2025 ISSUE 2 | GLANCDA.ORG OFFICIAL PUBLICATION OF THE GREATER LOS ANGELES NEW CAR DEALERS ASSOCIATION Building the Technician Pipeline GLANCDA Invests in Workforce Development Auto Show Student Career Fair Inspiring the Next Generation of LA Auto Professionals
BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations FERRUZZO.COM | CALIFORNIA | TEXAS Business Transactions • Buy-Sell Agreements • Entity formation and structure • Shareholder Agreements • Manufacturer approvals and relations Employment Practices • Arbitration agreements • Wage and hour class action lawsuits • Private Attorneys General Act (PAGA) claims • Employee handbooks and compliance Estate Planning • Succession planning for business continuation • Family estate planning (wills and trusts) Tax • Property tax planning, audits and appeals • EDD audits Business Litigation • Consumer Legal Remedies Act lawsuits • Sales and Service Agreements • Disputes before the CA New Motor Vehicle Board • Manufacturer audit disputes • Hearings before the AQMD, RWQC and OSHA Real Estate • Dealership site acquisitions and lease agreements • Lender opinion letters An Automotive Industry Authority For over 40 years, Ferruzzo & Ferruzzo, LLP has been a leading authority in the Automotive Industry. Our team of auto-focused attorneys provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. Solving Your Challenges, Together
©2026 The Greater Los Angeles New Car Dealers Association (GLANCDA) | The newsLINK Group LLC. All rights reserved. Los Angeles Dealer is published three times per year by The newsLINK Group LLC for GLANCDA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of GLANCDA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Los Angeles Dealer is a collective work, and as such, some articles are submitted by authors who are independent of GLANCDA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. We are GLANCDA. 4 PRESIDENT’S MESSAGE Celebrating Success and Looking Ahead By Jeanne Brewer, President, GLANCDA 6 GLANCDA Board of Directors and Staff 8 MANNING LEAVER LEGAL LANE Dealer Protests Before the California New Motor Vehicle Board By Gary H. Prudian, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 12 Building the Technician Pipeline GLANCDA Invests in Workforce Development 13 Auto Show Student Career Fair Inspiring the Next Generation of LA Auto Professionals 14 Dealer Management Systems Lessons From a Cyberattack By Scali Rasmussen 16 ASK ALISON Healthcare Trends Impacting Your 2026 Benefits Strategy By Alison McCallum, Principal, EPIC Insurance Brokers and Consultants 18 Iceberg Effect The Hidden Costs of Accidents By Sam Celly, MS, JD, CSP, Celly Services Inc. 20 Your Employees Are Embracing “Loud Vacationing” and So Can You 7 Tips for Building Supportive PTO Policies By Fisher Phillips 25 Leadership in Times of Crisis GLANCDA BOARD OF DIRECTORS PRESIDENT Jeanne Brewer Acura of Glendale VICE PRESIDENT Evan Ellis Alfa Romeo and Fiat of Glendale SECRETARY/TREASURER Peter Smith Bob Smith Toyota IMMEDIATE PAST PRESIDENT Howard Tenenbaum Porsche Woodland Hills GLANCDA DIRECTORS Howard Tenenbaum Peter Browning John Davis Rinaldi Halim Robb Hernandez Brad Mugg Tim Smith Ian Thomas 700 N. Central Ave., Ste. 320 Glendale, CA 91203 (213) 748-0243 | fax (213) 748-0245 Originally founded in 1907, the Greater Los Angeles New Car Dealers Association provides valuable educational and philanthropic benefits to the Los Angeles Community. The association believes that involvement with local charitable organizations makes a positive difference for everyone involved. 3
PRESIDENT’S MESSAGE Jeanne Brewer, President, GLANCDA As we close out the excitement of the 2025 LA Auto Show, I am pleased to share a few reflections and look ahead to the opportunities before us. As your president and the owner of Acura of Glendale, it is always inspiring to see our dealer community come together with such energy and purpose. Reflecting on the LA Auto Show This year’s LA Auto Show was a tremendous success and an important moment for our industry. GLANCDA’s role at the show is to promote and endorse the event with our dealer members, helping stimulate the new car market. More than 200 dealers received ticket packages through their memberships, strengthening engagement across our community. We were especially proud to host a career fair for 900 student technicians, offering direct exposure to dealership career paths and reinforcing our commitment to supporting the future workforce of our industry. The event was first hosted at the show in 2018, and it has been rewarding to see its attendance grow every year. Another highlight was the breakfast event GLANCDA hosted on Nov. 25, which more than 300 law enforcement detectives attended. With over a decade of support for this initiative, GLANCDA remains dedicated to supporting public safety. Attendees had the opportunity to explore the latest vehicles and receive valuable training on VIN verification and location. This effort continues to strengthen partnerships between our industry and law enforcement. 2026 Membership Renewal and Upcoming Events As we move toward 2026, I encourage all members to take advantage of the benefits of early membership renewal, including a ticket package for next year’s Auto Show and 10 additional complimentary tickets. Looking ahead, our annual Dealer Member Luncheon will take place on March 24 at the Universal Sheraton. With more than 300 attendees expected and Dave Roberts of the World Series Champion Los Angeles Dodgers slated as the keynote speaker, it promises to be an outstanding event. Each GLANCDA membership for 2026 includes two seats at the luncheon, with opportunities to purchase additional seats or an entire table. Sponsorship opportunities are also available; for information, please contact our executive director, Bob Smith, at (213) 748-0243 or email him at bob@glancda.org. We are also excited to launch a new series of four Member Appreciation Dinners for dealer principals in 2026. These gatherings will celebrate our members and welcome dealer principals who are interested in joining or becoming more engaged with the association. The first dinner will be held in March in the Pasadena/Glendale area, followed by events in the Cerritos/Long Beach, West Los Angeles, and San Fernando Valley regions later in the year. Leadership Updates Finally, I am pleased to share the results of our GLANCDA board elections. Directors Brad Mugg of Honda of Downtown Los Angeles, John Davis of Glenn E. Thomas Dodge Chrysler Jeep, and Peter Browning of Browning Automotive Group have each been elected to new two-year terms that began on Jan. 1, 2026. Our longest-serving director, Tim Smith of Bob Smith BMW, has been elected to a one-year term ending Dec. 31, 2026, after which he will retire following many years of dedicated service. We also welcome Tim Hutcherson of Downey Nissan, who has been elected to a two-year term. The entire board is excited to have him join our leadership team. Thank you for your continued support and commitment to our association. I look forward to working alongside all of you for a vibrant and productive year ahead. Warm regards, Jeanne Brewer President, GLANCDA Celebrating Success and Looking Ahead 4
Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® John Alexander, john.f.alexander@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. DFS-699-AD 6942528 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
GLANCDA Board of Directors and Staff BOARD OF DIRECTORS JEANNE BREWER President Acura of Glendale EVAN ELLIS Vice President Alfa Romeo and Fiat of Glendale PETER SMITH Secretary-Treasurer Bob Smith Toyota RINALDI HALIM Director Sierra Chrysler Dodge Jeep Ram ROBB HERNANDEZ Director Camino Real Chevrolet BRAD MUGG Director Honda of Downtown Los Angeles TIM SMITH Director Bob Smith BMW Mini IAN THOMAS Director Thomas Acura TIM HUTCHERSON Director Downey Nissan STAFF BOB SMITH Executive Director Greater Los Angeles New Car Dealers Association KELLY EDWARDS Administrator California Advocates Management Services JOE BERBERICH Legal Counsel Manning, Leaver, Bruder & Berberich HOWARD TENENBAUM Immediate Past President Porsche Woodland Hills PETER BROWNING Director Browning Automotive Group JOHN DAVIS Director Glenn E Thomas Chrysler Dodge Jeep Ram 6
MANNING LEAVER LEGAL LANE This is Part 1 of a two-part series. The California New Motor Vehicle Board (the “Board”) was originally established in 1967 as the New Car Dealers Policy and Appeals Board to hear appeals of new car dealer licensing decisions made by the Department of Motor Vehicles. Initially, its duties were similar to other occupational licensing boards. In 1973, the Legislature renamed the Board the New Motor Vehicle Board and expanded its authority by adding Vehicle Code sections 3060 to 3069, which became operative on July 1, 1974. These sections empowered the Board to adjudicate disputes between new car dealers and manufacturers. In enacting the 1973 legislation, the Legislature found that the distribution and sale of new motor vehicles were vital to the California economy and public welfare, and that empowering the Board to adjudicate disputes was necessary to address the power imbalance between manufacturers and independent new motor vehicle dealers. It would also ensure that said dealers fulfill their obligations as franchisees and provide adequate and sufficient service to consumers. Protests before the Board are a crucial tool for dealers to protect their rights and prevent manufacturer overreach. This article is Part 1 of a two-part series. Part 1 provides the many protest rights dealers can file with the Board to resolve disputes with their manufacturer-franchisors. Part 2 will focus on when dealers can file lawsuits to resolve franchisor disputes without first seeking arbitration or mediation through the Board for such disputes. Part 2 will also discuss the petition process that can be filed with the Board and when petitions are applicable. The following is a description of the various protests that franchisees can file with the Board, showing in each instance which party has Dealer Protests Before the California New Motor Vehicle Board By Gary H. Prudian, Esq., Partner, Manning, Leaver, Bruder & Berberich LLP 8
the burden of proof. The allocation of the burden of proof in Board proceedings is significant, because when a party has the burden of proof, it means that party must convince the administrative law judge that the evidence it has produced outweighs the evidence presented by the opposing party. The party with the burden of proof usually presents its case first in the Board proceeding. Termination When a dealer receives a written notice of termination (or a refusal to continue an existing franchise agreement), filing a termination protest automatically stays the termination, allowing the dealer to continue operating while the protest is pending. Most termination protests need to be filed within 30 days of the dealer’s receipt of the notice of termination, but some need to be filed within 10 days (e.g., insolvency, failure to operate during regular hours or transfer of ownership interest without consent). It is essential to promptly consult with competent counsel upon receipt of a notice of termination. The franchisor has the burden of proof to establish good cause for the termination. If the franchisor cannot do so, the Board will not permit the termination. Modification of Franchise This protest allows dealers to halt and challenge a proposed modification or replacement of a franchise agreement if it would substantially affect the franchisee’s sales, service obligations, or investment. This protest must be filed within 30 days from the dealer’s receipt of notice, or 30 days after the end of any appeal procedure provided by the franchisor. The dealer has the burden of proving a modification to the franchise agreement. Once it does, the burden shifts to the franchisor to show good cause for the proposed change. The franchisor cannot enact the change unless and until the protest is resolved in its favor. Additional or Relocated Franchise Within a Ten-Mile Radius Dealers can challenge the establishment of a new dealership or the relocation of an existing dealership of the same line-make within a ten-mile radius. The manufacturer or distributor must first give written notice to the Board and to dealerships of the same line-make within the relevant marketing area of the proposed new or relocating dealership. This protest must be filed within 20 days of the dealer’s receipt of notice, or 20 days after the end of any appeal procedure provided by the franchisor. The protesting dealer has the burden of