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New Year, Same Old Mistakes? Avoid Sexual Harassment At Your Dealership In 2017

2.1.17

Our last several Dealership Update newsletters have focused on new developments in dealership employment law, from heightened scrutiny of dealership arbitration agreements and employee handbooks, to the union threat in the retail automotive industry, to the always evolving world of wage and hour law. However, just because new issues arise that demand your attention doesn’t mean you can ignore the old ones. And one of the oldest and most common claims your dealership can face is a sexual harassment allegation. 

The U.S. Supreme Court first recognized a cause of action for sexual harassment under Title VII of the Civil Rights Act in 1986. Over 30 years later, it would stand to reason that all employers, including dealerships, would have taken measures to prevent such violations at their businesses. 

Recent Dealership Sexual Harassment Cases

However, a quick review of employment cases from recent years shows that allegations of sexual harassment remain prevalent within the dealership industry. Those dealers that have not implemented clear and effective policies against harassment, supplemented by meaningful anti-harassment training for employees and managers, have paid the price. Here is a summary of some of the more notable – and costly – cases:

As these cases demonstrate, allegations of sexual harassment remain prevalent within the dealership industry, and the resulting penalties are steep. When dealerships cannot show they conducted a thoughtful and thorough investigation into the employee’s allegations and then took prompt and appropriate remedial action to correct any potential wrongdoing, they can expect six-figure (and sometimes seven-figure) jury verdicts. And the raw numbers fail to tell the whole story, as these dealers also suffer decreased employee morale, poor employee retention, and the inability to recruit new talent.

The Simple Four-Step Solution

But there is a solution. You can mitigate against the potential for runaway verdicts by implementing policies and procedures at your dealership designed to prevent harassment from occurring in the first place. These policies should also correct and cure any instances of harassment before your employees feel they must seek solace at the courthouse. 

First, you should retain human resource consultants or legal counsel to prepare compliant equal employment opportunity and no-harassment policies designed to provide your dealership as much legal protection as possible. Second, invest resources to train your managers to quickly identify and correct workplace harassment. Third, educate your employees regarding your dealership’s equal employment opportunity and no-harassment policies. Finally, you should retain well-trained professionals to immediately investigate and respond to any allegations of harassment as soon as they arise.


For more information, contact the author at MSimpson@fisherphillips.com or 404.240.4221.

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