CLEVELAND - The state of Ohio will pay $420 million to settle a class action lawsuit filed against the Ohio Bureau of Workers' Compensation.
According to the agreement, the BWC will create a fund to distribute payments to organizations that were overcharged by the state agency between 2001 and 2008.
The settlement will affect approximately 270,000 Ohio businesses, churches and charities.
The class action lawsuit was originally filed in 2007 by Earl Stein, the owner of Corky & Lenny's in Woodmere Village.
The lawsuit alleged the BWC charged individual employers higher premiums to offset lower prices given to group employers.
Terry Delap owns the The Cleaning Authority in North Royalton.
He was happy to hear the lawsuit was settled. He said the BWC premiums nearly put him out of business.
"We didn't have money to pay extra people. We didn't have money for advertising, it was just strictly hampering the business from normal expenditures that if you didn't have that burden, you'd be able to pay and grow your business, so it really stagnated the growth of our business for years and years," said Delap.
Delap is owed $20,000.
Ohio BWC Administrator Steve Buehrer issued the following statement about the settlement:
Ohio has made major changes to its workers' compensation system over the past several years. The policies that were at issue in this litigation in 2007 are not the same ones in place today, and we're pleased that we have reached a settlement so we can move forward. Improvements have been made to how premiums and discounts are calculated, as well as to billing practices, and premiums are continuing to go down as a result. Sound management of the trust fund made it possible to return $1 billion in rebates to customers last year, and major investments in workplace safety are helping employers do a better job of preventing injuries by keeping their workers safe. All of these improvements are paying off for workers and businesses, and we're going to keep building on them.
Any organization owed money in the settlement must file a claim with the Cuyahoga County Common Pleas Court by September 22.