Ohio Termination Laws

October 27th 2024

When it comes to ending an employment relationship, it is important to understand the legal landscape in Ohio. Both federal and state laws set guidelines to ensure that terminations are conducted fairly and in compliance with the law.

This article discusses the essential laws that protect employees and employers during termination.

This Guide Covers

Legal Considerations for Termination in Ohio
At-Will Employment in Ohio
Lawful Termination in Ohio
Legal Protections During Termination in Ohio
Terminated Employee Benefits in Ohio
Layoffs in Ohio
Resignations in Ohio
Legal Cases Related to Wrongful Termination in Ohio

Legal Considerations for Termination in Ohio

When considering termination in Ohio, there are several legal considerations to keep in mind to ensure compliance with state and federal laws. Key legal aspects include:

  • Anti-Discrimination Laws: Ohio employers must adhere to both federal and state anti-discrimination laws. Employers cannot terminate employees based on race, color, religion, sex, national origin, disability, or age. Hence, employers should ensure that terminations are based on legitimate, non-discriminatory reasons to avoid legal disputes.
  • Retaliation Protections: Federal and state laws protect employees from retaliation for exercising their legal rights. This includes retaliation for filing a worker’s compensation claim, whistleblowing, participating in investigations, or engaging in union activities. Terminating an employee for such protected activities can lead to legal action.
  • Employment Contracts: If an employee has a written contract, the terms of the contract govern the conditions of termination. This can include fixed-term contracts, which specify a duration of employment, or contracts with specific clauses about termination procedures. Employers must comply with the contractual terms to avoid breach of contract claims.
  • Final Pay and Benefits: Ohio law requires that employers pay all earned wages by the next regular payday following termination. This includes final wages, unused vacation pay, and any other owed compensation. Employers must also provide information on the continuation of benefits, such as health insurance. Failure to comply with these requirements can result in wage claims or legal disputes.
  • Documentation: Proper documentation is important during the termination process. Employers should maintain detailed records of performance issues, disciplinary actions, and the reasons for termination. This documentation helps defend against potential legal claims and demonstrates that the termination was conducted per company policies and legal requirements.
  • Unemployment Benefits: Employees terminated through no fault of their own may be eligible for unemployment benefits. Employers should be aware that wrongful or justified terminations can lead to increased claims for unemployment compensation. Properly documenting the reasons for termination helps mitigate the risk of contested unemployment claims.

At-Will Employment in Ohio

What is At-Will Employment?

At-will employment allows either the employer or employee to have the right to end the employment relationship at any time, for any reason, or for no reason at all, as long as it is legal. Employers in Ohio can fire an employee without providing a cause or advance notice, and employees can also leave without providing a reason or notice.

What are the Exceptions to At-Will Employment in Ohio?

Despite Ohio’s at-will employment law, many exceptions limit an employer’s right to terminate employees:

  • Implied Contracts: Even in the absence of a formal written contract, an employer’s promises on job security or termination conditions (e.g., through an employee handbook or verbal statements) may create an implied contract that protects the employee from being fired without cause.
  • Public Policy Exception: An employer cannot fire an employee on grounds that violate public policy. For example, it is illegal to fire someone for submitting a workers’ compensation claim, sitting on a jury, or refusing to violate the law on behalf of the employer.
  • Discrimination Laws: Federal and Ohio state laws protect employees from being terminated based on discrimination related to race, color, religion, sex, national origin, age, disability, or other protected characteristics under laws like the Civil Rights Act and Ohio’s Anti-Discrimination Act.
  • Retaliation: Employees who engage in protected actions, such as whistleblowing or reporting harmful working conditions, cannot be lawfully fired in retaliation.

Employment Under Contract in Ohio

Employment under contract provides greater protection than at-will employment. If an employee has a written employment contract that specifies the period of employment, grounds for termination, and job tasks, the employer must adhere to those conditions. This frequently implies that employees can only be terminated for “cause,” such as misconduct or performance concerns, as specified in the contract.

Contracts may also include provisions for severance pay, specific notice requirements for termination, or other protections not available under at-will employment.

Lawful Termination in Ohio

Legal Grounds for Termination in Ohio

In Ohio, termination of an employee is legal under several circumstances, provided the reasons do not violate any federal, state, or local laws. Here are some scenarios where termination is generally considered legal:

  • Performance Issues: Termination is generally legal if an employee consistently fails to meet performance standards or job requirements. It is important that the employer has documented these performance issues and provided the employee an opportunity to improve.
  • Misconduct: Termination for misconduct, such as theft, dishonesty, insubordination, or violation of company policies, is legal. As with performance issues, employers should document the misconduct and follow established disciplinary procedures.
  • Attendance Issues: If an employee has excessive absenteeism or tardiness that is not protected under specific leave laws or covered by medical documentation, termination can be legal. Employers should ensure they have clear attendance policies and that the employee has been made aware of them.
  • Economic Reasons: Termination due to economic reasons, such as company downsizing, restructuring, or financial difficulties, is legal. This includes layoffs and reductions in force. Employers should ensure that these actions are not discriminatory and are handled according to any applicable laws or contracts.
  • End of Employment Contract: Termination at the end of a fixed-term contract or temporary assignment is legal if the contract or assignment has concluded. Employers should ensure they follow any specific terms outlined in the contract.
  • Business Necessity: If an employee’s role becomes redundant or no longer necessary due to changes in business operations, termination can be legal. Employers should document the business reasons for the decision and ensure it is not a pretext for illegal discrimination.

