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State ex rel. Mosier Industrial Services Corporation
v. Industrial Commission of Ohio and Shawn Walker, Case no. 2006-1889
10th District Court of Appeals (Franklin County)
City of Elyria, City of Avon Lake, City of North Ridgeville, Amherst Township, and Lorain County Metropolitan Park District v. Lorain County Budget Commission et al., Case nos. 2006-2293, 2006-2389 and 2006-2390
State Board of Tax Appeals
Al Minor & Associates, Inc. v. Robert E. Martin, Case nos. 2006-2340 and 2007-0121
10th District Court of Appeals (Franklin County)
Columbus Bar Association v. Philip Brian Willette, Case no. 2007-1195
State ex rel. Mosier Industrial Services Corporation
v. Industrial Commission of Ohio and Shawn Walker, Case no. 2006-1889
10th District Court of Appeals (Franklin County)
ISSUE: When the Industrial Commission makes an initial determination that a workers' injury qualifies him for Temporary Total Disability (TTD) for 30 days, but the worker's employer agrees to continue paying the worker's wages in lieu of state benefits, and the worker submits no additional documentation to support an ongoing award of TTD, does the Industrial Commission later have jurisdiction to make a finding requested by the employer that the worker has achieved maximum medical improvement and is therefore no longer eligible for TTD?
BACKGROUND: This case involves an employee, Shawn Walker, who suffered on-the-job injuries in the course of his employment with Mosier Industrial Services Corp. in August 2003. Within days after being injured, Walker filed a state workers' compensation claim for temporary total disability (TTD) that included the required form and a copy of an MRI showing spinal injuries. Based on that evidence, the Industrial Commission found that Walker was eligible for TTD benefits for 30 days. Mosier then entered into an agreement with Walker in which the company continued to pay his normal wages during his disability in lieu of Walker receiving state workers' compensation benefits. Pursuant to that agreement, after his initial 30-day period of TTD, Walker did not file updated eligibility forms or medical reports with the Industrial Commission and did not receive TTD disability benefits from the state.
In May 2005, Mosier filed a motion asking the Industrial Commission to declare that Walker had reached maximum medical improvement (MMI) of the workplace injuries he suffered in 2003 and to terminate his TTD eligibility on that basis. An Industrial Commission hearing officer denied the motion, holding that the commission had no jurisdiction to make an MMI finding in Walker's case because it was not currently paying him TTD benefits and had no medical evidence upon which to base such a finding because Walker had filed no medical reports with the commission since submitting his original claim in 2003.
Mosier filed suit in the 10th District Court of Appeals, seeking a writ of mandamus to compel the Industrial Commission to accept jurisdiction in the case and review Walker's TTD status. The 10th District granted the requested writ and ordered the commission to review Mosier's motion, holding that even though Walker was not receiving state benefits, the commission's 2003 grant of TTD had established “a jurisdictional basis for the commission's adjudication of Mosier's claim.”
Attorneys for the Industrial Commission now ask the Supreme Court to overrule the 10th District and affirm the hearing officer's determination that the commission has no jurisdiction to rule on Walker's TTD status. They argue that a wage continuation agreement between an injured worker and his employer is a private contract that is not subject to the jurisdiction of the Industrial Commission. If the Court affirms the 10th District's ruling that TTD and wage continuation are interchangeable, they assert, the commission would be forced to involve itself in private contractual disputes between workers and employers, and employers would no longer be able to terminate wage continuation agreements at will, but would instead be forced to obtain a prior determination by the commission that a claimant employee was no longer TTD eligible.
Attorneys for Mosier argue that it was the Industrial Commission's 2003 determination that Walker's injuries rendered him temporarily totally disabled that triggered their agreement to continue his wages. They assert that wage continuation agreements are specifically referenced in Ohio's workers' compensation statutes as an alternative to the payment of state benefits, and that once the Industrial Commission has found a claimant eligible for TTD status, it is obliged to accept and rule on an employer's subsequent motion to review and amend the claimant's status.
Contacts
Charissa Payer, 614.466.6696, for
the Ohio Industrial Commission.
John Tarkowsky, 419.524.6682, for Mosier Industrial Services Corp.
