NADA This Year: So Much to Look Forward To

A Renewed Focus on Workplace Harassment

The #MeToo and #TimesUp movements have brought the nation’s attention to the people side of compliance. In general, business leaders are recognizing the connection between retention and a workplace environment in which employees feel respected and supported throughout their careers. Although harassment has been recognized as a problem for years, it seems the industry is coming to terms with the fact we’re not dealing with isolated incidents, but reckoning with larger, systematic issues embedded in culture. It’s been encouraging and invigorating to talk with dealers about how better compliance can lead to a happier, more engaged, and more productive workforce.

While stories of harassment make headlines, the issue is only one possible source of litigation among many for dealerships. In fact, according to the Equal Employment Opportunity Commission, wrongful termination is the most common kind of lawsuit organizations face. For the automotive industry, where turnover is part of the nature of the business, this is an especially important area. And considering how tight the market is for talent right now, these conversations are well-timed.

Here at Compli, we’ve done quite a bit to develop an employment compliance system that promotes a culture of compliance in addition to protecting against potential areas of litigation. In addition to our expanding Harassment Suite, we’ve been busy behind the scenes advancing our technology and getting ready to bring a more streamlined and refined product to the market.

Mounting Cyber Security Risk

Another aspect of our solution I’m excited to show off is our expanded cyber security initiatives. Our work on these features began on the heels of last year’s still-hard-to-fathom Equifax breach, and we built them with auto dealers in mind. Dealers, after all, are uniquely susceptible to cyberattacks: cars are many consumers’ biggest purchases, and sales and lease agreements contain a large amount of sensitive financial information. Historically, customer files haven’t been regarded as a considerable area of exposure for dealerships, but we’re seeing that change in light of the recent rise of data breaches, ransomware attacks, and other cyber security obstacles.

Compli’s new cyber security solution set is designed to help any dealership enhance and safeguard protections for its confidential data—through an approach once again centered on people. Keep in mind that cyber security preparedness isn’t just about technology, but the incidence of human error: a financing document left on an unattended desk or a login password written on a sticky note attached to a monitor pose as great a cyber security risk as any digital vulnerability. Our expanded solution set takes all these issues into consideration to provide dealers of all kinds with the tools and knowledge to realistically stay ahead of cyberattacks.

An Evolving Regulatory and Economic Landscape

Technological and cultural forces aren’t the only reasons behind the changing compliance conversation. As we anticipated in our webinar after Donald Trump’s presidential election, we’re witnessing something of a regulatory pullback at the federal level. That said, the associated legal risks aren’t going anywhere: if anything, the number of lawsuits from consumers and former employees against dealerships continues to increase.

Why? For one, there’s no greater source of motivation than a feeling of being wronged. But moreover, states are stepping in where agencies such as the CFPB are pulling back. Dealerships located across multiple jurisdictions are facing new legislation and pressure from state attorneys general. In Massachusetts, for instance, dealers must comply with stringent data protection laws, and states such as California and New York are blazing regulatory trails of their own.

These regulations—not to mention the fact that your enforcement body may be headquartered down the street rather than somewhere in DC—pose significant compliance challenges for dealers, many of whom operate in more than one state. We’re seeing that savvy dealers are learning that they need to be compliant with the strictest of states in which they do business, and that the ideal approach involves a quilting together of several state requirements to maximize comprehensive prevention efforts.

At the same time, many dealers are anticipating an end to the market peak we have been experiencing. In other words, regulations are proliferating and becoming more local just as the industry is looking to reduce bloat and operational complexity.