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CMM Closes Multimillion-Dollar M&A Deal for Long Island Aerospace Business

Posted: May 17th, 2021

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Campolo, Middleton & McCormick’s M&A team continues its busy spring – closing another multimillion-dollar deal in a transaction that will keep business booming on Long Island.

The firm represented a multi-generation family-owned aerospace business in the sale of substantially all its business assets to a Connecticut-based private equity firm. Our client, the supplier of a diverse range of aerospace structural components and assemblies, flight safety assemblies, and flight critical parts, provides support to various private and military programs. These include the Lunar Space Program, Boeing’s 777 and 767 programs, as well as the U.S. Military’s V22 Osprey and CH-47 Chinook programs.

The family-owned business is located in the Long Island Innovation Park at Hauppauge (LI-IPH), which is recognized as the anchor of Long Island’s tradable economy, bringing critical new dollars into a region. In a display of long-lasting and continuous growth for Long Island, the deal includes the buyer’s commitment to keep the business in the Long Island community through the long-term lease of the client’s buildings located in the center of the LI-IPH.

While the deal faced several complications, CMM’s corporate team including Don Rassiger, Vincent Costa, and paralegal Katharine Campolo, were able to push through and close the transaction. As a champion for the Long Island business community, CMM takes pride in negotiating and closing complex transactions that secure long-term growth benefiting both our clients and Long Island as a whole.

Learn more about our Mergers & Acquisitions practice here and contact us for guidance on your next sale, purchase, or restructuring.

Biden Administration Rescinds Trump Era Independent Contractor Rule

Posted: May 14th, 2021

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Whether a worker is classified as an employee or independent contractor is not just legal jargon: the distinction has real implications for employees and employers alike. Under the federal Fair Labor Standards Act (FLSA), employees are entitled to a guaranteed minimum wage, overtime pay, unemployment insurance benefits, and workers compensation. Independent contractors, however, are not entitled to these same benefits, nor are they eligible to join unions or entitled to coverage under worker safety protection regulations. In addition, employers are not responsible for an independent contractor’s benefits or employment taxes. So how does an employer appropriately classify workers?

Trump Rule

In January 2021, with two weeks left before a new administration would be sworn in, the U.S. Department of Labor (DOL) issued a “final rule” changing the standard distinguishing employees or independent contractors under the FLSA. However, on May 6, 2021 the DOL withdrew the “Trump-era test,” also known as the “Independent Contractor Rule,” from going into effect as planned. Under that standard, there would have been only two core factors for determining employee status under the FLSA, both of which narrowed the facts and considerations included in the analysis (and, according to the Department, favored the employer). The DOL under President Biden has announced that the Trump rule was inconsistent with the FLSA and would have had a disruptive effect on workers and businesses alike.

Moving Forward

While the “Trump rule” is now withdrawn, the DOL has not issued a new rule in its place. This means that the previous guidance from the DOL using the economic realities test consisting of a six-factor balancing test, based on Supreme Court precedent, will still be used to determine a worker’s classification. The six factors include (1) the nature and degree of the potential employer’s control; (2) the permanency of the worker’s relationship with the potential employer; (3) the amount of the worker’s investment in facilities, equipment, or helpers; (4) the amount of skill, initiative, judgment, or foresight required for the worker’s services; (5) the worker’s opportunities for profit or loss; and (6) the extent of integration of the worker’s services into the potential employer’s business. Read additional information about these factors, as well as New York State guidance, here.

“ABC” Test

While the DOL has not issued a new rule at this time, the Biden administration has expressed support for regulatory and legislative action that would expand the type of workers that are considered employees as opposed to independent contractors. Similar to California’s independent contractor rule, the Biden administration has outlined a federal independent contractor standard called an “ABC” test that the DOL may choose to adopt.

The standard begins with the presumption that the worker is an employee and then goes on to test that presumption under three factors:

  • whether the worker is free from the employer’s control over performance of the work;
  • whether the work is outside of the hiring party’s line of business, and
  • whether the worker is engaged in an independent trade.

All three factors must be met to rebut the presumption and to classify the worker as an independent contractor.

While the three factors considered under Biden’s ABC test are already included in the current analysis, the ABC test is stricter in that it requires all three to be met as opposed to the longstanding “economic realities” approach and judged based on a totality of the circumstances. The ABC test was adopted by the House of Representatives in March via the “Protecting the Right to Organize Act” (PRO), but there is no binding authority of a final rule.

