Blog - Finney Law Firm

FLF wins million-dollar racial discrimination verdict for job applicant

By Stephen E. ImmSeptember 10, 2024

On August 30, a federal jury in Indianapolis returned a verdict totaling $1,090,000 for an unsuccessful job applicant represented by Steve Imm and Diana Emerson of the Finney Law Firm. The applicant, Cory Lange, had sued the Anchor Glass Container Corporation for denying him employment in 2018. The case went all the way up to the 7^th Circuit Court of Appeals in Chicago before being remanded to the District Court for trial last month.

Mr. Lange alleged that he was turned down for employment by Anchor because of his race, in violation of Title VII of the Civil Rights Act of 1964. The company originally claimed that it rejected Mr. Lange because of a felony conviction he had in 2009, but the evidence showed that the company had hired several other people who had significant criminal records, but who were of a different race than Mr. Lange. Also of key importance was the fact that, over time, the company had significantly changed its justification for not hiring Mr. Lange. This evidence permitted the jury to reasonably infer that the true reason for Mr. Lange’s rejection was his race.

Upon finding that Mr. Lange had proved his case for discrimination, the jury proceeded to award him $90,000 for mental suffering and $1,000,000 in punitive damages. The punitive award reflected the jury’s finding that the company had acted in reckless disregard of Mr. Lange’s rights.

The court will hold further proceedings to determine if Mr. Lange should receive additional damages for lost back pay and lost front pay, as well as attorney’s fees.

The case serves as an important reminder that the employment discrimination laws apply at ALL phases of the employment relationship, not just when someone is discharged.

Audio recordings of client and customer interactions

By Christopher P. FinneyAugust 22, 2024

In today’s digital age, one should almost expect that all personal interactions and appearances in public places are being recorded. In fact, there are apps for cell phones that automatically record every single phone call. In some ways, it seems creepy. In others the question would be: if you are doing nothing wrong, what do you have to fear? Personally, I see it as creepy and I don’t like it.

However, Ohio is a “one party” state as it relates to recording interactions. As such, it is legal for one party to a conversation to record that conversation, even if the other party is not aware of the recording.

We have learned through our law practice that clients, opposing counsel and opposing parties frequently are making recordings of interactions, on the phone and in personal meetings.

From my perspective, if I know I am being recorded, I likely would be more cautious and more guarded in what I say. In some instances, I would limit my interactions with that person entirely, or make sure communications are all in writing.

As a result, we have added a provision to our client fee agreements requiring clients to tell us if they are recording interactions with our office. If they fail to notify us of those recordings, they cannot later use those recordings against us.

I recently shared the fact that this is part of our standard engagement letter with a class of Realtors, and was asked by 9 participants for that form language to include in their own agency agreements. So, I thought I would share that language here on this blog as well. Feel free to make use of it as it suits your practice.

Audio and Video Recordings with this Firm

We will never make an audio or video recording of any communication with you or any third party. We occasionally have clients who either want to make an audio and/or video recording of a call or meeting with us. In the event that you choose to make an audio or video recording or any interaction with us, we require that you disclose each such instance to us in advance in writing. If you fail to disclose any such recording, (a) it will be a material breach of this agreement, (b) it will be the basis for termination of the relationship by this firm and (c) you agree not to use that recording in any proceeding relating to our representation.

It’s a dangerous world out there. Proceed with caution.

What do all of these contingencies mean? Strategies for buying a home in a competitive market without abandoning all reason

By Casey A. JonesAugust 11, 2024August 11, 2024

With interest rates dropping, the housing market is becoming even more saturated with buyers. Practically speaking, that means that buying a home has, once again, become super competitive and provisions that were once a “given” in Contracts to Purchase are now being eliminated in favor of making the offer more appealing to sellers, including the removal of financing, appraisal, and inspection contingencies.

But what is not always understood is what happens if these contingencies are removed and things go south.

I have had at least three clients or potential clients call me in the past month with varying levels of “buyers’ remorse.” Either they had simply changed their minds, or they had agreed to waive the inspection contingency altogether, or they had agreed to pay significantly more than the property’s appraised value – and, now, they wanted to walk away. Each of these clients were under the understandable, but mistaken belief that they could simply forfeit their earnest money and everyone would go their separate ways. Unfortunately, it is not so simple.

