You Budgeted for the employment lawsuit, right?

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You Budgeted for the employment
lawsuit, right?

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You Budgeted for the employment lawsuit, right?

  1. 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. 2. Presenter Jim Hendricks Partner with Ford & Harrison jhendricks@fordharrison.com
  3. 3. E.E.O.C. Handles charges of workplace discrimination 99,922 charges filed in fiscal 2010
  4. 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. 5. Reasons to Love HotlinkHR: • $404 million Recovered by EEOC in 2010 BUT • Does not reflect private litigation!
  6. 6. What’s Up? EEOC 2010 budget increased by $23 million, with the emphasis on investigation and enforcement
  7. 7. Handbooks – Important? 10/20/09 10th Circuit Court of Appeals in Compton v. Rent-a-Center
  8. 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 $$: provide training
  9. 9. Dealer Pays $85,000 to Settle EEOC Suite for Racial Discrimination and Retaliation Racial epithets – using the N-word and making sales teams based on race. Retaliation for complaining about unlawful discrimination. Settlement: – $$ – Revise policy on non-discrimination and non-harassment – Yearly anti-discrimination training More Reasons:
  10. 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. 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. 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. 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. 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. 15. James F. Hendricks Jr. Partner, Chicago Office 312-960-6118 jhendricks@fordharrison.com Atlanta Asheville Birmingham Chicago Dallas Denver Jacksonville Los Angeles Melbourne Memphis Miami Minneapolis New York Orlando Phoenix Spartanburg Tampa Washington, DC
  16. 16. CONTACT INFORMATION www.kpaonline.com bross@kpaonline.com 866-356-1735

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