You Budgeted for the employment lawsuit, right?

1. You Budgeted for the employment
lawsuit, right?
$300,000, $600,000, $1.2 million. Are you prepared to
defend your dealership from an employment lawsuit?

2. Presenter
Jim Hendricks
Partner with Ford & Harrison
jhendricks@fordharrison.com

3. E.E.O.C.
Handles charges of workplace
discrimination
99,922 charges filed in fiscal
2010

4. Types of Charges:
Disability: 25,165
Religion: 3,790
Retaliation: 36,258
Age: 23,264
Race: 35,890
Sex: 29,029
National Origin: 11,304

5. Reasons to Love HotlinkHR:
• $404 million
Recovered by EEOC in 2010
BUT
• Does not reflect private litigation!

6. What’s Up?
EEOC 2010 budget
increased by $23
million, with the
emphasis on
investigation and
enforcement

7. Handbooks – Important?
10/20/09 10th Circuit Court of Appeals in
Compton v. Rent-a-Center

8. $1.5 Million Reasons to Love Hotlink HR
EEOC and Colorado auto dealer settled case
alleging dealership subjected female
employees to sex discrimination and sexual
harassment and fired older male employees
because of their age. (EEOC v. Arapahoe
Motors, Inc. d/b/a Ralph Schomp Auto.
1/6/10)
Company defense: Female owner, couldn’t
discriminate against females. EEOC didn’t
buy it.
Remedy other than $$: provide training

9. Dealer Pays $85,000 to Settle EEOC Suite
for Racial Discrimination and Retaliation
Racial epithets – using the N-word and making sales
teams based on race.
Retaliation for complaining about unlawful
discrimination.
Settlement:
– $$
– Revise policy on non-discrimination and non-harassment
– Yearly anti-discrimination training
More Reasons:

10. Dealer Pays $500,000 to Settle
EEOC Harassment Suit
Dealer Pays $140,000 to Settle in GA
Dealer Pays $85,000 in Ohio
Dealer Pays $32,000 in Florida
More Reasons:

11. Mathis v. Phillips Chevrolet
GM with hiring authority at dealership, often
noted ages of employment applicants by
hand on their applications!
GM testified he was not aware that it was
illegal to discriminate on the basis of age!
Court: Leaving managers with hiring authority
in ignorance of the basic features of the
discrimination laws is an “extraordinary
mistake”: reckless indifference.
($100,000+)

12. U.S. Department of Labor
Handles claims for overtime and minimum wage
Examples:
Hiring
Secretary of Labor Hilda Solis
VERY pro union/employee
Hired many new investigators
Working with IRS and States!

13. Fiscal Year 2010 FLSA Violations:
• $175.6 million collected for violations
of the Fair Labor Standards Act’s
overtime and minimum wage rules.
• This does not include private sector
lawsuits!
• From 2001 to 2005 there was a
100% increase in cases filed.

14. The Bottom Line
Ignorance of the law is no excuse
Lack of training is no excuse
Minority ownership is no excuse
Good intentions but no process is no excuse
The Department of Labor doesn’t care what
your excuse is, they are focused on
investigation and enforcement and dealerships
have proved to be an easy target –expect more
lawsuits and big dollar settlements

15. James F. Hendricks Jr.
Partner, Chicago Office
312-960-6118
jhendricks@fordharrison.com
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Washington, DC

16. CONTACT INFORMATION
www.kpaonline.com
bross@kpaonline.com
866-356-1735