Among the regulatory compliance actions we have seen in just the past few months are increased interest by the Equal Employment Opportunity Commission (EEOC) in dealer and automobile industry workplace discrimination.
Most recently, the EEOC has filed actions for age, disability, and sex discrimination against dealers. Several private sexual harassment and sex discrimination lawsuits have also been filed against dealers seeking six and seven figure damages awards.
Age Discrimination
The EEOC’s most recent action was filed against a dealer group in Cleveland. The EEOC accused the dealer of intentionally subjecting older workers to age discrimination. According to the suit, the dealer discriminated against a former employee by refusing to re-hire her because of her age (52), and for terminating two sales employees because of their ages (67 and 70).
As a result of these practices, the EEOC brought a lawsuit alleging the dealer violated the Age Discrimination in Employment Act (ADEA), which prohibits age discrimination in employment against people who are age 40 or older, according to the lawsuit. The lawsuit seeks monetary relief, including back pay and liquidated damages for the three former employees, plus attorney’s fees. The suit also seeks injunctive relief to prevent future age discrimination, including an order for the dealer to institute policies, practices and procedures that conform to the requirements of federal law.
Disability Discrimination
In another recent case, The Ford Motor Company's Kentucky Truck Plant in Louisville, Ky., will pay up to $537,760 and furnish other relief to resolve a disability discrimination charge by the EEOC.
The EEOC's investigation found reasonable cause to believe that the Kentucky Truck Plant failed to hire applicants due to their disabilities. This also included screening out applicants based on criteria not shown to be job-related and consistent with business necessity, and failing to use the results of post-offer, pre-employment medical examination in accordance with the requirements of the Americans with Disabilities Act (ADA). Ford chose to voluntarily resolve the matter with the EEOC, without an admission of liability, to avoid an extended dispute.
The conciliation agreement provides relief to 12 individuals in addition to the person who filed a charge with the EEOC, and the EEOC retains discretion to distribute some of the funds to individuals it has yet to identify. The agreement also calls for the Kentucky Truck Plant to provide additional written guidance and training to employees involved in the pre-employment, post-conditional offer medical exam process, along with one-hour training on the ADA to the facility labor relations staff.
In a disability discrimination suit against a dealer, the dealer agreed to pay $27,100 to a former employee as part of the settlement of a lawsuit brought by the EEOC.
According to the EEOC's lawsuit, the company refused to provide a medical leave of absence as an accommodation to an employee who suffered from anxiety and depression and then fired her because of her disability.
In addition to paying the former employee $2,100 in back pay, the dealer will also pay $25,000 in compensatory damages. Further, the dealer agreed to:
· review and revise its written policy prohibiting disability discrimination, to ensure that the policy specifically explains the process by which an employee requests a reasonable accommodation;
· disseminate a copy of the policy to all employees;
· within 90 days of entry of the decree, have all employees sign and acknowledge receipt of the revised policy; and
· train all managers at its corporate office and at its dealerships on disability discrimination and reasonable accommodations.
Sex Discrimination
Sex discrimination and sexual harassment or retaliation are probably the most likely legal actions a dealer will face.
Recently, the EEOC brought a lawsuit against a dealer in St. Louis claiming it violated federal law when it refused to hire a female salesperson.
According to the suit, the owners bought an existing car dealership in 2017. After the purchase, they hired all the prior owner’s staff except one, the sole female salesperson, despite her successful sales record and previous customer service award. At the time, an executive told another manager, "This is not a lady's job yet."
Such alleged conduct violates Title VII of the Civil Rights Act of 1964 ("Title VII") which prohibits discrimination in employment based on race, color, national origin, sex, and religion. After first attempting to reach a pre-litigation settlement through its conciliation process, the EEOC filed the lawsuit in U.S. District Court for the Western District of Oklahoma where the dealership group has its headquarters. The agency seeks monetary damages, training on anti-discrimination laws, posting of anti-discrimination notices at the worksite, and other injunctive relief.
"Federal law has guaranteed equal employment opportunity for women for over 50 years, but some employers still say, 'not yet'," said Andrea G. Baran, the EEOC's regional attorney in St. Louis. "We are committed to ensuring that the millions of women who work in male-dominated industries every day are judged solely on their abilities, not their gender."
