november 2014 msada auto dealer

20152014November 2014 • Vol. 27 No. 11

FIRST CLASS MAILUS POSTAGE PAID

BOSTON, MAPERMIT NO. 216

MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109

autoD E A L E R

M A s s A c h u s E t t s

The official publication of the Massachusetts State Automobile Dealers Association, Inc

2015 New England

Preview

2015

New Governor in 2015

Ta b l e o f C o n T e n T s

4 From the President: Curtain Raisers

6 the roUndUP: Change afoot after elections

10 LeGAL: Hyperlinks & asterisks

11 LeGAL: earned sick Time for Massachusetts employees

12 AUto oUtLooK

14 Cover Story: Rolling into showrooms in 2015

18 neWs From Around the horn

23 troUBLeshootnG: an ounce of Prevention

24 nAdA mArKet BeAt

www.msada.org Massachusetts auto Dealer NOVEMBER 2014

The official publication of the Massachusetts State Automobile Dealers Association, Incs Ta f f D i R e C T o R yRobert O’Koniewski, Esq.

executive Vice [email protected]

Jean Fabrizio Director of administration

[email protected] Brennan, Esq.

Staff [email protected]

Marta Argueta-Guerraadministrative assistant/ Membership Coordinator

[email protected]

a u T o D e a l e R M a g a z i n eRobert O’Koniewski, Esq.

executive editorCatherine MacDonald

editorial [email protected]

subscriptions provided annually to Massachusetts member dealers. all address changes should be submitted to: MsaDa by

e-mail: [email protected]:

send address change to:one McKinley square, sixth floor

boston, Ma 02109

autoD E A L E R

M A s s A c h u s E t t s

auto Dealer is published by the Massachusetts state automobile Dealers association, inc. to provide information

about the bay state auto retail industry and news of MsaDa and its membership.

aD DiReCToRyblumshapiro, 19

boston Herald, 28leader auto Resources, 9lynnway auto auction, 21

nancy Phillips associates, inc., 19o’Connor & Drew, P.C., 27

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from the President4

NOVEMBER 2014 Massachusetts auto Dealer www.msada.org

by Scott Dube, MSADA President

F

Curtain RaisersGearing up for this year’s Auto Show irst, I want to take a minute to congratulate governor-elect Charlie Baker on a hard-earned victory, and, more importantly, use it as an oppor-tunity to remind us that the grassroots power of small businesses has much more impact in our Commonwealth than is often recognized. Every once in a while, the weight of Main Street can make a difference.

And, of course, right around the time when our new governor will be sworn into office, our New England International Auto Show will be an even more significant reminder of the power that drives our Main Street industry. No matter how long you’ve been in this industry -- no matter how many obstacles you’ve faced -- the love for the machines doesn’t go away.

If anything, I feel more pride in the line of work I’m in each time I see a new model get rolled into the showroom. As auto dealers, we’re the chief evangelists for the cutting-edge ingenu-ity that is getting Americans where they need to go.

The New England International Auto Show is like that mo-ment in the showroom multiplied 600 times over. That’s right, there will be 600 cars on display this year. That’s six football fields worth of vehicles and at least $37 million in inventory!

We all are going to have our own favorites at the Auto Show. Of course, we dedicate our livelihoods to certain manufacturers, and we had all better hope that our models catch the most eyes on the Auto Show floor. But the power of all of these vehicles under one roof trumps all. With all these new models rolled out for the public to come and see, we dealers are the people here to help

get them in the vehicle of their dreams. And that, of course, is the most im-

portant part of why we take on this mammoth task each year. We are here for our customers, and as they stroll around and look at what we have to of-fer they know that no amount of online browsing replaces that moment when a human being shares his or her knowl-edge of that dream car. We’re here for their convenience and, more impor-tantly, their safety. During the times

when we’re fighting the onslaught of legislative and regulatory battles that come our way, the Auto Show is our way of proving how vibrant the franchise dealer model remains.

So, as you peruse some of the models that you should expect to see this year, keep in mind that this is about celebrating ourselves as much as the vehicles. I hope you will join me January 16 at our New England International Auto Show Charity Night Gala, where we’ll have a fun night of wandering around the show floor, listening to the great entertainment we have lined up, hors d’oeuvres in hand, or playing the odds in our casino night (back by popular demand). It’s a great opportunity to spend a night in the city and enjoy the company of your fellow dealers. Remem-ber, for our dealer members we’re picking up the tab for you to stay downtown that night!

I encourage you to contact us with any ticket orders and ques-tions. Jean Fabrizio can be reached at (617) 451-1051 or [email protected]. We’re planning a great night, and I’m excited to see you there.

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MSADA

“As auto dealers, we’re the chief evangelists for the cutting-edge

ingenuity that is getting Americans where they need to go.”

