Ohio Supreme Court Continues Limited Use of Voluntary Abandonment Defense in Workers’ Compensation Claims

In an attempt to clarify when an employer can rely upon termination as a voluntary abandonment and bar future disability benefits, the Ohio Supreme Court continued to adhere its prior rulings and strict requirements.

In the Saunders case, the employee was terminated from his employment a month after he injured his knee at work for insubordination. The employer had initially supplied him with an employee handbook in June of 2004, who signed an acknowledgement for receipt of the handbook. However, that handbook was amended in June of 2004 and a new policy was included that referenced insubordination as a reason for termination. Unfortunately, the employer did not obtain any further acknowledgement from the employee that he had received the new policy or was aware of the policy.

The employee later underwent surgery and applied for additional temporary total disability benefits during his recovery. The employer raised the defense of voluntary abandonment to block the payment of those benefits. The Commission agreed with the employer and the employee then filed for mandamus relief with the court of appeals. The Tenth District Court of Appeals upheld the Commission’s findings and the employee then appealed to the Ohio Supreme Court.

In overturning the court of appeals’ decision and thus vacating the Industrial Commission’s denial of benefits, the Supreme Court focused on the lack of evidence that the employee was aware of any work rule regarding insubordination and of the consequences of violating that work rule. The Supreme Court reiterated that in order to rely upon a voluntary abandonment defense, the employer must establish:
  1. That a written work rule exists that clearly defines the prohibited conduct;
  2. That the prohibited conduct had previously been identified by the employer as a dischargeable defense; and
  3. That the written work rule was known or should have been known to the employee as well as the consequences.
While it would appear obvious that the insubordination of an employee could naturally lead to their dismissal, the court refused to adhere to this more practical or common sense approach. Instead, the court ruled that the three-prong elements of Louisiana-Pacific demanded a “clear, written articulation of work place rules and the penalties for their violations.”

The Saunders case sends a clear message to employers that if they intend to rely upon a termination as a tool to defeat future temporary total disability benefits, they must ensure they have:
  • evidence of a clear written rule prohibiting the conduct that gave rise to the termination;
  • evidence that the company could utilize the policy as a basis for termination, and;
  • specific evidence that the employee was aware of not only the prohibited conduct but of its consequences.
This is true even when the termination was clearly justified.

See State ex rel. Saunders v. Cornerstone Foundation Sys., Inc., 123 Ohio St. 3d 40, 2009-Ohio-4083.

 Author: Charlie Smith

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