Congratulations to the Weston Hurd team of Sam Lauricia, Scott Lucas, and Matthew Miller. In a recent order issued by the U.S. District Court for the Eastern District of Michigan, the Court awarded Weston Hurd client Mann Construction legal fees plus costs incurred during a five-year litigation with the Internal Revenue Service and the United States Department […]
We are pleased to announce the latest edition of Weston Hurd’s Architects & Engineers Newsletter is now available. The newsletter contains the following articles: Issues Confronting Engineering Firms that Act as Municipal Engineers Design and Accessibility Requirements Under the Fair Housing Act Download the 2024 Architects and Engineers Newsletter by clicking here Should you have any […]
Amended House Bill 179 (effective October 24, 2024) addresses the issue of vicarious liability in tort actions. Specifically, it outlines the conditions under which an injured party can sue either the primarily liable party (such as an agent, servant, or employee) or the secondarily liable party (such as a principal, master, or employer), or both. […]
Weston Hurd is pleased to announce that 21 attorneys are recognized in The Best Lawyers in America© 2025 including Joseph A. Gerling attaining “Lawyer of the Year” recognition. Best Lawyers® uses a methodology “…designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same […]
Weston Hurd is pleased to welcome Partners Frederick T. Bills (Columbus office), Matthew K. Seeley (Cleveland office), and Theresa N. Turk (Cleveland office). Fred focuses his practice on construction litigation with an emphasis on representing and defending design professionals. Matthew is a business, commercial, and employment attorney with 30 years of accumulated legal education and […]
This is a topic that never gets old and needs to be reviewed again and again. Over the years, I have counseled clients, conducted seminars, and written numerous articles on advertising compliance. And the topic is still relevant. As you know, the FTC has become actively involved in reviewing dealerships’ advertising practices. The FTC entered into numerous […]
On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule updating the salary threshold for employees classified as exempt. Under the Fair Labor Standards Act (FLSA), employees fall into classifications of either exempt or non-exempt from minimum wage and overtime requirements. Non-exempt employees must be paid overtime wages of 1.5 times their regular […]
On April 23, 2024, the U.S. Federal Trade Commission announced its long-awaited final rule regarding noncompete agreements. The FTC had issued a proposed rule in January 2023 and received more than 26,000 comments from the public in response. The final rule effectively bans employers from entering into noncompetes with workers and bans enforcement of most […]
Congratulations to the Weston Hurd team of Sam Lauricia, Scott Lucas, and Matthew Miller. In a recent order issued by the U.S. District Court for the Eastern District of Michigan, the Court awarded Weston Hurd client Mann Construction legal fees plus costs incurred during a five-year litigation with the Internal Revenue Service and the United States Department of Justice-Tax Division.
Following Weston Hurd prevailing for its client in the U.S. District Court and the Sixth Circuit Court of Appeals, Weston Hurd filed a motion requesting the Court award Mann Construction reimbursement of legal fees and costs incurred during the multi-year litigation. The USDC concurred granting Weston Hurd’s motion on November 1, 2024 (see Mann Construction, Inc., et al. v. United States of America 1:20-cv-11307).
The dispute centered on a purported listed transaction and the IRS’s failure to follow notice-and-comment rulemaking procedures when it issued Notice 2007-83. Weston Hurd attorneys Sam Lauricia, Scott Lucas, and Matthew Miller argued the notice violated the Administrative Procedure Act’s (APA) notice-and-comment rulemaking requirements when the listed transaction Notice was issued without an opportunity for a formal comment period. In March 2022, the Sixth Circuit Court of Appeals agreed and in a unanimous opinion, reversed a district court ruling in the matter of Mann Construction, Inc. v. United States, No. 21-1500 (6th Cir. 2022). In its opinion, the Sixth Circuit stated, “Because the IRS’s process for issuing Notice 2007-83 did not satisfy the notice-and-comment procedures for promulgating legislative rules under the APA, we must set it aside.”
The District Court granted Mann Construction’s request for legal fees and expenses pursuant to IRC Section 7430. IRC Section 7430 sets forth rules for making qualified offers. Prior to commencing the litigation, the result of which Mann Construction was the prevailing party, Mann Construction tendered a qualified offer to the IRS. The qualified offer proposed that the IRS settle, the all-or-nothing dispute, for $1.00. The IRS did not respond to the qualified offer, thus paving the way for the Court’s award of attorney fees and costs in the amount $221,838.40 announced on November 1, 2024.
***
We are pleased to announce the latest edition of Weston Hurd’s Architects & Engineers Newsletter is now available.