Regardless of whether the new standard becomes legal authority, it is clear the current administration is pushing for a more worker-friendly approach to the independent contractor definition. Whether you are a worker seeking to ensure you receive the benefits to which you are entitled, or an employer needing clarification on how to properly classify workers, please contact us for guidance.

The information contained in this article is provided for informational purposes only and is not and should not be construed as legal advice on any subject matter. The firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship.

McCormick Elected Second Vice President of Suffolk County Bar Association

Posted: May 7th, 2021

Campolo, Middleton & McCormick is proud to announce that Senior Partner Patrick McCormick has been elected Second Vice President of the Suffolk County Bar Association. In this role with the SCBA Executive Committee, McCormick will play a critical part in helping the legal profession reinvent itself, expanding access to the court system, and working directly with businesses as they continue to navigate the pandemic.

This election is a significant professional milestone for McCormick, who has previously served as Secretary and Treasurer of the SCBA Board of Directors, as well as Dean of the Suffolk Academy of Law. McCormick will be sworn in at the SCBA Installation Dinner on June 3, 2021.

McCormick chairs the Appellate Practice group at CMM, having built a reputation as a strategic and talented appellate attorney over three decades in the field. Representing clients in civil and criminal matters in both federal and state court, McCormick has argued numerous appeals, including three arguments at the New York State Court of Appeals, the state’s highest court. He is also a respected trial attorney, litigating all types of complex commercial and real estate matters, and also represents national commercial shopping centers, retailers, and publicly traded home builders in commercial and residential landlord-tenant matters. McCormick has been recognized by his peers with the Martindale-Hubbell AV Preeminent® rating for ethical standards and legal ability, the highest possible rating from the most recognized legal directory and resource. 

McCormick will continue to advocate for legal education and access in his new role as Second Vice President. We are pleased to congratulate McCormick on this achievement that highlights his leadership in the legal community.

CMM Closes M&A and Real Estate Deal with National Franchise for Long Island Company

Posted: April 29th, 2021

Campolo Middleton and McCormick’s M&A team has closed yet another deal involving a national franchise, showcasing the firm’s extensive reach and capacity to handle complex transactions.

The deal involved an asset sale and a corresponding commercial real estate sale. Our client, an owner of two independent quick lube and oil change locations in Suffolk County, sold the businesses to a national franchise of retail oil change stores. In addition to selling the businesses, our client, with locations in Medford and Mastic, also sold the real estate in a multimillion-dollar deal.

Many challenges arose as the deal headed toward the finish line, but CMM’s team, led by Donald Rassiger, adeptly worked through the issues. With the support of Paralegal Katharine Campolo, the team persevered in closing the deal, which resulted in a thrilled and relieved client.

The deal highlights CMM’s ability to help clients close difficult matters in national transactions. Contact us today for guidance on your next sale, purchase, or buyout.

REPLAY: Campolo Chats with World’s Largest Drug Royalty Buyer

Posted: April 22nd, 2021

CMM Managing Partner Joe Campolo, a Stony Brook University alumnus, led a virtual interview at the annual Entrepreneurs Edge on April 8, 2021. This year’s featured entrepreneur was Pablo Legorreta, Founder and Chief Executive Officer of Royalty Pharma, the largest buyer of biopharmaceutical royalties. As an experienced interviewer, Campolo asked thought-provoking questions that helped tell Legoretta’s story to inspire the students of SBU’s College of Business.

Watch the interview replay below:

CMM Closes Multimillion Dollar M&A Deal for Crane and Rigging Company

Posted: April 20th, 2021

Campolo Middleton & McCormick’s Mergers and Acquisitions team has successfully closed another deal, demonstrating resilience in the face of a challenging on-again/off-again transaction.

The deal involved our client, a crane company specializing in crane rentals and rigging services, as the seller in an asset purchase deal. Based on Long Island, the company has been servicing Long Island and the greater New York area for decades. The transaction was months in the making but CMM’s team – led by Vincent Costa – was able to push the multimillion-dollar deal across the finish line.

The deal demonstrates CMM’s perseverance and commitment to its clients through the firm’s ability to efficiently negotiate and close complex transactions during the pandemic. Where other firms see insurmountable challenges, CMM sees temporary bumps in the road to be negotiated and worked through. Learn more about our Mergers & Acquisitions practice and call us at (631) 738-9100 for guidance on your next sale, purchase, or restructuring.

Take Control of Your Negotiation Using Active Listening Techniques

By: Joe Campolo, Esq. email

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Have you ever had a conversation with someone, and while they’re talking you say, “I see,” “Hmm,” or even “Interesting”… but when they’re finished, you ignore everything they said and go in with your pre-planned response? That’s called passive listening. The fact is, most people aren’t listening to understand – just to respond. You may think you’re showing that you’re engaged, but you won’t fool anyone for long. That’s where active listening comes in.

