Protect Your Company
32 Construction Equipment Distribution www.cedmag.com October 2009 Human Resources Protect your dealership with a few common sense and compliance-oriented guidelines. By John Boggs, Esq. There is a boom in the car dealer-ship business, but it's not an increase in sales. The boom is in the number of lawsuits being filed against dealerships by employees who have been laid off. My business is defending car dealerships against employee labor and wage complaints, and I also serve as legal counsel to the California New Car Dealers Association. In the last six months the volume of cases coming to my office has increased 300 percent, which is not good news for dealers. Increased Unemployment = More Employee Lawsuits With unemployment at the high-est rate since 1983, the number of lawsuits filed by terminated employees is at an all-time high. Just Google the phrase how to sue when laid off, and you'll find more than half a million articles. The U.S. Equal Employment Oppor-tunity Commission (EEOC) reported a 15 percent increase in the number of bias charges filed with the agency in 2008, on top of an 11 percent jump during the two prior years (see Chart A). Even if you successfully defend your case, you still lose. In my experience, legal fees incurred by a dealership for a successful defense against a single claim brought by an employee are often between $75,000 and $125,000. Total costs if you lose a wage and hour with discrimination lawsuit can total $75,000 to $175,000 in attorney fees and $500,000 for the settlement (see Chart B). Pitfalls to Avoid in Employee Termination parT 1 of a Two-parT sEriEs