In another suit in Reno, Nevada, the EEOC sued a dealer for quid pro quo and hostile work environment sexual harassment and sex discrimination.
According to the EEOC's lawsuit, a female car salesperson hired into an all-male sales department was denied access to online training, sales opportunities, and payroll advances routinely available to her male counterparts. Her male co-workers frequently refused to assist her, despite readily helping each other. Frequently, her deals were overly scrutinized and rejected without justification. In addition, on an almost daily basis, she endured offensive comments about her sex, appearance and weight, and negative comments about women working in car sales. Although the discriminatory conditions were reported to management by both the saleswoman as well as a manager, the company took no action. Finally, the saleswoman was forced to quit to escape the abuse, the EEOC said.
Such alleged conduct violates Title VII. After first attempting to reach a pre-litigation settlement through its conciliation process, the EEOC filed the lawsuit in U.S. District Court for the District of Nevada and seeks monetary damages on behalf of the saleswoman, training on anti-discrimination laws, posting of notices at the worksite, and other injunctive relief.
"Our investigation found that sex-based discrimination was very open and flagrant - the saleswoman was warned during her interview that the all-male staff did not want women around, and that certainly turned out to be true," said William Tamayo, director of the EEOC's San Francisco District Office. "When an employer knows its workplace is infected with discriminatory attitudes, the employer is required by law to take steps to prevent and halt a hostile work environment. Instead, [the dealer] did nothing, and forced a valuable employee to quit to escape unacceptable abuse."
Race and National Origin Discrimination
The EEOC sued a dealership when the general manager at a Wheaton, Md. store repeatedly made derogatory comments to a sales consultant, who is of South Asian origin and is dark-skinned. Although the sales consultant objected, the comments persisted, sometimes in the presence of others. In addition to the demeaning names, the general manager even threw things at him. On one occasion, the general manager groped the sales consultant while calling him a "serial killer" and "creepy brown person." The general manager asked the sales consultant who he was going to kill and where the bodies were buried, the EEOC charges.
The sales consultant felt traumatized by the groping incident and as a result took leave. He complained to the dealership’s human resources director who, after a purported investigation, told the sales consultant he either would have to continue reporting to the general manager or transfer to another dealership an hour away. The EEOC says that the sales consultant was forced to resign based on the dealership’s inadequate response to the unlawful harassment.
The EEOC filed suit in the U.S. District Court for the District of Maryland, Greenbelt Division, after first attempting to reach a pre-litigation settlement through its conciliation process.
What’s a Dealer to Do?
This aggressive enforcement policy of the EEOC means that now is a good time to review your anti-discrimination and anti-harassment policies and schedule training for all your employees.
All such policies should contain a clear anti-retaliation provision ensuring that employees can and should report violations either through an internal escalation process, directly to a senior officer, or through a third-party whistleblower hotline. The third-party approach is probably most palatable to aggrieved employees and best to preserve confidentiality to the extent it can be preserved.
Studies have shown that the two biggest obstacles to employees reporting workplace wrongdoing are a fear of retaliation or a belief that nothing will change. Both fears must be displaced by senior management’s buy in and making visible changes in the workplace such as disciplining or terminating the offenders. Your dealership must be committed to a zero-tolerance policy for workplace discrimination or any form of harassment.
Harassment outside of the workplace can also be imputed to the dealer. This occurs when, for example, a manager takes subordinates out for drinks after work or at an office holiday party. Your dealership should also have a policy on office fraternization and dating. These situations are also ripe for sexual harassment and retaliation claims. Under no circumstances should managers be permitted to seek to date their subordinates and managers must show exemplary behavior as the models for the workplace.
If claims are reported, you must have a process in place to investigate and address the allegations quickly and completely. An external employment lawyer can be a good resource to help you establish such a process and possibly serve as a resource in the investigation team which can enable certain communications to be privileged.
Finally, do not forget to review employment hiring processes and make certain they are covered by your policies as well. Periodically look at your workforce and promote diversity in hiring. An all-male, all-white sales force was a catalyst for several of the EEOC’s actions described above. Don’t be the next victim.
