After over 25 years of proposals and negotiations among key stakeholders—including Ohio employers and their supporting associations, the Ohio plaintiffs’ employment law bar, and various employee-rights advocates—on December 22, 2020, the Ohio General Assembly passed sweeping reforms to the state’s employment discrimination statute, R.C. Chapter 4112.  Ohio Governor Michael DeWine signed the new legislation on January 12, 2021.  The law goes into effect on April 15, 2021, which is 90 days after the governor delivered the signed bill to the secretary of state.

Ohio’s Employment Law Uniformity Act (H.B. 352) finally curbs judicial lawmaking, which necessarily has occurred since 1991 regarding Chapter 4112.  The most substantial revisions affecting Ohio employers include:   

• Administrative exhaustion requirement: Before suing under Chapter 4112, an employee must first file a charge with the Ohio Civil Rights Commission (OCRC). The period for an employee to do so is two years. 

• Statute of limitations for lawsuits: The period for an employee to sue under Chapter 4112 is generally two years, reduced from the previous six-year limitations period.  Under a complicated tolling provision, however, this two-year statute of limitations is tolled while the employee’s claim is pending with the OCRC.  

• Damages caps for discrimination claims: The new law codifies judicial interpretation of Ohio’s Tort Reform Act—caps are placed on damages for compensatory and punitive damages in “tort actions,” which now expressly include court claims under Chapter 4112.

• Supervisor liability limited: An employee may not sue managers and supervisors for damages under Chapter 4112 unless that person is the employer (e.g., sole proprietorship) or has acted outside the scope of employment.

• Age discrimination claims simplified: Although there is still a choice of remedies for age discrimination claims, those choices are reduced and simplified. And all age discrimination claims now have the same statute of limitations and administrative exhaustion requirement as other discrimination claims.    

• New affirmative defense for hostile work environment claims: The judicially created Faragher-Ellerth defense is now codified in Chapter 4112, which shields employers from liability from hostile environment harassment claims where the employer exercised reasonable care to prevent and/or promptly correct harassment, and the employee failed to take advantage of those corrective opportunities. 

How Did We Get Here?

The problems with Chapter 4112 trace back to: (1) the 1987 amendment of Chapter 4112 when the Ohio General Assembly changed R.C. 4112.99 to abolish a misdemeanor penalty and provide instead that all violations of Chapter 4112 were subject to a “civil action” and other remedies; and (2) the Supreme Court of Ohio’s controversial 4-3 decision in Elek v. Huntington National Bank, 60 Ohio St. 3d 135 (1991) interpreting Chapter 4112.  Here is what happened:

As enacted originally, Chapter 4112 contained an administrative enforcement scheme for addressing employment discrimination based on race, sex, disability, age, and other protected classes.  The statute made administrative charge-filing mandatory and gave authority to the OCRC to eradicate discrimination in employment and housing.  In 1987, the Ohio General Assembly amended section 4112.99 from “Whoever violates divisions (A) to (H) of section 4112.02, or sections 4112.07 or 4112.11 of the Revised Code is guilty of a misdemeanor of the third degree,” to “Whoever violates this chapter is subject to a civil action for damages, injunctive relief, or any other appropriate relief.”¹  The legislative history of R.C. 4112.99—including written testimony before the Ohio General Assembly—shows the amendment’s purpose was to remove the criminal misdemeanor penalty because housing discriminators were raising 5^th Amendment objections to having to respond to subpoenas from the OCRC in housing discrimination cases.

In 1991, litigants presented the Ohio Supreme Court with the issue of whether the revised Chapter 4112.99 created a direct cause of action in court independent of other sections of Chapter 4112, including the statute’s mandatory charge-filing requirement.  In Elek, the defendant-employer terminated the employment of the plaintiff-employee on March 15, 1988, and the plaintiff sued the former employer on May 2, 1988, directly in common pleas court asserting a claim for disability discrimination under Chapter 4112.99.  The employer moved to dismiss the lawsuit under Civil Rule 12(B)(6) because the terminated employee had failed to exhaust his administrative remedies with the OCRC.  The trial court granted the motion to dismiss, but the appellate court reversed the dismissal.²  The Ohio Supreme Court affirmed the appellate court’s decision and held section 4112.99 created an independent cause of action and afforded claimants a remedy for damages, injunctive relief, and “any other appropriate relief” for any violation of Chapter 4112.³  This opinion upended the statutory scheme of Chapter 4112, giving plaintiffs permission to run to court with their claims and bypass their administrative remedies.   