proving that there is reasonable cause to prevent the establishment of the additional dealer or relocation. Additional or Relocated Satellite Warranty Facility Within a Two‑Mile Radius Dealers can challenge the establishment of an additional satellite warranty facility or the relocation of an existing satellite warranty facility within two miles of any dealership of the same line-make. The manufacturer or distributor must first give written notice to the Board and to dealerships of the same line-make within two miles of the proposed location. This also must be filed within 20 days from the dealer’s receipt of notice or after the end of any appeal procedure with the franchisor. The protesting dealer has the burden of proving that there is reasonable cause to prevent the establishment of the additional or relocated satellite warranty facility. Retail Warranty Compensation Law Compliance This protest allows a dealer to establish or modify their retail labor rate and/or retail parts rate by Board declaration if the franchisor fails to comply with the statutory methodology or if the dealer disputes the manufacturer’s proposed adjusted rates. If successful, the Board determines the correct rates, and the dealer may be entitled to retroactive payment. The franchisor has the burden of proof. Reduction in Warranty Reimbursement This protest allows the dealer to challenge a reduction in time or compensation applicable to specific parts or labor operations. The protest needs to be filed within six months following the franchisee’s receipt of notice of the reduction. The franchisor has the burden of proof to establish the reasonableness, adequacy and fairness of the reduction. Improper Disapproval of Warranty Claim The Board determines if the franchisor followed proper timelines and limited disapproval reasons (e.g., false claim, improper repair or material noncompliance), offering the dealer a path to overturn wrongful denials. The franchisor has the burden of proof. The dealer must file the protest within six months after receiving the written disapproval, and the franchisor bears the burden of proof. Improper Chargeback of Warranty Claim After Audit This is one of the most common protests. The franchisor may conduct audits of dealer warranty records on a reasonable basis and for a period of nine months following the payment of a claim. If the franchisor disapproves of a previously approved claim following an audit, within 30 days after the audit, the franchisor shall provide the dealer with a written notice of disapproval stating the specific grounds upon which the claim is disapproved. The dealer shall have at least 30 days thereafter to appeal and respond to any disapproval with additional supporting documentation or information that rebuts the disapproval. If, after the appeal process, the franchisor issues a final denial of a warranty claim, it must provide the dealer with a written notification of the final denial, and cannot charge the dealer back for 45 days after. If the dealer files a protest before the 45-day period expires, the franchisor is prohibited from charging the dealer until the Board issues a final order on the protest. The Board determines whether the franchisor followed timelines and limited claim disapproval reasons (false claim, ineligible under communicated terms or material noncompliance). The franchisor has the burden of proof. 9
Improper Chargeback of Sales Incentive Claims After Audit Dealers can challenge chargebacks following sales incentive audits to confirm the franchisor acted lawfully and did not violate audit limitations (e.g., adherence to the nine-month period or proper extrapolation methods). A dealer must initiate the protest within six months of receiving the chargeback notice from the franchisor. The franchisor has the burden of proof. Unreasonable Performance Standards A dealer can challenge any performance standard, sales objective or measuring program that materially affects them (e.g., affecting incentive payment eligibility or working capital) if it is inconsistent with standards outlined in Vehicle Code § 11713.13(g). The Board determines whether the standard is reasonable based on local demographics, market characteristics, vehicle allocation, economic circumstances, and historical sales and service records. No specific time limit is set for the dealer to file the protest, but it must be filed within a “reasonable time.” The franchisor has the burden of proof. Improper Vehicle or Parts Allocation A dealer can challenge the franchisor’s failure to deliver vehicles or parts in reasonable quantities and within a reasonable time after an order, or the failure to disclose the basis of the allocation system upon written request (VC § 11713.3(a)). No specific time limit is prescribed for filing, but it should be done within a reasonable time. The franchisor has the burden of proof. Franchisor Competing With Dealer Dealers can challenge a manufacturer or its affiliate that is unfairly competing in the sale, lease, or warranty service of new motor vehicles, except in cases where specifically permitted exceptions apply (e.g., temporary ownership or dealer development programs). Again, no specific time is prescribed, but the protest should be filed within a reasonable time. The franchisor has the burden of proof to show it is not competing with dealers. Requirement to Maintain Exclusive Facilities/Refusal to Allow Another Line Make So long as a dealer complies with the reasonable facilities and capital requirements of the franchisor, a dealer can protest its franchisor’s insistence to maintain exclusive facilities, and/or the refusal to authorize adding a sales or service operation of another line-make. The franchisor bears the burden of proof in such protests to demonstrate that its position is reasonable, considering all existing circumstances. Requirement to Make Facility Upgrades Dealers can protest manufacturer requirements for a facility upgrade. The franchisor has the burden of proof to show that the requirement is reasonable considering all existing circumstances. Requirement to Install Fast Charging Stations Dealers can protest a manufacturer’s fast charging station requirements. The franchisor has the burden of proof to show that all the statutory requirements of Vehicle Code § 11713.13(k) are met. Preparation and