Most recently, the EEOC has filed actions for age, disability, and sex discrimination against dealers. Several private sexual harassment and sex discrimination lawsuits have also been filed against dealers seeking six and seven figure damages awards.
Age Discrimination
The EEOC’s most recent action was filed against a dealer group in Cleveland. The EEOC accused the dealer of intentionally subjecting older workers to age discrimination. According to the suit, the dealer discriminated against a former employee by refusing to re-hire her because of her age (52), and for terminating two sales employees because of their ages (67 and 70).
As a result of these practices, the EEOC brought a lawsuit alleging the dealer violated the Age Discrimination in Employment Act (ADEA), which prohibits age discrimination in employment against people who are age 40 or older, according to the lawsuit. The lawsuit seeks monetary relief, including back pay and liquidated damages for the three former employees, plus attorney’s fees. The suit also seeks injunctive relief to prevent future age discrimination, including an order for the dealer to institute policies, practices and procedures that conform to the requirements of federal law.
Disability Discrimination
In another recent case, The Ford Motor Company's Kentucky Truck Plant in Louisville, Ky., will pay up to $537,760 and furnish other relief to resolve a disability discrimination charge by the EEOC.
The EEOC's investigation found reasonable cause to believe that the Kentucky Truck Plant failed to hire applicants due to their disabilities. This also included screening out applicants based on criteria not shown to be job-related and consistent with business necessity, and failing to use the results of post-offer, pre-employment medical examination in accordance with the requirements of the Americans with Disabilities Act (ADA). Ford chose to voluntarily resolve the matter with the EEOC, without an admission of liability, to avoid an extended dispute.
The conciliation agreement provides relief to 12 individuals in addition to the person who filed a charge with the EEOC, and the EEOC retains discretion to distribute some of the funds to individuals it has yet to identify. The agreement also calls for the Kentucky Truck Plant to provide additional written guidance and training to employees involved in the pre-employment, post-conditional offer medical exam process, along with one-hour training on the ADA to the facility labor relations staff.
In a disability discrimination suit against a dealer, the dealer agreed to pay $27,100 to a former employee as part of the settlement of a lawsuit brought by the EEOC.
According to the EEOC's lawsuit, the company refused to provide a medical leave of absence as an accommodation to an employee who suffered from anxiety and depression and then fired her because of her disability.
In addition to paying the former employee $2,100 in back pay, the dealer will also pay $25,000 in compensatory damages. Further, the dealer agreed to:
· review and revise its written policy prohibiting disability discrimination, to ensure that the policy specifically explains the process by which an employee requests a reasonable accommodation;
· disseminate a copy of the policy to all employees;
· within 90 days of entry of the decree, have all employees sign and acknowledge receipt of the revised policy; and
· train all managers at its corporate office and at its dealerships on disability discrimination and reasonable accommodations.
Sex Discrimination
Sex discrimination and sexual harassment or retaliation are probably the most likely legal actions a dealer will face.
Recently, the EEOC brought a lawsuit against a dealer in St. Louis claiming it violated federal law when it refused to hire a female salesperson.
According to the suit, the owners bought an existing car dealership in 2017. After the purchase, they hired all the prior owner’s staff except one, the sole female salesperson, despite her successful sales record and previous customer service award. At the time, an executive told another manager, "This is not a lady's job yet."
Such alleged conduct violates Title VII of the Civil Rights Act of 1964 ("Title VII") which prohibits discrimination in employment based on race, color, national origin, sex, and religion. After first attempting to reach a pre-litigation settlement through its conciliation process, the EEOC filed the lawsuit in U.S. District Court for the Western District of Oklahoma where the dealership group has its headquarters. The agency seeks monetary damages, training on anti-discrimination laws, posting of anti-discrimination notices at the worksite, and other injunctive relief.
"Federal law has guaranteed equal employment opportunity for women for over 50 years, but some employers still say, 'not yet'," said Andrea G. Baran, the EEOC's regional attorney in St. Louis. "We are committed to ensuring that the millions of women who work in male-dominated industries every day are judged solely on their abilities, not their gender."
