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Employment relationship

State-specific laws

What state-specific laws govern the employment relationship?

Chapter 4112 of the Ohio Revised Code contains most of Ohio’s laws pertaining to the employment relationship.

Who do these cover, including categories of workers?

Chapter 4112 defines an “employer” as anyone with four or more employees – as well as “any person acting directly or indirectly in the interest of an employer.” The latter provision has been construed to impose individual liability on supervisors and managers. The term “employee” is defined broadly (and circularly) as anyone who is employed by an employer.

Misclassification

Are there state-specific rules regarding employee/contractor misclassification?

Most Ohio courts address the right of control exercised over the individual’s actions to determine whether it is an employment relationship or an independent contractor relationship. The Ohio Department of Job and Family Services and the Bureau of Workers’ Compensation each applies a 20-factor analysis, the first factor of which is control, to make this determination in the context of unemployment compensation and workers compensation coverage.

Contracts

Must an employment contract be in writing?

Ohio law does not require employment contracts to be in writing.

Are any terms implied into employment contracts?

Ohio law recognizes an implied duty of good faith and fair dealing in every contract. Most courts hold that this duty is part of a breach of contract claim, rather than an independent tort claim.

Are mandatory arbitration agreements enforceable?

By statute, Ohio law recognizes the enforceability of arbitration agreements “except upon grounds that exist at law or in equity for the revocation of any contract.” Employees must demonstrate that an arbitration agreement is both procedurally and substantively unconscionable to avoid enforcement. Substantive unconscionability refers to the reasonableness of the terms in the agreement, while procedural unconscionability turns on whether one party lacked a meaningful choice in entering the agreement. However, Ohio courts have been clear that employers may condition employment on agreement to arbitration.

How can employers make changes to existing employment agreements?

Traditional contract law applies to amendments to employment agreements, and the language of the existing contract would control.