Car Dealerships

News & Analysis as of

New York AG Announces Nearly $14 Million Agreement with Local Auto Dealers Over Deceptive Sales Practices, Plans to Sue an...

On June 17, New York Attorney General Eric Schneiderman announced an approximate $14 million agreement with three jointly-owned auto dealers in connection with the alleged unlawful sale of add-on products, such as credit...more

6 Ways for Car Dealers to Avoid a $540,000 Sexual Harassment Jury Verdict

Many dealers took notice of the recent sexual harassment jury verdict against a Massachusetts Lexus dealer, in which a jury awarded $500,000 in punitive damages against the dealership although it awarded only $40,000 in...more

FTC follows in CFPB footsteps with GLBA privacy notices

The FTC recently proposed amendments to its Gramm-Leach-Bliley Act (GLBA) rules requiring motor vehicle dealers to send their customers an annual privacy notice. The amendments would allow motor vehicle dealers to notify...more

CFPB Expands Supervision to Nonbank Auto Finance Companies

The Consumer Financial Protection Bureau (CFPB) has published a rule that expands the CFPB’s supervision to nonbank auto finance companies for the first time. The CFPB currently supervises automobile financing at the largest...more

FTC Follows in CFPB Footsteps with GLBA Privacy Notices

The Federal Trade Commission (FTC) recently proposed amendments to its Gramm-Leach-Bliley Act (GLBA) rules requiring motor vehicle dealers to send their customers an annual privacy notice. The amendments would allow motor...more

UPDATE: CFPB Publishes Rule Authorizing it to Supervise Auto Finance Companies

On June 10, 2015, the CFPB published a new regulation that has been dreaded by the auto finance industry for more than a year. Following up on the rule it proposed in June 2014, the CFPB published a final rule on June 10,...more

You Should Know - June 2015

In This Issue: - What Are Lemons? - Your Rights - Avoid a Lemon - Excerpt from Is This Your Car? - Your Rights and How to Avoid a Lemon: If you buy a pair of jeans at the GAP that don’t fit, you...more

CFPB Finalizes Automobile Finance Larger Participant Rule and Publishes Examination Procedures

On June 10, 2015, the Consumer Financial Protection Bureau (CFPB) announced a final rule that will allow it to supervise larger nonbank automobile finance companies. Accompanying the rule, it also published the procedures...more

CFPB Finalizes Rule to Supervise Nonbank Auto Finance Companies, Releases Auto Finance Examination Procedures for Banks, Nonbanks

The Consumer Financial Protection Bureau has issued a final rule allowing it to supervise nonbank companies that qualify as “larger participants of a market for automobile financing.” Relatedly, it adopted simultaneously a...more

Why "Side Agreements" with your Customers are a Bad Idea

Your Sales and F&I teams are probably willing to go the “extra mile” to close a sale with a customer, but when that “extra mile” includes making a “side agreement” to lend the customer money to close the deal, it’s time to...more

Is It Time to Switch Gears? Enforceability of Automotive Company Employee Confidentiality Restrictions

Given the large workforces and importance of intellectual property and trade secrets in the automotive industry, automotive companies rely heavily on confidentiality provisions in employment agreements and employee handbooks....more

Maryland Law to Require Notice to Purchaser of Vehicle Prior to Dealer-Arranged Financing Approval

On May 12, Governor Larry Hogan (R-MD) signed HB 313, which will require auto dealers to provide notice to the purchaser/lessee before the dealer-arranged third-party financing is approved. The law requires the dealer to...more

Dealer Advertising: No More Excuses

There are no more excuses. Dealers have seen all the ongoing and very recent announcements from the Federal Trade Commission (“FTC”) imposing millions of dollars in fines, cease and desist orders, and promises by dealers not...more

Technology And The Workplace

How Email And Texting Are Transforming Business Interactions - The automotive industry has embraced technology. Most dealerships have installed business development centers, and Internet departments to attract the...more

Automobile Service Advisers Are Not Exempt Under the FLSA—At Least Not According to the Ninth Circuit

Navarro v. Encino Motorcars, LLC, No. 13-55323 (March 24, 2015): The plaintiffs in Navarro v. Encino Motorcars, LLC were “service advisors” at a Mercedes Benz dealership. The main duties of service advisors are to evaluate...more

Liberty Chrysler Dealership Sued by EEOC for Disability Discrimination

Saleswoman Discharged Due to Multiple Sclerosis, Federal Agency Alleged - RENO, Nev. -- Nevada-based dealership Liberty Chrysler, Jeep, Dodge LLC violated federal law when it fired an employee diagnosed with multiple...more

Stepping on the Gas: FTC Operation Targets Auto Industry

Why it matters - Continuing its efforts to accelerate enforcement actions against fraudulent practices in the auto industry, the Federal Trade Commission (FTC) recently reported the results of its Operation Ruse Control....more

9th Circuit Splits with 4th, 5th Circuits, Finds Auto Dealer Service Advisors Not Exempt Under FLSA

Reversing a district court decision, and declining to follow decisions from a number of other courts, including the Fourth and Fifth Circuits, the Ninth Circuit has deferred to the Department of Labor's (DOL) "flip-flopped"...more

Ninth Circuit Defers to DOL View that Automobile Service Advisors Have No Industry Overtime Exemption

When taking in your car to the dealership for repairs, you are usually greeted by a service advisor. Service advisors compile information needed for the mechanic to diagnose and repair the vehicle. They also provide cost...more

FTC Announces Results of “Operation Ruse Control” on Auto Industry

On March 26, the FTC announced the results of Operation Ruse Control, “a nationwide and cross-border crackdown” on the auto industry with the intent to protect consumers who are purchasing or leasing a car. Efforts taken...more

‘Operation Ruse Control’ Announcement Highlights Importance of Auto Finance Compliance

The Federal Trade Commission—and numerous other federal, state, and local law enforcement agencies in the United States and Canada—recently announced that an enforcement initiative dubbed “Operation Ruse Control” has resulted...more

Ninth Circuit Finds Auto 'Service Advisors' Not Exempt Under FLSA

In Navarro v. Encino Motorcars, LLC (9th Cir. Mar. 24 2015), the U.S. Court of Appeals for the Ninth Circuit addressed an issue of first impression in the Circuit: whether individuals who worked for automobile dealerships as...more

Everything Must Go? Dealership's Service Advisors Not Exempt from Overtime

Classifying employees as exempt or non-exempt can prove to be an arduous task for some employers. For others, however, the classification is easy, particularly where the state or federal authorities expressly spell out the...more

Exempt or Not? Service Advisors

The Fair Labor Standards Act (“FLSA”) requires payment of a minimum hourly wage and overtime, unless an employee fits within one of many exemptions. In some parts of the United States, courts had ruled that automobile service...more

Ninth Circuit Holds Service Advisors Non-Exempt Under FLSA Dealership "Salesman" Exemption; Section 7(i) Exemption Is Still...

The Ninth Circuit U.S. Court of Appeals (with jurisdiction over the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) has ruled in Navarro v. Encino Motorcars, LLC that Service...more

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