Kyle Coleman recently became a first-time dealer principal after 18 years working in retail automotive. His acquisition is the foundation for a group he aims to grow to 40 rooftops over the next 15 years.

For the last two or three years, few of Withum’s dealership clients looked at their expense structures, Stuart McCallum, leader of the tax advisory firm’s dealership services practice, says. Dealerships were making money hand over fist and didn’t feel the need to conserve money. Those days are gone.

If you’ve held on to your dealership to enjoy the historically high profits of the last few years but now you’re thinking of selling, the market has changed. Keep that in mind as you prepare to sell. James “J.T.” Taylor, managing director, automotive at Truist Securities, has advice for dealers thinking of selling their business in today’s market.

The dealership world has just come off two of the most profitable years in the industry’s history. The conditions that created that profitability are gone, however, and those looking to acquire a dealership are faced with the question of how to determine what the fair price for a franchise is.

The Department of Labor (“DOL”) recently announced its final rule that increases the minimum salary requirements for employees to qualify for exemptions from minimum wage and overtime pay requirements under federal law effective July 1, 2024. This has raised questions and introduces the possibility of confusion for California employers who must navigate both federal and California law to determine and apply the standard that is most employee friendly. Not surprisingly, California law is more employee-friendly in this area because it has a higher salary requirement for the exemptions to apply.

Since 2020, California law (specifically Code of Civil Procedure section 1281.97) has required employers to pay arbitration fees quickly or face harsh consequences. A check getting lost in the mail, or other minor delay exceeding 30 days after the due date has been found to be a “material breach” of the arbitration agreement under 1281.97, allowing the employee-plaintiff to withdraw from arbitration, pursue the case in court and seek sanctions against the employer-drafter.

On May 16, 2024, the U.S. Supreme Court decided Smith v. Spizzirri holding that federal courts have no discretion under Section 3 of the Federal Arbitration Act (“FAA”) to dismiss a case rather than staying the case once the court determines that the claims are subject to mandatory arbitration under the FAA.

Scali Rasmussen has had a lively 2024 so far and it doesn’t look like we are slowing down anytime soon. We are busy attending to our loyal clients, as well as participating in industry and community events.

In California, employees are entitled to recover reasonable attorney’s fees if they prevail on claims against employers alleging violations of the Labor Code. In the recent Court of Appeal opinion in Gramajo v. Joe’s Pizza, a California Court of Appeal was faced with the issue of whether to award excessive attorney’s fees to an employee even though the amount of the verdict was nominal. As shown below, the Court of Appeal sent a message across the bow that excessive attorney’s fees may be recoverable irrespective of the amount of damages.

As most car dealers are aware , offers made pursuant to California Civil Procedure Section (“CCP”) 998 can be a useful tool to reign in the cost of settling consumer litigation. Section 998 is a cost-shifting statute designed “to encourage the settlement of litigation without trial, by punishing the party who fails to accept a reasonable settlement offer from its opponent.”