Cleveland Law Library Weblog

Employees Sue Columbus-Based Skybus Under WARN Act

Last week, former employees of Skybus, a Columbus-based airline company which recently shut down its operations, sued the company in bankruptcy court, alleging that Skybus violated the Worker Adjustment and Retraining Notification Act (aka The WARN Act). The WARN Act (contained in 29 U.S.C. sec. 2101 and 20 CFR Part 639) was designed to protect employee rights and requires companies with 100 or more employees to give 60 days advance notice of a closing or pay its employees 60 days of pay. This case was filed in Delaware Bankrupty court as a class action adversary proceeding in Case No. 08-50570-CSS, and the Court's docket can be found on PACER. Skybus' bankruptcy proceeding on PACER is Case No.08-10636-CSS. Click here for a fact sheet on WARN from the U.S. Department of Labor. 

Akron City Employees Must Live Where They Work

In a case decided yesterday, the Ohio Ninth District Court of Appeals, held that Akron City employees must live in Akron if they want to keep their jobs. The Court’s decision upholding a residency restriction in Akron City Charter amendments (Section 105a) held that O.R.C. sec. 9.48.1 is unconstitutional. ORC sec. 9.48.1 was enacted 5/1/06 and generally prohibits political subdivisions from requiring their employees to live where they work. In December, another Court of Appeals upheld a Lima residency law similar to the one in Akron. Click here to read a story and listen to audio clips of responses from akronnewsnow.com. The Eighth District appeals Court has yet to decide the legality of similar residency restrictions for Cleveland employees.

Ohio's Minimum Wage Going Up On 1/1/08

Ohio's minimum wage for most employees is going up on January 1, 2008 from $6.85 per hour to $7.00 per hour for non-tipped workers and from $3.43 per hour plus tips to $3.50 per hour plus tips for tipped workers. According to the Ohio Department of Commerce, these new rates will apply to employers that gross more than $255,000 annually. Thereafter, rates will increase every January. For exceptions for younger employees or smaller employers, check the Commerce Department's Division of Labor & Worker Safety Press Release and website pamphlet.

Ohio Unemployment Fund in Jeopardy

Crain's Cleveland Business and the Dayton Daily News report that Ohio's unemployment insurance fund is running low and may even run out. Although the recommended level for the fund should be $2.28 billion, the fund is working with a balance of only $555.7 million. Part of the shortfall is due to two (2) major factors. In the first place, there have been no increases in the $9,000 per employee base amount upon which employers must pay 2.7% unemployment taxes. Secondly, there are a lot less businesses in Ohio, at only 226,808, which is down from 232,755 in 2000. The good news is that employees will not go without because the state can supposedly borrow money from the federal government like it did in the 1980's. In addition, the state has hired a consultant to recommend ways to repair the system. Click here for unemployment data for Ohio, and click here for the latest 12/21/07 ODJFS press release on unemployment rates in Ohio.

Prevailing Wage Laws to be More Aggressively Enforced

Crain's Cleveland Business reports that Ohio Attorney General Marc Dann has started a campaign to more aggressively enforce Ohio's Prevailing Wage Laws. These laws, which govern wages and hours on public works projects, can be found in the Ohio Revised Code.   According to Crain's, Dann will be allocating 6 attorneys to work with the Department of Commerce to enforce the existing laws. This announcement comes on the heels of a settlement of a major prevailing wage case in Ashtabula County involving 19 contractors and subcontractors who will be paying almost $453,000 to employees who were not paid prevailing wages for work they performed at an environmental cleanup site. Click here to read the Akron Beacon Journal's article.

Arbitration Agreement Substantively Unconscionable When Remedy Afforded by Law is Denied

Russ Bensing's The Brief Case Blog points out the following case:  Post v. Procare Automotive Services Solutions, Cuyahoga App. No. 87646, 2007-Ohio-2106.  The case struck down an arbitration clause contained in an employment contract.  The employees were suing for age discrimination under Ohio law, and the employer moved to compel arbitration.  The trial court denied the motion to compel arbitration.

The Court of Appeals held that the arbitration clause was substantively unconscionable.  The arbitration clause said that both parties would pay their own attorney fees, contrary to Ohio law, which provides that a plaintiff may recover attorney fees from the defendant in an employment discrimination case.  Additionally, while the employee is limited to binding arbitration, the employer may bypass arbitration for a breach or threatened breach of the non-compete and confidentiality provisions of the employment agreement.  However, the trial court failed to have a hearing to determine whether the arbitration clause was unconscionable, so the appellate court remanded for a hearing.  The appellate court stated that they had already determined that the arbitration clause was substantively unconscionable, but the trial court must decide whether the arbitration clause is procedurally unconscionable.  One must allege and prove a quantum of both substantive and procedural unconscionability in order to have the arbitration clause declared unenforceable. 