The newsletter contains the following articles:
Download the 2024 Architects and Engineers Newsletter by clicking here
Should you have any questions, feel free to contact Weston Hurd partners and the newsletter editors – David Patterson and Frederick Bills
Amended House Bill 179 (effective October 24, 2024) addresses the issue of vicarious liability in tort actions. Specifically, it outlines the conditions under which an injured party can sue either the primarily liable party (such as an agent, servant, or employee) or the secondarily liable party (such as a principal, master, or employer), or both. Bill 179 stipulates that for a plaintiff to prevail in a vicarious liability claim against a secondarily liable party, (such as an employer) the primarily liable party (employee) must have committed the act or omission within the scope of their relationship with the secondarily liable party.
However, the primarily liable party is not a necessary party to the lawsuit unless the claim involves specific professional malpractice, such as medical, dental, optometric, chiropractic, or legal malpractice. Bill 179 clarifies that in most vicarious liability cases, the action can proceed against the principal even if the agent is not a party to the lawsuit.
Additionally, Ohio courts have consistently held that a vicarious liability claim cannot survive if the direct claim against the agent is time-barred by the statute of repose. For instance, in Clawson v. Heights Chiropractic Physicians, L.L.C., the Ohio Supreme Court found that a vicarious liability claim for medical malpractice against a physician’s employer was precluded when a direct claim against the physician is time-barred.
Prior to Bill 179, the Clawson decision arguably required filing suit against the employees of a business who were participating in the negligence of the business in order to hold the business vicariously liable. Id. Bill 179 will affect lawsuits by potentially simplifying the process for plaintiffs to pursue claims against employers or principals without needing to include the primarily liable party (employee) in the lawsuit, except in cases involving the specified professional malpractice claims.
Also, R.C. §2305.15(A) provides for tolling the statute of limitations when a defendant is out of state, absconds, or conceals themselves. This provision applies to claims against the individual who absconds or conceals themselves but does not extend to vicarious liability claims against other parties, such as employers or principals, unless the specific conditions of the physician-patient relationship are met. Stafford v. Columbus Bonding Ctr. However, any tolling of the limitations period during the defendant’s absence or concealment does not apply to the statutes of repose.
Only in the context of medical malpractice and related vicarious liability claims, the tolling of the statute of limitations is influenced by the “termination rule.” This rule tolls the statute of limitations for vicarious liability claims against a hospital while the physician-patient relationship continues. Elkins v. Durrani.
Ohio law generally presumes that statutes operate prospectively unless they are expressly made retrospective. R.C. §1.48. The Ohio Constitution prohibits the General Assembly from passing retroactive laws that affect substantive rights. Therefore, unless Bill 179 explicitly states that it is to be applied retroactively, it would only apply to cases arising after its enactment. Bill 179 does not explicitly state that it is to be applied retroactively. Therefore, the first step in the two-part test for retroactivity is not satisfied, as there is no clear proclamation of retroactive application in Bill 179. Even if Bill 179 were to include language suggesting retroactivity, it would still need to pass the second part of the test, which examines whether the statute is substantive or remedial. The Ohio Constitution prohibits retroactive laws that affect substantive rights. State v. Palmer. Laws affecting procedure are typically considered remedial, while those affecting rights are substantive. Given that Bill 179 pertains to vicarious liability in tort actions, it most likely affects substantive rights, making its retroactive application unconstitutional.
In summary, Bill 179 simplifies the process for plaintiffs to pursue claims against secondarily liable parties by not requiring the inclusion of the primarily liable party in the lawsuit, except in cases involving specific professional malpractice. The existing provisions under R.C. §2305.15 tolling of limitation during a defendant’s absence, concealment or imprisonment and the “termination rule” in Frysinger continue to apply as described above. Bill 179 further clarifies that any tolling of the limitations period during the defendant’s absence or concealment does not apply to statutes of repose. Finally, the enactment of Bill 179 will not affect any claims that occurred prior to its enactment, as it does not explicitly state that it is to be applied retroactively and it effects a substantive right.
Please contact your Weston Hurd attorney or the authors of this update if you have any questions about this topic.
Best Lawyers® uses a methodology “…designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical region and legal practice area” to create a Best Lawyers® guide based entirely on peer-review™.
Weston Hurd is pleased to welcome Partners Frederick T. Bills (Columbus office), Matthew K. Seeley (Cleveland office), and Theresa N. Turk (Cleveland office). Fred focuses his practice on construction litigation with an emphasis on representing and defending design professionals. Matthew is a business, commercial, and employment attorney with 30 years of accumulated legal education and experience. Theresa concentrates her practice in estate planning, estate administration, trust planning, elder law, social security disability, guardianships, and probate litigation and administration.