Financing Contingency

This contingency allows you to justifiably terminate a Contract if you are unable to obtain financing. If you are getting a loan/outside financing (versus paying cash for the property), you NEED to keep this contingency. This protects you in the event you lose your job, or experience a significant change in your income or financial situation. Buyers are generally required, however, to apply for financing within a set number of days and to act in good faith in attempting to obtain financing. In other words, if you experience a change of heart, ghosting your lender so that they deny your financing is likely not a feasible strategy.

Appraisal Contingency

We most often see this contingency removed in cash purchase situations. When using outside financing, your lender will almost certainly require that the home appraise for the purchase price or for the purchase price less the amount you are planning to put “down” (i.e., pay out of pocket at closing). Buyers (in both cash and financed transactions) sometimes add provisions that they will pay $“x” or “x”% over the appraised value to make their offer more competitive. What this means is that the Buyer agrees to bring the difference between the appraised value and amount for which the property was required to appraise to closing. If this contingency is removed entirely or amended to allow for a certain amount above the appraised value, the buyer may be contractually obligated to pay significantly more than the fair market value of the home, resulting in a negative equity situation.

Inspection Contingency/”As-Is” Purchase

Removal of the inspection contingency is, by far, the most popular among buyers seeking to make their offers more competitive. This can be done in a few ways: 1) designating the purchase “as-is” or stating that inspections are for “informational purposes only,” 2) forfeiting the right to terminate based on inspections, and 3) waiving inspections altogether.

An as-is purchase does not necessarily mean that you waive inspections. It can also mean that you are performing inspections but that you will not seek repairs or a price reduction from the seller based on what you may find during inspections (or that you will only seek repairs/a reduction based on defects or conditions estimated above a certain dollar value). Under an “as-is” purchase or when inspections are for “informational purposes only,” you can still maintain the right to terminate based on the inspections. However, the contract language should be clear as to what is intended as the above terminology can be somewhat ambiguous.

The inverse of No. 1 above, buyers sometimes agree that they will perform inspections but they will not terminate based on the inspections. Instead, they will allow the seller the opportunity to “fix” any defective conditions. Candidly, this can create a whole host of issues. For example, what happens if there is a dispute between seller and buyer as to whether the issue was fixed or fixed properly? What if the seller refuses to drop the price or fix a condition, or disagrees that it is defective? Under a prototypical inspection contingency, the buyer could terminate in this situation (i.e., where no agreement can be reached between the parties) but, here, the buyer has ostensibly forfeited its right to terminate. While there could be defenses to the enforceability of such forfeiture, it could also be quite expensive to litigate that issue to conclusion.

Finally, buyers in a competitive market often waive inspections altogether. This means they will not perform any due diligence as to the physical condition of the property. While this can allow for a faster closing and obviously sounds great to the seller, it is very risky if things go awry. Under such circumstance, the buyer will have essentially no recourse if they discover a defect after closing, the exception to this harsh result being if they can prove that (a) the seller knew about the defect, (b) the buyer did not know about the defect, (c) the defect would not have been discovered had the buyer performed reasonable inspections (e., it was a “latent” defect and not an open and obvious one), (d) the seller did not disclose the defect on the Residential Property Disclosure Form or otherwise misrepresented the same, and (e) the buyer suffered damages as a result. These are the elements of a cause of action for fraud and are not easily proven. Further, unless the cost of remedying the defect is at least $30-40,000+, it is often not financially worthwhile to pursue given the legal/expert fees and expenses. A buyer can seek reimbursement for its attorney’s fees upon satisfying the elements of fraud, but such reimbursement can never be fully guaranteed.

As noted above, there are a number of ways that each of these contingencies can be crafted, limited, or even removed and the resulting implications can vary widely. This is why it is so critical to consult with an attorney before agreeing to deviate from standard language. If you are found to be in breach of the contract or decide to “walk away” without legally adequate justification, your liability is often not limited to your earnest money – in fact, it can add up to tens, if not hundreds, of thousands of dollars.

There are other options and terms that can be included in an offer to “sweeten the deal” for sellers and help get your offer noticed, even in a competitive market, without jeopardizing the rights and protections that are so vital to buyers.

We can help make sure you understand the potential consequences of the contract language and even draft or revise an offer to make sure you are protected, whether you are working with an agent or purchasing a home on your own. Making a competitive offer does not have to mean taking on substantial additional risk.