In another suit in Reno, Nevada, the EEOC sued a dealer for quid pro quo and hostile work environment sexual harassment and sex discrimination.
According to the EEOC's lawsuit, a female car salesperson hired into an all-male sales department was denied access to online training, sales opportunities, and payroll advances routinely available to her male counterparts. Her male co-workers frequently refused to assist her, despite readily helping each other. Frequently, her deals were overly scrutinized and rejected without justification. In addition, on an almost daily basis, she endured offensive comments about her sex, appearance and weight, and negative comments about women working in car sales. Although the discriminatory conditions were reported to management by both the saleswoman as well as a manager, the company took no action. Finally, the saleswoman was forced to quit to escape the abuse, the EEOC said.
Such alleged conduct violates Title VII. After first attempting to reach a pre-litigation settlement through its conciliation process, the EEOC filed the lawsuit in U.S. District Court for the District of Nevada and seeks monetary damages on behalf of the saleswoman, training on anti-discrimination laws, posting of notices at the worksite, and other injunctive relief.
"Our investigation found that sex-based discrimination was very open and flagrant - the saleswoman was warned during her interview that the all-male staff did not want women around, and that certainly turned out to be true," said William Tamayo, director of the EEOC's San Francisco District Office. "When an employer knows its workplace is infected with discriminatory attitudes, the employer is required by law to take steps to prevent and halt a hostile work environment. Instead, [the dealer] did nothing, and forced a valuable employee to quit to escape unacceptable abuse."
Race and National Origin Discrimination
The EEOC sued a dealership when the general manager at a Wheaton, Md. store repeatedly made derogatory comments to a sales consultant, who is of South Asian origin and is dark-skinned. Although the sales consultant objected, the comments persisted, sometimes in the presence of others. In addition to the demeaning names, the general manager even threw things at him. On one occasion, the general manager groped the sales consultant while calling him a "serial killer" and "creepy brown person." The general manager asked the sales consultant who he was going to kill and where the bodies were buried, the EEOC charges.
The sales consultant felt traumatized by the groping incident and as a result took leave. He complained to the dealership’s human resources director who, after a purported investigation, told the sales consultant he either would have to continue reporting to the general manager or transfer to another dealership an hour away. The EEOC says that the sales consultant was forced to resign based on the dealership’s inadequate response to the unlawful harassment.
The EEOC filed suit in the U.S. District Court for the District of Maryland, Greenbelt Division, after first attempting to reach a pre-litigation settlement through its conciliation process.
What’s a Dealer to Do?
This aggressive enforcement policy of the EEOC means that now is a good time to review your anti-discrimination and anti-harassment policies and schedule training for all your employees.
All such policies should contain a clear anti-retaliation provision ensuring that employees can and should report violations either through an internal escalation process, directly to a senior officer, or through a third-party whistleblower hotline. The third-party approach is probably most palatable to aggrieved employees and best to preserve confidentiality to the extent it can be preserved.
Studies have shown that the two biggest obstacles to employees reporting workplace wrongdoing are a fear of retaliation or a belief that nothing will change. Both fears must be displaced by senior management’s buy in and making visible changes in the workplace such as disciplining or terminating the offenders. Your dealership must be committed to a zero-tolerance policy for workplace discrimination or any form of harassment.
Harassment outside of the workplace can also be imputed to the dealer. This occurs when, for example, a manager takes subordinates out for drinks after work or at an office holiday party. Your dealership should also have a policy on office fraternization and dating. These situations are also ripe for sexual harassment and retaliation claims. Under no circumstances should managers be permitted to seek to date their subordinates and managers must show exemplary behavior as the models for the workplace.
If claims are reported, you must have a process in place to investigate and address the allegations quickly and completely. An external employment lawyer can be a good resource to help you establish such a process and possibly serve as a resource in the investigation team which can enable certain communications to be privileged.
Finally, do not forget to review employment hiring processes and make certain they are covered by your policies as well. Periodically look at your workforce and promote diversity in hiring. An all-male, all-white sales force was a catalyst for several of the EEOC’s actions described above. Don’t be the next victim.
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