Frederick T. Bills represents architects, engineers, construction managers, contractors, subcontractors, and suppliers in payment disputes, contract drafting, loss prevention, delay claims, and all forms of litigation and appeals. Fred received his B.A. magna cum laude from Ashland University and earned his J.D. from The Ohio State University Michael E. Moritz College of Law. Fred is certified in the American Institute of Architect’s Train the Trainer program and is a presenter to design professionals on AIA contract documents. He is counsel to the American Council of Engineering Companies of Ohio. In 2024, Fred was named an Ohio Super Lawyer in Construction Litigation.
A business, commercial, and employment attorney Matthew K. Seeley represents Fortune 500 companies, midsized, closely held, family, and startup entities as well as individuals and their personal/business partners. He represents his clients in transactional, regulatory, and administrative matters, as well as in disputes involving corporate, commercial, employment, real estate, tax collection, and workers’ compensation. Matthew has litigated cases throughout Ohio State courts, in the U.S. Northern and Southern District Courts, the U.S. Court of Appeals for the Sixth Circuit, U.S. Tax Court, and myriad state and federal administrative agencies and municipalities. Matthew is AV-rated and an Ohio Super Lawyer in Business/Corporate law. After receiving his B.A. from Kenyon College, Matthew obtained his J.D. from the University of Akron where he spent a summer studying European Union law at Magdalene College, Oxford University, England.
Theresa N. Turk represents her clients in matters involving estate planning, estate administration, trust planning, elder law, social security disability, guardianships, and probate litigation and administration. Collaborating with her clients, Theresa creates plans that make the most sense for each client’s individual needs. She also assists with navigating complex areas of law including determining eligibility for programs such as Medicaid, Social Security, and asset protection. Prior to joining Weston Hurd, Theresa was the founder and managing partner of Turk Law. Theresa received her B.A. from Ohio University and her J.D. from Cleveland State University College of Law.
This is a topic that never gets old and needs to be reviewed again and again. Over the years, I have counseled clients, conducted seminars, and written numerous articles on advertising compliance. And the topic is still relevant. As you know, the FTC has become actively involved in reviewing dealerships’ advertising practices. The FTC entered into numerous consent agreements with dealerships indicating the stores could not advertise prices or discounts unless qualifications are clearly disclosed. Further, the ads cannot misrepresent the existence of any discounts, rebates, bonus incentives or prices, or the existence of any price advantage/value unless it is disclosed. Further disclosing the number of vehicles at a specific price is another material fact and the required disclosures for financing or leasing of the vehicle.
The typical question I get when discussing advertising with dealers is, “Well others do it, why can’t I?” My canned response is, “Because it is illegal and eventually you will be the one who gets caught.”
Ohio, like every other state, has extensive rules and regulations regarding automotive advertising. I always suggest that you obtain a copy from your local dealer association or state Attorney General’s Office, who will be more than happy to provide one. Generally, ads are not blatant lies; rather, the ads are just slightly misleading. This is what causes most stores to get into trouble. Other primary issues for dealer compliance is the use of third party vendors and advertising agencies that create the ads. Although the vast majority of them are very well intentioned, they do not know the specifics of the state advertising laws and you, as the dealer putting your name on the ad, need to review the ads and amend them to make sure the ads conform to state law. Obviously, as Tier II and Tier III advertisers, it is your responsibility to create excitement. However, you must still comply with federal and state laws. You know the old adage, if ads are too good to be true then they are and will get you into trouble.
I have had numerous discussions with ad agencies regarding disclaimers and formats in ads and the general response is, “Well, we put it in the disclosure, isn’t that sufficient?” No. If there is an issue of stacking, rebates, or other offers than this is a problem. Further disclaimers have to be of a certain size depending on the size of print in the ad, must be close to the offer being made and the ad must be understandable to the general public. There is always a pushback by the ad agency stating, “Well this will not look good in print or the disclaimer is too long for radio or television.” However, the law is the law and you need to do the best you can to make the ad work. Further, you always get the argument from the third party vendors, “Well they used it in other states, why can’t we use it here?” The simple answer is because state law prohibits it.
My law firm has been involved in several class action lawsuits dealing specifically with dealer advertising. Obviously there are different fact patterns for each lawsuit but, in general, the class action lawsuits state that the ad is misleading to the consumer and contains statements in the ad that are not true or, and this is the big one, the dealership did not sell the vehicle at the advertised price. Make sure if you run an ad at a specific price on a specific vehicle that your sales managers and your sales people know that the vehicle has been advertised at a specific price, and sell the vehicle at the advertised price!