One judge dissenting, opining that the trial judge should have granted the motion to compel arbitration.

Thanks to Jack Sargent for the tip.

Posted by Sue Altmeyer

Ohio's City Ordinances Prohibiting Discrimination Based on Sexual Preference

This post is thanks to a tip from Jack Sargent:

Brian DeWitt, writer for the Gay People's Chronicle, wrote a fantastic article listing the ordinances in various Ohio cities which outlaw discrimination based on sexual preference.  These ordinances are particularly important in Ohio, because there is no Ohio or Federal law explicitly prohibiting discrimination against homosexuals, bisexuals and/or transgender individuals.  (Current sex discrimination statutes could possibly be utilized in a case where discrimination occurred based on sexual preference, depending on the circumstances.) 

Some of the ordinances apply to all city residents, and aim to prevent discrimination in employment, public accomodations, credit or housing.  Other ordinances only prohibit employment discrimination against city workers.  The article also identifies ordinances disallowing discrimination in issuing parade permits.  Additionally, sexual preference discrimination laws from other states are examined.

The article is: Over Half the Nation Will be Covered by an Equality Law by Brian DeWitt, Gay People's Chronicle, May 11, 2007.  The article also appears at Google Groups - Transgender News.

Senate Passes Bill Eliminating Deduction of Social Security from Unemployment Compensation

The Ohio Senate passed SB 116, which will eliminate the current practice of deducting social security benefits from unemployment compensation benefits.  See Bill to Eliminate 'Unfairness' in Seniors' Unemployment Benefits Moves to House by Chris Spittal, Central Ohio Source, May 7, 2007. 

Employment Lawyers' Group Asserts EEOC Funding Inadequate

This post is courtesy of Jack Sargent: 

The National Employment Lawyer's Association issued a report entitled Worker's Rights in Jeopardy: EEOC's Enforcement of Equal Opportunity Laws Impeded by Inadequate Funding by NELA, April 27, 2007.  The NELA conducted a survey to gauge the frequency of the EEOC's refusal to accept charges, and other problems with filing charges at the EEOC.  The responses revealed "an agency that is resistant to the filing of employment discrimination charges".  The report summarizes comments made by attorneys concerning problems with filing charges at the EEOC.   Pages 13-16 of the report detail the funding problems faced by the EEOC.

Correction to Prior Post: Ohio Dept. of Commerce Says Ohio Min Wage Applies to Farm Workers

Our prior post Ohio Dept. of Commerce Says Ohio Min Wage Applies to Farm Workers is corrected to read as follows:

Home health care, amusement park and some farm workers are getting the state's new, higher minimum wage, enacted by the 125th General Assembly's HB 690. The Republican legislators of the 125th General Assembly felt that HB 690 excluded home health care, farm and amusement park workers from the new Ohio minimum wage. The Ohio Department of Commerce disagreed, finding that the Ohio minimum wage law does apply to these groups.  See Workers Exempted in Bill to get Wage Hike by Associated Press, The Plain Dealer, Apr. 27, 2007; Wage Increase Broadly Applied by Alan Johnson and Jonathan Riskind, Columbus Dispatch, Apr. 26, 2007.

HB 690 states as follows:

(1) "Employee" means individuals employed in Ohio, but does not mean individuals who are excluded from the definition of "employee" under 29 U.S.C. 203(e) or individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213 and from the definition of "employee" in this chapter.

ORC 4111.14(B)(1) as enacted by HB 690. 

Robert Kennedy, the agency's Division of Labor & Worker Safety superintendent, told The Columbus Dispatch "'We're interpreting that you've got to be in both of those [state and federal statutes] to be exempted from Ohio's minimum wage,' . Workers Exempted in Bill to get Wage Hike by Associated Press, The Plain Dealer, Apr. 27, 2007. Thus, according to the Ohio Dept. of Commerce, the following employees are exempt:  (1) Employees exempt under  29 USC 203(e) (ie. certain government employees and volunteers ) and (2) Employees exempt under 29 USC 213 (ie. farm workers, home health aids and amusement park workers) but only if the 29 USC 213 employee is also specifically exempt under the definition of employee in ORC Chapter 4111.  See Ohio Announces the New Minimum Wage Exemptions by Neil Klingshirn, My Employment Blogger, Apr. 28, 2007.

