Federal laws such as Title VII, the Americans with Disabilities Act and the Age Discrimination in Employment Act serve an important purpose. Together, they prohibit discrimination in employment on a wide array of characteristics, including race, color, religion, sex, national origin, disability and age.
During the recent economic downturn, courts throughout the United States have witnessed an increase in the number of employment discrimination claims brought by employees. This is not likely a reflection of an increase in actual discrimination by employers; instead, it is more likely the inevitable consequence of a period of slowed economic growth, in which many people have been discharged, laid off or are otherwise struggling to find comparable, available jobs.
Accompanying this increase in discrimination claims is the increasingly high cost associated with litigating or settling them. These costs, along with the risk of large jury awards in favor of the employee or applicant, can become a huge burden on small or mid-sized businesses.
The U.S. Congress has addressed this tension between balancing an aggrieved employee’s right to complete relief against the goal of protecting smaller businesses and individuals from large liability awards and the danger of being forced out of business. Title VII excludes from its reach employers with fewer than 15 employees, and in 1991, when Congress expanded Title VII to include compensatory and punitive damages, it placed caps on those damages based on the size of the employer.
Lastly, federal courts have interpreted Title VII to protect supervisors and managers from personal liability.
Notwithstanding these federal protections, in Ohio, employees may seek relief from small business employers and their agents under the Ohio Civil Rights Act. Similar remedies exist in other states. While much of Ohio’s Civil Rights Act mirrors the language and purpose of the federal antidiscrimination statutes, several provisions afford employees who sue under state law broader rights, of which small business employers must be aware.
Ohio exempts only employers with fewer than four employees, as opposed to 15 under federal law. Second, there is no cap on compensatory or punitive damages, regardless of the size of the employer. Third, Ohio courts, relying on statutory language similar to that found in Title VII, have nevertheless held that individual supervisors and managers may be subject to personal liability for employment discrimination along with the employer.
Lastly, Ohio law gives a person up to six years to file certain discrimination lawsuits — a period much longer than that provided under federal law. Thus, the Ohio Civil Rights Act undermines many of the protections federal law provides small businesses and individual agents.
Current legislative activity in Ohio may provide small and mid-sized employers some relief. On Oct. 14, 2003, some state representatives introduced a bill that would amend the Ohio Civil Rights Act to address the imbalance between federal and state law. Among other things, the proposed amendment would cap the amount of compensatory and punitive damages awarded in discrimination actions based on the number of people the business employs; eliminate the personal liability of supervisors and managers without eliminating the vicarious liability of their employers; and, consistent with federal law, establish a uniform 300-day statute of limitations period.
If enacted, the proposed amendments would help eliminate the disparities between federal and Ohio law and assist small and mid-sized employers in managing the costs of defending against employment discrimination claims. Nelson D. Cary is an attorney practicing in the labor and employment group of Vorys, Sater, Seymour and Pease LLP. P. Jason Dejelo is an associate with Vorys. Reach them at (614) 464-6400 or www.vssp.com.