Page 10 - VIADA-2021-1

Continued from previous page 10. D. It is more critical than at any other iation is against company policy and can
8. FALSE. An employee handbook is criti- time to use pay plans that protect the deal- lead to discipline, including termination.
cal to let employees know what is expected ership. The pay plan simply describes the Retaliation is the most prevalent category
of them and to convey information required method for calculating pay due a salesper- of complaints to the EEOC, according to
by law. A properly designed handbook ben- son. No length of time should be specified, the agency. Protect the dealership against
efits a dealership. The challenge today will or the plan could be construed as an agree- retaliation claims.
be to keep up with changes in policy by the ment for employment for a specified time.
new administration in Washington. Your 12. FALSE. The Fair Labor Standards Act
handbook is likely to require revisions due There should not be a specific definition will be a law under the microscope for the
to changes in regulations or differing legal of vehicle cost. In any pay plan in which Biden administration, with frequent and sig-
interpretations in the next four years. calculation of commissions is based upon nificant changes in interpretation. Enforce-
sale price over cost, the cost should be de- ment of the FLSA will also be high on the
9. TRUE. Don’t assume that policies for termined in the sole discretion of the deal- agenda of the Department of Labor. Time-
running credit reports on customers apply ership, and the plan should specifically state cards have always been the best method to
to employment situations. The rules are dif- that. A pay plan should never indicate that know hours worked by employees. For those
ferent. A dealership can only run a credit pay calculations are final. They should al- exempt from premium overtime, like new
bureau on an applicant for employment if ways be subject to revision. car dealer salespeople, this will give your
the authorization is based on a signed doc- office the ability to track earnings to ensure
ument that authorizes a consumer report 11. FALSE. Under the Biden administra- those personnel are paid minimum wage for
and an investigative background report and tion, #MeToo and related movements will hours worked. For nonexempt personnel,
nothing else. That is why if you are using an have increased influence over enforcement this will give your office the opportunity to
employment application that contains an of laws against harassment and discrimina- calculate premium overtime properly. n
authorization to run a credit bureau report, tion. Retaliation can be a separate violation
the application is hopelessly out of date. Use of the law even if there is no underlying To contact:
an updated employment application and a offense. Managers and employees must be CHARAPP & WEISS, LLP
separate form to authorize a credit report. well trained in the company’s policy and 8180 Greensboro Drive, Suite 1000
Credit reports contain critical personal process against discrimination and harass- McLean, VA 22102
data, and personal data protection will be ment. Every complaint must be taken se- 703.564.0220 | cwattorneys.com
an even higher priority under the Biden ad- riously. When investigating, always warn Contents © 2021 Charapp & Weiss, LLP.
ministration. those with whom you discuss the circum- Articles are for information only and do not
stances leading to the complaint that retal- constitute legal advice.
THE CARLAWYER ©

CASE OF THE MONTH

Dealership’s Ads Violated TILA and the court denied summary judgment on these fine-print disclaimer in a nondescript hyper-
CLA by Failing to Include Legally Re- counts. The court found that there was insuf- link. The court found that it could not, as a
quired Credit Information: The Federal ficient evidence to show that the defendants’ matter of law, determine that these ads were
Trade Commission sued several car dealer- practice was likely to mislead customers, deceptive and, therefore, denied summary
ships and their co-owners for violating the given evidence that some customers were judgment on these counts. Counts V and
Federal Trade Commission Act, the Truth in aware that their information was inaccu- VI alleged that the defendants’ advertising
Lending Act, the Consumer Leasing Act, and rately reported to finance companies and, violated TILA and the CLA by failing to
corresponding regulations. Since then, the in some cases, complicit. Counts III and include legally required credit information.
dealerships settled their claims with the FTC IV alleged that the defendants’ advertising The court granted the FTC summary judg-
and filed for bankruptcy protection. The FTC misrepresented or failed to disclose material ment on these counts, finding that some of
moved for summary judgment on its claims information, in violation of the FTC Act. the defendants’ ads stated down payments
against the co-owners, and the U.S. District but failed to include other required infor-
Court for the District of Arizona granted the In particular, the FTC alleged that one ad- mation such as the terms of repayment
motion in part and denied it in part. Counts vertisement with a $169 monthly payment or the annual percentage rate. See Federal
I and II alleged that the defendants violated was false, another group of advertisements Trade Commission v. Tate’s Auto Center of
the FTC Act by telling customers that they promoting a “Tires for Life” program did not Winslow Inc., 2021 U.S. Dist. LEXIS 23088
would submit accurate financial information disclose material limitations and exclusions, (D. Ariz. February 5, 2021). n
to finance companies but instead inflated and a third advertisement offering a $5,250
income and down payment information. The discount hid material information behind a

8 | THE VIRGINIA INDEPENDENT NEWS | Q1 2021