Thursday, September 16, 2010

Taking more than one bite at the apple in discrimination cases

7. snow white and poison apple eat

One of the anomalies of Ohio’s employment discrimination statute is that it provides for individual liability for managers’ and supervisors’ own acts of discrimination. This peculiarity presents at least three issues for businesses to deal with:

  1. By adding an in-state manager or supervisor as a defendant, Ohio employees can make it difficult for out-of-state businesses to remove discrimination cases to federal court based on diversity of citizenship.

  2. A conflict of interest may prevent one attorney from defending both the business and the individual defendant, thus signaling to the plaintiff that there may be liability problems.

  3. A federal court may pass on hearing the state law claims against the individual defendant, thereby giving the plaintiff two bites at the apple.

Price v. Carter Lumber Co. (Ohio Ct. App. 9/15/10) [pdf] is a poignant illustration of this third issue.

Gerald Price claimed that his former supervisor, Jim Collins, told him that Carter Lumber was not willing to work around his dialysis schedule and therefore would not rehired him. Price sued Carter Lumber and Collins in federal district court for disability discrimination. The federal court dismissed without prejudice (meaning Price was free to re-file) the state-law claims against Collins. Price then sued Carter Lumber and Collins in state court. After Carter Lumber won a jury verdict in federal court, both it and Collins moved the state court for dismissal.

The law uses a lot of Latin phrases, one of which I am about to introduce—res judicata. Ohio law uses res judicata as an umbrella term to cover both claim preclusion and issue preclusion. Claim preclusion bars subsequent actions between the same parties (or those related to them) on all claims arising out of the transaction that was the subject of a previous action. Issue preclusion bars the same parties (or those related to them) from re-litigating an issue in a subsequent action if the fact or point was directly at issue in a previous action and was ruled upon by a court. In other words, a plaintiff is only supposed to get one bite at the proverbial apple.

The court of appeals concluded that even though a federal jury concluded that Carter Lumber did not discriminate against Price, a state court jury might have the opportunity to determine the same issue as to Collins, one of its supervisors. Whether Price was able to litigate his discrimination and intentional infliction of emotional distress claims against Collins would hinge on the trial court’s review of the specific issues decided by federal jury.

It is likely that Collins will ultimately succeed and have the state court claims dismissed. Yet, that fact that he has to spend time and money litigating the issue—when a jury has already concluded that the employer did not discriminate—is reason enough for Ohio’s legislature to amend our state discrimination statute to bring it on par with its federal counterpart by eliminating individual liability. 

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or