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Employment relationship

State-specific laws What state-specific laws govern the employment relationship? Ohio has adopted the employment-at-will doctrine, but it has been judicially eroded over the years. The Ohio statutes governing employment generally are found in Title 41 of the Ohio Revised Code. Chapter 4111 generally parallels the federal Fair Labor Standards Act, while Chapter 4112 generally parallels Title VII of the Civil Rights Act. Ohio also has statutes relating to the payment of wages (Ohio Revised Code § 4113.15) and whistleblower protection (Ohio Revised Code § 4113.51). 

In addition to statutory enactments, the Ohio Supreme Court has recognized the common law claim of wrongful termination and violation of public policy. This at-will exception permits employees to challenge a discharge decision where it contravenes Ohio public policy as expressed in the common law, the Ohio Constitution, or Ohio statutory law.

Who do these cover, including categories of workers?

Ohio laws (with different thresholds for the required number of employees) generally cover employees, not independent contractors.

Misclassification Are there state-specific rules regarding employee/contractor misclassification? Yes. Ohio’s state agencies (e.g., unemployment, workers’ compensation and tax) rely on different standards to determine whether an individual is an employee or independent contractor. Ohio courts engage in case-by-case analysis in other employment claim situations.

Contracts Must an employment contract be in writing? No. Ohio courts recognize implied-in-fact contracts, unilateral contracts, and promissory estoppel claims when the alleged employment contract is not written. The distinctions between those theories is less than clear. However, employment contracts that exceed one year must be in writing. It is recommended that an employment contract (which has numerous terms and conditions) be reduced to writing.

Are any terms implied into employment contracts?

  • Employment contracts for an indefinite period of time are at will. Either party can terminate them at any time, for any or no reason—except an illegal reason.
  • Contracts for a specified term are not considered terminable at will by either party before their expiration. Those contracts may be terminated only for the reasons set forth in the contract or, absent such detail, only for just cause. 
  • Ohio courts do not imply a covenant of good faith and fair dealing to employment at-will relationships.

Are mandatory arbitration agreements enforceable? Assuming such provisions do not violate a public policy issue, mandatory arbitration agreements are generally upheld in Ohio.

How can employers make changes to existing employment agreements? Ohio law focuses on contract law legal principles and the actual provisions of the agreement. Continued employment is sufficient consideration to revise an employment agreement (e.g., non-competition).

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