Promoting Good Employment Practices in Your Dealership - Insurance
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Promoting Good Employment Practices in Your Dealership

By Randy Bombrowski

Article Date: 10-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.

Careful how you walk – managers should keep these three key areas in mind to avoid a lawsuit.

After terminating a low-performing employee from your dealership, you learn he or she filed a lawsuit alleging age-discrimination and wrongful termination. In another case, a former employee has filed a complaint claiming on-the-job harassment caused their resignation. Creating more anxiety across your management team is your inability to assemble credible documentation on either case – now basing your defense on memory and hearsay.
Employee lawsuits alleging harassment, racial and age discrimination or wrongful termination continue as a leading threat to the financial stability of today’s dealerships. This is due to high defense costs, large settlements, increased media coverage and negative publicity; and prominent political activism by politicians and other public figures. All of these factors (combined with continued economic uncertainty) have led to increased employee awareness of improper terminations or other employment issues. Dealerships can incur significant claims and out-of-pocket expenses as a result. Dealers should invest the time to review Human Resource policies and procedures to ensure they focus on preventing such claims and provide an effective defense in the unfortunate event of a lawsuit.
Focus your process on (1.) Screening and Testing, (2.) Harassment and (3.) Terminations.
Screening and Testing
Remove questions or criteria from your employment application or interview outlines that could be interpreted as seeking information on non-job related criteria such as:
  • Physical conditions and disabilities
  • Gender, race or age
  • Religion
  • Sexual orientation
  • Marital status
Limit your questioning to information that is directly related to an applicant’s performance in your job opening. Also, review your application and interview outline with counsel qualified in employment practices.
Any applicant testing should be related to skills required for the job. Any evaluation of skills, knowledge or physical capabilities must be both valid (correlates to success on the job) andwork related. You must be able to support a connection between the test results and future job success.
Harassment may be interpreted as a hostile, intimidating or offensive work environment. Dealerships lacking a formal policy and procedures to prevent harassment are vulnerable to inappropriate workplace behavior, harassment-based lawsuits and adverse publicity. An effective anti-harassment program includes: 
  • A written policy statement
  • Reporting procedures
  • An annual reminder to all employees
  • Formal acknowledgement by all employees
  • Investigation procedures
  • Disciplinary measures reinforcing an absolute zero-tolerance policy
Today’s broad economic uncertainty affects all dealerships – especially if terminations or downsizing become necessary. Unfortunately, because of these events there has been an increase of discriminatory or unlawful termination allegations. With most states being “employment at will,” many dealerships fail to recognize that “at will” employees are entitled to legal protections from wrongful termination in violation of specific laws or public policy. To protect your dealership from such allegations, establish written “employment and termination” policies. A critical part of these must be the requirement for clear and relevant documentation supporting any termination because of unacceptable performance. Document any history of marginal performance reviews, disciplinary notices, incident reports or attendance notes. Consulting with an attorney specializing in employment practices before taking any termination action can help you avoid discrimination allegations.
Employment practices will remain a challenging issue for dealership owners and management. Documenting
and practicing clear employment practices reduces your risk of lawsuits and reinforces a commitment to an equitable workplace. 
This document is made available by Sentry Insurance a Mutual Company and its subsidiaries and affiliates (collectively “SIAMCO”) with the understanding that SIAMCO is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals. THE INFORMATION CONTAINED IN THIS DOCUMENT IS DISTRIBUTED BY SIAMCO “AS-IS”, WITHOUT ANY WARRANTIES.  SIAMCO WILL HAVE NO LIABILITY TO ANY PERSON OR ENTITY WITH RESPECT TO ANY LOSSES OR DAMAGES CAUSED, OR ALLEGED TO HAVE BEEN CAUSED, DIRECTLY OR INDIRECTLY BY THIS DOCUMENT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND FOR PROPERTY DAMAGE AND DEATH) OR OTHER GROUNDS.

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Article Categories:  Workforce  »  Legal