Delivery Compensation If a dealer believes the compensation specified by the franchisor for fulfilling delivery and preparation obligations is unreasonable, it can file a protest with the Board. The dealer has the burden of proof to demonstrate that the compensation is unreasonable, considering all relevant circumstances. Association Challenging Export Policy Legality A dealer association may file this protest on behalf of two or more dealers to obtain a Board declaration regarding whether a manufacturer’s export or sale-for-resale prohibition policy violates dealer protections. The association has the burden of proof. For detailed information about these protest rights, review the California New Car Dealers Association (CNCDA) Franchise Law Manual authored by our firm. It can be found in the Comply section at www.cncda.org. Manning, Leaver, Bruder & Berberich LLP is a Los Angeles law firm that practices throughout California and has been in existence for over 100 years. Its strong automobile dealer practice covers all areas related to the automobile dealer industry, including dealership buy-sells, real estate transactions, business and consumer litigation, regulatory compliance, dealer association law, new motor vehicle board matters and franchise law. Visit www.manningleaver.com for more information and areas of practice. Nothing in this article may be considered as legal advice. Contact legal counsel for legal advice. Protests before the Board are a crucial tool for dealers to protect their rights and prevent manufacturer overreach. 10
Building the Technician Pipeline GLANCDA INVESTS IN WORKFORCE DEVELOPMENT Ensuring a strong and sustainable pipeline of skilled automotive technicians remains one of the most critical priorities for franchised dealers across Greater Los Angeles. In late 2025, the Greater Los Angeles New Car Dealers Association (GLANCDA) reinforced that commitment through a series of workforce development events designed to connect student technicians with real-world dealership opportunities and industry leaders. Throughout the fall, GLANCDA hosted five workforce development events at community colleges with established automotive technology programs. These events took place directly on campus at Los Angeles Trade-Technical College, Rio Hondo College, East Los Angeles College, Pierce College and Long Beach City College. By hosting events where students are already learning and training, GLANCDA created an accessible and meaningful bridge between education and employment. Local franchised dealerships were well-represented at each campus, with dealer personnel sharing firsthand insight into career pathways, advancement opportunities and the long-term benefits of working in dealership service departments. GLANCDA Executive Director Bob Smith addressed students at each event, emphasizing the growing demand for technicians and the role dealerships play in offering stable, well-compensated and technologically advanced careers. A highlight of each campus event was the presentation of student awards. With generous support from Snap-on, GLANCDA awarded five $500 scholarships at each school to high-achieving automotive technology students. These awards recognized academic performance, technical skill, and commitment to the profession, reinforcing the industry’s investment in the next generation of technicians. Workforce outreach extended beyond campus events. On Friday, Nov. 21, on the opening day of the Los Angeles Auto Show, nearly 900 student technicians from area high schools and community colleges participated in a large-scale career information program. The event provided students with exposure to dealership career options, followed by the opportunity to experience the latest vehicles, technologies, and innovations showcased on the show floor. Together, these initiatives underscore GLANCDA’s ongoing focus on technician workforce development. Association leadership and dealer members continue to dedicate time, funding, and partnerships to ensure students see a clear and rewarding future in automotive retail. That commitment will continue into 2026. In early March, GLANCDA will co-host two additional career information events with the California New Car Dealers Association Foundation. These events are scheduled for March 10 at Long Beach City College and March 11 at Los Angeles Trade-Technical College, further strengthening the pipeline of skilled technicians entering dealership service departments across the region. For GLANCDA and its members, investing in students today ensures the strength and success of the industry tomorrow. 12
More Auto Show Highlights Community Engagement: Supporting Catholic Big Brothers Continuing a beloved tradition, GLANCDA provided over 300 tickets to Catholic Big Brothers, allowing Bigs and Littles to experience the auto show together and reinforcing GLANCDA’s commitment to the community. Member Benefits: Sharing the Auto Show Experience GLANCDA dealer members enjoy the benefit of a ticket package they can share with customers, employees and family. With over 300 dealers participating, this benefit strengthens community ties and enables more people to come and enjoy the show. Sponsoring the National Insurance Crime Bureau Event On Nov. 25, GLANCDA sponsored a breakfast event for the National Insurance Crime Bureau. This event, held before the Auto Show opened later in the day, allowed detectives to conduct VIN checks and learn about various fraud prevention techniques, making the event a valuable opportunity for both law enforcement and the industry. Stimulating the Local Car Market The LA Auto Show attracts hundreds of thousands of visitors and plays a crucial role in stimulating the local automotive market. For dealers and customers alike, the chance to see so many new cars in one place is invaluable, and GLANCDA’s decades-long support ensures this cherished tradition endures. On Nov. 21, the public opening day of the LA Auto Show, the Greater Los Angeles New Car Dealers Association hosted a vibrant career fair. Nearly 900 college students and instructors from local automotive programs met with over 25 dealer groups to explore exciting career opportunities in the automotive industry. Students had the chance to engage directly with dealership staff, including fixed ops directors, service managers, shop foremen, and HR recruiters, to discuss career pathways and job opportunities. They were also able to experience the latest vehicle technologies shaping the future of the industry, offering them a glimpse of what the future holds for those pursuing a rewarding career in the automotive field. This year’s career fair, presented in partnership with the CNCDA Foundation, was a rousing success, forecasting a bright future for the auto industry in the Greater Los Angeles area. Auto Show Student Career Fair INSPIRING THE NEXT GENERATION OF LA AUTO PROFESSIONALS 13
