Soon these guys were back to telling foul jokes, and one had the poor judgment to wrap up a mixed-audience sales meeting by popping a porn movie in the training room VCR.

By this time, you are undoubtedly weary of all the warnings and informational overload regarding discrimination claims in the U.S. The dangers still exist, however, for dealers to sustain monumental jury awards and some could, potentially, threaten solvency. This article offers a quick and simple set of reminders as to how best to position your operation and prevent unnecessary claims and losses in this very volatile area.

First, it warrants a reminder that the first line of defense against discriminatory practices is the uncompromised commitment of each dealership owner and management team to a “zero tolerance” policy. This sounds pretty simplistic, but there are dealerships that go to the trouble to lay the proper groundwork in this area, then drop their guard and allow activities to occur that defeat their good intentions.

Every good system must have parameters for prompt and appropriate response to parties involved in these matters. Reports of abuse must be addressed, as quickly as possible.

I recently read an article about a major problem at a dealership in which everything appeared to be in order in terms of zero tolerance. The dealership retained an experienced law firm and, according to schedule, held meetings with all employees announcing and embracing a no-harassment and no-discrimination workplace.

Everyone was asked to participate and was provided a written copy of the zero tolerance policies. Unfortunately, within a few weeks of this terrific training, they allowed a couple of employees to drift back into old bad habits. Soon these guys were back to telling foul jokes, and one had the poor judgment to wrap up a mixed-audience sales meeting by popping a porn movie in the training room VCR.

To compound this train wreck in progress, the dealership general manager sat through it, and seemed to give the movie two thumbs up. Obviously, this key dealership employee had failed miserably to link his responsibilities to the dealership back to his training of several weeks earlier.

As you might imagine, this bozo looked like a “deer in headlights” when he was sued, personally, along with the dealership, in a seven-figure discrimination lawsuit six weeks later. The result was as bad as you could imagine.

This is not rocket science. The anti-discrimination and anti-sex harassment message has been delivered time and time again, but certain businesses still allow this type of misconduct in the workplace. Luckily, most dealers have read the headlines and put a stop to the nonsense. They have clearly set the example and consistently delivered a strong commitment to providing all employees and customers with a zero tolerance environment. We all applaud those dealers.

Remember, when a complaint does surface, there are two key questions to be asked in a good investigation. The first is simply, “What happened?” The second is, “What did the dealership do to prevent the misconduct?”

The first question is obviously important to the value and significance of any case. However, the second question is vital to how well the honor and reputation of your business may weather the storm of adverse press and publicity. Teach your employees the newspaper test: “If the way you run your dealership was featured in you local newspaper, would be proud to have Mom read the article?”

In summary, our legal and cultural environment will not allow anyone to get away with discrimination. Those who step out of bounds will continue to face extraordinary financial and reputational danger. Many will suffer the consequences. A few reminders are as follows:

Have a Published Policy. Be sure your policy is developed by legal counsel experienced in such matters. Knowledge and insight in your type of business would also be of benefit to you.

Acknowledgement of Your Policy. It's a good practice to have every employee sign an acknowledgment of having reviewed and accepted your no-harassment and zero tolerance for discrimination policies. Retain and protect that and other relevant documentation in these matters.

Be Consistent. Every individual in your business should be held to the same high standards in these matters. Your “characters” and jokesters should not be allowed any deviation from your policy.

Revisit And Retrain. One shot at this type of training will not suffice. Schedule your attorney or another trained in these matters to revisit and retrain periodically. New employees should receive this training and sign an acknowledgment as part of their basic orientation.

Create a System For Response. No plan can succeed without a carefully designed system for reporting incidents to your business. Use your legal counsel for design and execution of your reporting system.

Respond Promtly And Appropriately To Every Complaint. Every good system must have elements for prompt and appropriate response in these matters. Reports of abuse must be addressed quickly. Once again, use experienced legal counsel to guide you in establishing the timetable and formats for responding to all problems.

In a nutshell, set and maintain high standards for professional conduct in your business and you'll dramatically reduce your chances of becoming involved in one of these legal nightmares. Be sure you and your management team are on the same page. Both levels must “walk the walk” and “talk the talk” with your employees and customers. Consistency is a key.

Stay current in your dealership best practices and there should be one less matter to keep you awake at night!

Joseph Coulter is an attorney and a vice president and general manager of Universal Underwriters Insurance Co.

(Editor's Note: Excerpts of this article appeared in a December 2000 Ward's Dealer Business story on lawsuits stemming from finance and insurance matters. Some of Mr. Coulter's comments were out of context so we are running the article in its entirety.)