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Name Contact TelephoneADESA Boston Chris Carli (508) 270-5403ADP Dealer Services Maria Trezza (973) 404-4466Albin, Randall & Bennett Barton D. Haag (207) 772-1981American Fidelity Assurance Co. Tom Trudell (413) 885-5477AutoAlert Don Corinna (949) 398-7008AutoRaptor (RAL) Howard L. Leavitt (401) 421-6533Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt Andron & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000Boston Globe Mary Kelly (617) 929-8373The Boston Business Advisory Group Paul Cuomo (781) 681-1501 Vincent Saccone (781) 681-1519Burns & Levinson LLP Paul Marshall Harris (617) 345-3854Cars.com Heidi Allen (312) 601-5376 CitNOW Jack Gardner (617) 221-8008 Construction Management & Builders, Inc. Kate Sullivan (781) 246-9400CVR John Alviggi (267) 419-3261DealerDOCx Brad Bass (978) 766-9000 Dealermine Inc. Karen Parmenter (800) 304-3341 x5179 DealerTrack Ernest Lattimer (516) 547-2242Downey & Company Paul McGovern (781) 849-3100EasyCare New England Inc. Mike Douglas (770) 246-9724Ethos Group, Inc. Drew Spring (617) 694-9761F & I Resources Jason Bayko (508) 624-4344Federated Insurance John Ballard (859) 312-9896First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher & Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320Gulf State Financial Services Stephanie Franklin (713) 580-3143GW Marketing Services Gordon G. Wisbach Jr. (781) 899-8509 Huntington National Bank John J. Marchand (781) 326-0823John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 Key Bank James Q. Moretti (781) 558-5132KPA Rob Stansbury (484) 326-9765Leader Auto Resources, Inc. Brendan J. Murphy (518) 878-6341Lynnway Auto Auction Jim Lamb (781) 596-8500M & T Bank John Federici (508) 699-3576Management Developers, Inc. Dale Boch (617) 312-2100MetroMedia Energy Timothy Teevens (800) 828-9427Micorp Dealer Services Frank Salkovitz (508) 832-9816Mid-State Insurance Agency James Pietro (508) 791-5566Mintz Levin Kurt Steinkrauss (617) 542-6000Murtha Cullina Thomas Vangel (617) 457-4000Nancy Phillips Associates, Inc. Nancy Phillips (603) 658-0004Northeast Dealer Services, Jim Schaffer (781) 255-6399O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120Performance Management Group, Inc. Mark Puccio (508) 393-1400R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300Reflex Lighting Ping Weiner (617) 269-4510Resources Management Group J. Gregory Hoffman (800) 761-4546Reynolds & Reynolds Marc Appel (413) 537-1336Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301Samet & Company John J. Czyzewski (617) 731-1222Santander Richard Anderson (401) 432-0749Schlossberg, LLC Michael O’Neil, Esq. (781) 848-5028Sentry Insurance Company Eric Stiles (715) 346-7096Shepherd & Goldstein Ron Masiello (508) 757-3311Silverman Advisors, PC Scott Silverman (781) 591-2886Solect Energy Development Kristen Brandt (781) 733-0223 Southern Auto Auction Tom Munson (860) 292-7500Sun Trust Bank Michael Walsh (617) 345-6567 Target Dealer Services Andrew Boli (508) 564-5050TD Auto Finance BethAnn Durepo (603) 490-9615TD Bank Michael M. Lefebvre (413) 748-8272TrueCar Pat Watson (803) 360-6094 Wells Fargo Dealer Services Christopher Peck (508) 314-1283 Wicked Local Media Massachusetts Jay Pelland (508) 626-4334 Windstream Rick Caruth (978) 296-0313; (413) 977-6111 Zurich American Insurance Company Steven Megee (774) 210-0092

AssociAte MeMber Directory

Msada BOaRd Barnstable County

gary beard, Dick beard ChevroletBerkshire County

brian bedard, bedard brothers auto sales Bristol County

Richard Mastria, Mastria auto groupEssex County

William Deluca iii, Woodworth Motors John Hartman, ira Motor group

Franklin CountyJay Dillon, Dillon Chevrolet

Hampden CountyJack sarat, Jr., sarat ford

Hampshire Countybryan burke, burke Chevrolet

Middlesex CountyChris Connolly, Jr., Herb Connolly Motors

scott Dube, bill Dube Hyundaifrank Hanenberger, MetroWest subaru

Norfolk CountyJack Madden, Jr., Jack Madden ford

Charles Tufankjian, Toyota scion of braintreePlymouth County

Christine alicandro, Marty’s buick gMC isuzuSuffolk County

Robert boch, expressway ToyotaWorcester County

steven sewell, Westboro Mitsubishisteve salvadore, salvadore auto

Medium/Heavy-Duty Truck Dealer Director-at-Large

[open]Immediate Past PresidentJames g. boyle, Tuck’s Trucks

NADA DirectorDon sudbay, Jr., sudbay Motors

OFFICERsPresident, scott DubeVice President, Chris Connolly, Jr.Treasurer, Jack Madden, Jr.Clerk, Charles Tufankjian

MSADA

As the saying goes, “Elections have consequenc-es”, and that was clearly evident on November 4 when Massachusetts voters handed the governor’s office back to Republican control with the election of Charlie Baker over Democrat, and sitting At-torney General, Martha Coakley. Former state rep-resentative Karyn Polito (R-Shrewsbury), Baker’s running mate, was elected lieutenant governor.

Two million voters hit the polls that day, less than the predicted 50% turnout of eligible enrolled voters, and they delivered a slim 40,000-vote mar-gin of victory to Baker. With the Baker-Polito vic-tory, the GOP has triumphed in five out of the last seven gubernatorial contests since 1990.

Although the GOP made gains in the Massachu-setts House and Senate, the Democrats will main-tain firm control over the Massachusetts Legisla-ture when Baker is sworn in on January 8, 2015.

In the House, the GOP picked up seats for the third straight cycle, increasing by six to 35 the number of members in their caucus (out of a total number of 160 seats). The GOP was able to snag a number of open seats that are currently held by Democrats, and they successfully replaced open Republican seats with winning GOP candidates. Only two in-cumbents lost seats, both Democrats: Rep. Rhonda Nyman (D-Hanover) lost to David DeCoste (R-Nor-well) by a slim margin, and Rep. Denise Andrews (D-Orange) lost to Susannah Whipps (R-Athol).

In the 40-member Senate, the Republican cau-cus increased itself by 50%, going from four to six seats. Including all four incumbents who won re-election, Rep. Vinny deMacedo (R-Plymouth) grabbed the seat being vacated by Senate President Therese Murray, who is retiring, and Rep. Ryan Fattman (R-Webster) defeated high ranking Sen. Dick Moore (D-Uxbridge), who is the sitting Sen-ate President Pro Tempore.

Statewide races all went Democrat: Incumbents William Galvin and Suzanne Bump were re-elect-ed as secretary of state and state auditor, respec-tively; Maura Healey will become the new attor-ney general; and Deb Goldberg will replace Steve Grossman as state treasurer, since Grossman ran for governor and lost in the September Democrat primary to Coakley.

There were also four ballot questions this year. Three were rejected by the voters: tying automatic increases in the gas tax to inflation; expanding the bottle bill; banning casinos. The voters did ap-prove a new law requiring employers to provide sick days to employees. We will have more on this as the law is rolled out.

Nationally, the GOP built on its House majority and will take control of the Senate when Congress returns in January.

Before the election, Democrats held 55 Senate seats (including the two independents who caucus with them) and Republicans held 45. On Election Day, the GOP gained eight seats to take the major-ity, 53-46. The one outstanding race – Louisiana – will be decided in a December 6 runoff.