Thereafter, Ohio courts were left to decide issues normally established by a legislature, such as the statute of limitations for section 4112.99 claims; individual liability under 4112.99 claims; and whether plaintiffs could assert the same claims under competing statutes. With H.B. 352, the General Assembly has finally addressed and ironed out this judicial legislating.

How the General Assembly Fixed the Problem

Section 4112.99 no Longer Creates a Cause of Action

The General Assembly has revised section 4112.99 to clarify the section does not create an independent cause of action for employment discrimination.  Aggrieved employees must now pursue their claims only under sections 4112.051, 4112.052, and 4112.14.

Exhaustion of Remedies for Chapter 4112 Claims and Reduced Statute of Limitation

Before H.B. 352, employees could assert Chapter 4112 claims in court without having to first exhaust their claims with the OCRC.   H.B. 352 changes this “rush to court” practice.  As Ohio’s General Assembly had enacted Chapter 4112 originally, aggrieved applicants, employees and former employees are once again required to exhaust their administrative remedies by first filing a charge of discrimination with the OCRC before initiating court action, and the new law sets reasonable time limits for aggrieved individuals to do so.  Here is how it works:

• Charges of discrimination filed with the OCRC must be filed within two years of the alleged discriminatory practice.⁴ 

Once a charge is filed with the OCRC, Ohio’s new administrative process mirrors the process with the U.S. Equal Employment Opportunity Commission (EEOC).The OCRC may initiate a confidential investigation into the charge allegations; following its investigation, it will make a determination.  If the OCRC finds there is probable cause of a discriminatory act or practice, the charging party has two options:

(1)  withdraw their charge, obtain a right-to-sue notice from the OCRC, and pursue their claim(s) in court; or

(2)  not withdraw their charge, and the OCRC is charged with eliminating the alleged discriminatory practice through conciliation and/or an administrative hearing. 

If the OCRC determines there is no probable cause of an unlawful discriminatory act or practice, the OCRC will issue the charging party a right-to-sue notice, allowing the aggrieved individual to further pursue their claims in court.⁵ 

• Although an aggrieved individual may not bypass the requirement they exhaust their administrative remedies, there is an opportunity for them to shorten or even eliminate the investigative process to pursue more quickly their claims in court.  A charging party may request that the OCRC not investigate or stop investigating the charge allegations and, instead, issue a right-to-sue notice without a determination.  Upon this request, the OCRC must issue the charging party a right-to-sue notice, but may do so no sooner than 60 days after the charging party filed the charge.⁶

• After filing a charge, one of the following must occur before the individual may assert a Chapter 4112 claim in court: (1) the charging party has received a right-to-sue notice from the OCRC; (2) the charging party has requested a right-to-sue notice, and the OCRC failed to issue one within 45 days (after the period in which the OCRC may issue the notice); or (3) the OCRC made a probable cause determination and the charging party notified the OCRC that they elect to pursue the claim in court instead of with the OCRC.⁷

Although the amended statute provides that the period to sue under Chapter 4112 is two years from the alleged discriminatory act or practice, that statutory period is tolled based on when the aggrieved individual files their charge with the OCRC:

(1)  If the individual files a charge of discrimination less than 60 days before the two-year deadline to file the charge is set to expire, then the period to file the civil action is tolled for the period beginning on the date the charge was filed and ending 60 days after the charge is no longer pending with the OCRC.