The June 2024 ransomware attack on CDK disrupted dealership operations nationwide. For nearly two weeks, many dealers could not process sales, repair orders or routine management tasks. Staff resorted to pen-and-paper recordkeeping. Transactions stalled, warranty submissions backed up and communication with manufacturers slowed. Anderson Economic Group later estimated that dealers suffered more than $1 billion in direct losses during the outage. The event underscored a reality every dealer knows: The Dealer Management System (DMS) is not a back-office tool; it is the backbone of the business. Manufacturers require dealers to maintain a DMS for reporting new vehicle sales, warranty claims and service work. Dealers depend on it for financial reporting, payroll, inventory tracking and customer communications. The DMS also houses sensitive information, like customer contact details, Social Security numbers, financial records and other confidential business data. Because of the sensitivity of this information, both federal and state laws impose privacy and security obligations. Dealers and their vendors must use reasonable safeguards to protect records and, if records are compromised, comply with notification and reporting requirements to regulators and affected consumers. Recognizing how central the DMS is to compliance, some states adopted dealer protection statutes. These statutes confirm that dealers own their data, require vendors to maintain safeguards and prohibit contractual terms that prevent dealers from meeting their obligations under privacy laws. Even with these protections, many dealers learned after the CDK event that their contracts left them exposed. Typical provisions include: • Liability limits that cap damages at the cost of services. For a dealer, this means the vendor’s liability for a weeks-long outage may equal little more than the monthly fee, while the dealer bears the financial and reputational harm. • Termination fees that impose heavy costs if a dealer seeks to move to another provider, even after a significant outage. • Gaps in coverage for compliance costs. Dealers may have to pay for consumer notices, regulatory filings and third-party claims, even if the trigger was a cyber event affecting the vendor. To be clear, most DMS providers strive to maintain secure systems and strong contractual relationships. However, the lessons of 2024 highlight the need for dealers to evaluate contracts and coverage with care. Practical Steps for Dealers Dealers can take several steps to reduce future risk: 1. Negotiate liability provisions. Push to eliminate broad limitations of liability or, at a minimum, carve out business interruption losses tied to outages outside the dealer’s control. 2. Expand indemnity clauses. Ensure the contract requires the vendor to cover costs associated with regulatory compliance, consumer notices and third-party claims linked to a vendor cyber event. 3. Secure termination rights. Add language confirming that a significant outage or compromise of data constitutes a material breach that allows early termination without penalty. 4. Review insurance coverage. Cyber and business interruption insurance should cover primary losses and secondary costs like forensic investigations, customer communications and reputational repair. 5. Establish a response plan. Work with counsel to create a playbook for how the dealership will respond to vendor-related outages, including communication with staff, customers and regulators. Dealer Management Systems LESSONS FROM A CYBERATTACK By Scali Rasmussen 14
Questions to Ask Your Vendor Dealers should also engage in proactive dialogue with DMS providers. Helpful questions include: • What cybersecurity frameworks and third-party audits do you follow? • How often are backups tested, and how quickly can service be restored? • What is your incident notification process and timeline? • How will you support dealers in complying with federal and state privacy laws in the event of a breach? • What contractual flexibility exists if a major outage occurs? These questions foster transparency and demonstrate a dealer’s commitment to partnership. Looking Forward The DMS is indispensable to every dealership. Providers and dealers share an interest in resilient, secure systems that protect data and ensure business continuity. Contract negotiations like the ones suggested here only benefit and protect both parties, aligning risk with responsibility and promoting long-term trust. The CDK incident is not the last cyber event the industry will face. Technology will continue to evolve, as will the threats. Dealers that treat their DMS agreements and insurance coverage as part of their risk-management program will be better positioned to withstand future disruptions. Conclusion If the events of 2024 taught dealers anything, it is that a DMS contract is just as critical as a floor plan financing agreement or franchise document. Take the time to review your contracts and insurance policies with experienced auto industry counsel. Doing so now helps ensure that when the next challenge comes, dealers and providers can move forward with resilience. 15