The GOP did very well in the House, as well. The day began with Republicans holding 233 seats, the Democrats 199, and three vacancies. As we go to press, the GOP netted a gain of 11 seats, to hold a 244-188 advantage, with two races in Louisiana to be decided in a December 6 runoff and an Arizona race going to a recount. The Republicans will have their largest House majority since 1947.

In Massachusetts, Democrats retained all nine House seats, including the Sixth Congressional District, where Democrat Seth Moulton, who beat incumbent John Tierney (D-Salem) in the Sep-tember primary, outpaced Republican Richard Tisei, who represented the GOP’s best chance of

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the roundup

by Robert O’Koniewski, Esq. MSADA Executive Vice President

Change Afoot After Elections

7


MSADAgrabbing a Congressional seat in Massa-chusetts. Readers may recall Tisei lost a squeaker to Tierney two years ago. Fur-ther, Sen. Ed Markey was re-elected to a full six-year term. All eleven federal of-ficeholders here are Democrats.

Finally, the U.S. House will have at least 60 new members. According to NADA, two new members have dealership experi-ence: Mark Walker (R-NC), who worked in finance management for the Flow Auto-motive Group prior to becoming a pastor, and Don Beyer (D-Virginia), owner of the Beyer Automotive Group.

Baker Hitting the Ground Running

Although Charlie Baker officially does not take over the reins of Massachusetts government until January 8, 2015, he and his team have been busy putting together the pieces of his Cabinet and senior staff, in addition to announcing members of his transition team.

Baker’s first Cabinet announcement was Jay Ash, a Democrat and city manager of Chelsea, who will serve as the secretary of the Executive Office of Housing and Eco-nomic Development. Since then, Baker has put forth the following names:• Kristen Lepore as the secretary of the

Executive Office for Administration and Finance;

• Matthew Beaton, currently a Republican state representative, as the secretary of the Executive Office of Energy and En-vironmental Affairs;

• Marylou Sudders as the secretary of the Executive Office of Health and Human Services; and

• Steven Kadish as Baker’s chief of staff.To assist in the development of his admin-

istration’s agenda and organizational needs, Baker has created seven transition commit-tees formed around several pertinent issues: State of the State, Human Resources, Better Government, Community, Schools, Health Care, and Jobs and The Economy.

State Budget DeficitBaker unfortunately cannot rest on his

laurels, even temporarily, and waste any

time getting his hands on the Common-wealth’s ever-growing government – the Patrick Administration the day after the election filed a bill to address a reported $325 million deficit in the state’s current fiscal year budget that commenced on July 1. The various cuts Patrick has proposed include a $25 million reduction in local aid to the Commonwealth’s city and towns, which received an immediate rejection by legislative leaders. Some outside experts have said the current budget shortfall is actually closer to $600 million, not the Patrick administration’s figure. It seems the Patrick administration’s fiscal misman-agement once again is catching up with it as it prepares for the transition to a Baker administration.

Baker was Gov. William Weld’s admin-istration and finance secretary in the 1990s and knows the inner workings of the state’s budget rather well. His proposed secretary of A&F, Kristen Lepore, also has consid-erable budgetary experience. They will be entering a fiscal firestorm as revenues continue to fall short of the level needed to fund the FY15 budget, which was an al-most six percent increase over last year’s budget.

As we go to press, the Legislature has not put forth an official game plan to address the proposed deficit during the current lame duck session that will run through the end of this year into early January.

CFPB & H.R. 5403As we reported on these pages last

month, NADA and the dealer associations across the country, including your MSA-DA, have been lobbying the U.S. House of Representatives to take up legislation, H.R. 5403, Reforming the CFPB Indirect Auto Financing Guidance Act, to address the process by which the Consumer Finan-cial Protection Bureau issues guidance to lenders on auto financing activities.

The bill is designed to require the CFPB to comply with a transparent process that would include public notice and participa-tion, much like what every federal admin-istrative agency must follow. In an effort to promote this bill, we are striving for a

bi-partisan commitment from Republican and Democrat legislators.

Congress is now back for its “lame duck” session, which is expected to wrap up on December 11. Adding co-sponsors to H.R. 5403 continues to be NADA’s top priority. As of this writing, the bill now has co-sponsor commitments from 144 House members (88 Republicans, 56 Democrats). So far, Cong. Stephen Lynch (D-South Boston) is the lone Massachusetts member to commit to the bill. This is important as he sits on the committee that has jurisdic-tion over the legislation.

If you want information on how to con-tact your Congressman to urge him or her to co-sponsor the bill, please do not hesi-tate to call or email me.

For more information on the legislation, or a copy of the bill text and issue sheet with talking points, please go to www.nada.org/cfpb.

Auto Lending Study ReleasedCharles River Associates recently re-

leased a study, entitled “New Comprehen-sive Study of Loan Records Refuting the CFPB Position on Auto Lending,” which shows that the CFPB methodology to mea-sure for discrimination is inherently flawed and unreliable. The peer reviewed study calls into question the reliability of a test-ing methodology that the CFPB has used to level allegations of unintended discrimina-tion against, and extract settlements from, auto lenders and to pressure auto lenders to change the way they compensate dealers for originating finance contracts.

The study reviewed more than 8.2 mil-lion new- and used-vehicle finance con-tracts issued during 2012 and 2013 and measured differences in dealer reserve paid by minorities and non-minorities us-ing the CFPB methodology. The study concluded that the CFPB’s methodology frequently misidentifies the background of consumers and dramatically overestimates differences in dealer reserve paid by differ-ent groups of consumers.

For example, the study showed that the CFPB’s methodology overestimated the African-American population by a stag-

the roundup


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gering 41%. In addition, the CFPB fails to correct for these errors, and it makes no attempt to ensure that consumers from different groups who are being compared are similarly situated. It also conducts a pricing analysis of a lender’s portfolio in a way that can suggest the presence of pro-hibited pricing differences where none ex-ist. These collective flaws result in a test-ing methodology that is unreliable.

