Blaming the Employer: Strategies for Limiting Your Client’s Exposure

Posted on January 13th, 2016 by sutteroconnell

In Ohio, workers compensation is a “fault-free” system.   An injured employee  can receive benefits regardless of who is to blame.  All that matters is whether the employee was injured during the course and scope of her employment.   In exchange for paying into workers compensation, employers get immunity.  An employer who complies with workers compensation is immune from all negligence claims related to or arising from the job-related accident.

But injured employees can still sue third parties.  When this occurs, “non-employer” defendants are faced with a daunting challenge:  apportioning fault to the plaintiff’s employer.  Although workers’ compensation is a fault-free system, our civil justice system is not.  And defendants routinely find evidence that the plaintiff’s employer is responsible, in whole or in part, for the alleged injuries.   But trying to blame the plaintiff’s employer – and thereby reducing potential exposure – can be a difficult undertaking.

There are three potential options:  (1) suing the employer, (2) apportioning fault to the employer, and (3) arguing that the employer’s conduct was a superseding/intervening cause.   Determining which options are available is highly case-specific and may depend upon your appellate district, public policy, or even the judge’s political leanings.

Seeking Contribution or Indemnification.  One option is sue the plaintiff’s employer directly for indemnification or contribution.  The problem is, employers are immune from third-party claims.    Perry v. SS. Steel Processing Corp., 40 Ohio App. 3d 198 (8th Dist. 1987).  The same immunity that prevents an employee from suing her employer also protects the employer from third-party claims.  Id.

There is one main exception:  express waiver.   An otherwise immune employer can enter into an agreement that expressly waives workers’ compensation immunity.   The test is stringent.  Contractual language is key.  In order to be an “express waiver”, the contract “must refer specifically” to workers compensation immunity.  Kendall v. U.S. Dismantling Co., 20 Ohio St.3d 61, 65 (1985).  A generally worded indemnification clause will not suffice.  Id.  For example, the following clause was not an “express waiver”:

… Subcontractor agrees to indemnify and hold harmless Contractor and the Owner…from all claims, liabilities, costs, and expenses whatsoever for injury or damage to any person…arising out of the performance of this Subcontract, or arising or occurring by reason of the Work or the use thereof…”

Lamb v. Summit Mall, 9th Dist. No. 20777, 2002-Ohio-1646.  Even when an indemnification clause covers “all claims…whatsoever,” workers’ compensation immunity is still not waived.  The agreement must specifically reference workers compensation immunity and expressly state that the employer is waiving such immunity.   As such, your client’s ability to sue the plaintiff’s employer will likely depend upon the applicable contractual language.

Pursuing an Intentional Tort Claim.   For the vast majority of defendants, pursuing an intentional tort against an employer is not an option.  It is true that workers’ compensation immunity does not cover intentional torts.  However, only an employee has standing, and intentional torts are exceedingly difficult to prove.

Apportioning Fault.   Even if a defendant is not barred from suing the plaintiff’s employer, adding an additional defendant is not always the best strategy.   The employer may be motivated to defend its actions and, potentially, even criticize your client.   Sometimes it is easier to blame an empty chair.   But under Ohio law, it is not entirely clear whether defendants can use the “empty chair defense” to apportion fault to an immune employer.

In 2005, Ohio enacted a new apportionment of fault statute: O.R.C. § 2307.23.  Under the new framework, a jury may apportion fault to any person whose negligent actions caused the plaintiff’s injuries.  The person does not need to be a party.  The person does not need to be present at trial.  A defendant can point to an empty chair and argue that an absent party was responsible, in whole or in part, for the plaintiff’s injuries.  The jury can then assign a percentage of the fault to that empty chair.

But does the “empty chair defense” apply to immune employers?  Notably, the apportionment statute does not address the issue of immunity.   O.R.C. § 2307.23 merely states that the jury can apportion fault to “each person from whom the plaintiff does not seek recovery in this action.”  See O.R.C. § 2307.23(A)(2).   The statute does not differentiate a person from whom the plaintiff “does not seek recovery” and a person from whom the plaintiff “cannot seek recovery”.

