From technology to the economy to politics and legislation, the world is moving faster and faster. And while it may not be possible to tell the future with 100% accuracy, we know a few people whose predictions can come pretty darn close.
This week Michael Semanie, Shareholder with our attorney friends Killgore Pearlman, joins us to help dealers gear up for 2019. Here’s what Michael sees in his crystal ball:
Uptick in TCPA Lawsuits in 2019?
With statutory damages of $500 for every call/text that violates the TCPA (and up to $1,500 for every knowing or willful violation), Telephone Consumer Protection Act (“TCPA”) class action lawsuits have long been fertile ground for plaintiff’s attorneys. With this year’s federal district court decision holding that “ringless voicemail drops” are “calls” that are subject to the TCPA, and in anticipation of the FCC possibly bringing a remand order in 2019 on the landmark ACA International case that reined in the FCC’s exceedingly broad definition of what constitutes a “automatic telephone dialing system,” we are expecting an uptick in the already robust number of TCPA filings against dealers and auto finance companies. Dealers and auto finance companies should also be aware that they may be held vicariously liable for TCPA violations committed by third party marketing and collections companies making calls and texts on behalf of the business. Since different forms of consent are required for different types of calls and texts (for example, marketing calls vs. collections calls), an audit of dealership and finance company forms and processes, along with a review of insurance coverage, is recommended to help avoid this potentially substantial liability.
Will Dealerships Revise Their Employee Pay Plans in 2019?
Changes to management and sales associate pay plans are expected in 2019 in light of various recent employee lawsuits claiming that reported expenses and the application of packs, fees, and other charges overstate true dealership costs and artificially reduce commissionable gross, thereby reducing performance-based pay to managers and sales associates. The various lawsuits brought by current and former dealership employees generally allege that dealerships are liable for breaches of contract, fraud, and wage theft. While some industry commentators believe that these lawsuits will cause dealers to shift away from commission/bonus based pay and toward a more hourly/salaried compensation structure, we expect dealers to retain a performance-based compensation structure for managers and sales employees, but to update and revise the language of their pay plans to adequately address these issues. Since dealership pay plans tend to use somewhat subjective industry jargon and can be difficult to understand for those not familiar with the industry (such as your potential jurors), we recommend having employee pay plans reviewed by experienced legal counsel to ensure compliance with federal, state and local employment laws and to reduce exposure to the common law claims raised in these lawsuits.
But wait, there’s more! Tune in over the next few weeks as we share more predictions from some trusted advisors.