NEARL PresentationWe at your Association continually

reach out to non-dealer organizations in order to broaden our outreach on issues important to our industry. On October 29 MSADA staff attorney Peter Brennan ad-dressed the monthly meeting of the New England Association of Retail Lenders. Attorney Brennan briefed NEARL mem-bers on the challenges facing dealers and lenders due to overzealous regulatory mea-sures taken by the Consumer Financial Protection Bureau. Additionally, Attorney Brennan updated members on compliance efforts, such as NADA’s Fair Credit Com-pliance Policy and Program and legisla-tive solutions like H.R. 5403. NEARL has been active in representing retail lenders in New England since 1933. Many of the or-ganization’s members work directly with MSADA member dealers, and several are MSADA associate members.

MSADA Director ElectionsYour Association’s Board of Directors

consists of 20 member dealers, elected pri-marily by their fellow dealers in the coun-ty in which they do business. This year we are conducting elections to choose direc-tors for the counties of Barnstable, Bristol, Essex, Hampden, Middlesex, Suffolk, and Worcester.

We have incumbent directors seeking re-election in four counties: Rick Mastria in Bristol; Bill DeLuca III in Essex; Frank Hanenberger in Middlesex; and Steve Sal-vadore in Worcester.

In three counties we are seeking nomi-nations for open seats: Barnstable, where Gary Beard cannot run for re-election due to term limits; Hampden, where Jack

Sarat has been serving past the term limit amount while we seek a replacement; and Suffolk, where Robert Boch, too, has been serving while we seek a replacement after he hit the term limits.

We have a great team of directors serv-ing their fellow dealers and their associa-tion. The vitality of our organization is enhanced as we circulate new individuals into our Board’s ranks. If you are a dealer in one of these counties and are interested in serving, or if you know someone who would be interested in serving, use the nomination form we sent you recently. If you have additional questions, please do not hesitate to contact me.

2015 Truck Dealer of the Year Nominee – Kevin Holmes

Recently the American Truck Deal-ers (ATD), which is a partner of NADA, Heavy Duty Trucking magazine, and Pro-cede Software announced the nominees for the 2015 Truck Dealer of the Year award.

Among the six nominees is MSADA member Kevin G. Holmes, president and CEO of Tri-State Truck Center, Inc., in Shrewsbury.

The nominees were selected by state, metro, and national association leaders. They will be evaluated by a panel of pro-fessors from Indiana University’s Kelley School of Business on dealership perfor-mance, industry leadership, and civic con-tributions.

The winner and runner-up will be an-nounced on Friday, January 23, 2015, dur-ing the 52nd annual ATD Convention & Expo in San Francisco, which runs, Janu-ary 22-25.

Congratulations to Kevin for the nomi-nation and best of luck in the final selec-tion process.

2015 Auto Show, Dealer Summit & Charity Gala

Circle the dates now. MSADA’s 58th edition of the New England International Auto Show will run January 15-19, 2015, at the Boston Convention and Exposition Center in South Boston.

In order to celebrate our Auto Show,

dealers, their family, friends, and key em-ployees are invited to attend on Friday, January 16, our Eighteenth Annual Auto Show Charity Gala at the BCEC, from 5:00 p.m. to 10:00 p.m. The Gala benefits our Charitable Foundation’s Automotive Technician Scholarship Program.

Prior to the Charity Gala we will con-duct a Dealer Summit at the BCEC from 2:00 p.m. to 5:00 p.m., at which we will have several speakers discuss on-going events in our industry, including our key-note presenter, Jim Ziegler.

Invitations have been sent out, so be sure to register as soon as possible. For member dealers and their key staff who at-tend the Dealer Summit, you will receive at registration two free Charity Gala tick-ets for each meeting attendee. Additional Charity Gala tickets can be purchased in advance for $50 each. (They will be $100 each at the door.)

We as an Association exist to help our dealers in any manner that we can, and we provide a host of member services to achieve that end. We urge every dealer principal in this Association to attend these events and bring your key managers with you to see first-hand what your Association is all about. After all, this is YOUR Asso-ciation, and we are in business to assist you.

MSADA-Reynolds Forms Rollout

For five years we have operated our forms sales program in partnership with Reynolds & Reynolds. For the past year we internally have been working with Reynolds on an improved menu of forms, including updating the forms needed by our dealers to properly conduct business in Massachusetts.

We are now in the process of rolling out the increased menu of improved forms, and we encourage our members to take full advantage of the improve-ments we have made. Check out the ad in this month’s magazine and contact your Reynolds rep today to obtain the full complement of forms your dealership may need.

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MSADA

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wwww.msada.org Massachusetts auto Dealer NOVEMBER 2014

MSADA

Staff attorney, MSaDa

By Peter Brennan, Esq.

An Ounce of Prevention

MSADALegal10


How often do you or your advertising agency decide to save space or “air time” by pushing promotion details, lease terms, or disclosures to a page on your website? If you are like most retailers, the majority of your advertisements use an asterisk or clickable “details” or “more info” button to direct customers to the fine print, be-cause it removes clutter and helps focus customers on the thrust of your promo-tion. But, is this legal? To the surprise of most retailers, it is not.

The Federal Trade Commission’s (FTC) detailed 53-page guide on “.com disclo-sures” issued in March 2013 answers al-most every question a retailer might have about using e-mails, websites, pop-ups, and other forms of online advertising. The FTC’s regulations are often ignored ,because most retailers are focused on the actions of their local Attorney General. However, the FTC has even greater au-thority to issue rules and regulations like the “.com disclosure” guide and initiate costly enforcement actions for non-com-pliant advertising. In fact, Massachusetts General Laws Chapter 93A, the Consum-er Protection Act, requires that courts use the FTC regulations as guidance when de-ciding whether an advertisement is decep-tive, and the Attorney General may only issue regulations if they are consistent with the FTC’s rules.

The FTC, like many federal regula-

tors, is getting increasingly aggressive. The “.com disclosure” guide was both an educational tool and a warning that retail-ers need to pay attention. Just two months ago, the FTC dinged sixty companies for noncompliant print and television adver-tisements in what it called “Operation Full Disclosure.”

The FTC’s regulations are also impor-tant because some of the Massachusetts Attorney General’s regulations were last revised in 1993. As a result, the regula-tions lack any specific guidance about on-line advertising, leaving dealers largely in the dark about how they should advertise when not using traditional paper media. The Attorney General, therefore, could use the FTC regulations in justifying an enforcement action.

