Court Denies Unemployment Benefits to Striking Employees

In somewhat of a novelty decision, the Fifth District Court of Appeals of Ohio has upheld a trial court decision affirming the denial of unemployment benefits to 51 non-teaching employees who went on strike after OAPSE and the Board of Education were unable to reach an agreement on a successor contract.

In Ohio, employees are entitled to unemployment benefits in cases of a lockout. However, employees engaged in a labor dispute during which they can continue working while negotiations proceed are not eligible for benefits. Here, the Unemployment Commission found that the employees were engaged in a labor dispute, other than a lockout when they applied for benefits and were therefore not eligible.

The Ohio Supreme Court has defined a lockout as a “cessation of the furnishing of work to employees or a withholding of work from them in an effort to get for the employer more desirable terms.” A lockout can be actual or constructive. A constructive lockout occurs when “the conditions of further employment announced by the employer are such that the employees could not reasonably be expected to accept them and the terms manifest a purpose on the part of the employer to coerce his employees into accepting them or some other terms.”

In reconciling these disputes, the Unemployment Commission will analyze whether the employer will allow employees to continue working under the status quo of the expiring agreement while negotiations continue and whether the employees agree to continue working. It boils down to whether management or the union changed the status quo. 

The court found that the record established that the Board did not withhold work in an effort to gain a bargaining advantage. The applicable CBA expired in July of 2017. The parties began negotiating in April of 2017 and the Board permitted work to continue under the preexisting agreement all the way into March of 2019 when the strike commenced. The Court further found that the Board had made a last, best, and final offer to the union but did not implement it or threaten to implement it. Therefore, the Court found that it was not the employer who had changed the status quo. The union on the other hand, did not act reasonably under the circumstances because it could have pulled its strike notice, continued to negotiate and continued to work while doing so, and then it could have ultimately refiled the strike notice if need be. Because it was the union that changed the status quo, and doing so was unreasonable under the circumstances, there was credible evidence for the Unemployment Commission to find that the employees were ineligible for benefits because they were not subjected to a lockout.

Ohio Assn. of Pub. School Emps. v. Unemp. Comp. Rev. Comm., 2020-Ohio-4028

COVID-19 Update: Changes in Unemployment Law

Districts should expect to see a rise in unemployment claims due to the current pandemic. Ohio received 187,000 claims during the week of March 15-21. Substitutes, in particular, are likely to make claims during this time. 

Governor DeWine has issued an order (EO 2020-03D) to ease the process of obtaining unemployment benefits. Employees who are ordered to stay home or isolated by an employer or public health authority, whether infected or not, will qualify for benefits so long as the employee is otherwise eligible. The basic requirements for eligibility for benefits are that a claimant has worked a sufficient number of hours and has earned a sufficient amount of pay during a period referred to as the “base period.” The base period is the first four of the last five completed calendar quarters at the time the claim is filed. (Claims filed in March would be calculated on the four quarters beginning October 1, 2018, through September 30, 2019.) Individuals must have at least 20 weeks of employment and an average weekly wage of $269 during the base period of the claim.

ODJFS issued a mass-layoff number (2000180) that employees can use to expedite the handling of their claim. Employees subject to RIF due to COVID-19 can use this form and reference number.

Substitute employees may file claims for lack of work due to the ordered shutdown of the school to students. Outside of the context of a shutdown, districts may attempt to challenge lack of work claims by substitutes, due to the nature of the assignment not having guaranteed hours or days of work per year. Many substitutes pick and choose their own assignments. Those arguments will not be applicable, where, as here, there are no assignments for the substitute to choose from. Therefore, such employees are much more likely to receive benefits under these circumstances. 

Additional benefits of the order are that certain benefit recipients will not be subject to the work search requirement during the period of the emergency. All claimants, however, will continue to be required to be “able and available for work,” in order to receive benefits.

Finally, penalties against employers for failing to provide reports or make payments during the emergency declaration period.

The merits of each claim are fact dependent and may be subject to challenge even in light of the order. Please do not hesitate to contact an attorney at Ennis Britton to discuss your particular claim.

COVID-19 Update: Unemployment Coverage for Public Entities

Many public employers are considering staffing adjustments in light of the coronavirus and its impact on available work. For those employees not covered under contracts that must be paid in the case of an “epidemic or other public calamity” pursuant to RC 3319.08(B) and 3319.081(G), layoffs are being contemplated. In order to have all the information on the financial impact of such a decision, the public employer should consider whether it is a “contributory employer” or a “reimbursing employer.” 

Generally speaking, public employers are reimbursing employers. Essentially, reimbursing employers are self-insured and will be billed dollar-for-dollar by the Ohio Department of Jobs and Family Services for claims paid.   Public entity employers who have elected to become a contributory employer have paid unemployment tax. Contributory employers will have their claims mutualized with other employers in the state and will not have to reimburse on a dollar-for-dollar basis. Determining if the public entity is a contributory employer or a reimbursing employer will be necessary to determine how much will be saved via staffing reductions.