In negotiations, active listening can be used as a powerful tool to gather information. This requires an active mind, a degree of empathy, and listening with a goal in mind. Active listening is not simply nodding your head while your counterpart talks or just making great eye contact. Rather, it involves asking questions and providing feedback. If you can master active listening, you’ll be able to steer a negotiation to your advantage…if you would just actively listen!

Let’s break it down into three easy steps, then we’ll put it into practice:

Paraphrasing aka Mirroring

No, this isn’t the same type of mirroring where if someone scratches their head, you lift your hand up to do the same. This type of mirroring involves paraphrasing and repeating some of the words your adversary just said. Say the words as a question to keep the person talking. This makes the person feel like you’re truly listening to them and creates a connection.

Inquiry aka Asking Questions

Asking questions that start with “what” and “why” is a great way to make the person you’re negotiating with feel in control despite the fact that you’re the one who asked a calibrated question. Calibrated questions starting with words like “how” will make your counterpart stop and think about the question you just asked. This will help you gain insight into what they’re thinking and how you can entice them with an offer they can’t refuse.

Acknowledgment aka Tactical Empathy aka Labeling

Empathy involves the ability to understand and point out (but not necessarily agree with) the feelings that the person you’re negotiating with is feeling. When you acknowledge that person’s point of view, you can help win their trust. Additionally, by using emotion labels like “You seem angry” and “It sounds like you’re upset,” you can verbally observe and point out feelings that can help you gather even more information when your counterpart confirms or denies your emotion label.

Let’s talk about a real-life example. Suppose you’re a roofer and you have a client with a commercial property in the suburbs that refers you to repair/replace a business associate’s roof in the city. After some confusion finding the access door, you inspect the city roof and let the prospective client know your recommendation to replace the entire roof, as well as the proposed price.

Later, the prospective client calls you with some concerns, saying, “The fact that you didn’t initially know how to find the way onto the roof yesterday does not give us comfort that you know how to service roofs in this area. The reviews on your website look great, and our business partners loved the service your provided for them, but we’re not sure that redoing the entire roof is the way we want to go. We appreciate your recommendation, but if you won’t consider just doing roof patches, then we are prepared to find someone who will.”

Here’s how you as the roofer might respond using passive listening:

“We do service city roofs. The complex that you own just gave us a little bit of trouble, but no worries since we were able to access the roof eventually. And in terms of the patches, we highly recommend redoing the whole roof at once since we’re up there already. Patches will not last as long as redoing the whole roof.”

Here’s how you as the roofer might respond using active listening:

Paraphrase: “It sounds like your business associates were satisfied with the service we provided them a few months ago. But if I understand correctly, you need me to assure you that we are experienced at working on city roofs? You’re also concerned about our recommendation to replace the whole roof versus doing patches? Have I captured your main points?”

Inquire: “You mentioned that you don’t know if you want to redo the whole roof? Help me understand how to you came this conclusion. Let’s talk about the cost efficiency of replacing the whole roof at once to last longer as opposed to doing patches that would be less efficient.”

Acknowledge: “It seems like you’re upset that we had difficulty finding our way up to the roof yesterday and you think that this reflects a lack of experience in the city. While we primarily fix suburban area roofs, we can assure you that we’re well qualified to fix city roofs and do it all the time.”

The roofer’s response using passive listening would most likely not have resulted in the roofer nailing the job. They failed to address the concerns of the clients and responded with a standard answer.

On the other hand, the response using active listening would have divulged key information. By using the three-step approach of paraphrasing, inquiring, and acknowledging, the roofer could have found out, for example, that the potential client wanted to do patches instead of the whole roof because the client was not expecting to do business in the building long-term and wanted only a temporary solution. With this information, the roofer could have tailored their recommendation differently and gained a new client.

Using mirroring, calibrated questions, tactical empathy, and labeling, you too can gather information to guide a negotiation. Using active listening to understand the goals of your counterpart could be the difference between a recipe for control of the situation and a recipe for disaster. So, the next time you find yourself listening to a person and coming up with your own rebuttals right away, try slowing down, making a few observations, and asking a few questions. You might find yourself with the understanding of your counterpart that you need to succeed in that negotiation. For more information on active listening, check out the Harvard Program on Negotiation article, “Negotiation Skills for Win-Win Negotiations” here and read up on passive vs. active listening in the Social Engineer blog here.