The FTC’s guide on “.com disclosures” is easy reading (or at least not mind-numbing legalese), and every retailer should review it in its entirety. Important highlights include:• Relevant disclosures should be placed

on the SAME page as the advertise-ment and not in a hyperlink, particularly where they concern additional fees the consumer will have to pay;

• It is the retailer’s responsibility to make sure that their advertisements are com-pliant;

• If a particular platform, such as mobile advertisements, does not allow for ad-equate disclosures, then it should not be used in the advertising campaign; and

• A disclosure cannot remedy a mislead-ing or false claim, and cannot change the meaning of a prior statement.

Attorney General Enforcement Action

As mentioned above, the Massachusetts Attorney General has not updated its auto-mobile advertising regulations in over two decades, but that has not stopped it from

investigating dealers’ online advertising. The Attorney General announced in June a $175,000 settlement with a dealership group in western Massachusetts over al-legedly misleading advertisements. The settlement listed the following violations of the Attorney General’s regulations:• Advertising prices did not include all

necessary or usual charges;• Refusing to sell vehicles in accordance

with advertised terms or conditions;• Advertising sales without disclosing the

expiration date or other conditions; • Making false or misleading statements

in advertisements; • Failing to honor advertised prices for

trade-in vehicles; and• Using asterisk pricing in its advertise-

ments.

Class Actions In addition to threats from state and fed-

eral regulators, retailers should be aware that class action lawsuits alleging inade-quate disclosure or misleading advertise-ments have become increasingly common over the past few years. There are local law firms focused solely on using Chapter 93A to initiate class actions against local and regional retailers. The damages in a class action can mount very quickly for even minor infractions. This past sum-mer, a dealer paid almost $100,000 plus defense costs to settle a class-action claim over improper disclosure of a service fee that was less than $3.00.

Your Take Away Today

The FTC regulations, recent enforce-ment action by the Attorney General, and a growing number of class actions should remind retailers that online advertising is not the Wild West. Retailers must take it upon themselves to make sure their online advertising is compliant.

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Hyperlinks & AsterisksLiability is Just a Click Away

by Scott Silverman

Scott SilverMan can be contacteD at (781) 591-2886 or S c o t t@S i l v e r M a n aDviSorS.coM.


MSADA Legal 11

It’s almost over, but 2014 has ushered in several new laws affecting employers in Massachusetts. In July, we reported on the new minimum wage law. In Septem-ber, we reported on the new domestic vio-lence leave law. The latest new statute is The Earned Sick Time for Employees Act, which the people of the Commonwealth voted into law on November 4, 2014 (al-though it does not go into effect until July 1, 2015). In short, the new law will require (1) employers with 11 or more employees to allow all employees who work in Mas-sachusetts to accrue and use up to 40 hours of paid sick leave per calendar year and (2) employers of 10 or less employees to pro-vide the same amount of sick leave, but on an unpaid basis. While the regulations that will govern this law have yet to be written, and the statute as written raises a number of questions, we offer the following gen-eral overview:

How Do Employees Accrue and Use Earned Sick Time? Under the new law, employees will earn a minimum of 1 hour of sick leave for every 30 hours they work starting on July 1, 2015, or from their date of hire (whichever is later), up to a maximum of 40 hours per calendar year. However, employees are not entitled to use their accrued earned sick time for the first 90 days of their employment.

As with the Family and Medical Leave Act, employees may use their earned sick leave intermittently, either in hourly in-crements or in the smallest increment in your payroll system for absences. If an employer and employee both agree, how-ever, an employee may work an equivalent number of hours during the same or next pay period and not use accrued earned sick time. (Employers, of course, cannot re-quire employees to make up sick time in

this manner.)Moreover, employees can carry-over

up to 40 hours of earned but unused sick leave into the next calendar year, but they may not use more than 40 hours in any cal-endar year regardless of how much they carry over or accrue. Notably, however, the new law does not require employers to pay out any accrued but unused paid sick time upon termination.

For What Purposes Can An Employee Use Earned Sick Time? An employee can use earned sick leave for any of three pur-poses: (1) to care for a physical or mental illness, injury, or medical condition affect-ing the employee or the employee’s child, spouse, parent, or parent of a spouse; (2) to attend routine medical appointments of the employee or the employee’s child, spouse, parent, or parent of a spouse; or (3) to ad-dress the effects of domestic violence on the employee or the employee’s dependent child.

Must Employers Provide Earned Sick Time in Addition to What They Already Provide? Maybe, maybe not. Employers who already provide their employees with time off (under a PTO, vacation, or other paid leave policy), usable for the same purposes and under the same conditions as outlined above, need not provide such employees any additional paid or unpaid (as the case may be) sick leave. However, employers who do not currently provide such sick leave, of course, must ensure that they do.

Do You Need to Take Your Employ-ee’s Word that S/he is Sick? An employ-er can require medical certification of the need for earned sick leave if an employee is absent for more than 24 consecutively-scheduled work hours (three days). We expect that employers will be frustrated by

the inability to require medical certifica-tion for illnesses of three days or less.

No Retaliation. Predictably, the new law prohibits employers from interfering with, restraining, or denying an employ-ee’s right to earned sick leave or from re-taliating against an employee who requests such leave, or who is supports another em-ployee’s exercise of such rights.

What Can You Do to Prepare? In anticipation of these changes, you should review your leave policies to determine whether they already comply with the new law. In particular, you should look at your accrual policies to see if they meet the minimum of one hour accrued sick leave for every 30 hours worked. If they do not, you should revise your policies and prac-tices to be in compliance by July 1, 2015. If you would like a model policy, feel free to contact us. Moreover, you should en-sure that your payroll staff is accurately keeping track of employees’ sick time. Finally, you should inform your managers and supervisors of any policy changes and advise them of any added responsibilities.

t

Earned Sick Time for Massachusetts Employees

Will Your Dealership be in Compliance?