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) provides that reimbursing employers may be reimbursed for one-half of the amounts paid into a state unemployment trust fund between March 13, 2020, and December 31, 2020.

If you have any questions regarding unemployment compensation issues, please reach out to any of the Ennis Britton lawyers.

Unemployment Claims and “Independent Contractors”

Generally, employees in Ohio are eligible to receive unemployment benefits if they are laid off from their place of employment. However, under Ohio law, if you are an “independent contractor,” you are precluded from receiving those benefits. The Eleventh District Court of Appeals recently held that a truck driver was an independent contractor as opposed to an employee and therefore, was not entitled to unemployment compensation.

In Marcus Roach Express, L.L.C. v. Dir., Ohio Dept. of Job & Family Serv., 2019-Ohio-5414, a truck driver claimed that he was an employee and entitled to receive unemployment benefits. The Ohio Department of Job & Family Services (“ODJFS”) initially issued a determination allowing him to receive benefits, which the employer appealed to the court.

At issue in the appeal was whether the truck driver was really an independent contractor, rather than an “employee” separated from his job due to a lack of work. In making the determination of employee versus independent contractor, the Unemployment Review Commission will generally look to the list of twenty factors outlined in Ohio Adm. Code 4141-3-05(B). Though these factors may be used by the Commission, they are not necessarily determinative of whether the individual was or was not “subject to direction and control” over their services — the primary metric in the analysis of deciding independent contractor status.

In this case, the truck driver’s agreement actually stated that he was an independent contractor and not an employee of the company. Though this fact supports a finding that he was an independent contractor, the court looked to the totality of the circumstances in order to determine whether the employer actually had the right to control the driver’s work. 

ODJFS argued that “control” existed because the employer paid the driver weekly, approved his time-off requests, owned the delivery truck and paid for its repairs, required him to turn in logbooks, and continued a working relationship with the individual for eight years.

The court, however, noted that the driver was paid based on how many loads he accepted as opposed to the number of hours he worked. Additionally, the claimant was able to decide which routes he wanted and was able to set his own schedule, all of which led the court to conclude that the company did not exercise nor retain a right to control the individual’s work. Therefore, the driver was considered to be an independent contractor and was not eligible to receive unemployment benefits.

This case should remind us that in the service-oriented nature of public education, there are limited opportunities to truly employ “independent contractors” for daily operations of districts.  In teaching, feeding, counseling, transporting, and operating buildings, districts maintain control of personnel in the delivery of those services — and for good reason. The factors for establishing a true independent contractor are important to know, particularly when attempting to defeat a claim for unemployment.  While this case is instructive, should you want to question a request for unemployment compensation on this basis, it is advisable to contact an Ennis Britton attorney to review your realistic options.

Medical Marijuana in Ohio

In 2016, Ohio became the twenty-sixth state to legalize the use of marijuana for certain specified medical conditions. Medical marijuana facilities and patient registries are expected to be fully operational in the near future. School districts should be aware of how the medical marijuana law might impact current policy and operations.

Overview of State Law

Under state law, individuals who suffer from any of twenty-one identified medical conditions (listed below) may register with the state to use medical marijuana. In addition to these twenty-one conditions, the state medical board may be petitioned to add other conditions to this list.

Qualifying Medical Conditions

AIDS Inflammatory bowel disease
Alzheimer’s disease Multiple sclerosis
ALS (“Lou Gehrig’s disease”) Pain that is chronic, severe, or intractable
Cancer Parkinson’s disease
Chronic traumatic encephalopathy Posttraumatic stress disorder
Crohn’s disease Sickle cell anemia
Epilepsy or seizure disorder Spinal cord disease or injury
Fibromyalgia Tourette’s syndrome
Glaucoma Traumatic brain injury
Hepatitis C Ulcerative colitis

When registering with the state, an individual’s application must be accompanied by a licensed physician’s recommendation. Caregivers of medical marijuana users must also register with the state to avoid criminal prosecution for possession of medical marijuana and to assist registered patients. Medical marijuana may be used in oils, tinctures, plant material, edibles, patches, and vaporizers; however, smoking marijuana is prohibited.

Federal Laws and Regulations

Regardless of Ohio’s legalization of marijuana for medical purposes, marijuana is still a prohibited substance under federal law. The Americans with Disabilities Act requires that employers provide reasonable accommodations to employees with certain disabilities so that they may perform the requirements of their job; however, the ADA does not require employers to permit the use of medical marijuana as a reasonable accommodation. Similarly, the Family Medical Leave Act does not require employers to grant leave for employees so that they may obtain medical marijuana treatments for a serious health condition. Federal law does not interfere with an employer’s right to maintain a drug-free workplace, to implement a zero-tolerance drug policy, or to subject an employee to a drug test. Currently, pending federal legislation to enact the STATES Act would give states the freedom to decide how to legalize or regulate marijuana.