(2)  If the individual files a charge of discrimination days before the two-year deadline to file the charge is set to expire, then the period to file the civil action is tolled for the period beginning on the date the charge was filed and ending on the date the charge is longer pending with the OCRC.⁸

Damages Caps Now Expressly Apply to Employment Discrimination Claims

H.B. 352 also codifies Ohio judicial interpretations that “tort action” damages caps for compensatory and punitive damages apply to discrimination claims under sections 4112.052 and R.C. 4112.14.⁹  The damages caps are:

• Economic compensatory damages (e.g., lost wages) – no cap.
• Non-economic compensatory damages (e.g., emotional distress) – $250,000 or three times the economic compensatory damages up to $350,000, whichever is greater.
• Punitive damages – two times the amount of compensatory damages (excluding any award of attorney’s fees) awarded to the plaintiff.¹⁰

If a jury award exceeds the limit on damages, the trial court judge must amend the award to comport with R.C. 2315.18.  H.B. 352 did not, however, address whether the punitive damages calculation is based on the uncapped jury award or the judicially modified award.  Unfortunately, several Ohio appellate courts have ruled that the punitive damages cap is based on the uncapped compensatory damage award.¹¹  

No More Individual Supervisor Liability

For over 20 years, since the Ohio Supreme Court’s decision in Genaro v. Central Transport, Inc.,¹² plaintiffs have been able to assert claims of discrimination directly against individual supervisors and managers, in addition to and separate from their employer.  This has long been contrary to the legislative intent of holding employers vicariously liable for the unlawful acts of their employees.  As many employers and their management-level employees have experienced, plaintiffs have used Genaro to name individuals as defendants to defeat diversity jurisdiction, pressure settlement, and create conflicts between individuals and employer defendants.¹³ 

H.B. 352, for the most part, relieves individual managers and supervisors of this threat of personal liability, and the Ohio General Assembly clarified its intent regarding individual liability:

The General Assembly further declares its intent that individual supervisors, managers, or employees not be held liable under Chapter 4112 of the Revised Code for unlawful discriminatory practices relating to employment that are described in division (A)(24)(a) of section 4112.01 of the Revised Code, as amended by this act. The General Assembly does not intend this act to abrogate the imposition at common law of vicarious liability on employers for the unlawful discriminatory practices of their employees or agents or to abrogate any other statutory claims that exist outside of Chapter 4112 of the Revised Code or claims existing at common law that may be made against an individual.¹⁴

Thus, the new law modifies Chapter 4112 by stating individuals do not have a cause of action for discrimination against a supervisor, manager or other employee unless the individual is the employer (e.g., a sole proprietorship).  This limitation, however, does not abrogate potential claims beyond Chapter 4112 claims, such as common-law clams for defamation, public policy violation, assault, false imprisonment, and intentional infliction of emotional distress where the evidence shows the supervisor, manager, or other employee was acting outside the scope of their employment.¹⁵  To that end, and if the evidence and law support doing so, we anticipate plaintiffs may still at times name managers, supervisors, or other employees as individual defendants by asserting other non-Chapter 4112 statutory or common law claims against them.

No More Duplicative Age Discrimination Claims

For decades, the legal framework for age discrimination claims under Ohio state law could be described as “convoluted” at best, and “incomprehensible” at worst.  An employee wanting to pursue a Chapter 4112 age discrimination claim had a bevy of options available, each of which came with its own administrative requirements, statute of limitations, and potential remedies.

Before H.B. 352, the options to pursue an age discrimination claim under Chapter 4112 were:

(1) File a charge with the OCRC under section 4112.05 within six months of the alleged adverse action—remedies were limited to back pay and reinstatement, and filing an administrative charge barred the employee from pursuing the claim in court; or

(2) File a lawsuit in court under sections 4112.02(L) and/or 4112.99 within 180 days of the alleged adverse action—with a right to a jury trial, and the full range of damages for other discrimination claims; or

(3) File a lawsuit in court under sections 4112.14 within six years of the alleged adverse action where the employer purportedly fired without just cause an employee age 40 or older who is otherwise qualified and the employee cannot arbitrate the termination decision—with a right to a jury trial, and damages were limited to lost wages and benefits, reinstatement, and attorneys’ fees and costs.

This scheme begat confusion among employees, employers, and even the courts.  Detrimental to unwitting plaintiffs was the election of remedies bar—if an employee filed a charge of discrimination with the OCRC for age discrimination, that charge barred them from pursuing the claim in court.  This election of remedies did not apply to other types of discrimination claims (e.g., race, sex, disability) asserted under Chapter 4112. 