By Joseph W. Ambash and Jeffrey A. Fritz

Joe aMbaSh iS the Managing Partner anD Jeff fritz iS counSel at fiSher & PhilliPS, llP, a national labor anD eMPloyMent firM rePre-Senting hunDreDS of DealerShiPS in MaSSachu-SettS anD nationally. they May be reacheD at 617 722 0044.


AUtO OUtLOOK12 AUtO OUtLOOK


MSADA 13

Chevrolet Toyota Ford Scion Mercedes GMC Honda Subaru Lexus Mini Cadilac Toyota BMW

14


2015 New England International Auto Show PREVIEW

2015 Toyota Rav4With expressive styling and a roomy, comfortable interior, RAV4 is decidedly refined—but with agile handling and all-weather capability.

2015 Chevrolet CamaroPerformance-driven design enhancements to the front and rear fascias give the new Camaro a low, wide, contemporary look.

2015 Hyundai Santa Fe SportInnovative tech-inspired features include Blue Link® in-car telematics, your choice of 4.3-inch or 8-inch touchscreens with rearview camera and an available Hands-free Smart Liftgate with auto open.

Rolling into Showrooms in 2015

Chevrolet Toyota Ford Scion Mercedes GMC Honda Subaru Lexus Mini Cadilac Toyota BMW

2015 New England International Auto Show PREVIEW 15


2015 Mazda MX-5 Miata Mazda engineers took into account every bolt, wire and upholstery stitch to achieve near-perfect front-to-rear weight distribution and handling

2015 Ford Transit ConnectThe all-new 2015 Ford Transit is engineered to ultra-stringent Ford commercial truck standards for durability.

2015 VW BeetleThe Beetle has modern and premium amenities, like standard Bluetooth® with streaming audio for compatible devices and voice control, Volkswagen Car-Net®3 and available Bi-Xenon headlights.

2015 BMW X6MThe X6 M delivers a modicum of functionality with immense performance. Power comes from a twin-turbo 4.4-liter V-8 producing 567 hp, delivered to BMW’s xDrive all-wheel-drive system through an eight-speed automatic transmission.

Rolling into Showrooms in 2015

Chrysler Toyota Ford Scion Mercedes Honda Subaru Lexus Mini Cadilac GMC Toyota BMW

1616



2015 Chrysler 300 The All-Wheel-Drive system, available on V6 engine-equipped 300 models, is always active, requiring no driver input. It combines an axle disconnect function, the Electronic Stability Control system and powertrain controls in real time, to seamlessly engage AWD at any speed.

2015 Subaru OutbackThe Outback features the EyeSight® driver assist technology system, which monitors traffic movement, optimizes cruise control, and warns drivers when they are swaying outside their lane. It can even help slow down the car or bring it to a complete stop when danger is lurking.

2015 Ford F150With its class-exclusive high-strength, military grade, aluminum-alloy body and high-strength 70,000-psi steel frame, this next-generation F-150 is much lighter than the previous model.

Chrysler Toyota Ford Scion Mercedes Honda Subaru Lexus Mini Cadilac GMC Toyota BMW

17



2015 Dodge DartThe Dodge Dart offers a number of class-exclusive features including an available premium 7-inch customizable digital gauge cluster display. Real-time information is presented in rich graphics

2015 GMC CanyonRated at 305 horsepower, Canyon’s 3.6L V6 engine is the most powerful in its segment. When equipped with the trailering package, it offers a Best-in-Class Max Trailering rating of 7,000 lbs

2015 Scion tCThe 2015 Scion tC is available with an optional 6-speed automatic transmission with paddle shifters and Dynamic Rev Management® and comes standard with a panoramic moonroof and 18-inch alloy wheels.

2015 Lamborghini HuracánCheck out Lamborghini’s new “entry-level” supercar, the Huracán, which features a stealth fighter–like cockpit.

2015 Honda FitThe 2015 Fit earned an esteemed 2014 TOP SAFETY PICK rating from the Insurance Institute for Highway Safety.

from Around the HornNEWS


18

BOSTON

Ernie Boch Jr. Helps save BU student Newspaper

Bolstered by large gifts from high-profile donors, Boston Uni-versity’s student-run newspaper exceeded the $70,000 it needed to save its weekly print edition, the publication announced recently.

The Daily Free Press received $50,000 from local car dealer Ernie Boch Jr.; $10,000 from Fox News TV host Bill O’Reilly, a BU alumnus who had worked at the paper; and nearly 300 smaller contributions that totaled more than $17,800, and were raised through an online campaign, editor in chief Kyle Plantz told The Boston Globe.

In a statement, Boch said newspapers “at the local, regional, daily, and, yes, collegiate level are all vital parts of our democ-racy.”

“A vibrant newspaper ensures for a free exchange of ideas and Boston University’s independent student-run newspaper, The Daily Free Press, should continue to have that opportunity for its readers,” said Boch.

BERKSHIRE

Former Msada Board director and Treasurer Robert Quattrochi dies at 87

Robert Quattrochi, a former MSADA board director and trea-surer, died on November 16. He was 87.

A Pittsfield native and graduate of Pittsfield High School, Quattrochi served in the U.S. Naval Reserve until he was honor-ably discharged in 1946. He was a 1949 graduate of Worcester Polytechnic Institute.

Quattrochi then joined Pete’s Motors, operated then by his fa-ther, and eventually rose to President and CEO.

He served as the chairman of the Board of Trustees for Berk-shire Medical Center; served on the finance committee of Berk-shire Health Systems; was a President of the Board of Trustees of the Berkshire Historical Society; a past President of Berkshire Kiwanis; and past chairman of the Board of Directors for the Central Berkshire Chamber of Commerce.


19MSADAIn addition, Quattrochi served on the Board of Direc-

tors of the First Agricultural Bank; the regional Board of the Bank of Boston and was a past President of the Country Club of Pittsfield.

Quattrochi also served on the board of Downtown Pittsfield, Inc., serving as president for more than a doz-en years, and on the board of Hancock Shaker Village. Politically, he was known as a tough but fair member of the Pittsfield Licensing Board for many years.

He volunteered in the Meals on Wheels Program for many years.

The list of civic service awards Quattrochi won is an impressive one; they included the David Kagan Award, presented to him in 1984 by the Pittsfield Rotary for Service Above Self; the Robert K. Agar Jr. Award for Volunteerism, presented by Berkshire United Way to him in 1996; the Serata Italiana Award for Community Service in 1998 and the Francis X. Doyle Award, pre-sented to him in 2008 by Berkshire Health Systems for outstanding contributions to the community.

