In 2012, a Porsche dealership owned by Republican U.S. Senate candidate Bernie Moreno hired a Virginia-based executive with decades of experience selling German sports cars. A year and a half later, they cut ties with the salesman, and shortly afterward he was in court, claiming Moreno had failed to deliver on the salary package that had lured him to Ohio.
From hiring to firing
Before taking the job, Michael Falcone wanted to be sure that the move to Ohio made financial sense, according to his complaint. The offer on the table was $80,000 in base salary plus a commission of 5 percent of the dealership’s “total variable gross profit.”
In a subsequent email exchange, Falcone pressed Moreno on the terms and, according to court documents, Moreno responded, “Just so we’re clear, you will be paid based on TOTAL VARIABLE gross profit.”
Falcone signed the offer the next day and started work shortly after. In his complaint, he describes working for several months before requesting documentation to verify his commission. “Despite multiple requests,” Falcone argued, the company did not provide him with the kind of sales information that could have helped him calculate what he was owed.
In addition, Falcone claims that after he began asking about his severance pay, his superiors retaliated against him and “launched a concerted campaign to force Mr. Falcone’s resignation.”
Falcone was demoted from general manager to used car manager and relieved of all responsibilities. In January 2014, after working there for about a year and a half, Falcone was fired. The company said he was let go due to poor performance and a “permanent reduction in staff.”
However, the job cuts were exceptionally small. Falcone was the only employee laid off.
Falcone claimed that the manager told him in the meeting that he would not receive his back pay until he signed the severance agreement. He did so, albeit reluctantly, because he wanted to be paid and because he understood that the reduction in staff would make him eligible for unemployment benefits.
When we left, he was not given a copy of the form and Falcone had an unpleasant surprise when he emailed HR asking them to provide a copy.
“When Human Resources emailed him a copy of the form, it was clear that the form had been altered after it was signed and without Mr. Falcone’s knowledge or consent,” the complaint states. “In particular, the line indicating that his termination was due in part to a permanent reduction in staff had been painted over, leaving only the unsubstantiated allegation of inadequate performance as the sole reason for Mr. Falcone’s termination.”
To qualify for unemployment benefits in Ohio, a worker must be unemployed through no fault of his own. If Falcone was fired solely because of his performance, that could have complicated his application.
Moreno’s answer
In court documents, Moreno provided a copy of Falcone’s signed offer, arguing that Falcone could not claim he relied on Moreno’s statements in an email when he signed a form the next day.
Falcone “cannot demonstrate that he could reasonably have relied on his June 28, 2012 communications with Mr. Moreno because he signed the June 29, 2012 compensation plan, which expressly sets out the terms of his monthly compensation,” Moreno argued.
Regarding Falcone’s termination, Moreno acknowledged that Falcone was the only one fired and that they had modified the termination form.
“Defendants admit that the termination form was altered,” Moreno’s lawyers wrote, “but this was done to correct an error made by Defendants and not to achieve any fraudulent purpose.”
However, Moreno argued that even if they had committed fraud to get Falcone to sign the form, it would be irrelevant. After all, Falcone was an employee without a fixed schedule.
Moreno’s dealership “had the right to fire him for any reason or no reason – regardless of whether he signed the form,” the filing states. “Therefore, it is irrelevant for (Falcone) to argue that he would have refused to sign the form if the only reason listed for termination was unsatisfactory performance.”
Although Falcone complains that the changes to the termination form jeopardized his entitlement to unemployment benefits, Moreno says there is “a glaring lack of any factual allegation that he was denied unemployment benefits as a direct result of signing the termination form.”
In March 2016, Moreno and Falcone reached an out-of-court settlement.
What now?
Speaking to reporters at a campaign rally in Chillicothe, Moreno called Falcone “a good guy,” but added: “In every business, there is someone who doesn’t perform as well as they should. Usually, they don’t blame themselves, they blame others.”
“It was a disgruntled employee who filed the lawsuit,” he added, “and like all companies, we ultimately settle because it’s cheaper than going to court.”
Look at his hundreds of satisfied employees, Moreno argued. Look at his awards for his workplace’s highest honors.
For Moreno’s political opponents, however, the Falcone case is reminiscent of the wage theft cases brought against Moreno in Massachusetts. In that dispute, Moreno’s employees argued that he had wrongfully withheld 1.5 times their wages. The court ordered him to keep records related to the case, but he himself destroyed overtime records. Moreno argued that the underlying data was still intact, but the judge and jury did not believe him. He was ordered to pay more than $400,000.
In a statement, Ohio AFL-CIO President Tim Burga argued: “The Senate race in Ohio is easy. While (Democratic U.S. Senator) Sherrod Brown takes care of Ohio workers, Bernie Moreno continues to show them that he only cares about himself.”
“With the workers, your word is a guarantee,” he added. “Sherrod Brown’s word is his, while Moreno has proven that he cannot be trusted.”
Tiffany Muller, chair of End Citizens United, argued that the cases showed a “clear pattern.”
“Moreno’s history of wage theft should be grounds for disqualification,” she said. “If he can’t be trusted as a business leader, how can he expect Ohio voters to trust him in the Senate?”
Follow OCJ Reporter Nick Evans on Twitter.
Get the morning’s headlines straight to your inbox
