Articles Posted in Car Salesman Pay Plan Lawsuits

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Sales people lawsuits

I authored a similar post on this issue in May of 2009. Please click here to review that post.

One area of litigation drive addressed in my ears as an attorney is the area of salespeople suing the dealership for improperly calculating wages.
The starting point in this analysis is the pay plan. Then once the pay plan is looked at closely one must examine the method by which the pay is calculated to see if this method of calculation is consistent or inconsistent with the pay plan.

Very poorly worded pay plans can lead to significant litigation results against the dealership principle or the Corporation. As an example if it fails to properly define profit or properly define cost or to find any other term which is involved in the calculating of the commission. In New Jersey any ambiguity in the wording is construed against the drafter of the agreement meaning the selling dealership. Thus, employees make an argument of that profit includes other items which might be ambiguous based on a reviewing of the pay plan. The same might be true for costs. Whether or not a cost to be assessed to a vehicle might be ambiguous based on the pay plan.

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Buying a Car is Awful Because… Tell me…

I have represented over a thousand people and have purchased many cars myself. Almost every experience related to me is the same. It sucked. The reasons are different BUT the results are the same. It sucked!! Take a look! Here too about the tricks.

I would describe it as follows:

The New Jersey Consumer Fraud Act is to be Watered Down, significantly.

New Jersey has one of the strongest Consumer Fraud Acts in the United States.

There is pending legislation to change the Consumer Fraud Act and make it easier to avoid civil penalties for fraud.

Amy Handlin and John McKeon are sponsoring an anti-consumer bill that would change the business landscape in New Jersey.

A key provision of the new New Jersey Consumer Fraud Act would exempt out of state transactions. This means the following: if someone in New Jersey commits consumer fraud upon a non-resident (living in NY, PA or CT) there are no consequences.

“a. apply only to transactions that take place in the State”

Car Salesmen and Dealerships to be Protected with Proposed Changes in Consumer Fraud Act.

Amy Handlin and Jack McKeon have sponsored and introduced ANTI-CONSUMER legislation to reduce consumer rights and protect car dealerships.

The changes in the Consumer Fraud Act would exempt or limit liability against businesses that are already regulated, such as car dealerships. It would also limit liability for consumers who consummate out-of-state transactions. This arguably contradicts other legislation that has been introduced to increase liability for those committing consumer fraud.


Amy Handlin is the co-sponsor on this bill to protect car salesman

John McKeon is the primary Sponsor on this bill to protect car salesmen.

It is not uncommon for the very employees upon whom the dealership relies to have complaints with upper management or ownership. My experience over the years has demonstrated that the dealership employees were subject to the same type of “trickery” to which the consumers are subject. In my experience, it is still common for the upper-level management and/or ownership to implement schemes or plans, intentionally or unintentionally, that reduce the commissionable gross proceeds for the salesman. The salesman and a large portion of the dealership employees rely upon the basic profit on the sale and financing of automobiles. I have seen cases where the dealerships have violated the pay plans by claiming various alleged “fictitious” costs. It is these costs, when added to the initial cost of the automobile, which reduces the gross commissionable proceeds for the dealership employees.

As an example, if a dealership acquired a vehicle at auction for $5,000 and it is placed on the books at $9,000, in my opinion the salesman has been denied the appropriate profit on the increased cost of the vehicle.

Further, hypothetically, if a dealership principal owned companies which supplied the gap or other after-market products, what would the appropriate costs be attributable to this product? The “captive” company could price a product wherein there is no profit for the dealership, thus funneling the profits into the subsidiary, which is owned and controlled by the dealership principals and/or management team. In my opinion, the sales staff or the employees have a claim against the ownership for this type of conduct.


This is not a joke. It is true.

The names will be withheld until suit is filed BUT today I saw, possibly, the worst case in the many years that I have been doing this type of work.

Both of my clients are legally blind, the primary obligor and the cosigner. They do not even have a driver’s license, nor are they permitted to drive. The dealership even got the car registered and insured. The customer was at the dealership with his cane and his glasses. When they told me the story it was hard to believe. They are both legally blind.

To make matters even worse, the car is a mess. It looks like it was in a prior accident with a different hood and various parts are melted on the interior of the car. They were told the car had only one prior owner, when in fact it had two.

The following are the causes of action (theories of liability) against the dealer and/or the lender:

• Consumer Fraud-deceptive conduct. Cox v. Sears.
• Fraud • Breach of contract • Breach of good faith and fair dealings. Wilson v. Hess
• Revocation. Cuesta v. Classic
• Negligence • Discrimination against disabled persons, the blind. Law against discrimination.
• Declaratory relief that the contract is void ab initio (from the beginning)
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