City of Elyria, City of Avon Lake, City of North Ridgeville, Amherst Township, and Lorain County Metropolitan Park District v. Lorain County Budget Commission et al., Case nos. 2006-2293, 2006-2389 and 2006-2390
State Board of Tax Appeals
ISSUE: Did the State Board of Tax Appeals err in dismissing complaints filed by several Lorain County municipalities against the Lorain County Budget Commission based on alleged defects in the plaintiffs' written pleadings?
BACKGROUND: The Lorain County municipalities of Elyria, North Ridgeville and Avon Lake and an unincorporated township within the county filed complaints with the State Board of Tax Appeals (BTA) alleging that the Lorain County Budget Commission had misallocated the county's share of state tax revenues from the Undivided Local Government Fund (ULGF) and Undivided Local Government Revenue Assistance Fund (ULGRAF) for the 2003 through 206 tax years. The complainants alleged that the budget commission had unlawfully reduced their respective shares of ULGF and ULGRAF funds for the disputed tax years in order to implement a settlement between the budget commission and the city of Lorain that increased Lorain's percentage share of the county's ULGF and ULGFRAF funding beginning in 2003.
After the complainants' appeal had been pending before the BTA for more than two years and an evidentiary hearing had been held, Lorain filed a motion to dismiss the complainants' appeals on the basis that the notices of appeal they had filed with the board were defective because they did not comply with the requirement in R.C. 5747.55(C)(3) that an appeal must set forth the name of each political subdivision complainant believes has been overallocated and the amount of the alleged over-allocation. The BTA subsequently granted the motion to dismiss, ruling that it did not have jurisdiction to hear the municipalities' appeals because their petitions for relief had identified only Lorain County, and not the city of Lorain, as a party receiving an excessive allocation of the county's ULGF and ULGRAF funds.
Elyria and the other municipalities have exercised their right to appeal the BTA's ruling to the Supreme Court. They argue that the BTA's dismissal of their claims should be reversed because: (1) The statutory requirements cited in the BTA's ruling apply only to appeals challenging a budget commission's allocation under the statutory formula prescribed by the legislature, while the allocation at issue in this case was made under an “alternative” formula adopted by Lorain County that is not subject to the requirements of RC. 5747.55(C)(3). (2) Even if R.C. 5747.55(C)(3) does apply in this case, the appellants substantially complied with its requirements by specifying the amounts they believed had been underallocated to them and the increased amounts awarded to Lorain for each tax year – amounts which they believed at the time of filing they could only recover directly from the county, rather than from the city of Lorain.
Attorneys for Lorain and the county budget commission urge the court to affirm the BTA's dismissal of the municipalities' appeals. They assert that the pleading requirements imposed on appellants by R.C. 5747.55(C)(3) are mandatory and jurisdictional, and that those requirements apply regardless of whether the formula under which a challenged allocation of revenues was made was the statutory formula or an alternative formula adopted by a county.
Contacts
Terry S. Shilling, 440.326.1464, for
the City of Elyria.
John T. Sunderland, 614.469.3200, for the Lorain County Board of County Commissioners.
Al Minor & Associates, Inc. v. Robert E. Martin, Case nos. 2006-2340 and 2007-0121
10th District Court of Appeals (Franklin County)
ISSUE: In the absence of a no-compete agreement between an employer and its former employee, does the employee's compilation from memory and competitive use of a list of his former employer's customers constitute a violation of Ohio's Uniform Trade Secrets Act?
BACKGROUND: From 1998 until 2003, Robert Martin of Columbus was employed as a pension analyst by Al Minor & Associates, a company providing third-party pension administration services to client companies. During the period of his employment, Martin was an at-will employee and there was no non-compete or trade secrets agreement in effect between Martin and the Minor firm.
In January 2003, Martin resigned his position with Minor. Shortly thereafter he opened his own pension analyst business and began soliciting clients, including a number of companies that he recalled from memory as being current or former clients of Minor. Minor filed suit in the Franklin County Court of Common Pleas, alleging that Martin's solicitation of its clients violated provisions of state law that prohibit the “misappropriation of trade secrets.” The trial court ruled in favor of Minor, assessing civil damages against Martin totaling $25,973.