Read our comprehensive guide to firing employees in Ohio for further information.

How Do I File a Wrongful Termination Claim in Ohio?

To file a wrongful termination claim in Ohio, employees must keep records of all communications, employment contracts, or company policies pertaining to their termination. It is also important for employees to verify whether the reason for their firing was unlawful (e.g., retaliation, discrimination, or breaking public policy).

If the allegations involve discrimination or retaliation, employees should file a wrongful termination claim with the Equal Employment Opportunity Commission (EEOC) or the Ohio Civil Rights Commission (OCRC) within 180 days of termination.

Legal Protections During Termination in Ohio

In Ohio, federal and state laws protect employees during termination. Laws that govern terminations in Ohio include:

  • Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin. This federal law ensures that employees cannot be fired for discriminatory reasons related to these protected categories.
  • Americans with Disabilities Act (ADA): The ADA protects employees from discrimination based on disability and requires employers to provide reasonable accommodations to qualified individuals. If an employee is terminated due to their disability or because they requested accommodations, it could constitute a violation of the ADA. According to this federal statute, workers with disabilities should receive equal treatment and won’t face consequences for their condition.
  • Age Discrimination in Employment Act (ADEA): The ADEA is a federal law that protects employees 40 years of age or older from discrimination based on age. This federal law ensures that older workers are not dismissed solely because of their age and that any discriminatory practices related to age can be challenged.
  • Family and Medical Leave Act (FMLA): The FMLA is a federal law that permits qualified workers to take up to 12 weeks of unpaid leave annually for certain family or medical reasons (e.g., childbirth, personal illness, or taking care of a family member). It is against the law for employers to fire workers for taking FMLA leave, and following a leave of absence, employees must be reinstated to their previous job or an equivalent position after their leave.
  • Whistleblower Protection Act: The federal Whistleblower Protection Act protects employees who are exposed to illegal activities or violations of law by their employer from retaliation or termination. Employees who report fraud, safety issues, or other illegal activities cannot be dismissed. Because of this protection, employees are encouraged to report misconduct without fear of losing their jobs.
  • Ohio Civil Rights Act:  It is illegal for employers to discriminate against job candidates on the grounds of race, color, religion, sex, military status, national origin, disability, age, or ancestry under the Ohio Civil Rights Act. As per Ohio Rev. Code § 4112.02, employees who were fired for reasons pertaining to any of these protected categories can file a wrongful termination claim.
  • Ohio Public Employees Collective Bargaining Act: The Ohio Public Employees Collective Bargaining Act gives Ohio’s public employees the ability to collectively bargain for pay, working conditions, and other aspects of their jobs. Membership in a union protects public employees from being fired without cause, and the collective bargaining agreement (CBA) sets rules for disciplinary actions such as layoffs and terminations.
  • Ohio Whistleblower Protection Law: Employees in Ohio who disclose violations of state or federal law are protected from retaliation or termination under the Ohio Whistleblower Protection Law, especially when those reports involve workplace safety or legal infractions. Employees must adhere to strict reporting guidelines in order to be eligible for protection, which includes giving written notice to their employer before reporting a problem to the police.

Terminated Employee Benefits in Ohio

In Ohio, terminated employees may be eligible for several benefits depending on the circumstances of their termination and their eligibility for such programs:

  • Unemployment Benefits: Employees laid off or terminated without fault may be eligible for unemployment compensation. At the same time, those fired for misconduct or resignation without good cause are often ineligible. Employees can make a claim with the Ohio Department of Job and Family Services (ODJFS) and meet certain eligibility requirements, such as actively looking for work and being physically capable of working. Unemployment benefits in Ohio can last up to 26 weeks, and the payment amount is based on the employee’s previous earnings, subject to a maximum limit set by the state.
  • Severance Pay: Ohio law does not require employers to provide severance pay unless it is specified in an employment contract or company policy. Some businesses may include severance compensation in a separation agreement.
  • Health Insurance Continuation: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows terminated employees to keep their employer-sponsored health insurance coverage for a limited time (usually 18 months) after leaving the company. While COBRA allows employees to keep their health insurance, they must pay the entire payment, including any percentage the employer previously covered, which can be costly. In addition, the state has its Ohio Mini-COBRA program, which applies to employees of smaller businesses, those with less than 20 employees, who are not covered by federal COBRA. Coverage under Ohio Mini-COBRA may terminate before 12 months if employees become eligible for another group health plan, the employee fails to pay his premium, and the employer discontinues offering a group health plan to active employees.

