and 301 will be made available to the public, certain information will not be made available, including employee names, addresses, and medical providers.

Practically speaking, application of the new rule will give OSHA significantly more information at its disposal to not only analyze over the long-term, but also use in the short term to prepare for onsite inspections and to target employers under existing national emphasis programs.

The deadline to submit information for the 2023 calendar year is March 2, 2024. OSHA has posted FAQs and written instructions on how to submit information on the ITA on their website.

If you have any questions about your obligations under the new Rule, please contact Katie McLaughlin or any member of Frantz Ward’s Labor & Employment Group.

On January 9, 2024, the Department of Labor (the “DOL”) announced its final rule defining “independent contractors” under the Fair Labor Standards Act (the “FLSA”).  Displacing the 2021 two-factor Trump Administration rule, the Biden Administration’s Final Rule returns to the “totality of the circumstances” test.

As we know, the FLSA provides that nonexempt employees must earn minimum wage and overtime. Independent contractors, of course, are not afforded these and other protections under the FLSA.  Unfortunately, the FLSA – passed in 1938 – fails to define the term independent contractor, which has necessitated rules promulgated by the various politically-appointed Departments of Labor since that time.

The Trump Administration sought to streamline the process of classifying workers as employees vs. independent contractors in 2021, giving greater weight to two main factors: (1) control; and (2) opportunity for profit or loss.  If both of these factors weighed in favor of the same classification, then in theory, the worker classification analysis need not proceed further.  However, if the factors split, then three remaining factors would be considered: (1) the amount of skill required for the work, (2) the degree of permanence of the relationship, and (3) whether the work is part of an integrated unit of production. Those three individual factors, however, were not intended to outweigh the factors of control and opportunity for profit or loss.

Shortly after taking office, and four days before the Trump Administration’s rule took effect, President Biden’s Administration’s Department of Labor published a rule delaying the effective date, and on May 6, 2021, published a rule withdrawing the 2021 Rule.  Legal proceedings ensued, after which the Biden Administration undertook new rulemaking on October 13, 2022, which became final on January 9, 2024.

The Final Rule re-establishes the multifactor, totality-of-the-circumstances test, aligning with decades of (varying) judicial precedent analyzing worker classifications. The Final Rule outlines six main factors for analysis, to be weighed equally: (1) the opportunity for profit or loss depending on managerial skill; (2) investments by the worker and the potential employer; (3) the degree of permanence of the work relationship; (4) the nature and degree of control; (5) the extent to which the work performed is an integral part of the potential employer’s business; and (6) the skill and initiative of the worker.  As previously, the DOL leaves open the door for additional factors demonstrating that a worker is in the business for him or herself.

Outside of the Final Rule’s departure from the previous two-core factor analysis, two other changes from the 2021 Rule are noteworthy: first, the DOL’s re-establishment of “investments by the worker and the potential employer” as a separate factor; and second, required analysis as to whether the work performed is an integral part of a potential employer’s business (as opposed to the 2021 Rule’s “integral part of unit production”). Both changes broaden the scope of relevant facts in determining a worker’s status, with the stated goal of determining “whether the worker is economically dependent on the potential employer for work or is in business for themself.”

The Final Rule becomes effective on March 11, 2024. In the meantime, businesses of all sizes should review their independent contractor relationships and consult with a Frantz Ward attorney if questions remain. Full text of the Final Rule and accompanying Executive Summary can be found here.

As an update to our prior client alert addressing the enactment of R.C. §4123.56(F), there has been a recent decision in State ex rel. Butler v. Indus. Comm., 10th Dist. Franklin No. 22AP-274, 2023-Ohio-3774 holding that a claimant is no longer required to prove that the inability to work is solely due to an impairment arising from the workers’ compensation injury. In this case, the claimant resigned her employment and then requested the payment of temporary total disability (“TTD”). The Industrial Commission of Ohio (“ICO”) awarded the TTD as it was determined that claimant resigned her employment due to her workers’ compensation injury. The employer filed a mandamus action with the Court of Appeals contending that the ICO abused its discretion by granting TTD following claimant’s resignation causing unemployment for reasons unrelated to the workers’ compensation injury. The Court held that claimant was entitled to the payment of TTD, based on a Medco-14 form completed by her physician of record, which provided evidence that she was unable to return to her former job based on the allowed conditions in the workers’ compensation claim. The Court did not address the claimant’s resignation as they found that they were no longer required to do so, in accordance with the amendment to R.C. §4123.56(F) and the AutoZone case.

