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Trucking firm that violated unemployment comp laws loses appeal

ANNIE YAMSON
Special to the Legal News

Published: February 21, 2017

A Fostoria-based trucking company lost its case in the 10th District Court of Appeals recently when a panel of three judges found that the company was properly found to have violated Ohio unemployment compensation laws.

MNH Truck Leasing Company is a limited liability company primarily in the business of freight brokerage and trucking services.

Court documents state that the Ohio Department of Job and Family Services' case against the company stemmed from a claim for unemployment benefits filed by one of the company's former workers.

The claim prompted the department to audit MNH's status under the state's unemployment compensation law and classification of its workers.

In August 2013, the department issued two employer's liability and contribution rate determinations, assessing against MNH the maximum penalty tax rates for 2012 and 2013 as a result of the company's failure to timely submit required quarterly wage information.

A case summary states that the Job and Family Services director issued a reconsideration of the decision that affirmed the first assessment.

According to the audit, MNH misclassified 41 workers as independent consultants and underreported wages by nearly $2.5 million.

The audit report states that, at the time, MNH had "no comment concerning people being considered employees or wages paid by the employer."

Nevertheless, the company appealed the department's decision to the Unemployment Compensation Review Commission and, during a telephone hearing, a lawyer for the Department of Job and Family Services testified with regard to the audit.

Over MNH's objection that the lawyer's testimony was hearsay and "not the best evidence," the commission admitted it as admissible in administrative proceedings.

The commission affirmed the earlier decision, ruling that MNH "did not provide the wage information in the specified timeframes to receive a calculated rate, even despite the fact that the employer now acknowledges that at least some individuals performed services for the employer in covered employment from 2011 to the present."

The commission also held that MNH was properly assessed penalties.

In an appeal to the Franklin County Court of Common Pleas, the company argued that the commission's decision was not supported by reliable evidence and that the evidence offered during the hearing should not have been admitted.

The trial court also upheld the initial ruling, finding that the company's "brief in this matter does not argue that the (Department of Job and Family Services) or (the commission's) findings of fact are actually wrong."

"Instead, (MNH) attacks the (commission's) decisions on essentially procedural and due process grounds," the common pleas court wrote.

In resolving the appeal, the trial court found that MNH presented nothing to dispute the factual findings made in any of the hearings.

The 10th District court, in an opinion authored by Judge Lisa Sadler, upheld the lower court's decision and reasoning with a ruling that held that administrative proceedings, while bound by the fundamental aspects of due process, are not judicial in nature and are not subject to the strict rules of evidence applied in courtrooms.

"For example, statements or evidence that would be excluded as hearsay elsewhere are admissible in an administrative proceedings where there are not inherently unreliable and are sufficient to constitute substantive, reliable and probative evidence," Sadler wrote.

"Here, the testimony offered by the attorney for the Ohio Department of Job and Family Services is essentially a description of the exhibits offered for submission and an explanation of the director's reconsidered decisions."

The testimony, according to the appellate panel, was corroborated by exhibits and affidavits and, considering its reliability, was not admitted in error.

The court of appeals also held that the trial court conducted an independent review of the record and found that the commission's findings were supported by sufficient evidence.

It concluded by affirming the ruling against the trucking company.

Judges Jennifer Brunner and Susan Brown concurred.

The case is cited MNH Truck Leasing Co., LLC. v. Dir., Ohio Dept. of Job & Family Servs., 2017-Ohio-442.

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