Layoffs in Ohio

Layoffs in Ohio happen when firms reduce their staff for economic reasons, restructuring, or other causes beyond the employee’s control. In such events, Ohio follows the federal Worker Adjustment and Retraining Notification (WARN) Act.

Under the WARN Act, employers must provide a 60-day notice before mass layoffs or plant closures. In Ohio, this happens when:

  • The company has 100 or more employees.
  • 50 or more employees at a single location are laid off within 30 days.

If the employer fails to provide an appropriate warning, the employer may be entitled to back pay and benefits for the violation period.

Resignations in Ohio

In Ohio, resignations can be classified under two categories:

Voluntary Resignations

Voluntary resignations in Ohio occur when an employee decides to leave the job of their own free will. The state operates under an at-will employment doctrine, meaning the employees can end their employment relationship at any time for any lawful reason without needing to give notice. However, providing a two-week notice is considered a standard professional courtesy but is only legally required if outlined in an employment contract or company policy.

Ohio law requires employers to provide the final paycheck on the next regular payday after the employee’s resignation. Employers are not required by law to pay out unused vacation time unless it is stipulated in the employment agreement or company policy.

Involuntary Resignations

Involuntary resignations occur when an employer forces an employee to resign, often when the employer offers the resignation as an alternative to being terminated. If an employee resigns due to intolerable working conditions that leave them with no choice but to quit, it may be considered a constructive discharge. In Ohio, this could give rise to claims for unemployment benefits or legal action for wrongful termination.

Legal Cases Related to Wrongful Termination in Ohio

1. Multinational Retail Corporation Pays $363,419 for Sexual Harassment and Retaliatory Discharge

In EEOC v. Walmart Stores East, L.P., the U.S. Equal Employment Opportunity Commission (EEOC) sued the multinational retail corporation on behalf of Jamie Wells, an intellectually disabled employee at Walmart Store #1911 in Arkon, Ohio.

Wells had endured years of sexual harassment from a co-worker, and despite store management being aware of the situation, no action was taken. When Wells filed a formal complaint, instead of receiving support, she was fired shortly after.

The EEOC alleged that Walmart’s failure to address the harassment and retaliatory termination of Wells violated Title VII of the Civil Rights Act of 1964. After failing to resolve the matter through pre-litigation settlements, the EEOC filed a lawsuit, which led to a settlement.

Walmart agreed to pay Wells $363,419, including $295,000 in compensatory damages. The settlement also mandated that Walmart take further steps to prevent future incidents of harassment. These measures include sexual harassment training for managers at store #1911, working with job coaches and vocational counselors, and regularly reporting to the EEOC over the next three years to ensure compliance.

Key Lessons Learned from the Case:
  • Employers are advised to take immediate and appropriate action to stop harassment in the workplace, whether or not the victim belongs to a vulnerable group.
  • Retaliation against employees for reporting discrimination or harassment is unlawful and can lead to substantial legal consequences.
  • Comprehensive training programs and clear communication of employee rights are important in preventing future cases of workplace harassment.
  • Ongoing monitoring by the EEOC ensures that corrective measures are maintained and that companies remain accountable for their actions.

2. Medical Transportation Company Pays $72,500 for Wrongful Termination Due to Disability Discrimination

In EEOC v. Lifecare Medical Services, the EEOC filed a lawsuit against Lifecare Medical Services, Inc., an Ohio-based medical transportation company, for violating the Americans with Disabilities Act (ADA). The EEOC alleged that the company refused to provide a reasonable accommodation to John Adair, an EMT-paramedic diagnosed with multiple sclerosis (MS), and subsequently fired him for absences related to his disability.

When Adair requested additional leave to manage his condition, Lifecare Medical Services issued disciplinary actions and terminated him instead of accommodating the request. According to the EEOC, this conduct violated the ADA, which mandates that employers provide reasonable accommodations for employees with disabilities.

The case was resolved in the U.S. District Court for the Northern District of Ohio, with Lifecare agreeing to a settlement of $72,500. In addition to the monetary compensation, the consent agreement requires the company to revise its attendance policies to include procedures for requesting reasonable accommodations. Lifecare must also provide yearly ADA training for managers and human resources staff and post notices about the lawsuit’s outcome on bulletin boards for three years.

Key Lessons Learned from the Case:
  • The ADA mandates employers to provide reasonable accommodations to employees with disabilities, including granting additional leave when necessary. Failure to accommodate disabilities can result in significant legal and financial consequences.
  • Clear policies and procedures for handling accommodation requests are essential to ensuring compliance with ADA regulations and preventing future legal issues.
  • Training supervisors and HR personnel on the ADA and accommodation procedures can help prevent discrimination and foster a more inclusive workplace.

Learn more about Ohio Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.