< Previous20 GET TO KNOW YOUR LEGISLATORSENATOR TOM UMBERG Representing the 34th Senate District including parts of Anaheim, Garden Grove, Huntington Beach, Orange , Santa Ana, and WestminsterCommittee Membership: Chair-Senate Elections and Constitutional Amendments Committee; Chair-Senate Select Committee on Growing Impact of Artificial Intelligence in California; Co-Chair Joint Select Committee on the Census; Judiciary Committee; Veterans Affairs Committee; Budget Committee - Subcommittee 4 on State Administration and General Government; Housing Committee; Transportation Committee; Joint Committee on Rules Biography: State Senator Tom Umberg is a retired U.S. Army Colonel, former federal criminal prosecutor, three term state legislator, small business owner and Deputy Drug Czar for President Clinton.Senator Umberg began his military service at the Korean DMZ and served three overseas tours. Umberg served active military duty in 2009, leading the U.S. military effort to attack corruption within the Afghan Army and Police, for which he was awarded a Bronze Star for meritorious service in a combat zone. As a federal criminal prosecutor, Senator Umberg had a 100% conviction rate, trying numerous white collar, civil rights and gang cases. He successfully tried over 100 cases to verdict or judgment.Senator Umberg served as Deputy Drug Czar for President Bill Clinton where he was responsible for foreign drug interdiction, counter-drug intelligence and international drug policy. Umberg has a deep understanding of the strategies and resources we need to stop the current opioid epidemic and to put an end to senseless gun violence in our communities.Senator Umberg served three terms in the State Assembly, representing central Orange County. He worked across party lines, authoring 76 laws and bringing more than $563 million in funds to Orange County.Senator Umberg founded and built a successful veteran-owned small business in Orange County, recognized as one of California’s preeminent boutique law firms by “Best Lawyers” and “The Daily Journal.” Senator Umberg knows how to run a local business and will be a strong advocate for local small businesses, cutting red tape and unnecessary regulation.Personal: Senator Umberg lives in Orange County with his wife Robin, who is a Retired Brigadier General. They have three adult children and one grandchild.District Office Contact Information:1000 E. Santa Ana Blvd., Ste. 220BSanta Ana, CA 92701Phone: (714) 558-3785sd34.senate.ca.gov21Arbitration Agreements Are Under Attack: Here’s What to DoTwo recent legal developments in California have brought employee arbitration agreements under attack. One is the California Supreme Court’s decision in OTO, LLC v. Kho. The other is the California legislature’s enactment of AB 51. In spite of the challenges presented by these developments, arbitration agreements are still an important line of defense for dealers against class action lawsuits and runaway jury verdicts. Dealers should adjust their approach in light of these new developments but not abandon arbitration altogether.OTO, LLC v. KhoIn this case, the California Supreme Court denied enforcement of an Oakland Toyota dealer’s arbitration agreement. The court found numerous problems with the agreement that it considered unconscionable, including that the entire agreement appeared in a single paragraph containing 51 lines of text in very small font, and that it contained complex sentences (one of them 12 lines long) filled with unexplained statutory references and legal jargon. The court also noted that the agreement was presented to the plaintiff (an automotive technician) by an employee who waited in his work bay for him to sign it. He did not have time to read it or ask questions of someone knowledgeable, and it was not explained to him. The court also observed that the agreement was not clear on how to begin an arbitration case or who would pay for the arbitration, and the employee was not given a copy of the agreement after signing it.Dealers that are using similar arbitration agreements to the one in the OTO case should revise their agreements now. One of the court’s criticisms was that the arbitration agreement was part of a “Comprehensive Agreement – Employment at Will and Arbitration,” and not a separate agreement. Therefore, a new Dispute Resolution Agreement should be a separate document that includes a confirmation of employment at will but