Judge Invalidates BWC Group Rating Program -
How a Typo Cost Ohio Employers Millions of Dollars
*By Steve P. Dlott

Last week, a Cuyahoga County Common Pleas Judge struck down the BWC group rating program. In his decision, the Judge found that the BWC unlawfully enacted the group rating program. As a result, the Court enjoined the BWC from enacting the group rating program effective July 1, 2009.

Buried in the avalanche of news about the Judge’s decision was the actual legal basis underlying that decision. That legal basis serves as a powerful lesson to all Ohio employers.

Not surprisingly, media groups have portrayed the decision as an attempt to correct the devastating inequities in the premium rating system itself. Employers with stellar claims’ histories have seen their premiums skyrocket because of one bad claim. Clearly, the system is fundamentally unfair and punitive.

However, while the Judge’s decision touches on the program’s inequities, those were not the basis for his decision. Rather, the underpinning of the decision rests upon the statutory language itself.

The statute that authorizes the BWC to create a group rating plan states that the plan must be a “retrospective rating plan.” However, as the disqualified group-rated employers who initiated the lawsuit pointed out, the BWC’s group rating plan as implemented is prospective, not “retrospective.” In response, the BWC argued that “retrospective” language was actually a typo and that the legislature intended language to read “prospective.”

The Judge invoked a well-known legal principle, noting that if the language of a statute is clear on its face, the courts must apply it as written. Here, the Judge concluded the statute’s language is clear: it says “retrospective.” Accordingly, the Judge found he had no choice but to enforce the statute as written. Since the group rating program as implemented by the BWC is prospective and not retrospective as the statute requires, the group rating plan is unlawful. With this one decision, the Judge invalidated the BWC’s group rating program and affected thousands of Ohio employers.

While the BWC has not yet commented on its intentions, it is likely that the BWC will appeal the decision. It is also likely that the BWC will request a stay of the Court’s decision pending the appeal so that the group rating program can proceed as planned on July 1, 2009.

Zashin & Rich Co., L.P.A. will continue to keep employers informed as more information about this important decision becomes known.

*Steve P. Dlott is an OSBA Certified Specialist in Workers'' Compensation law and has extensive experience in defending employers in workers' compensation matters. For more information or assistance in any workers' compensation-related matter, please contact Steve at 216.696.4441 or spd@zrlaw.com.

This newsletter is not intended as a substitute for professional legal advice and its receipt does not constitute an attorney-client relationship. If you have any questions concerning any of these articles or any other employment law issues, please contact Stephen S. Zashin at 216.696.4441.
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