Group Rating Controversy Finally Reaches a Conclusion
Nearly seven years ago, a group of employers challenged the group rating system in San Allen, Inc. v. Stephen Buehrer, Admin., Ohio Bur. Of Workers’ Compensation. Eventually, the case went to trial and the trial court ruled in favor of the class of employers, finding the Bureau overcharged such employers by approximately $1 billion dollars. The Bureau appealed the decision to the 8th District Court of Appeals, but, found no relief, as the court of appeals affirmed the trial court’s decision, except for the calculation of the damages owed the class of employers.
On June 27, 2014, the Bureau appealed the appellate court’s decision to the Ohio Supreme Court, where the matter remains pending on appeal. By all accounts, the Bureau had vowed to continue the fight in this controversy. However, on July 23, 2014, in a surprising turn of events, the Bureau announced it had reached a settlement, apparently ending this contentious legal battle. According to a report in the Columbus Dispatch, the Bureau has agreed to create a $420 million fund, from which each employer would receive a pro-rata share of the settlement fund. The case will return to the trial court for an order approving settlement.
While it may never be known why the Bureau ultimately decided to end this litigation, it is clear the group rating controversy has been a political sore spot for employers, the Bureau, and the Governor alike. Employers on both sides of the issue believe the Bureau’s system of charging workers’ compensation premiums has hampered the growth of business in what remains a challenging economic period in the State’s history. Both Governor Kasich and Mr. Buehrer have received harsh criticism for their roles in the group rating controversy, despite the Bureau’s restructured premium system and its implementation of substantial “rebate” programs benefiting employers over the past year.
Renowned philosopher Noam Chomsky once said: “For many of the world’s conflicts, it is difficult even to conjure up a feasible settlement.” However, the group rating settlement may be the right medicine to heal Ohio’s workers’ compensation system and allow Ohio’s leaders to rebuild this great State.
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September 25, 2014 at Hilton Garden Inn, Perrysburg, Ohio
Supreme Court Finds Employee’s Negligence Bars VSSR; Court of Appeals Finds Otherwise
As all workers’ compensation practitioners know, Ohio’s workers’ compensation system is a no-fault system. Even employees who negligently cause their own injuries are entitled to benefits under the law. Cases involving violations of specific safety requirements (VSSRs), however, are different because the critical issue is whether the employer complied with the safety requirement. If the employer complies with the safety requirement, but the employee suffers an injury due to his own negligence, then a VSSR award will not be found. The Ohio Supreme Court’s recent decision in State ex rel. Richmond v. Indus. Comm., 139 Ohio St.3d 157, 2014-Ohio-1604 illustrates this point.
In Richmond, an employee fell from a ladder while working on a billboard and sustained an injury, resulting in a compensable workers’ compensation claim. The employee later sought an award for a VSSR, alleging the employer failed to comply with several safety requirements under the Workshops and Factories and the Construction codes. The safety rule in question, Ohio Admin.Code 4123:1-3-03(J)(1), creates a dual responsibility setting forth that the employer provide and the employee use safety harnesses and lanyards when working more than 6 feet off the ground. An investigation of the VSSR revealed the employer had provided a safety harness and lanyard, which the employee had attached securely to the ladder. However, the employee improperly placed the ladder on the billboard.
Although the employee did not deliberately circumvent the safety requirement, the Court found it was the employee’s negligence in attaching the ladder to the billboard which caused his fall. Because the employer met its obligation under the safety rule, the Court held the Commission did not abuse its discretion in denying the VSSR award.
It is instructive to contrast the Richmond case with State ex rel. Armstrong Steel Erectors, Inc. v. Indus. Comm., 2014-Ohio-2616, which was decided two months after Richmond. In Armstrong, the employee, who worked as an iron worker, fell from a bridge and sustained injuries. Although personal fall protection equipment had been provided to the employee, he did not wear it because he worked on his hands and knees and had to crawl in small places. The Commission found the use of personal fall protection equipment was “impractical,” and consequently, the employer was required to substitute the use of a safety net in place of the personal fall protection equipment. Because the employer failed to use a safety net, the Commission found the employer failed to comply with Ohio Admin.Code 4123:1-3-03(L) and granted the employee a VSSR award.
On appeal, the employer argued the accident occurred because of the employee’s negligence. The court of appeals rejected this argument, because the employer had failed to comply with the rule requiring safety nets, where personal fall protection equipment is impractical. As the Richmond court noted above, the critical issue in a VSSR is the employer’s compliance with the safety rule.
Employers must be mindful that compliance with safety rules is required BEFORE asserting the defense of the employee’s negligence.