Quattrochi is survived by his wife, Kathryn, their four daughters, Susanne Quattrochi of Bedford, N.Y., Robin Fernsell of Walpole, N.H., Karen Bauer of Man-chester, Conn., and Joanne Quattrochi of Pittsfield, who also served on the MSADA board, and his seven grand-children.

SOMERVILLE

Herb Chambers Companies Ranked among Top Places to Work

Herb Chambers Companies were ranked a “Top Place to Work” by The Boston Globe for the sixth con-secutive year.

This year, they were ranked second among largest compa-nies. Companies in this cat-egory must employ at least 1,000 people.

“We are honored to once again (and for the past 6 years) to be named one of the Top Places To Work in Mas-sachusetts by The Boston Globe,” said Herb Chambers in a written statement. “We are #2 on the list as well as being the only Auto Dealership to ever make this list. Thank you to all the employees as well as our extended family: our clients, we would not be here without all of you!”

from Around the Horn20 NEWS


The American Truck Dealers (ATD), Heavy Duty Trucking magazine and Pro-cede Software recently announced the nominees for the 2015 Truck Dealer of the Year award. Among the six nominees is Kevin Holmes, president and CEO of Tri State Truck Center, Inc., in Shrewsbury.

The nomi-nees were selected by state, metro and national association leaders.

The win-ner and run-ner-up will

be announced on Friday, January 23, 2015, during the 52nd annual ATD Conven-tion & Expo in San Francisco, which runs January 22-25.

SHREWSBURY

Holmes Nominated for 2015 Truck dealer of the Year award

HANOVER

Massachusetts dealerships Named Top Places to Work

In late October Automotive News named its top 100 dealerships to work for in the country. Two Mas-sachusetts dealerships made the list: Planet Subaru, in Hanover, whose dealer principal is Jeff Morrill, and Kelly Nissan of Woburn, owned by our current TIME Dealer of the Year Brian Kelly. Our congratulations go out to Jeff and Brian and their re-spective teams.

We also offer up our congratula-tions to MSADA member David Rosenberg and his Prime Automo-tive Group who also ranked two Maine stores on the list.


MSADA 21

HADLEY

TommyCar Auto Group Donates $3,000 To Springfield Open PantryTommyCar Auto Group

recently was a proud sup-porter and sponsor of the Rock 102 Mayflower Mara-thon. The Service Depart-ment offered discounts on vehicle maintenance to any-one willing to donate non-perishable canned goods.

“Thanks to the response and generous support of community members, we received an overwhelming support,” the group said in a statement.

In addition, Country Hyundai, Country Nissan and Northampton Volkswagen matched the first $1,000 that was donated by listeners each day, donating a grand total of $3,000 to the Springfield Open Pantry.

“It was inspiring to see how many people come out during those three days to donate non-perishable items. We were honored to be part of this amazing cause,” said group Pres-ident Tom Cosenzi.

This year, the an-nual Rock 102 May-flower Marathon raised $108,000 for the Spring-field Open Pantry. Bax & O’Brien broadcasted 52 hours from the Bas-ketball Hall of Fame in

downtown Springfield. Their goal was to fill three, 48-foot trail-ers with non-perishable food donations.

t

23MSADA troubleshooting

The automotive industry is the most regulated industry in the United States. Here at your Association, we try to edu-cate our dealer members on the laws and regulations that impact their business and keep our members updated on any chang-es to these laws and regulations before they take effect.

Our reasons for continuously preach-ing legal compliance are numerous. A large monetary judgment, especially one amplified by punitive damages, can be fatal to a small business, such as your dealership. Even smaller cases, such as an action by an individual against a deal-ership for improper payment of wages, can result in mandatory treble damages under the Massachusetts Weekly Wage Act (M.G.L. c. 149 §150).

From the viewpoint of your Associa-tion, advocating on behalf of franchised automotive dealers is an easier task when state and federal investigators don’t have as much “low hanging fruit” to choose from when looking to bring legal actions. Violations, especially large-scale viola-tions, are a black eye to the industry and bring the sort of negative publicity that allows government regulators and ambi-tious legislators to unfairly place a target on the backs of dealers.

Compliance with state and federal employment laws and regulations is es-pecially important in this regulatory envi-ronment. Recently, the U.S. Department of Labor (DOL) reached seven-figure settlements with defendants in three cas-

es for violations of the Fair Labor Stan-dards Act (FLSA).

As the result of an investigation by the DOL’s Wage and Hour Division, LinkedIn Corp. agreed in August to pay $3,346,195 in overtime back wages and $2,509,646 in liquidated damages to 359 former and current employees working at company offices in California, Illinois, Nebraska, and New York. According to the DOL, LinkedIn failed to record, account, and pay for all hours worked in a workweek. The company claimed that a faulty system of properly record-ing employee hours was to blame for the violations, and it accepted an enhanced compliance agreement as part of the settlement that will require the company to distribute its policy prohibiting off-the-clock work to all non-exempt employees and their managers.

In September, Shell Oil and Motiva Enterprises agreed to pay $4,470,764 in overtime back wages to 2,677 current and former employees as the result of another DOL Wage and Hour division investiga-tion. The DOL found that the companies violated FLSA overtime provisions when they required workers to attend mandato-ry pre-shift meetings at Shell and Motiva facilities in Alabama, California, Loui-siana, Texas, and Washington, yet failed to pay the workers for this time or record the time for the purposes of calculating overtime. Under the FLSA, non-exempt workers must be paid at least the federal minimum wage of $7.25 per hour for all hours worked.

In each of these cases, the DOL also turned over their findings to the enforce-ment authorities in the state where the violations occurred, and the companies may face additional prosecution. While these recent examples of DOL investi-gations that led to multi-million dollar settlements did not target the automobile industry, the next investigation may.

Closer to home, Fulfillment America, Inc., a Billerica marketing and promo-

tions company, recently agreed to a settle an overtime case brought by 120 current and former employees for $430,000. Job Done, LLC, the agency that hired the workers, is accused of manipulating pay stubs so that the workers’ total hours did not surpass 40 in a given week. Job Done, LLC, also agreed to cover $50,000 of the settlement total.