ASK ALISON Healthcare Trends Impacting Your 2026 Benefits Strategy By Alison McCallum, Principal EPIC Insurance Brokers and Consultants Dealerships face the crucial challenge of balancing compelling employee benefits with sustainable healthcare cost management. Effectively attracting and retaining talent means looking ahead and adapting to an evolving landscape. To help you prepare for 2026, here are seven critical trends defining 2026 benefits strategies: 1. Accelerating Cost Increases: The rampant reemergence of healthcare trends continues to outpace inflation, with medical costs rising 8%, pharmacy 10%, dental 5% and vision 4%. These steep increases are putting unprecedented pressure on benefits budgets and causing dealerships to explore alternative strategies. 2. Innovative Plan Structures: Forward-thinking dealerships are exploring alternatives to traditional plans, including Health Reimbursement Accounts (HRAs), Health Savings Accounts (HSAs), variable copay designs and captive insurance arrangements to better control costs while maintaining competitive benefits. 3. Compliance Concerns: Compliance challenges for employee benefits programs continue to stress HR departments. Evolving state absence laws and fiduciary liability continue to be challenging areas. 4. Stop Loss Markets: Stop loss costs are exploding, led by cancer, and high-cost drugs and procedures. Employers are seeing a significant increase in large claims, particularly for cancer treatments, with costs ranging from $250,000 to $750,000. While cell and gene therapies remain on the horizon, uptake is slower than initially anticipated. These therapies promise significant advancements but also come with high costs, which will impact stop loss insurance. 5. Weight Loss Medication Impact: The increasing demand for GLP-1 medications is transforming both healthcare utilization patterns and costs. With growing employee demand and an average annual cost of $12,000 to $15,000 per patient, dealerships must develop thoughtful coverage strategies that balance access with cost containment. 6. Specialty Medication Pipeline: The specialty medication landscape continues to evolve with breakthrough treatments entering the market. While these medications offer hope for previously untreatable conditions, their six-figure price tags are creating significant financial challenges for self-funded plans. 7. Mental Health Access and Equity: Expanding mental health services remains a top priority, with employers focusing on eliminating barriers to care and ensuring equitable access across diverse employee populations. Virtual care options and specialized EAP programs are becoming standard components of comprehensive benefits packages. 16
“We have a fantastic relationship with the LSL team. They keep our interests top of mind and maintain a positive reputation in the industry.” —Craig Whetter, President | David Wilson Automotive Group (relationship since 1983) Adam Odom, CPA, Partner Assurance & Advisory adam.odom@lslcpas.com LSL | CPAs & Advisors | Irvine & Sacramento, CA | The Woodlands, TX | lslcpas.com/automotive | 949.829.8299 Donald Slater, CPA, Principal Consulting & Advisory donald.slater@lslcpas.com David Myers, MST, CPA, Partner Tax & Advisory dave.myers@lslcpas.com As you plan your 2026 benefits strategy and budget, partnering with an experienced broker who is well-versed in the unique dealership industry is indispensable. If you would like more information or a benefit strategy and cost review, EPIC will provide details to GLANCDA members at no cost. EPIC ranks among the top 15 retail insurance brokers in the United States and is the largest insurer of auto dealers in the state. Alison McCallum has been in the employee benefits industry for over 20 years and personally works with more than 80 California dealerships. She is a principal with EPIC Insurance Brokers and Consultants. EPIC offers unique dealership expertise and services available to GLANCDA dealer members at no cost. If you have questions or would like further information, please feel free to contact her at alison.mccallum@epicbrokers.com or (949) 417-9136. 17
Workplace accidents can be expensive for any corporation. Management often can brush away accidents and injuries by stating that it is just part of doing business. Some may look at accidents in terms of the dollar costs of treating injured employees, replacing injured employees, replacing broken machinery, etc. Accident-related expenses often go much deeper than what meets the eye. Hence, the iceberg effect. The visible tip of an iceberg represents only a tiny fraction of its true impact, just like the immediate costs of an accident. Managers understand the acute impact of workplace injuries — medical bills, damaged equipment and downtime — but the hidden costs lurking beneath the surface are even more devastating. Iceberg Effect THE HIDDEN COSTS OF ACCIDENTS By Sam Celly, MS, JD, CSP, Celly Services Inc. The visible tip of an iceberg represents only a tiny fraction of its true impact, just like the immediate costs of an accident. 18
Accidents come with substantial costs that often go unnoticed until they start piling up. Here are some common ones. • Loss in Productivity: When an accident happens, work slows down or stops entirely, resulting in delays and inefficiencies. For example, your only transmission mechanic breaks an arm and is gone temporarily for six weeks on disability. You must find a substitute. For calculation purposes, the tech was paid $40/hour. Your labor rate is $240/hour. The $200 differential at 40 hours/week is $8,000 weekly. For six weeks of downtime, you lost $48,000. Lost time is serious money! • Employee Replacement Costs: If the employee is permanently disabled, you need to hire another mechanic. Lube techs may come easily; a master mechanic is likely more difficult to lure to your store. According to the 2023 NADA Dealership Workforce Study, the average cost to recruit and onboard a new hire is $5,000. Time to fill is another factor, impacting overall costs. According to DHI Group’s Hiring Indicators 2017 Report, the retail industry had a time-to-fill average of 25 days. That’s 25 days of customers waiting for a specialist to repair their vehicle. • Training Costs: Companies spend significant time and money training new hires in the company standards and their way of conducting business. According to the NADA Study, the average training cost for dealership employees is $1,200. These can spin upward of $10,000 per employee, depending on their skill level and job, according to CBTNews! • Legal Fees and Fines: Companies may face lawsuits, regulatory fines or settlements, which can be financially draining. OSHA fines and penalties are $16,500 per violation and $165,000 for a willful violation. With nearly 40 years of experience in workplace safety, I am confident that OSHA will find a code violation for a serious accident, roping you into a regulatory morass of appeals, hearings