In 2012, a Porsche dealership owned by Republican U.S. Senate nominee Bernie Moreno recruited a general manager from Virginia with decades of experience selling the German sports cars. A year and a half later they cut ties with the salesman, and pretty soon he was in court claiming Moreno hadn’t delivered on the pay package that lured him to Ohio.
From hiring to firing
Before agreeing to take the job, Michael Falcone’s complaint states, he wanted assurance that the move to Ohio would make financial sense. The offer on the table was $80,000 in base pay as well as a commission of 5% of the dealership’s “total variable gross profit.”
In a follow-up email exchange, Falcone pressed Moreno on the terms and according to court documents, Moreno wrote back, “Just so we are clear, you will get paid on ALL VARIABLE gross profit.”
Falcone signed the offer sheet the following day and began work shorty after. His complaint describes working for several months before asking for documentation so he could double check his commission. “Despite multiple requests,” Falcone argued, the company didn’t provide the kind of sales information that would help him calculate what he was owed.
What’s more, Falcone contends that after he began asking about his compensation, his superiors retaliated against him and “embarked on a concerted campaign to force Mr. Falcone’s resignation.”
Falcone was demoted from general manager to used car manager and stripped of responsibilities. In January of 2014, after he’d been working there for about a year and a half, Falcone was terminated. The company said he was being let go because of unsatisfactory performance and a “permanent reduction in force.”
But that round of downsizing was exceptionally narrow. Falcone was the only employee dismissed.
Falcone alleged that the manager in the meeting told him he would not receive his outstanding compensation until he signed the termination agreement. He did so, albeit reluctantly, because he wanted to be paid, and because he understood the reduction in force designation would make him eligible to collect unemployment compensation.
They didn’t give him a copy of the form when we left and Falcone got an unsettling surprise when he emailed the human resources department asking them to provide one.
“When HR e-mailed him a copy of the form, it was clear that the form had been altered after it had been signed and without Mr. Falcone’s knowledge or consent,” the complaint states. “Specifically, the line indicating that his termination was, in part, due to a permanent reduction in force had been whited out, leaving only the unsupported allegation of unsatisfactory performance as the sole reason for Mr. Falcone’s termination.”
To claim unemployment benefits in Ohio a worker must be out of work through no fault of their own. If Falcone was terminated for his performance, and nothing but, it could have complicated his application.
Moreno’s response
In court filings, Moreno shared a copy of Falcone’s signed offer sheet. He argued Falcone can’t assert he was relying on Moreno’s representations in an email when he signed a form the following day.
Falcone “cannot conceivably demonstrate reasonable reliance on his communication with Mr. Moreno on June 28, 2012 because he clearly signed the Pay Plan on June 29, 2012 that specifically outlines the terms of his monthly incentive,” Moreno argued.
As for Falcone’s termination, Moreno acknowledged Falcone was the only one fired and that they did alter the termination form.
“Defendants admit that the termination form was altered,” Moreno’s attorneys wrote, “but this was done to correct an error on Defendants’ part and was not done to accomplish a fraudulent purpose.”
But Moreno argued even if they had engaged in fraud to get Falcone to sign the form, it would be irrelevant. After all, Falcone was an at-will employee.
Moreno’s dealership was “entitled to terminate him for any reason or for no reason whatsoever — regardless of whether he signed the form,” the filing states. “Therefore, it is immaterial for (Falcone) to argue that he would have refused to sign the Form if the only listed reason for termination was unsatisfactory performance.”
Although Falcone complains the changes to the termination form jeopardized his unemployment claims, “glaringly absent,” Moreno argued, “is any factual allegation that he was denied unemployment compensation benefits as a proximate result of signing the Employee Termination Form.”
In March of 2016, Moreno and Falcone settled out of court.
What now?
Speaking to reporters at campaign event in Chillicothe, Moreno called Falcone “a good guy,” but added “in any business, somebody doesn’t perform, they typically don’t blame themselves, they blame others.”
“This was a disgruntled employee that filed the suit,” he added, “and like all businesses, we eventually settle these things, because it’s cheaper than litigation.”
Look at his hundreds of happy employees, Moreno argued. Look at his top workplace awards.
But to Moreno’s political opponents, the Falcone case echoes wage theft cases filed against Moreno in Massachusetts. In that dispute, Moreno’s employees argued he had improperly withheld time-and-a-half pay. The court ordered him to maintain documents related to the case, but he shredded overtime reports. Moreno argued the underlying data was still intact, but the judge and the jury weren’t buying it. He was ordered to pay more than $400,000.
In a statement, Ohio AFL-CIO president Tim Burga argued “the choice for Senate in Ohio is easy. While (Democratic U.S. Sen.) Sherrod Brown looks out for Ohio workers, Bernie Moreno continues to show them that he only cares about himself.”
“With working people your word is your bond,” he added. “Sherrod Brown’s word is good while Moreno has proven he can’t be trusted.”
Tiffany Muller who heads up the organization End Citizens United argued the cases demonstrate a “clear pattern.”
“Moreno’s record of wage theft should be disqualifying,” she said. “If he can’t be trusted as a business owner, how can he expect Ohio voters to trust him in the Senate?”
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