it should focus primarily on arbitration. By James J. McDonald, Jr. , Fisher & Phillips LLPCONCERNED WITH THE COST, COMPLIANCE AND SERVICING OF YOUR DEALERSHIPS’ INSURANCE?EPIC CAN HELP WITH YOUR BENEFIT AND BUSINESS INSURANCE NEEDS• CNCDA's only licensed broker for Health and Business insurance• The largest insurer of auto dealers in the state• The only broker with proprietary products specific to dealerships • 15TH largest brokerage firm in the nationWe know dealerships have specific needs and issues, we are here to help. Please contact us for a free evaluation of your insurance and HR/compliance packages.EPIC IS© EDGEWOOD PARTNERS INSURANCE CENTER | CA LICENSE 0B29370EPICBROKERS.COMAlison McCallum 949.417.9136alison.mccallum@epicbrokers.comEric Kitei 949.417.9145eric.kitei@epicbrokers.com23The agreement should be written in at least 12 point font and be broken up into several digestible paragraphs. It should avoid long sentences and legalese where possible. It should identify the person at the dealership to whom a claim should be directed to commence an arbitration (a position should be identified, e.g., the general manager or business manager, rather than the name of the individual holding that position). It should describe the process for selecting an arbitrator and state that the employer will pay the arbitrator’s fees. It should include language stating that the employee had time to review the agreement and ask questions of the employer’s representative before signing it. When the agreement is presented to the employee, the employee should not be rushed through signing it but should be given sufficient time to read it and ask questions, and someone familiar with arbitration should be available to answer questions. After the employee has signed the agreement, a copy of the signed agreement should be given to him or her. AB 51AB 51, which becomes effective on January 1, 2020, prohibits employers after that date from requiring applicants and employees to arbitrate employment disputes as a condition of hire, of continued employment, or of receipt of any employment-related benefit such as a raise, a bonus or a promotion. The prohibition on mandatory arbitration applies to all claims of unlawful discrimination, harassment and retaliation raised under the California Fair Employment and Housing Act and all claims arising under the California Labor Code. Mandatory arbitration agreements signed before January 1, 2020 and voluntary arbitration agreements signed after that date remain enforceable under the law.AB 51 will most likely face a legal challenge in the courts on the basis that it is pre-empted by the Federal Arbitration Act, which prohibits states from enacting laws that interfere with the enforceability of arbitration agreements. It could take some time for these legal challenges to be resolved, however. Until that time, and effective January 1, 2020, dealers must decide on one of the following approaches:• Continue to require applicants and employees to sign arbitration agreements, and plan to raise the pre-emption argument in the event an action is brought for violation of AB 51 or an arbitration agreement is attacked as procured involuntarily. This approach carries some risk of exposure, including to criminal penalties, if AB 51 is not ultimately held to be pre-empted. AB 51 includes a private right of action for violation of the statute which includes attorneys’ fees for a prevailing plaintiff.• Cease requiring or requesting employees to sign arbitration agreements until the validity of AB 51 is determined. This approach is not recommended as it will leave a dealer with a large portion of its workforce without arbitration agreements and the protections for dealers that such agreements provide.• Present arbitration agreements to employees on a voluntary basis, perhaps with a cover page explaining the benefits of arbitration for employees as well as employers, and assuring applicants and employees that there will be no reprisals for declining to sign the arbitration agreement. A greater number of applicants and employees will likely decline to sign than prior to enactment of AB 51, but a substantial number are still likely to sign the agreement, especially if it is presented during the onboarding process or in connection with the roll-out of a new employee handbook. Employment applications that contain arbitration language will need to be changed as well. The