New Ohio Law Modifies the Legal Requirements for State Employment Discrimination Claims

In Short  

The Background: Until recently, employment discrimination claims in Ohio were governed by a patchwork of vague laws and employee-friendly judicial decisions that differed significantly from federal and other states' laws, provided significant advantages to plaintiffs, and made litigation of discrimination claims unnecessarily complicated.  

The Development: The Ohio Employment Law Uniformity Act, effective April 15, 2021, clears the muddied waters of state-law discrimination litigation and creates a more employer-friendly forum for such cases. 

Looking Ahead: Under the Act, litigants more easily can understand—and predict—the procedural steps required in discrimination cases raised under state law, and employers will enjoy a narrowed statute of limitations and protections for individual managers.

The Ohio Employment Law Uniformity Act ("Act") took effect on April 15, 2021, streamlining Ohio law and aligning it with federal law in the area of employment discrimination claims in various respects. A summary of the key provisions of the Act are as follows: 

  • Exhaustion of Administrative Remedies: Ohio law now requires that discrimination claimants first file a charge of discrimination with the Ohio Civil Rights Commission ("OCRC") and exhaust administrative procedures before filing a civil action seeking damages (though they may pursue a claim for injunctive relief without exhausting administrative remedies). Plaintiffs have two years from the date of the alleged discriminatory practice to file such a charge.
  • Shortened Statute of Limitations for Employment Discrimination Claims: At six years, Ohio previously had one of the longest statutes of limitations for such claims in the country. Under the Act, Ohio adopted a two-year statute of limitations. However, that two-year statute of limitations will be tolled for the period during which a plaintiff's charge of discrimination is pending before the OCRC (or, if the plaintiff filed the charge 60 days or less before the two-year cutoff, the statute will be tolled through 60 days following the disposition of the OCRC charge).
  • Narrowed Definition of Employer: An "employer" for purposes of employment discrimination claims is now defined as "the state, any political subdivision of the state, or a person employing four or more persons within the state, and any agent of the state, political subdivision, or person." This change rejects a line of cases authorizing individual liability for a company's managers and supervisors under the previous law. 
  • Revised Age Discrimination Claim Procedures: Before the Act took effect, age discrimination claimants could pursue claims in three different ways, each with different statutes of limitations, administrative requirements, and remedies. Now, claimants can bring age discrimination claims in only one of two ways where their claims are based in whole or in part on the same allegations and practices. Under either method, claimants are subject to the same two-year statute of limitations as other discrimination claims and claimants must exhaust administrative remedies, unless they are seeking only injunctive relief. 
  • Sexual Harassment Hostile Work Environment Affirmative Defense: The Act codifies an affirmative defense used in federal cases alleging hostile work environment sexual harassment, the Faragher-Ellerth defense. To prove this defense, an employer must show by a preponderance of the evidence that: (i) it exercised reasonable care to correct or prevent any sexually harassing behavior; and (ii) the employee alleging the hostile work environment unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise. Note, however, that the affirmative defense is not available if a supervisor's harassment resulted in a tangible employment action against the employee. 
  • Damages Cap: The Act clarifies that the caps on damages in Ohio's Tort Reform Act apply to employment actions. Specifically, the Act modifies the statutory definition of "tort action" to include employment discrimination claims such that damages caps on compensatory and punitive damages expressly apply to such state claims. While there is no cap on economic compensatory damages, noneconomic compensatory damages are limited to the greater of: (i) $250,000, or (ii) three times the economic loss, up to $350,000 per plaintiff, or $500,000 per occurrence that is the basis of the tort action. Punitive damages are limited to two times the amount of compensatory damages. If a jury awards a plaintiff in excess of these amounts, the judge must amend the award in accordance with Ohio Rev. Code § 2315.21. In cases in which the jury awards damages in excess of the cap, it is unclear from the Act whether the punitive damages cap is based off of judicially modified damages or jury-awarded damages. However, Ohio courts have found the punitive damages cap is calculated from the uncapped jury-awarded compensatory damages amount. If the employer is considered a "small employer," as defined by the statute (i.e., less than 100 employees), punitive damages are capped at the lesser of two times the amount of compensatory damages or 10% of the employer's net worth, up to $350,000.  

The Act comes as a welcome legal change for Ohio employers as the prior statutory scheme relative to employment discrimination claims was convoluted and out of step with processes at the federal level and in most other states.

Three Key Takeaways 

  1. Employers likely can move to dismiss a civil claim for failure to exhaust administrative remedies if an employee fails to raise an OCRC charge before filing a suit. Although the statute of limitations to raise such a civil claim now is limited to two years—less than half the prior limitations period—the plaintiffs' bar will enjoy statutory tolling while such charges are pending at the agency level. 
  2. Under the Act, employers no longer need to rely on judicial interpretations when raising the Faragher-Ellerth defense to sexual harassment claims or when taking a position respecting the extent of damages in employment discrimination claims. In effect, this could decrease somewhat the expense associated with such litigation because the statute alleviates the need to argue these issues.
  3. Though Ohio now effectively is a more employer-friendly state to litigate these claims, employers should consult counsel regarding ongoing developments respecting how the Act is interpreted by the courts.
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