and penalties. Trial lawyers are lurking in the waters, too. If they smell employer culpability that caused a serious accident or harm, they will bypass the workers’ comp judge under some novel theory and head to the Superior Court. • Equipment and Property Damage: Repairs and replacements for damaged tools, machinery or infrastructure can be costly. Downtime for equipment can create a backlog and loss of productivity. If a customer’s vehicle is damaged during the incident, associated costs may follow, such as providing a loaner until repairs are made. • Increased Insurance Premiums: Insurance costs often rise after an accident, adding immediate and long-term financial strain to the dealer. • Emotional and Psychological Impact: Accidents can lower morale, increase stress and lead to long-term emotional effects on employees. • Reputation Damage: A serious accident can hurt a company’s public image, making it harder to attract employees and even customers. Customers may demand a buyback if a vehicle is damaged during an accident at the dealership. This is an excellent framework for understanding why proactive workplace safety measures are a financial necessity and not merely compliance. Preventative measures like rigorous safety training, regular equipment maintenance and fostering a safety-conscious workplace culture can significantly reduce these risks. Companies that invest in safety upfront often find that their return on investment (ROI) outweighs the costs of handling accidents after they occur. DISCLAIMER: The contents of this article are for informational purposes only and are not to be considered as legal advice. Employers must consult their lawyer for legal matters and EPA/OSHA consultants for matters related to environmental health and safety. The article was authored by Sam Celly of Celly Services Inc., who has been helping automobile dealers across the United States comply with EPA and OSHA regulations for over 38 years. Sam is a certified safety professional (No. 16515) certified by the National Board of Certified Safety Professionals. Sam received his BE (1984) and MS (1986) in chemical engineering, followed by a JD from Southwestern University School of Law (1997). Sam is a member of the American Chemical Society (No. 31176063), American Industrial Hygiene Association (No. 124715) and National Association of Dealer Counsel (NADC). Sam also serves on the Board of Orange County American Industrial Hygiene Association and on the California Industrial Hygiene Council (CIHC). Celly Services newsletters can be accessed at www.epaoshablog.com. Your comments and questions are always welcome. Please send them to sam@cellyservices.com. 19
Your Employees Are Embracing “Loud Vacationing” and So Can You 7 TIPS FOR BUILDING SUPPORTIVE PTO POLICIES By Fisher Phillips The trend for workers to hide their time off from their managers — known as “quiet vacationing” — has taken a sharp turn. Employees are now “loud vacationing” by openly sharing their travel plans and using their paid time off (PTO) without hesitation. While this should be a welcome shift for employers, it also highlights the importance of creating supportive policies that balance employee well-being with workplace productivity. How can you help your employees and your business thrive this summer and beyond? Here are seven tips to help you refresh your PTO policies. 20
1. Start by Reviewing the Latest Employee Trends Here’s why you should consider revisiting your organization’s approach to PTO and start encouraging loud vacationing: • 85% of employees believe that vacations boost their happiness.1 • 46% don’t use all their allotted PTO in a year.2 • 47% feel guilty about taking a vacation.3 • 68% say they work during vacation.3 2. Create a Plan To Revamp Your PTO Program There’s no one-size-fits-all PTO plan, and your policies will depend on the unique needs of your business. However, as you consider updating and modernizing your program, you can start by asking yourself the following questions: • How do your PTO policies stack up against offerings from your competitors and other businesses in your area? • Are you providing enough time off each year for employees to disconnect as needed? • Do you have an adequate system for tracking and approving PTO use? • Do you have clear procedures for handling requests at popular times or during your busy season? • Have you asked employees for feedback about their experience requesting or using PTO? • Have you identified any patterns of underuse organization-wide or in particular departments? • Do you have a legally compliant cap on accrual of paid time off or a legally compliant PTO policy? • Do your policies comply with all applicable federal, state and local leave laws? 21
3. Consider Different Types of PTO Models To embrace loud vacationing, you may need to think outside the box. But first, let’s talk about unlimited PTO models, which have become popular in recent years. Under these plans, employees don’t have a set number of PTO days, accruals or caps. Instead, they request paid time off as needed or desired, and managers use their discretion to approve or deny such requests. These policies place no cap on the amount of time an employee can take off. The benefits of an unlimited PTO policy include: • More flexibility for employees to take the time they need, when they need it, rather than waiting for PTO to accrue. • May be a good recruiting and retention tool, as it promotes autonomy over the employees’ own work-life balance. • May avoid employee burnout. • Reduced administrative costs for employers in tracking PTO. • Cost savings, as in some states there is no need to pay out unused PTO days at the end of the employment relationship if the employer truly has an unlimited PTO policy. But watch out for these potential pitfalls of unlimited PTO policies: • You may have employees who prefer to “earn” accruals rather than use their discretion in taking time off. • Some employees may request less time than they need, while others may request excessive time off. • Managers may not apply and enforce policies consistently, which could lower morale or lead to discrimination claims. • Although the purpose of a vacation allowance is to encourage employees to disconnect and recharge, they may be frustrated if they can’t cash out unused vacation time