While this YAK just scratches the surface on the advertising issues dealers face, always review your ads whether placed by yourself or placed by third party vendors, don’t lie, don’t mislead and don’t try to be cute and tricky. Most importantly, SELL THE VEHICLE AT THE ADVERTISED PRICE!
On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule updating the salary threshold for employees classified as exempt. Under the Fair Labor Standards Act (FLSA), employees fall into classifications of either exempt or non-exempt from minimum wage and overtime requirements. Non-exempt employees must be paid overtime wages of 1.5 times their regular hourly rate for hours in excess of 40 per week. Employees may be exempt from minimum wage and overtime pay requirements if the terms and conditions of their employment satisfy the standards for exemption under the FLSA. In particular, employees working in an administrative, executive, or professional capacity generally fall within such exemptions if they meet the following tests:
Currently, the minimum salary level for the administrative, executive, and professional exemptions is $684 per week (equivalent to $35,568 per year). The final rule provides for significant increases to the minimum salary level in 2024 and 2025, and subsequent adjustments based on current earnings data beginning in 2027 and every three years thereafter. The increases are scheduled as follows:
There is also an exemption for highly compensated employees, who earn above a significantly higher compensation level and perform certain responsibilities under a less rigorous duties test. The current compensation threshold for highly compensated employees is $107,432 total annual compensation, including at least $684 per week on a salary basis. That amount will increase as follows:
As a result of these updates to the regulations, employers should review the compensation of employees classified as exempt to ensure they meet the new minimum salary thresholds as they go into effect. If an employer does not satisfy each component for an exemption, including paying no less than the minimum salary level, they will lose the benefit of that exemption and risk liability for unpaid overtime and misclassification of workers. The FLSA provides for significant damages beyond just the amount of unpaid overtime wages, including liquidated damages equal to the unpaid wages and plaintiff’s attorney fees. As a result, it is important for employers to identify any employees whose current salaries are below the updated threshold amounts that will be implemented beginning in a few months, and develop a plan to either increase such salaries to preserve exempt status or reclassify the employees as non-exempt and pay for any overtime hours.
For more information about the DOL’s final rule regarding increases to the salary threshold for exempt employees, and guidance for compliance and avoiding legal pitfalls, please do not hesitate to contact Russell Rendall or one of the other employment law attorneys at Weston Hurd LLP.
On April 23, 2024, the U.S. Federal Trade Commission announced its long-awaited final rule regarding noncompete agreements. The FTC had issued a proposed rule in January 2023 and received more than 26,000 comments from the public in response. The final rule effectively bans employers from entering into noncompetes with workers and bans enforcement of most existing noncompetes. The FTC explained its rationale for the rule in a press release, available here, including that noncompetes are an “unfair method of competition” that “tend to negatively affect competitive conditions in labor markets . . . [and] product and service markets, inhibiting new business formation and innovation.”
The FTC estimates that approximately 30 million workers in the U.S. are subject to noncompete agreements. Nearly all of these existing noncompete agreements will no longer be enforceable once the final rule goes into effect. The final rule defines a noncompete clause as “a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.” The ban is broadly inclusive of noncompetes pertaining to employees, independent contractors, interns, volunteers, and other types of workers. There is a limited exception for existing noncompete agreements with senior executives (workers in policy-making positions earning more than $151,164 annually).
Employers will be required to provide notice to workers (other than senior executives) who are currently subject to a noncompete, informing them that the employer will not be enforcing such agreements. Going forward, employers are banned from entering into or enforcing any new noncompetes, even with senior executives.
The final rule will not generally prohibit non-disclosure/confidentiality agreements, noncompete clauses related to the sale of a business entity or ownership interests, or enforcement of noncompetes where the cause of action accrued prior to the effective date of the final rule.
The final rule will become effective 120 days after publication in the Federal Register. Publication is expected to occur within the next several days after the FTC’s announcement, meaning the likely effective date will fall sometime in late August or early September 2024. However, legal challenges have already been filed and more will no doubt be filed, including by the U.S. Chamber of Commerce. Such challenges could delay or prevent the final rule from becoming effective.
In the meantime, employers should work with legal counsel to plan and prepare for next steps should the final rule go into effect, including drafting notices to workers and identifying alternatives to noncompete agreements, such as non-disclosure/confidentiality agreements that effectively protect their interests in the marketplace.
For more information about the FTC’s final rule regarding noncompetes, and guidance for compliance and avoiding legal pitfalls, please do not hesitate to contact Russell Rendall or one of the other employment law attorneys at Weston Hurd LLP.
* * * *