On review, the 10th District Court of Appeals affirmed the trial court's judgment and award, holding that Minor's client list was a valuable trade secret and that although Martin had not taken a written copy of that list when he resigned, he had gained access to that information through his employment with Minor and his subsequent competitive use of that information, whether taken from a written document or from memory, constituted misappropriation. The 10th District also certified, however, that its ruling was in conflict with a decision of the 8th District in a similar case. The Supreme Court agreed to hear arguments in the case to resolve the conflict between appellate districts.
Attorneys for Martin, supported by an amicus curiae (friend of the court) brief submitted by the Ohio Employment Lawyers' Association, argue that the rulings of trial and appellate courts in this case departed from prior judgments of other Ohio and federal courts regarding what constitutes a “trade secret” and what constitutes “misappropriation” of business information by a former employee in the absence of a no-compete agreement. They urge the Court to adopt the holding of the 8th District in Michael Shore & Co. v. Greenwald (1985) that, unless there was a no-compete agreement between the parties, a former employee's recollection from memory of the names of some of his former employer's customers and subsequent attempts to solicit business from those customers was not the misappropriation of a trade secret. They contend that the lower court rulings in this case improperly treat an individual who happens to recall the names of customers from memory the same as one who deliberately makes and uses an unauthorized physical copy of a customer list. They also argue that the 10th District's decision unfairly places the same legal restraints on an employee who never entered into a no-compete agreement as on an employee who signed a covenant not to compete when and if he left his former employment.
Attorneys for Minor argue that Ohio's 1994 adoption of the Uniform Trade Secrets Act made changes in state law that invalidated the 8th District's decision in Michael Shore and other pre-1994 court cases. They argue that the loss suffered by a former employer from the unauthorized use of valuable customer information is no different whether a former employee used a photocopier or his memory to capture that information. They urge the Court to affirm the 10th District's ruling that an ex-employee's competitive use of valuable information obtained through access to a former employer's records is a sanctionable misappropriation of trade secrets, whether or not there was a no-compete agreement between the parties.
Contacts
Samuel N. Lillard, 614.469.8000, for
Robert Martin.
Barry A. Waller, 614.228.2300, for Al Minor & Associates.
Columbus Bar Association v. Philip Brian Willette, Case no. 2007-1195
The Board of Commissioners on Grievances & Discipline has recommended that the license of Pickerington attorney Phillip B. Willette be suspended for one year, with six months of that term stayed, for multiple violations of the Rules of Professional Conduct.
The violations arose from Willette's participation in what the board characterized as a “trust mill” business scheme in which paid marketers working for an out-of-state law firm solicited clients for Willette, who then advised those clients to place their assets in a living trust and referred them to a representative of the out-of-state firm who recommended funding the trust with insurance products sold by that firm without disclosing (1) that Willette was contractually obliged to refer clients to the firm's insurance representative, or (2) that Willette was sharing the clients' financial information and 50 percent of the legal fees he collected from the clients with the out-of-state firm.
The board found that Willette's conduct violated 10 state attorney discipline rules including those that prohibit paying a third party for referrals of legal business; sharing fees with persons not licensed to practice law in Ohio; soliciting legal business by telephone; using advertisements that are misleading or contain unverifiable claims; revealing the confidential information of a client to a third party; accepting employment when the attorney's personal interests may be in conflict with those of the client; and engaging in conduct involving fraud, deceit, dishonesty or misrepresentation.
Willette has filed objections to the disciplinary board's findings and recommended sanction. He acknowledges that the marketing agreement he entered into with the out-of-state law firm did not comply with Ohio's restrictions on client solicitation, but argues that his recommendation of a living trust to the complaining clients was consistent with their estate planning needs, and that he believed his sharing of fees with the out-of-state firm was permissible payment for its services in marketing his services and clerically preparing trust documents for his clients pursuant to Willette's specifications. Willette disputes the board's holding that his failure to disclose all details of his business arrangement is sufficient to find him guilty of intentionally deceiving or misleading his clients, and urges the Court to impose a public reprimand rather than a license suspension as the appropriate sanction for his conduct.
Contacts
Bruce A. Campbell, 614.340.2053, for
the Columbus Bar Association.
William Mann, 614.224.4114, for Philip Willette.
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Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.