CAR DEALER PAYPLAN LITIGATION (PART I)

The auto sales business is a major tax source for all states, including New Jersey. In this regard, many states have hundreds, if not thousands of dealerships, which generate billions of dollars in tax revenue for the state coffers. All these dealerships rely upon the skills of sales people to sell cars in order to benefit themselves as well as the state economy. It is an ongoing battle between the sales persons and management pertaining to the issuance and calculation of gross commissionable proceeds upon which sales people are paid.

Generally, there are two areas of profit to the dealership,

the front end and the back end
. The front end is associated with the profit on the sale of the car and of itself. The back end profit pertains to and relates to the profit on financing, after sale items, pre-delivery services and other items, such as lo-jack. Car dealerships operate differently, however; generally, the sales people get paid on the front end and the managers and the upper management get paid on the back end of the transaction. On occasion, a car dealership does provide a certain amount of computation to the sales staff based on the total profit of the dealership, which would naturally include the back end or the reserve part of the transaction.

CARTON AND RUDNICK LITIGATES THESE CLAIMS.