Porter Wright helps secure key Ohio Supreme Court victory as special counsel to the Ohio Attorney General in long-running dispute over unpaid workers’ compensation premiums
For several years, Porter Wright litigators Jim King, David Bloomfield and Brad Hughes have represented the Ohio Bureau of Workers’ Compensation (the Bureau) as Special Counsel to the Attorney General in multiple separate lawsuits involving a staffing services company called Daily Services, L.L.C., and its predecessor, I-Force, L.L.C.
In 2009, I-Force ceased operating due in large part to over $3.5 million in workers’ compensation premiums owed to the Bureau. Daily Services then took over much of I-Force’s business. The Bureau proceeded with several attempts to collect the unpaid premiums, but Daily Services persisted in litigating the dispute; bringing a public-records mandamus case in Ohio’s 10th District Court of Appeals, a civil action for unjust enrichment before the Franklin County Court of Common Pleas, and a civil rights case against certain Bureau employees in the U.S. District Court for the Southern District of Ohio. Daily Services also filed two original actions in the Ohio Supreme Court, as well as an original action in the 10th District. Porter Wright represented the Bureau and the individual defendants in all of these actions.
In December 2016, the Bureau faced a setback when the 10th District found that Daily Services did not “wholly succeed” from I-Force for purposes of the administrative rule on successor liability that was in effect when I-Force ceased operations. On June 6, 2018, however, the Ohio Supreme Court reversed the 10th District’s decision and confirmed Daily Services’ successor liability for I-Force’s unpaid premiums. The Court’s per curiam opinion held that “even if Daily Services did not assume every customer, employee, or lease held by I-Force, there was some evidence to support the conclusion that Daily Services wholly succeeded I-Force” under the successor-liability rule. State ex rel. Daily Servs., L.L.C. v. Morrison, 154 Ohio St.3d 498 2018-Ohio-2151, ¶ 24. The Supreme Court agreed that the Bureau’s statutory obligation to safeguard the State workers’ compensation fund authorizes it to find that an employer is a “successor in interest” when that employer attempts to evade workers’ compensation liabilities.
The Ohio Supreme Court’s decision in favor of the Bureau was noted by several local, state and national media outlets, including:
- "Columbus Employment Agency Owes $3.5 Million in Unpaid Workers’ Compensation Premiums," from Court News Ohio on June 6, 2018
- "Supreme Court orders staffing company Daily Services to pay workers’ comp premiums," from the Columbus Dispatch on June 6, 2018
- "Ohio court rules that defunct temp agency must pay comp insurance," from Business Insurance on June 6, 2018
- "Ohio Supreme Court Rules Temp Agency Owes $3.48 Million in Unpaid Workers’ Comp Premiums," from Best’s Insurance News on June 8, 2018 (requires a subscription to read article)
- "OH Supreme Court Orders Staffing Company to Pay Back Workers Comp Premiums," from WCInsights on June 7, 2018
- "State Supreme Court Holds That Successor Company Must Pay $3.5 Million in Premiums," from WorkCompCentral on June 8, 2018 (requires a subscription to read article)
- "Ohio Supreme Court rules staffing agency owes nearly $3.5 million in workers’ comp claims," from Staffing Industry Analysts on June 11, 2018