I recently got a call from a dealership controller on a personnel issue. I asked who was in charge of human resource issues for the dealership. The reply: “I am as soon as I finish the monthly statement, review the money due list and meet with department heads to cut expenses.”

Most dealerships don't have full time HR managers. While I am impressed at the general familiarity of most dealership controllers and senior managers about applicable employment laws, sometimes erroneous decisions are made based on “Everybody knows that.” Here are some.

  • Personnel handbooks just give employees ideas. Everybody knows that we're better off without a handbook.

Wrong. A well-written handbook sets standards for staff conduct and performance. It also allows you to make disclosures mandated under federal law, such as the Family and Medical Leave Act.

  • We don't want to discuss our policy against sexual harassment openly since everybody knows that will just make employees more suspicious and lead to misunderstandings.

False, and dangerous. It's important that employees know where to complain about sexual harassment. The law may give protection to an employer in the event of a sexual harassment claim where the employee doesn't give management a chance to remedy the problem, but not if an employee claims credibly that he or she didn't know where to complain. Have a written policy telling employees how to bring concerns to the attention of management. Occasionally remind employees. If you don't want to get into an explanation of what constitutes sexual harassment, don't. But emphasize that you have a policy against it and can only help if you know of a problem.

  • Our sales manager is calling the receptionist at home after she complained that he sexually harassed her. Everybody knows that we aren't responsible for behavior outside the dealership.

Really wrong! Retaliation is usually worse than the underlying problem. Employers have been held liable for retaliation even where the original sexual harassment claim was found to be unjustified. Retaliatory behavior need not happen in the workplace for the dealership to be liable. Act on any claim of retaliation.

  • Everybody knows we can't enforce a dress code because we can't treat male and female employees differently.

False. An appropriate-attire policy can take into account gender differences.

  • We want to run credit bureau reports on job candidates to make sure they don't have credit problems. Everybody knows that's just like running credit reports on customers; we can do it based on job-seekers' signatures on applications.

Definitely not. The rules are different. A dealership can only run a credit report on a job applicant who signs a document that authorizes a credit report and an investigative background check and nothing else. It is hopelessly out of date if you are using a job application that contains an authorization to run a credit check.

  • We're better off if we don't have written pay plans. Everybody knows that gives us more flexibility.

No. It can lead to expensive claims for back wages and legal fees. Without written plans, you give employees the chance to make claims based on what they think they were told, what co-workers told them or what everybody knows. You put yourself at the mercy of what a jury or an arbitrator may believe. Put pay plans in writing. Be sure to include that the plan does not affect the employee's at-will employment status (if permitted by state law) and is not a contract.

Michael Charapp, an attorney with Charapp & Weiss, LLP who specializes in representing motor vehicle dealers, can be reached at (703) 564-0220 or mike.charapp@cwattorneys.com

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