arbitration language should be removed from the application and presented separately to the applicant with the cover sheet described above. There is some risk, of course, that an applicant who declines to sign an arbitration agreement and is not hired, or a new hire who declines to sign and is later terminated for poor performance, will allege retaliation for refusing to sign the arbitration agreement. This risk may be mitigated a bit by not revealing to managers involved in hiring and firing decisions whether or not employees have signed an arbitration agreement.Now Is the Time to ActDealers that are using arbitration agreements similar to the one struck down in the OTO case, or agreements that lack class action waivers, should have employees sign new agreements prior to year-end if possible. After the first of next year, unless AB 51 has been ruled invalid, dealers will have to decide which of the above approaches to follow. Consultation with legal counsel prior to making the decision is recommended.James J. McDonald, Jr. is managing partner of the Irvine office of the national labor and employment law firm Fisher & Phillips LLP. He is author of the book, California Employment Law: An Employer’s Guide, published by the Society for Human Resource Management.24OC Auto Show Raises $68,379 for StudentsThis fall the OC Auto Show donated tickets valued at $68,379 to youth clubs and sports teams for students to sell and keep 100% of their proceeds. Since 2010, $572,982 has been raised by student groups in Orange County. The OC Auto Show Fundraising Program is just another example of how Orange County dealers support your communities!The fundraiser runs during August and September, just prior to the auto show each year, and student groups have a limitless opportunity to sell tickets. The OC Auto Show Fundraiser may be Orange County’s best-kept secret, so when you receive requests for donations please send your local schools and teams to www.OCStudentFundraising.com to learn more about this incredible dealer-supported youth fundraiser.25dealershipsWe leverage our knowledge of and relationships within the industry to help identify solutions surrounding dealership trends and hot issues, which include:Mergers & AcquisitionsSuccession PlanningFacilities & Factory MattersRisk & RegulatoryPerformancePeople & Talent AcquisitionDRIVING RELATIONSHIPS FORWARD877.DLR.CPAS | dealerships@dhg.com Assurance | Tax | Advisory | dhgdealerships.comDEALERSHIP CLIENTS IN 50 STATES160+Dedicated Dealerships Professionals3,000+Dealership Clients Served50States with Dealership Clients 26The Clean Vehicle Rebate ProjectCalifornia leads the nation with the highest number of Electric Vehicles (EV) on its roads than any other state, and Orange County EV car shoppers contribute significantly to EV adoption. During the 2019 OC Auto Show, Electric Vehicles were largely on display while consumers had the opportunity to speak with representatives from the Center for Sustainable Energy about Electric Vehicles and the Clean Vehicle Rebate Project.Since 2009, the California Air Resources Board has implemented the Clean Vehicle Rebate Project (CVRP), a program administered by Center for Sustainable Energy, and has issued more than $720 million to fund 320,000 EVs on California’s roadways to date. CVRP Program ChangesThe annual life cycle of CVRP comes with frequent updates to funding and program changes, which helps expand accessibility of EV adoption to California residents. CVRP will formally transition to the below eligibility requirements for applications received on or after December 3, 2019. New Standard Rebate Amounts• Decreased Rebate Limits: An individual may apply for only one rebate per lifetime (previously two rebates)• Shorter Application Window: Applications must be submitted within three months of vehicle purchase or lease date• New MSRP Cap of $60,000 for All BEVs and PHEVs (No MSRP cap for FCEVs)• Increased Minimum All Electric Range to 35 miles UDDS (Previously 20 miles UDDS)Program Changes to the Clean Vehicle Rebate ProjectCRVP Eligible Vehicle TypeStandard Applications Before 12/3/19Standard Applications On & After 12/3/19Plug-In Hybrid Electric Vehicle (PHEV)$1,500 $1,000 Battery Electric Vehicle (BEV)$2,500 $2,000 Fuel Cell Electric Vehicle (FCEV)$5,000 $4,500 Zero-Emission Motorcycle$900 $750 27What can CVRP Dealership Outreach do for you? The CVRP dealership outreach team provides information