upon separation — especially if your old policy allowed it or state law requires you to pay out accrued vacation at termination. • Combining vacation and sick time off may run afoul of various state and local sick leave laws. • Some states may still classify unlimited PTO as “earned wages” depending on how the policy is structured and applied — so check with your attorney on the legal nuances for your locations. For example, scan the QR code to read about California-specific issues. https://www.fisherphillips.com/en/news-insights/unlimitedpto-great-resignation-concerns-practical-tips-policy.html To address some of the concerns with unlimited vacation programs, some employers are setting “minimum PTO” or “mandatory vacation” policies – meaning they require employees to take at least a certain amount of time off a year. The benefits of this type of policy include: • Helping prevent burnout and encouraging better work-life balance by ensuring employees take breaks from work. • Helping managers plan for absences and schedule work assignments accordingly. • May be a good recruiting and retention tool. • You can be flexible in your approach. For example, an unlimited policy can be combined with a minimum requirement to reap the benefits of an unlimited PTO plan and address some of the pitfalls (like the fear of taking time off that’s not “earned”). You can also combine minimum PTO with accruals or other policies that provide a set number of earned vacation time per year to avoid high cash-outs or rollovers at the end of the year if offered by your company or required in your jurisdiction. However, be vigilant of state-specific requirements, such as California-specific issues relating to accrual caps and payment of PTO at separation. • You can still award employees with extra time off based on tenure, for example, by raising the minimum for employees with seniority. A word of caution: You’ll want to ensure your written policy is developed and implemented carefully so that the minimum doesn’t unintentionally become the maximum. We’ll discuss corporate culture in more detail next. 4. Work With Employees To Reduce Anxiety According to Glassdoor’s research, 77% of employees feel anxious about the workload they’ll face when they return from vacation. You can help assuage their fears by: • Scheduling a one-on-one meeting prior to their vacation to go over any projects or tasks that will need to be reassigned to other employees during their absence. • Encouraging them to truly disconnect while on vacation and reassuring them that you have an adequate work-coverage plan in place. • Following up when they return to work to help prioritize tasks and manage their workload. • Offering words of encouragement to enjoy their time off and welcoming them back when they return. 22
5. Create Metrics for Managers You’ll certainly want to train your managers on your PTO philosophy and policies. But you can go a step further in the spirit of loud vacationing by developing performance metrics for managers based on time-off objectives for their teams. Consider doing the following: • Analyze team PTO use to ensure sufficient time is being taken by all employees. • Address patterns of underuse. Is the manager discouraging vacation use, or are employees hesitant to take time off for some reason? Get to the root of the issue. • Assess whether PTO is being approved and used equitably across the team. If not, find out why and address any disparities. • Ask employees for feedback. You can periodically survey employees to find out what is and isn’t working for them. Just remember that if you ask employees for their input, it’s important to follow up and address their concerns. 6. Don’t Forget the Legal Stuff • Ensure your PTO policies align with all applicable federal, state and local leave laws — including paid family leave, paid sick leave and accrual requirements. Note that some states have banned “use-it-or-lose-it” PTO policies or require employers to pay out accrued but unused PTO at the end of employment. • Employers with multiple locations may need to make jurisdiction-specific adjustments. • Be sure to create a clear and objective process for approving or denying vacation requests, whether based on performance issues, busy seasons or seniority during popular vacation times. • Document your legitimate business reasons for denying requests. Make sure decisions are made consistently and fairly to reduce the risk of discrimination claims. Consult with legal counsel, if needed, to ensure the denial doesn’t interfere with protected leave. • Train managers on PTO policies and basic leave-law compliance and let them know who to contact on your HR or legal team when issues arise. Sources 1. https://www.empower.com/the-currency/work/pursuit-of-pto-research 2. https://www.pewresearch.org/short-reads/2023/08/10/more-than-4-in-10-u-s-workers-dont-take-all-their-paid-time-off/ 3. https://www.glassdoor.com/blog/why-employees-dread-returning-to-work-after-pto/ 7. Lead by Example We’ll end with one of the most important aspects of a thriving workplace culture: Remember that your senior leadership team sets the tone for the entire organization. To embrace loud vacationing, your leaders must prioritize and value their own time away from work — and they should let your employees know about it. To set the tone, think about taking these actions: • Encourage senior leaders and all managers to mention in their internal out-of-office message that they are on vacation and disconnecting while away. Be sure they designate a point person for critical issues in their absence. • Talk about PTO in team meetings. Give space for employees to share their vacation plans or post-vacation stories — but also be sure to respect their privacy. • Create a space on your internal portal or team site where employees can voluntarily share their vacation photos. (You can designate someone in HR to upload submissions and ensure professionalism.) Conclusion Fisher Phillips will continue to monitor developments in this area and provide updates as warranted, so scan the QR code to subscribe to Fisher Phillips’ Insight System and get the most up-to-date information. For further information, contact your Fisher Phillips attorney. https://www.fisherphillips.com/en/Subscribe.html 23
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