School District Employees

Ohio employers are not required to permit their employees to use medical marijuana at work and may continue to take adverse employment action against employees for their use of medical marijuana – even if the employee has a recommendation from a doctor for use and uses the marijuana outside of work hours. School districts may elect to make accommodations and modify policies to allow employees to use medical marijuana in some circumstances, although employees must continue to comply with state and federal regulations that prohibit use of drugs in safety-sensitive positions. School districts should be clear that employees may not be under the influence of marijuana when they are responsible for the safety or supervision of students and staff.

For workers’ compensation purposes, if an injury occurs at the workplace and the employee tests positive for marijuana, a rebuttable presumption arises that the use of marijuana was the cause of the injury, even if the employee has a recommendation for use from a doctor. To overcome this presumption, the employee must then demonstrate that the marijuana use did not factor into the cause of the injury. If unsuccessful, the employee would not be eligible to receive workers’ compensation benefits. Similarly, with unemployment compensation, an employee’s use of medical marijuana is just cause for termination, and no benefits would be provided to an employee in this scenario.

Ohio’s law does not prohibit an employer’s right to refuse to hire a job applicant because of use, possession, or distribution of medical marijuana.

Patient Protections

A very small section of the Revised Code delineates the rights of patients who are registered with the state to use medical marijuana. Patient rights include the right to use and possess medical marijuana, up to a maximum of a 90-day supply; to possess any paraphernalia or accessories for the use of medical marijuana; and to avoid arrest or criminal prosecution for obtaining, using, or possessing medical marijuana and the necessary paraphernalia and accessories. Registered caregivers have the same rights to possess medical marijuana, paraphernalia, and accessories, but do not have the right to use medical marijuana. Operating a vehicle is prohibited while under the influence of medical marijuana. No minimum age is specified for patients to use medical marijuana.

Activities Prohibited Near Schools

No medical marijuana cultivator, processor, retail dispensary, or testing laboratory may be located within five hundred feet of a school, except for academic research institutes.

Court Sides with Unemployment on Scope of Appeals

Friedel v. Quota, 2015-Ohio-4060

The Sixth Appellate District (Williams County) has reversed a trial court ruling which overturned the unemployment Commission’s (ODJFS) grant of benefits to a truck driver who quit his job. At the initial hearing, the truck driver claimed to have quit because his truck broke down and his employer refused to assist.

The truck driver claimed that the employer provided debit card did not have enough funds to make the repairs, that the employer refused to assist because he was intoxicated and that he had to summon his son-in-law to the scene for assistance, who had to drive eighty miles in the middle of the night.

The employer testified that his understanding at the time of hire was that the employee was able to make minor repairs, that there were in fact sufficient funds on the card provided, that the employer recommended he call his son-in-law because he was employed as a road services tech and that the trip was only thirty miles.

ODJFS found in favor of the employer denying the benefits and finding that the employee quit without just cause. The employee appealed. At the appeal hearing, the truck driver claimed for the first time that he quit because his employer asked him to violate federal regulations regarding down time for truck drivers who have driven a certain number of hours. The employee claimed that the employer insisted that he drive a route in violation of law. This caused an argument to ensue and the employee quit. The employer did not participate and the initial decision was reversed, finding that the employee had just cause to quit and was therefore entitled to benefits.

The employer unsuccessfully appealed to the Review Commission and then to the trial court. Before the court, the employer challenged the employee’s credibility by questioning why the employee set forth his most recent justification for the first time on appeal. The trial court agreed finding that the employee had really quit because of the roadside breakdown incident and found in favor of the employer.

ODJFS appealed to the Sixth Appellate District. There, the Court reviewed the standard on appeal. Courts reviewing decisions of the Unemployment Commission are to limit their inquiry as to whether the decision by unemployment is “unlawful, unreasonable, or against the manifest weight of the evidence.” This is a high standard. That reasonable minds might disagree is not enough for a court to overturn the unemployment decision so long as there is “some competent, credible evidence in the record” to support it. The Appellate Court found that the Trial Court had improperly considered the credibility arguments on appeal because there is no rule providing that a claim or defense is waived if not made in the initial application or hearing.

Accordingly there are lessons to be learned from this case:

1. Do not rest until the fight is finished. Here, the employer did not participate in the appeal where the employee’s ultimately successful argument was made. Credibility could have been attacked at this time, rather than improperly before the court. Therefore, make sure you are represented and are participating at all levels of the appeal.

2. The standard on appeal to a court of common pleas is difficult. Courts are generally limited to the record provided by ODJFS. The scope of the review by the court is limited as to whether the hearing officer’s decision was “unlawful, unreasonable, or against the manifest weight of the evidence.”

Please do not hesitate to contact an attorney at Ennis Britton Co., L.P.A., with your questions regarding unemployment.