"Employee" is defined in Chapter 4111 by ORC 4111.14(B)(1) as quoted above, and also by ORC 4111.14(B)(2), which excludes volunteers.   Employee is further defined by ORC 4111.03(E)(1) to exclude federal government employees,  babysitters, newspaper deliverers, executives and professionals, and other catagories.  No where does Chapter 4111 specifically exclude agricultural, home health aid or amusement park workers, so the Ohio minimum wage statute applies to them.

Senator Steven Stivers feels the Department of Commerce interpretation is incorrect because ORC 1.02(F) states,

"As used in the Revised Code, unless the context otherwise requires:

......

(F) “And” may be read “or,” and “or” may be read “and” if the sense requires it."

The AFL-CIO dropped its plans for a lawsuit to have HB 690 held invalid.  They are satisfied that the minimum wage law is being applied to farm workers, amusement park workers and home health aids.

For a more detailed explanation, see: Ohio Announces the New Minimum Wage Exemptions by Neil Klingshirn, My Employment Blogger, Apr. 28, 2007.  This article has a link to  the Department of Commerce's Minimum Wage Poster, which lists all the exemptions.  Also see: See Ohio Minimum Wage Laws on the Division's website.

See our prior post:  Taft Signs Bill Implementing Minimum Wage But Exempting Some Workers.

Our prior post Ohio Dept. of Commerce Says Ohio Min Wage Applies to Farm Workers is corrected to read as follows:

Home health care, amusement park and some farm workers are getting the state's new, higher minimum wage, enacted by the 125th General Assembly's HB 690. The Republican legislators of the 125th General Assembly felt that HB 690 excluded home health care, farm and amusement park workers from the new Ohio minimum wage. The Ohio Department of Commerce disagreed, finding that the Ohio minimum wage law does apply to these groups.  See Workers Exempted in Bill to get Wage Hike by Associated Press, The Plain Dealer, Apr. 27, 2007; Wage Increase Broadly Applied by Alan Johnson and Jonathan Riskind, Columbus Dispatch, Apr. 26, 2007.

HB 690 states as follows:

(1) "Employee" means individuals employed in Ohio, but does not mean individuals who are excluded from the definition of "employee" under 29 U.S.C. 203(e) or individuals who are exempted from the minimum wage requirements in 29 U.S.C. 213 and from the definition of "employee" in this chapter.

ORC 4111.14(B)(1) as enacted by HB 690. 

Robert Kennedy, the agency's Division of Labor & Worker Safety superintendent, told The Columbus Dispatch "'We're interpreting that you've got to be in both of those [state and federal statutes] to be exempted from Ohio's minimum wage,' . Workers Exempted in Bill to get Wage Hike by Associated Press, The Plain Dealer, Apr. 27, 2007. Thus, according to the Ohio Dept. of Commerce, the following employees are exempt:  (1) Employees exempt under  29 USC 203(e) (ie. certain government employees and volunteers ) and (2) Employees exempt under 29 USC 213 (ie. farm workers, home health aids and amusement park workers) but only if the 29 USC 213 employee is also specifically exempt under the definition of employee in ORC Chapter 4111.  See Ohio Announces the New Minimum Wage Exemptions by Neil Klingshirn, My Employment Blogger, Apr. 28, 2007.

"Employee" is defined in Chapter 4111 by ORC 4111.14(B)(1) as quoted above, and also by ORC 4111.14(B)(2), which excludes volunteers.   Employee is further defined by ORC 4111.03(E)(1) to exclude federal government employees,  babysitters, newspaper deliverers, executives and professionals, and other catagories.  No where does Chapter 4111 specifically exclude agricultural, home health aid or amusement park workers, so the Ohio minimum wage statute applies to them.

Senator Steven Stivers feels the Department of Commerce interpretation is incorrect because ORC 1.02(F) states,

"As used in the Revised Code, unless the context otherwise requires:

......

(F) “And” may be read “or,” and “or” may be read “and” if the sense requires it."

The AFL-CIO dropped its plans for a lawsuit to have HB 690 held invalid.  They are satisfied that the minimum wage law is being applied to farm workers, amusement park workers and home health aids.

For a more detailed explanation, see: Ohio Announces the New Minimum Wage Exemptions by Neil Klingshirn, My Employment Blogger, Apr. 28, 2007.  This article has a link to  the Department of Commerce's Minimum Wage Poster, which lists all the exemptions.  Also see: See Ohio Minimum Wage Laws on the Division's website.

See our prior post:  Taft Signs Bill Implementing Minimum Wage But Exempting Some Workers.