In June your Association unveiled our Legal and OSHA Compliance Assistance Program as part of our efforts to assist our dealer members and increase the benefits that members receive through their Association. The employment law compliance portion of this program is offered in conjunction with the national employment law firm Fisher and Phillips. It is designed to encourage members to review their pay plans, employee hand-books, and employment applications and to undertake a manager training audit.

So far, about 35 dealer principals have taken advantage of our program. As a dealer, you may think you are either al-ready in compliance or willing to risk the scrutiny of regulators. Why take that po-tentially expensive chance?

In addition to the Compliance As-sistance Program, your Association is offering legal seminars throughout the state for dealers and their key managers at no cost to our members who attend. The next free legal seminar will be held on Thursday, December 11, 2014, at the Marriott Hotel, 2 Boland Way, in Spring-field, from 9:00 a.m. – 11:00 a.m.

. t

If you require any additional infor-mation on dealer data security regula-tions, service provider agreements, or any other issue, please contact Robert O’Koniewski, MSADA Executive Vice President, [email protected], or Peter Brennan, MSADA Staff Attorney, [email protected], or by phone at (617) 451-1051.

Staff attorney, MSaDa

By Peter Brennan, Esq.

An Ounce of Prevention


nAdA Market BeatProduced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

in North America was 45.3 percent, down from a share of 45.5 percent last year. That for the Europe-based companies was 8.7 percent, down from a share of 9.1 percent last year.

All company categories by geographic bases – North America, Asia/Pacific, and Europe – experienced growth in light-vehicle sales in October 2014 YTD figures from last October with the

24


Overall There were 1.3 million light-vehicle sales in October 2014. This

sales figure was up 2.8 percent from September 2014, and it was up 6.0 percent from October 2013.

October 2014 YTD light-vehicle sales amounted to 13.6 million, up 5.4 percent from a year ago. The October 2014 Seasonally Ad-

justed Annual Rate (SAAR) for light-vehicle sales was 16.4 million. This is the seventh month, this year, for a monthly SAAR value to fall in the sales range of 16.0–16.9 million, inclusive.

In October 2014 YTD figures, car sales held a mar-ket share of 47.3 percent with sales up 1.0 percent from last year. Corresponding figures for light trucks put the light-truck share at 52.7 percent with sales up 9.7 percent from a year ago. See Figure 1.

COmpanies/BrandsCompanies with a geographic base in North Amer-

ica (Detroit 3 and Tesla Motors) held the largest mar-ket share of light-vehicle sales for October 2014: 45.6 percent of the market. This was followed by compa-nies based in the Asia/Pacific region at 44.6 percent and then companies based in Europe at 9.8 percent.

In October 2014 YTD terms, companies with a base in the Asia/Pacific region held the largest share of light-vehicle sales in the U.S. at 45.9 percent, which was up from a share of 45.4 percent a year ago. The corresponding share held by companies based

Review of New Light Vehicle Sales

nAdA Market BeatProduced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

Produced by NADA’s Industry Analysis Group • Angela Lisulo, Economist


25 MSADA

Asia/Pacific region in the lead with 6.6 percent growth.

From the Detroit 3 companies, Fiat Chrysler ex-perienced the most growth in October 2014 YTD sales, from a year ago, at 15.3 percent, followed by General Motors at 3.9 percent while Ford experi-enced a contraction in sales over the same period.

From the group of Asia/Pacific-based companies, Isuzu experienced the most growth in October 2014 YTD sales from last October at 53.6 percent, fol-lowed by Mitsubishi at 29.8 percent.

From the group of Europe-based companies, Audi experienced the most growth in October 2014 YTD sales from a year ago at 14.7 percent, followed by Porsche at 11.2 percent.

See Figures 2, 3 and 4.

segmentsThe cross utility vehicle

(CUV) segment held the largest share in October 2014 YTD sales at 26.7 per-cent, which was up from a share of 25.2 percent last year.

Within the CUV segment, the middle CUV sub-seg-ment was the largest sub-segment, holding 64.6 per-cent of October 2014 YTD CUV sales, which was up from a share of 63.3 percent last year. For October 2013 YTD, the middle CUV sub-segment also held the largest share of CUV sales.

In terms of October 2014 YTD market share, the middle car segment and the small car segment fol-lowed the CUV segment with each holding a share of 18.9 percent of the sales in the market.

Compared to last year, all segments except for the CUV, sport utility vehicle (SUV) and van segments lost market share in YTD light-vehicle sales.

All the segments, except for the middle car seg-ment and the large car segment, experienced some growth in YTD sales since last year, with the CUV and SUV segment sharing the lead with growth of 11.9 percent since last year. The large car segment was the only segment with a decline in YTD sales since last year, with sales down 10.6 percent since last October.

See Figures 5 and 6.

Produced by NADA’s Industry Analysis Group • Angela Lisulo, Economist

nAdA Market Beat26

pOwer sOurCeAs a power source, gasoline held a market share of 93.5 percent

of October 2014 YTD light-vehicle sales, which was up from a share of 93.3 percent a year ago.

The market share held by the diesel category was 2.9 percent of October 2014 YTD light-vehicle sales, up from a share of 2.8 per-cent last year.

The market shares held by electrics and plug-in hybrids each grew compared to last year, in YTD terms, while those for hybrids and vehicles powered by natural gas and fuel cell technology each declined for the same period.

For the alternative power category, the following light vehicles were sold in October 2014: 7,106 electrics; no units powered by fuel cell technology; 30,890 hybrids; 61 units powered by natural gas; and 3,740 plug-in hybrids, amounting to 41,797 light-vehicle sales.

See Figure 7.

mOdelsFrom the list of the 15 best-selling light vehicles for October 2014

YTD, eight out of 15 models were cars while the rest were light trucks.

The companies based in the Asia/Pacific region dominated the car category on the list: five out of eight cars were from com-panies based this region. In the case of light trucks, the Detroit 3 companies led with the number of models in this category: five out of seven light trucks were from the Detroit 3 companies.

See Figure 8.


november 2014 msada auto dealer

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