Prior to September 15, 2020, when a workers’ compensation claimant’s departure from the workplace was “voluntary” and for reasons unrelated to the industrial claim, claimant was ineligible for the payment of TTD – commonly referred to as the judicially-created defense of “voluntary abandonment”. In short, when a claimant removed himself from employment for reasons unrelated to the work injury, he was no longer eligible for TTD since the voluntary abandonment (not the injury) caused the loss of wages.

When the Ohio legislature enacted §4123.56(F) on September 15, 2020, it superseded any prior judicial decisions applying the doctrine of “voluntary abandonment”. As we previously discussed in our September 11, 2020 client alert,  the amended statute expressly wiped out all prior case law regarding the voluntary abandonment doctrine and now states that if a wage loss is a direct result of the allowed conditions in a claim, TTD is payable, and if the wage loss is a direct result of something other than the allowed conditions, it is not.

R.C. §4123.56(F) provides:
If an employee is unable to work or suffers a wage loss as the direct result of an impairment arising from an injury or occupational disease, the employee is entitled to receive compensation under this section, provided the employee is otherwise qualified. If an employee is not working or has suffered a wage loss as the direct result of reasons unrelated to the allowed injury or occupational disease, the employee is not eligible to receive compensation under this section. It is the intent of the general assembly to supersede any previous judicial decision that applied to the doctrine of voluntary abandonment to a claim brought under this section.

Some contend that the intent behind the new law was to eliminate the concept of voluntary abandonment from Ohio’s workers’ compensation law altogether.  Others argue that the intent was to bring clarity to conflicting case law and eliminate judicially-created exceptions to voluntary abandonment issues.

The first case to address the new law was State of Ohio ex rel. AutoZone Stores Inc. v. Indus. Comm., 10th Dist. No. 21AP-294, 2023-Ohio-633, decided on March 2, 2023, where the claimant had been terminated from his employment while working light duty and prior to his request for TTD. The claimant’s request for TTD was based on the fact that he had undergone surgery for the allowed conditions in the workers’ compensation claim. The employer argued that since the claimant voluntarily abandoned his position due to his termination, he was not entitled to TTD.

 The AutoZone court found that R.C. §4123.56(F) sets forth two operative questions to be eligible for TTD:

  1. Whether claimant is unable to work as a direct result of an impairment arising from the injury or occupational disease; and
  2. Whether claimant is otherwise qualified to receive TTD. (“Otherwise qualified” related back to the disqualifications set forth in R.C. §4123.56(A) which provides claimant is ineligible for receipt of TTD if he has returned to work, has a statement from his doctor opining he is capable of returning to his former position of employment, when work within the physical capabilities of the employee is made available by the employer or another employer, or when the employee has reached maximum medical improvement.)

The AutoZone court held that claimant was entitled to the payment of TTD and did NOT consider whether claimant’s departure (i.e., his termination) from his workplace was “voluntary” in determining his eligibility for TTD. The Court held that R.C. §4123.56 (F) requires a claimant’s inability to work to stem from an impairment arising from an injury. The Court declined to address an additional requirement that a claimant prove he is unable to work ONLY due to an impairment from an industrial injury. AutoZone is currently on appeal and pending before the Ohio Supreme Court.

As referenced above, the more recent case of Butler adopted the finding of AutoZone by holding that a claimant is no longer required to prove that an inability to work is solely due to an impairment arising from the workers’ compensation injury.

In sum, the courts in AutoZone and Butler have found that even when they do not have a job to return to, claimants are entitled to TTD.

While the change in the law and subsequent court cases clearly present a challenge to employers, it goes without saying that workers’ compensation cases are extremely fact specific and determined on a case-by-case basis. It is possible that with a different set of circumstances, the Industrial Commission of Ohio and/or the courts may find that a claimant’s lost wages are directly the result of reasons unrelated to the industrial injury and deny the payment of TTD.

Frantz Ward will continue to monitor similar workers’ compensation decisions closely and provide updates.