Fixed Ops Journal - June 2017 - 8

FIXED OPS JOURNAL

LEGAL LANE
 Lithia settles with techs
over wages and hours

Lithia Motors Inc. settled lawsuits filed
against DCH Auto Group Inc. over service
technicians' wage-and-hour claims for $3.6
million. Including previously settled claims,
the total payout was $4 million.
The Los Angeles Superior Court on May 18
said that the settlement will be divided among
more than 400 mechanics from 19 California
dealerships.
The settlement resolved residual lawsuits
filed against DCH, some as far back as 2012,
before Lithia acquired the group in 2014, Lithia attorneys said.
The litigation alleged "wage theft," saying
the automotive group violated California Labor Code standards, including refusing to pay
all wages earned and failing to pay the minimum wage.
DCH also was accused of falsifying time records to reflect breaks and meals the workers
were not granted. According to court docu-

ments filed by the workers' attorneys, "Defendants did not want to pay premium wages [for
missed meal and rest breaks] to their auto
dealership employees. But instead of simply
permitting their employees to take meal and
rest breaks, Defendants achieved their goal by
falsifying time records to make it appear that
employees were getting breaks, even though
Defendants knew they were not."
While the settlement concludes litigation
for service workers, lawsuits are still outstanding on behalf of other employees, including
service writers, service cashiers, salespeople
and clerical workers.
The lawsuits that have been resolved originated after a 2013 case that altered dealership
pay plans in the state. The California Court of
Appeal ruled in favor of technicians in a class
action against Downtown L.A. Motors on the
grounds of unresolved payment issues, unleashing a domino effect of litigation against
dealerships.
To ward off lawsuits and still pay technicians

wages equivalent to what they had been paying, dealership groups statewide reworked
their pay plans, instituting an hourly wage
with an added flat-rate component smaller
than traditional flat-rate plans.
Before the acquisition, DCH operated exclusively on a flat-rate system - just as the
majority of dealerships did throughout the
state - in which service technicians were
paid only for hours of labor and nothing for
inactive periods.
The acquisition was one of the reasons for
the delays in reaching a settlement.
Lithia litigators also said the case was prolonged because multiple actions against the
dealership group were consolidated. Lawyers
for the staffers said that the dealership group
at one point sought to coerce employees into
signing settlement agreements, which offered
pennies on the dollar, over the claims without
the benefit of counsel and in violation of the
law.
- Jackie Charniga

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Table of Contents for the Digital Edition of Fixed Ops Journal - June 2017