GNYADA April 2016 Newsletter

NYS Franchise Law Limits OEM Audits

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however, it can be demonstrated through patterns of false submissions. Barring such a pattern, an auditor’s unilateral claim of “fraud” should not grant access to older records. Day-to-day conduct limits Auditors — in the case of both war- ranty and incentive audits — do not have unfettered access to dealership records or personnel. They cannot rummage through salespeople’s or service writer’s desks. An audit team cannot disrupt the ordinary business of the dealership. Dealers should set aside a separate room for the auditors’ use and desig- nate a trusted employee to be their liaison. The auditors should request documents and employee interviews through that liaison only; they Dealers should review their policies and employment applications, and revise if necessary, in order to comply with the new protected classification. NYC COUNCIL MANDATES EMPLOYEE PROTECTIONS FOR CAREGIVERS Another new protected category was established when Mayor Bill de Blasio signed a bill prohibiting employment discrimination against caregivers. This law takes effect May 3, 2016. The new city law defines “caregiver” as a “person who provides direct and ongoing care for a minor child or a care recipient.” “Care recipient” is very broadly defined and applies to less time and energy to devote to the job.

shouldn’t be communicating with other employees or roaming the premises. Post-Audit Protocol At the conclusion of the audit, the manufacturer is legally required to thoroughly explain any proposed chargeback amount so that the dealer has an opportunity to explain their position. Following any necessary internal dispute resolution procedures (e.g., mediation), the manufacturer then has to give written notice of the final amount. If the dealer disagrees with the audit results, they have 30 days to challenge them through a protest proceeding at the DMV.

When manufacturers conduct audits of dealerships, dealers should know that New York Franchise Law sets specific limitations on the auditors. While your manufacturer does have the right — per to the terms of the Dealer Agreement — to audit your store, if audits occur more than once a year, that qualifies as prohibited harassment under the franchise laws. Look Back Period All audits are limited to a 12-month look back period, starting from the date the manufacturer paid the dealer. The manufacturer can only refer to earlier claims (up to five years) if the initial audit finds claims to have been fraudulently submitted. “Fraud” requires knowing misrepresentation, which can be challenging to prove; “FAMILIAL STATUS” Per New York State’s “End Family Status Discrimination” legislation, “familial status” is now considered a protected classification, like religion or age. Employers are prohibited from inquiring about familial status in their hiring processes or in making employment decisions. The goal of the law is to exclude factors like pregnancy and parenthood as consid- erations in determining whether to hire or promote a worker, and how much to pay them. According to the Governor’s Office and the Women’s Equality Coalition, disclosure of familial status inadver- tently disadvantages applicants who are mothers. For example, a manager may opt to hire a non-parent over a mother of three, subconsciously assuming that the mother will have

This article was provided by Richard Sox, Esq. from Bass Sox Mercer.

New Protected Categories in NY Employment 13

any person who relies on the caregiv- er to meet their daily needs.

NYC employers may not terminate, refuse to hire, or limit the payment or privileges of an employee, based on their actual or perceived status as a caregiver. Moreover, they should review and update their HR policies to assure that they steer clear of dif- ferential treatment toward employees with such responsibilities. (Employers should also be aware that an employ- ee’s request for FMLA leave may constitute notice of caregiver status.) If your dealership needs help with drafting policies or wording applications, please contact Susan Bieber at the Association: susan@gnyada.com or 718.746.5900.

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • April 2016 7