sessions, marketing materials and other resources to ensure dealership sales staff has everything they need for their EV customer. Orange County has seen tremendous growth in EV adoption and it’s the combined work of dealerships and CVRP that increase those sales. CVRP Dealership Coordinators are always available to answer any questions and concerns regarding the program. Please feel free to contact us by phone at 866-984-2532 or email us at dealership@energycenter.org. Taking Advantage of the CVRP Dealer HubPlease visit the CVRP Dealer Hub at https://cleanvehiclerebate.org/eng/dealer for downloadable flyers regarding CVRP rebate information and resources supporting EV sales.Orange County’s Influence of EV AdoptionFrom January 1, 2019 to June 30, 2019, Orange County individuals, businesses, and local government entities received a total of 5,766 rebates amounting to $14.3 million in funding.Vehicle CategoryTotal VehicleRebatesFundingPHEV1491$2,542,500 BEV4064$10,736,000 FCEV205$1,075,000 ZEM6$5,400 TOTAL5766$14,358,900 For more information, visit CleanVehicleRebateProject.org Center for Sustainable Energy (2019). California Air Resources Board Clean Vehicle Rebate Project, Rebate Statistics. Data last updated [October 23, 2019]. Retrieved [November 4, 2019] from https://cleanvehiclerebate.org/rebate-statistic28Cypress College T-TEN Program is #1 in the NationCypress College’s Toyota/Lexus Technician Training and Education Network (T-TEN) is the #1 T-TEN program in the Nation! This competitive pathway requires 63 units of course work taken sequentially and begins in the summer each year with 48-52 students enrolled in the first course, Introduction to Toyota Technology (AT 109 C). The course covers critical introductory technician skills including vehicle lifting, multi-point inspections and related maintenance service, use of tools including torque procedures, a field trip to local Orange County Toyota or Lexus dealers and more. The pace is fast and the students know that only the top 50% will advance into the T-TEN program, as there are only 24 seats available. Being prepared, being on-time and being in class every day are stressed in this environment! Instructors Michael Klyde and Paul Kelley were honored at the T-TEN national meeting in August with the 2019 T-TEN Top School award. The honor is awarded to the college having the highest number of student graduations and the highest number of ASE tests passed – Cypress College T-TEN students earned an average of 6.4 ASEs each, with eight students earning 8 ASEs, plus one student passed L1. Ask Mike or Paul and they will tell you, “We work hard on this program to ensure every student that wants to succeed does the best they can. By the Fall of year two, they are all working and have 3 or more ASEs, and most will have all 8 ASEs by program completion.” Since T-TEN became a separate pathway within Cypress College’s Automotive department, the student success has skyrocketed, when measured by student ASEs pass rates, graduate numbers and students employed at a dealer. The dealers have noticed these improved outcomes, as these students are vetted and the rigorous course work prepares them well for employment.T-TEN coursework includes all 8 ASE areas along with L1 advanced engine performance and L3 Hybrid/EV content will be included for beginning Fall 2020 for the class of 2022. The course content meshes the general knowledge required for each area with Toyota/Lexus specific content. Course time is focused on lab work with specially prepared Toyota donated vehicles that have course related faults. Michael and Paul have developed over 250 lab sheets, each approximately 25 pages or more, that guide students through related system knowledge, use of Toyota service information and then actual vehicle system diagnosis and complex service procedures. 2019 T-TEN Graduate Wyatt Calderon of Toyota Place talks with new T-TEN students who will become the class of 2021. LOS ANGELES | ONTARIO | SAN DIEGO | SACRAMENTO | OAKLAND | scalirasmussen.comAvoiding litigation when it’s possible. Protecting you when it isn’t. •Franchise Advice & Litigation •Labor & Employment •Regulatory & Licensing •Complex Litigation •General Counsel Services •Mergers & Acquisitions TALK WITH US | (714) 672-0022lslcpas.com/automotive-dealership-consultingDAVE SUMMERSAutomotive ConsultantDIXIE STANTONAutomotive ConsultantHave CDK & ACCCOUNTING Issues?We Have SOLUTIONS.Next >