Please reach out to Casey A. Jones, Esq. at [email protected] or (513) 943-5673 for assistance.

Another win for our employment law group at federal 6th Circuit Court of Appeals

By Matthew S. OkiishiAugust 11, 2024August 11, 2024

On August 9, 2024, a panel of the United States Court of Appeals for the Sixth Circuit held for a former public employee Eric Noble, represented by Matt Okiishi of our Employment Law group, that his posting of a meme critical of a well-known protest movement while on his private time was “protected speech” under the First Amendment.

While the public employer asserted that it terminated Mr. Noble because it “anticipated disruption,” the panel determined that this belief failed to be “objectively reasonable.” The panel also noted that the public employer’s decision to engage in the same debate as Mr. Noble cast “doubt on its motive for firing him,” undercut its interest in maintaining workplace harmony, and violated the First Amendment’s prohibition against allowing “one side of a debate from using the government to cancel the other side.”

The panel concluded that because Mr. Noble was terminated in retaliation for exercising his First Amendment speech rights, and prior precedent “does not give the Library carte balance to take away Mr. Noble’s means of livelihood based on his speech,” he was entitled to summary judgment in his favor. A copy of the decision in the case styled Eric Noble v. Cincinnati & Hamilton County Public Library, et al. is linked here.

The Court has recommended this victory for full publication, signifying that it views the case as one of great importance and significance. This victory also comes just three years after another free speech victory by our firm, Barger v. United Bhd. of Carpenters & Joiners of Am., 3 F.4th 254 (6th Cir. 2021) (discussed here).

Rebecca Simpson adds mediation services to Finney Law Firm’s offerings

By Christopher P. FinneyApril 25, 2024

Finney Law Firm announces that attorney Rebecca Simpson is expanding her practice to offer mediation services. Rebecca has decades of diverse litigation and advocacy experience, and believes that even the most difficult conflicts can be resolved through strategic, amicable, problem-solving negotiations. This can result in faster, less expensive and more satisfactory results for clients.

Rebecca’s experience includes employment (representing both employers and employees), commercial, real estate and public interest litigation, as well as zoning, land use and other administrative and legislative matters at the state and local level. Click here to see Rebecca’s bio.

As a mediator, Rebecca will leverage her years of experience in these areas to assist you and your client in exploring efficient and effective resolutions to what could otherwise be lengthy, expensive litigation with uncertain results.

If you believe that Rebecca can be of assistance to you and your client, or if you’d just like to learn more about her mediation practice, you can contact her at [email protected] or at 513-703-6227.

Employment Law Update: Department of Labor Increases Salary Threshold for Overtime Exemptions

By Matthew S. OkiishiApril 25, 2024

On April 23, 2024, the Department of Labor announced a final rule increasing the salary threshold for the overtime exemption of administrative, executive, and professional employees. Beginning on July 1, 2024, the salary threshold will increase from $35,568 to $43,888 per year. The threshold will again increase to $58,656 per year on January 1, 2025. The DOL plans to review these thresholds in 2027 and every three years thereafter to determine additional increases.

The highly compensated employee threshold for overtime exemption is also increasing from $107,432 to $132,964 after July 1, 2024 and $151,164 after January 1, 2025.

Assuming the rule passes constitutional muster, employers who pay salaries below the prescribed thresholds may find themselves liable for overtime, additional damages, and attorney fees if the employee works over 40 hours in a week, even if the employee would otherwise be considered exempt from the overtime requirements. To protect against this, employers should engage competent legal professionals to audit their time records, job duties, and salary levels to ensure compliance with the new rule before January 1, 2025.

Employment Law Update: New Federal Trade Commission Rule Bans Noncompete Agreements

By Matthew S. OkiishiApril 25, 2024

On April 23, 2024, the Federal Trade Commission (“FTC”) released its long-awaited rule concerning the validity of employee noncompete agreements. Following its effective date (projected to be 120 days after April 23, noncompete agreements will be considered a restraint of trade except where they are executed in connection with the sale of a business.

All existing noncompete agreements, with the exception of those signed by “senior executives” (defined as policy-making employees earning at least $151,164 in annual compensation) in existence prior to the rule’s effective date, will retroactively become unenforceable, and they will not be permitted going forward.

The rule does not apply to noncompete agreements that were breached prior to the effective date. So cases currently in court over an alleged breach are not affected by the new rule.

