Former sales associates in Naples sue Hendrick Automotive Group over low commissions

Former sales associates are suing the Hendrick Automotive Group, alleging they were cheated out of commissions at its Chevy dealership in Naples.

A lawsuit has been filed in Collier Circuit Court against the automotive group and its dealership, operating under the name Naples CH LLC.

Thirty-three salespeople seek a class-action status. The judge, Lauren Brodie, dismissed the initial case Jan. 19 but allowed for it to be amended and refiled within 20 days.

"We agreed to the dismissal so we could refile the allegations to make them more clear," said Ben Yormak, a Bonita Springs attorney representing the plaintiffs.

Yormak filed the amended complaint Feb. 5.

In the complaint, plaintiffs allege they were deliberately deprived of their commissions because of a policy and practice that added "fictitious or wildly inflated costs" to deals, resulting in the lowest possible payouts to sales associates. They say there were markups for cleaning, detailing, equipment, parts and other services.

The added costs cut commissions earned on vehicles to the mandatory minimum of $200 per sale, according to the lawsuit.

If the case is certified as a class action, it could involve more than 250 sales associates in Florida — and well over 1,000 around the country if it crosses state lines, Yormak said.

"That's to be decided," he said.

The Hendrick Automotive Group operates more than 100 dealerships in 14 states — including North Carolina, where the company is headquartered, Georgia and California — and has more than 10,000 employees.

A spokesman for Hendrick said the company doesn't comment on pending lawsuits but that it believes the case is without merit and should be dismissed. It's still working on an answer to the amended complaint, which is expected later this month.

In its motion to dismiss the original case, Hendrick argued the suit had legal deficiencies, including failing to establish the basis for a class action and a cause of action against the automotive group, as the plaintiffs were employed by the dealership.

The suit seeks damages of more than $75,000, including unpaid wages. Claims include breach of contract, breach of the implied covenant of good faith and fair dealing, fraud and civil conspiracy. Plaintiffs demand a jury trial.

"We estimate the wages to be measured in the hundreds of thousands, if not in the millions," Yormak said. "It's all dependent on whether class-action status is granted."

According to the suit, the sales associates, who worked strictly on commissions, were to get paid a gross profit of 25 percent on new cars and 30 percent on used cars, with the guaranteed minimum set at $200, based on their employment contracts. Gross profit is defined as the difference between the vehicle's sales price and what the dealership paid to get it on the lot.

The plaintiffs allege the dealership, at the direction of Hendrick, engaged in deceptive and deceitful practices to manipulate its sales numbers so it could pay lower commissions — and that it refused to provide an accounting of their deals.

"The salesmen would regularly ask for an accounting of the various deals, and they were usually stonewalled every time," Yormak said.

Plaintiffs allege the inflated charges to ready cars for sale ranged from $600 to $700 for washing and vacuuming them to nearly $300 for adding nitrogen to their tires.

"It starts to look kind of funny when a sales associate sells a $65,000 vehicle and yet somehow receives a minimum $200 commission," Yormak said. "That's just the kind of stuff we believe was happening with a degree of regularity."

With such low commissions, Yormak said the sales position became "a minimum wage job," even for some of the most experienced professionals.

Since a story appeared in Automotive News about the lawsuit in mid-February, Yormak said he's received phone calls from other sales associates who claim they've had similar experiences working at Hendrick dealerships around the country.

Rick Hendrick Chevrolet on Airport-Pulling Road — across the street from Barron Collier High School — operated for more than 45 years as Bob Taylor Chevrolet. Hendrick purchased the dealership in October 2015. At the time, the dealership's new manager said all Bob Taylor employees had the option to stay.

More: Bob Taylor Chevrolet to become Rick Hendrick Chevrolet Naples on Thursday

Some of the plaintiffs in the suit were longtime employees of the dealership, while others worked there a few months. All of them left on or before June 29, 2017, when the last ones were terminated, including Brett Trekell, a newer hire, and Jack Lefevre, who had worked at the dealership for decades.

Trekell, 47, joined the dealership in November 2015 after Hendrick bought it. He started as a floor manager and trained new sales staff, then became a sales associate too. After a few months working there, he said he realized something wasn't right.

"They never advertised they were going to put high shop bills on cars," Trekell said. "They make their shop appear to make more money, their service department, with inflated bills. Ultimately, it has helped them keep the money in-house."

In 15 months, he said, the dealership went through 150 salespeople, showing the depth of the problem, which he labels as "commission blocking."

"That's a lot of people to go through," he said. "That's usually a 30-year amount of salespeople."

Shop bills that should have been $200 or $300 were $1,200 and $1,300, and it happened "over and over again" on hundreds of cars, Trekell said.

Trekell worked for five dealerships in sales and management over a 25-year career before going to work for Rick Hendrick Chevrolet. Those other dealerships charged a few hundred dollars to detail a car at most, not $600 or $700 like he saw at Hendrick, he said.

"I've never seen anything this extreme before," he said, "nothing."

To make up for lower commissions, the dealership offered bonuses to salespeople who sold more than 10 cars a month; however, it was a hard goal to achieve, especially with so much turnover on the sales floor, Trekell said.

Trekell now works for Airport Kia in Naples as a sales associate and sales team leader, where he said he's back to earning his expected commissions.

Lefevre, 72, joined the Bob Taylor dealership in 1977 and stayed on when Hendrick bought it. He said he was terminated in June with what was left of the "Taylor regime," whose combined service there totaled about 100 years.

"They fired some of the best people that ever worked there," he said.

Some of the new salespeople quit after getting their first paycheck, but Lefevre and some of the other plaintiffs hung in much longer, he said, hoping to make the situation right.

"Mr. Taylor was just a real nice, nice gentleman to work for," he said. "The guy that came after was nothing like Bob Taylor, nothing in the caliber of Bob Taylor."

The dealership has countersued Lefevre for damages of more than $15,000, saying a few days before he was terminated, he hurt the business by telling a customer it was "run by a crook," and by arranging a private sale to that same customer, who wanted a Corvette.

In an answer to the complaint, Lefevre argues that any comments he made to the customer were fair and true and that the dealership's reputation was "so bad" that nothing he said could have made it worse.

Lefevre now works for Estero Bay Chevrolet in south Lee County on a referral basis.

"They hire people nowadays if you have a good service record with your customers," he said. "So it was easy for most of us to get placed."

Dan Beavers, 59, another plaintiff, joined the Chevy dealership after Hendrick purchased it and stayed on for about six months. He worked as a floor manager, then went back to selling cars after he was demoted, he said.

"They demoted me. They demoted us," Beavers said. "They didn't want to pay us."

Beavers, a disabled veteran who lives in Fort Myers, said he'd been a top-producing salesman at other dealerships, where he earned a good living, but he couldn't survive on what he made at the Hendrick dealership.

"A good salesperson should be able to survive on 10 to 12 units a month," he said. "We had guys selling 15 to 20 units, making $2,000."

After two recent knee surgeries, Beavers said he's left the car sales business for good.

"I can't be on my feet for very long," he said. "I couldn't sell cars anymore."

The next court date for the lawsuit is scheduled for March 23 for a case management conference. Yormak said he expects an answer to be filed in the case over the next week.

If the case is certified as a class action, it could take two to three years to resolve, or even longer. The lawsuit could force Hendrick to open its books and pay records for examination.

"The purpose of the litigation is to obtain the wages lost by virtue of the deceitful practices by the Hendrick Automotive Group and the local dealership," Yormak said.