A Florida judge won't certify a lawsuit as a class action involving former salespeople of Hendrick Automotive Group, a win for the nation's sixth-largest dealership group, which faced the possibility of hundreds or even thousands of additional plaintiffs in a 2017 lawsuit alleging that Hendrick deliberately underpaid commissions.
Collier County Circuit Judge Lauren Brodie in a June 27 opinion said the plaintiffs, a group of 33 former employees of Rick Hendrick Chevrolet Naples, in Florida, failed to establish commonality. The proposed class members' contracts vary and class certification would be inappropriate because the three other Hendrick dealerships in Florida have their own agreements with salespeople at those dealerships, the judge ruled.
Brodie also said in the order denying the motion that the plaintiffs did not establish the predominance element required for class certification.
"The class members' common questions of law and fact do not predominate over the claims of the individual proposed class members," according to the order.
In 2017, 33 former salespeople at the Hendrick dealership in Naples sued Hendrick Automotive and the store, alleging commissions were cut through various schemes by inflating acquisition costs of vehicles, undervaluing a customer's trade-in and creating service "phantom work" on vehicles. That alleged work included charges of $299 to add nitrogen to tires when a nitrogen machine was broken and up to $700 to wash and vacuum a vehicle, a former dealership salesman previously told Automotive News.
A Hendrick Automotive spokesman declined on Tuesday to comment on the judge's action but added that the company has strongly argued that the case is without merit and should be dismissed.
Benjamin Yormak, an employment and disability lawyer in Bonita Springs, Fla. who is representing the plaintiffs, on Tuesday said in an email that an appeal of the class issue is “quite likely,” though he declined further comment until he speaks to his clients.
The court has ordered the parties to complete nonbinding arbitration by March 2020. The parties agreed earlier that the case could be ready for trial in June or July 2020.
Brodie held a May hearing on the class certification motion and heard evidence from both sides. The hearing determined that Hendrick Automotive has administrative services agreements with four Florida dealerships that are each owned by a separate company. The dealerships also have varying compensation agreements with salespeople and those agreements differ at each dealership, while the four dealerships also have different formulas for calculating sales commissions.
Hendrick Automotive Group has 95 dealerships in 14 states. Hendrick of Charlotte, N.C., ranks No. 6 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 111,845 new vehicles in 2018.