The new FTC rule will also impose an affirmative duty on all employers with existing noncompete agreements to notify workers that those agreements are no longer in effect by the effective date. Because the duty to notify is triggered at the rule’s effective date, employers should make arrangements to ensure compliance with the new rule.

There will likely be legal challenges to the FTC’s authority to make this Rule, so stay tuned. But if it survives it will be a true game changer for American workers.

Finney Law Firm offers free FinCEN Webinar on Tuesday, May 14 at noon

By Christopher P. FinneyMarch 19, 2024March 21, 2024

As reported here and in our prior newsletter, new legislation requires owners of small businesses (including LLCs and corporations; under $5 million in revenue) to report their owners’ names to the federal agency known as FinCEN (Financial Crimes Enforcement Network). There is a fine of up to $500 per day for violations, so this is a regulation that should not be ignored.

For new LLCs and corporations, the deadline is within 90 days of the formation. For LLCs and corporations in existence as of January 1st of this year, the deadline is January 1. 2025.

Finney Law Firm attorney Casey Jones has carefully researched and written about the new FinCEN requirements and is heading our efforts to educate our clients on the intricacies of the statute and to assure compliance by our firm and our clients.

On Tuesday, May 14, at noon Ms. Jones will conduct a webinar informing clients of the new FinCEN requirements and answering questions you may have.

The link to sign up for the webinar is here.

Finney Law Firm welcomes new associate J. Andrew Gray

By Christopher P. FinneyMarch 18, 2024

Finney Law Firm is pleased to add to our team of attorneys J. Andrew Gray. Andrew is a recent graduate of the University of Cincinnati College of Law where he served as chair of the Honor Council, the student-run organization dedicated to academic integrity and enforcing the College of Law’s Honor Code.

Andrew also brings to our firm and the practice of law his background in engineering. In 2020 he earned his bachelors degree in Industrial & Systems Engineering from The Ohio State University.

Prior to joining the Finney Law Firm, he clerked for a long-serving local Common Pleas judge, helping the court resolve civil matters ranging from personal injury suits to complex construction litigation.

Andrew joins our burgeoning litigation team.

Small Businesses now required to report ownership to FinCEN

By Casey A. JonesFebruary 12, 2024March 13, 2024

*** PLEASE CAREFULLY READ ***

If you are an owner or officer of any closely-held corporation or limited liability company (or any other business entity or serve as a fiduciary of any entity) – or intend to be, you need to carefully read about these new federal regulations that mandate disclosure of the ultimate beneficial ownership of that entity – the consequence being as much as a $500 per day fine for non-compliance.

For small business owners:

We strongly recommend attention to this matter and compliance.
If you have a long-dormant LLC or corporation, now may be a time to consider dissolving the same to avoid filing requirements under this regulation.

On January 1, 2024, the Corporate Transparency Act (“CTA”) took effect, requiring non-exempt entities (both foreign and domestic) that are registered to conduct business in the United States to submit certain information regarding their “beneficial ownership” to a confidential database housed within the Financial Crimes Enforcement Network (“FinCEN”). Unless exempt, the CTA affects:

Corporations, LLCs, and other similar entities created by the filing of a document with the Secretary of State, whether formed prior to or after the effective date of January 1, 2024; and
Corporations, LLCs, and other entities formed under the laws of a foreign country but registered to do business in any U.S. State, whether formed prior to or after the effective date of January 1, 2024.

These non-exempt entities are referenced in the CTA as “Reporting Company(ies).” The Reporting Companies required to submit information under the CTA are not just limited to corporations and LLCs, but also include limited liability partnerships, limited partnerships, and business trusts.

How do I know if my entity is exempt?

FinCEN recognizes 23 exemptions to the CTA’s BOI reporting requirement.

Please note that these exemptions contain many nuances. If you are unsure whether your entity may qualify for an exemption, we are happy to help you in your evaluation. Additionally, FinCEN’s Compliance Guide (linked below) contains a wealth of information to consider when making this determination.

https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

We anticipate the most common exemption for our clients will be No. 21 (large operating company). Large operating companies are those that (a) employ more than 20 full-time employees (30+ hours per week) within the United States, (b) maintain a physical location with an operating presence within the United States, and (c) can demonstrate over $5 million in gross sales or receipts via federal tax return or other applicable IRS form.

