Virus issue returns to showrooms

A married couple in their 70s, drivers for a Nissan store in Colorado, died in recent weeks in a COVID-19 outbreak linked to the dealership as the resurgent coronavirus cascades across the U.S.

The outbreak at Nissan of Durango, to which a public health agency last week attributed three deaths, is among a number of infections spreading at dealerships and in the wider public as the more contagious delta variant of the virus fuels the pandemic to caseloads not seen since the winter.

The surging virus has more dealers reviving mask requirements and implementing or considering vaccine incentives — even mandates — for their employees. Many are wrestling with how to balance some staffers' resistance to public health guidelines with others' concerns for their own safety. In a tight labor market, the stakes are high.

"They're trying to figure out what to do," said Kevin Troutman, a partner with employment law firm Fisher Phillips, which advises dealerships.

One of the country's largest dealership groups, Asbury Automotive Group Inc., this month began requiring COVID-19 vaccinations for all new hires but has not mandated or incentivized vaccines for current employees. Asbury officials said the retailer continues to adhere to U.S. Centers for Disease Control and Prevention recommendations, which means it instructed vaccinated employees in locales with high infection rates to mask back up after the CDC revised guidance in late July.

A Group 1 Automotive Inc. executive described encouraging but not mandating elevated precautions. Used-vehicle giant CarMax Inc. said it is following the CDC's updated guidance.

Neither Asbury nor Group 1 were offering incentives for employee vaccinations. CarMax said employees who get vaccinated can earn a financial incentive through its well-being program.

Four of the other publicly traded dealership groups did not respond to requests for details on their policies.

The risks of the virus in the workplace are real.

An official with Nissan of Durango in Colorado said the dealership had masking requirements and a nearly fully vaccinated work force — yet still saw the disease sicken employees and infect and kill freelance drivers this summer. San Juan Basin Public Health last week said it had linked 12 cases and three deaths to the dealership. The agency said a fourth person died after contracting COVID-19, but that circumstances around that case didn't meet the state's requirements for classifying it as a death caused by the virus.

And at a dealership in Daphne, Ala., nearly 30 employees, most of whom were not vaccinated, contracted COVID-19 within a week in late July, WPMI News reported July 29. Eastern Shore Toyota owner Shawn Esfahani, who said he "almost died" from the disease in December, is now offering vaccine incentives to employees, according to the station. The dealership also established weekly $1,000 drawings for newly vaccinated customers and is hosting Pfizer vaccine clinics onsite.

The National Automobile Dealers Association last week said it hadn't changed its June 14 recommendation, which refers to the CDC's earlier guidance that the vaccinated did not need to wear masks, but also recommends that dealers stay "abreast of the latest federal and state mandates and best practice suggestions" and could mandate masks and vaccines if they wished.

"We are closely monitoring what is a very fluid situation," NADA spokesman Jared Allen wrote in an email.

Many dealerships are "contemplating less of a 'carrot' and more of a 'stick' approach to getting their employee vaccination numbers up," Fisher Phillips wrote in an Aug. 3 advisory.

Still, the firm's Troutman told Automotive News that dealerships "seem to be less likely" to institute vaccine mandates than businesses in general. "We're not seeing a lot in terms of vaccine mandates in the automobile industry," said Troutman, chairman of the firm's national vaccine work group.

A recent informal survey of clients that received more than 700 responses found "overall, about 15 percent of employers" would enact vaccine mandates or had considered them, he said. Just 9 percent of automotive clients felt that way.

Even so, Troutman estimated companies on the whole are more open to vaccine mandates than in the past. He described a sense of frustration among businesses in general as COVID-19 resurged after seeming to recede.

Companies that get too lax on workplace precautions run a risk. "We're seeing [the Occupational Safety and Health Administration] out there doing more inspections," Troutman said.He noted some companies opted to institute employee COVID-19 testing, a "middle ground" approach.

Private equity firm ZT Corporate, which owns nine dealerships and seeks to buy more, initiated a vaccine mandate at its corporate facilities effective Aug. 3, CEO Taseer Badar said.

The company announced Aug. 6 that it was considering "rolling the mandate out to its entire employee force in the coming months." However, Badar said last week that ZT plans to be "a little more ginger" with dealership employees, likely offering education rather than a mandate.

"As you know, the labor market's shot," Badar said.

While he estimated that the majority of the company's dealership employees were vaccinated anyway, he noted that some of ZT's stores are in rural areas where "education is quite needed" to overcome resistance.

ZT plans to encourage vaccination by leveraging its healthcare holdings to create a COVID-19 hotline employees can tap for answers about the inoculations, Badar said. The corporate office's example also has helped. Badar said he saw an uptick in vaccinations at subsidiaries since the announcement of the headquarters mandate.

The company encourages but doesn't require masks among dealership employees except when required by state and local law, he said.

The outbreak tied to Nissan of Durango suggests that dealerships should consider policies for contract workers as well as full-time staff.

The deaths and most of the dozen infections were associated with a group of independent contractors hired to drive vehicles for off-site sales, according to Nissan of Durango finance manager Warren Gutierrez.

"They all get together in a van, and they drive back," Gutierrez said.

Gutierrez said he and two other dealership employees contracted COVID-19 during the outbreak. Gutierrez said his two infected colleagues were fully vaccinated; he has not been inoculated. He estimated that only he and two or three others among the 40-employee staff haven't been vaccinated.

No dealership employees died in the outbreak, and no customers were infected, he said.

San Juan Basin Public Health said its investigation found evidence that "lack of public health precautions within the workplace, especially regarding unvaccinated staff, contributed to the elevated number of cases." The agency didn't provide examples and didn't respond to Automotive News queries last week.

But Gutierrez said the dealership has "followed the rules." The company still requires all employees to wear masks. Sales reps don't test-drive with customers, and he conducts signings out in the open rather than in his office, he said.

Gutierrez said he knew about three of the fatalities; he wasn't aware of the fourth death mentioned by the health department.

Two of the dead were a married couple in their 70s who had driven for the dealership for a decade, according to Gutierrez, who called it "super-sad." He said the third fatality involved a contract driver's mother.

Though the dealership required its employees to mask up, it hadn't held the freelance drivers to a mask mandate, Gutierrez said.

"Moving forward, absolutely," Gutierrez said. But he added that the dealership may move to trucking vehicles for offsite sales instead of hiring drivers.

Nissan of Durango didn't conduct offsite sales in 2020, and Gutierrez said it had grown relaxed when it reestablished them this year.

"We essentially just left [COVID-19 protection] up to them," he said of the contract employees.

Jackie Charniga and David Muller contributed to this report.