H.B. 352 cleans up this statutory mess.  First, H.B. 352 removes section 4112.02(L) in its entirety, and clarifies that section 4112.99 does not create an independent cause of action for age (or any other) discrimination claims.  Second, as stated above, H.B. 352 streamlined causes of action for discrimination claims with section 4112.052, under which a plaintiff must exhaust their administrative remedies and timely file their charge and lawsuit within two years, subject to the tolling provisions.  Third, although section 4112.14 still provides an independent cause of action for age discrimination in the same narrow circumstances, the plaintiff must still exhaust their administrative remedies (file a charge with the OCRC) unless the section 4112.14 plaintiff seeks injunctive relief only.¹⁶ 

In short, post-H.B. 352, whether age claims are pursued under the new section 4112.052 or in the limited circumstances provided in section 4112.14, the plaintiff must first exhaust their administrative remedies with the OCRC and all claims are subject to a two-year statutory period, subject to tolling while the claim is pending with the OCRC.  Notably, the plaintiff cannot bring an age claim under sections 4112.052 and 4112.14—they must elect one or the other.

Faragher-Ellerth Hostile Environment Defense Added

H.B. 352 codifies the judicially created Faragher-Ellerth defense, which provides employers with an absolute defense to hostile work environment claims in certain circumstances.  In the Faragher and Ellerth cases, the U.S. Supreme Court concluded that employers were not liable for workplace harassment if they prohibited harassment, provided a reasonable opportunity for employees to report harassment, and the employee either failed to report the harassment before pursuing legal action or reported the harassment and the employer promptly and reasonably responded.¹⁷  In other words, the Court held that employers should be given an opportunity to learn about and eliminate workplace harassment before they are held liable for the conduct in court.  In codifying this defense:

The General Assembly declares its intent in enacting section 4112.054 of the Revised Code pursuant to this act that employers will be encouraged to implement meaningful antidiscrimination policies and foster a work environment that is fair and tolerant. The General Assembly further declares its intent that human resource professionals should have the first opportunity to resolve personnel complaints and rectify detrimental workplace behavior before such issues result in costly litigation.¹⁸

Although this defense has long been available to employers defending harassment claims asserted under Chapter 4112, H.B. 352 cements it into Ohio law.  New section 4112.054 creates an affirmative defense to vicarious liability (e.g., the acts of a manager or supervisor) if the employer shows: (1) “the employer exercised reasonable care to prevent or promptly correct any sexually harassing behavior”; and (2) the employee “unreasonably failed to take advantage of preventative or corrective opportunities provided by the employer.”¹⁹ 

Unfortunately, this revision to the Revised Code does not provide clarity as to what may constitute an employer’s “reasonable care to prevent or promptly correct” harassment.  To help prevent and/or eliminate workplace harassment, and to preserve this affirmative defense in cases where a claim may be asserted against an employer, we recommend employers do the following: (1) implement and enforce effective anti-harassment policies and disseminate them to employees; (2) conduct anti-harassment training; (3) provide effective means for employees to report workplace discrimination, such as harassment, including options for an employee to circumvent the accused supervisor, and ensure employees know about these reporting options; and (4) thoroughly and quickly investigate any complaints and respond appropriately.

It’s a New Day for Ohio Employers  

H.B. 352 does not affect how employers conduct business and manage its workforce. 

• Employers should still make employment decisions without regard for an employee’s membership in a protected class. 
• Employers should still promptly investigate workplace complaints of unfair treatment and respond appropriately. 
• Employers should engage in the interactive process and provide reasonable job accommodations for employees with disabilities. 
• Employers should still performance manage their employees based on practices and policies applied fairly to the workforce. 

But H.B.352 will affect employers by leveling the playing field for employers that have to defend against alleged discrimination claims.

• Plaintiffs must first raise their claims with the OCRC, which is a far more efficient and cost-effective way to address these workplace disputes. 
• Plaintiffs must now assert their claims in a timely manner.
• Plaintiffs cannot drag individual supervisors or managers into discrimination lawsuits as a strategic way to defeat diversity jurisdiction or leverage an employer into settlement.
• Ohio employees must take advantage of internal reporting procedures for their discrimination claims—they cannot make the employer aware of these concerns for the first time in a lawsuit.