What information am I required to disclose?

Reporting Companies are required to complete and submit a form detailing their “beneficial ownership information” or “BOI.” A beneficial owner is any individual who, directly or indirectly, (a) exercises substantial control over the Reporting Company, or (b) owns or controls at least 25% of the ownership interests of the Reporting Company (“Beneficial Owner”). In other words, FinCEN wants to know who owns and controls entities operating within the United States at an individual level.

Examples of a beneficial owner who exercises substantial control of a Reporting Company include, without limitation:
Officers and directors (or those who exercise the authority of an officer or director), g., CEO, CFO, COO, President, Treasurer, etc.;
Individuals with the authority to appoint or remove officers or the board of directors;
Individuals with ownership or control of a majority of the voting power or voting rights of the Reporting Company;
Individuals with rights relative to the Reporting Company associated with any financing arrangement or interest in a company;
Individuals who exercise control over one or more intermediary entities that separately or collectively exercise substantial control over a Reporting Company; and
Individuals who direct, determine, or have substantial influence over important decisions made by the Reporting Company.
Examples of an ownership interest include, without limitation:
Individuals with an interest in the Reporting Company by virtue of equity, stock, or similar instrument; preorganization certificate or subscription; or transferable share of, or voting trust certificate or certificate of deposit for, an equity security, interest in a joint venture, or certificate of interest in a business trust;
Individuals with any capital or profit interest in an entity; and
Individuals who have an “option” relative to any of the foregoing.

Minors, individuals acting solely as employees, and those whose only interest in the Reporting Company is via a future right of inheritance are NOT considered beneficial owners.

In determining the percentage of ownership interest in corporations, entities taxed as corporations, and other entities that issue shares of stock, an individual’s percentage of ownership interest is the greater of (a) the total combined voting power of all classes of ownership interests of the individual relative to the total outstanding voting power of all classes of ownership interests entitled to vote, or (b) the total combined value of the ownership interests of the individual relative to the total outstanding value of ownership interests.

For entities that issue capital and profit interests (including entities treated as partnerships for tax purposes—e.g., many one or two-member LLCs), the individual’s total capital and profit interests are compared to the total outstanding capital and profit interests of the Reporting Company.

The person(s) who prepares and/or files the BOI Report is referred to as the “Company Applicant.” This can be an owner or representative of the Reporting Company, such as an attorney. Each Reporting Company will need to provide the name, residential street address, and a copy of a photo ID for each of its Company Applicants AND each of its beneficial owners.

A copy of the BOI Report template can be found here: https://boiefiling.fincen.gov/fileboir.

What is the deadline for submitting the BOI Report?

In short, the deadline for Reporting Companies to submit their BOI Reports differs depending on when the Reporting Company was formed.

Reporting Companies formed prior to January 1, 2024 must submit their BOI Reports by January 1, 2025. However, we recommend getting these reports submitted sooner rather than later in case the FinCEN database experiences any technical issues due to increased traffic toward the end of 2024.
Reporting Companies formed on or after January 1, 2024 but prior to January 1, 2025 are required to submit their BOI Reports within 90 days of formation (the date on which they receive confirmation from the Secretary of State in most instances).
Reporting Companies formed on or after January 1, 2025 are required to submit their BOI Report within 30 days of formation.
Any update or change to a Reporting Company’s BOI must be submitted within 30 days of when the change occurs.

What happens if my Reporting Company does not submit its BOI Report within the required timeframe?

FinCEN has provided that:

The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held [personally] accountable for that failure.

Furthermore, any individual who refuses to provide information required to be included in the BOI Report, or who provides false information, may also be subject to civil and/or criminal penalties.

Next Steps

If your entity is a Reporting Company created prior to January 1, 2024, you have time. However, you should be compiling the necessary documents and information required to complete the BOI Report. Finney law Firm is offering BOI Consultations, during which time we will (a) help you determine whether your entity is a Reporting Company or whether an exemption applies, (b) hep you identify your company’s beneficial owner(s), and (c) submit your Reporting Company’s BOI Report to FinCEN as a Co-Company Applicant.

If your entity was formed on or after January 1, 2024, your deadline may be quickly approaching, and it is extremely important that you file the BOI Report and/or contact us right away.

Please contact the business law attorney with whom you work at Finney Law Firm or Casey Jones (513) 943.5673 for filing compliance and for more information.

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