Without statutory guidance, the question still remains:  can a jury apportion fault to an immune employer?  The Ohio Supreme Court has not answered this question.  Only Ohio’s 5th and 8th Appellate Districts have addressed this issue, and each District reached a different conclusion:  the 8th District answered “yes”; the 5th District answered “no”.

On January 27, 2012, Ohio’s 5th Appellate District decided Romig v. Baker Hi-Way Express, Inc., 2012-Ohio-321.  In a 2-1 decision, the 5th District decided that a jury cannot apportion fault to an immune employer.  Judge Gwinn wrote that “there is no way to reconcile” Ohio’s apportionment statute and Ohio’s workers’ compensation immunity statute.  Id. at ¶37.  The apportionment statute does not contain an exception for workers compensation immunity.   And the workers compensation statutes do not contain an exception for the “empty chair defense”.  In light of this perceived conflict, Judge Gwinn made a bold statement about Ohio law:  “[i]n Ohio, there is no such thing as employer negligence, and a tortfeasor cannot raise the affirmative defense of the empty chair to an employer for negligent acts.”  Id. at ¶45.  According to the 5th District, to allow the empty chair defense would be “completely inconsistent” with workers’ compensation immunity.  Id. at ¶46.

Judge Julie Edwards disagreed.  She saw no conflict between Ohio’s apportionment statute and the workers’ compensation statutes.  Id. at ¶81.  The goal of the apportionment statute is to ensure that no defendant pays more than his or her fair share.  While the goal of workers’ compensation immunity is to shield an employer from liability.   According to Judge Edwards, apportioning fault to an empty chair does not undermine either goal.  The employer is still immune from suit.  And the defendant will not be forced to pay more than his or her fair share.

Nearly two years later, the 8th District agreed with Judge Edwards.  In Fisher v. Beazer East Inc., 2013-Ohio-5251, the Court unanimously concluded that, under the apportionment statute, defendants may apportion fault to an immune employer.  Id. at ¶39.  The Court’s reasoning was simple and straightforward.  The apportionment statute, O.R.C. § 2307.23, “does not exclude employer negligence from the apportionment.”  There is no evidence that the Ohio General Assembly intended to treat immune employers differently than any other absent entities.  Interestingly, the Fisher Court did not cite, distinguish, or even acknowledge the 5th District’s opposite holding in Romig, even though Romig was decided 22 months earlier.

To date, no other appellate court has weighed in on this issue.  Given the limited guidance, trial courts will be left to determine – on a case-by-case basis – whether to allow a jury to apportion fault to an immune employer.  Plaintiffs will cite Romig, defendants will cite Fisher, and judges will have to choose a side.

Superseding Intervening Cause.  Another option is to argue intervening cause.  With this affirmative defense, the employer’s fault is not the issue.  The issue is whether the employer’s act broke the chain of causation.  Plaintiffs may argue that asserting that an immune employer is an intervening cause is just another way to argue that the employer was negligent, which – according to Romig – does not exist under Ohio law.  To combat this argument, defendants should clarify that intervening cause is not about an employer’s negligence or fault.  Even in a fault-free system – such as strict liability – defendants may argue that another person’s act was a superseding  intervening cause.  See R.H. Macy & Co., Inc. v. Otis Elevator Co., 51 Ohio St. 3d 108, 112 (1990).

Practice Tips

  • Draft Contracts Carefully. When drafting indemnification clauses, always include an express waiver of workers compensation immunity. This will enable your client to bring indemnification and contribution claims against otherwise immune employers.
  • Advise Your Clients. Early on in every case, clients want to know whether someone else is potentially responsible for the alleged damages. Knowing the interplay between Ohio’s apportionment statute and workers’ compensation statutes is critical. Manage your clients’ expectations and inform them of the uncertainties and realities regarding apportioning fault to immune employers.

Prepare for Appeal.   If the judge prevents you from apportioning fault to an immune employer, you should discuss appellate options with your client right away. Also, do not let the adverse ruling affect your trial strategy. Prepare for trial as if the employer’s fault is still on the table. Call all of your witnesses and experts. And if necessary, make offers of proof. It difficult for an appellate court to find “harmless error” when the records is replete with evidence of the plaintiff’s employer’s negligence.