Thirty-three former salespeople at Rick Hendrick Chevrolet Naples in Florida are suing Hendrick Automotive Group, alleging the nation's sixth-largest dealership group took actions that deliberately reduced their commissions.
The group added "fictitious or wildly inflated" costs to the sales associates' deals, thereby manipulating the gross margins so as to pay smaller commissions, said allegations in an amended complaint filed Feb. 5 in 20th Judicial Circuit in Collier County, Fla., which includes Naples.
The lawsuit, which seeks to be certified as a class action, said the damages for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, civil conspiracy and unpaid wages exceed $75,000.
The plaintiffs' lawyer, Ben Yormak, told Automotive News a payout could be "well in excess" of $75,000.
"We would be seeking dollar-for-dollar what each sales associate lost," said Yormak, president of Yormak Employment and Disability Law in Bonita Springs, Fla. "That means Hendrick and the dealership have to produce records that substantiate the payments that should have been made to each sales associate."
If a judge certifies the lawsuit as a class action, 250 Hendrick sales associates in Florida could be included in it and thousands more if it includes all 102 Hendrick dealerships, Yormak said.
Hendrick Automotive Group, of Charlotte, N.C., owned by Rick Hendrick, moved to dismiss the initial lawsuit. But at a hearing last month, a judge allowed Yormak to file an amended complaint instead.
A Hendrick spokesman said last week that the company does not comment on pending litigation, but he added that Hendrick's lawyers believe the case is without merit and should be dismissed.
Hendrick has 20 days to respond to the amended suit. The spokesman said lawyers are working on that response.