RIVERSIDE, Calif. – Another Southern California Harley-Davidson dealer has narrowly avoided termination in a case that alleged violations of the Motor Co.’s Non-Retail Sales Policy (NRSP). The dealer will not be required to pay the costs of the protest, but will have to pay for the audit that revealed the questioned sales.
The decision means that 65 to 70 employees at Riverside Harley-Davidson Inc., dba Skip Fordyce Harley-Davidson, will keep their jobs, at least for now.
But as with a similar case decided earlier this year, it may not be over. Harley-Davidson attorneys weren't immediately available for comment, but are expected to appeal the administrative decision to civil court.
Harley-Davidson notified the dealer June 23, 2011, of its intent to terminate the dealer agreement within 30 days, citing NRSP violations.
Harley-Davidson contended that the dealership sold 25 motorcycles in violation of the NRSP over 13 months starting in July 2009. In doing so, the dealer also failed to perform required pre-delivery inspections (PDIs) and filed false Sales Warranty Registrations (SWRs).
The dealership protested to the California New Motor Vehicle Board, contending that former GM Lester Veik made the disputed sales and concealed the circumstances from dealer principal Jay Dabney. Further, the dealer said it repaid Harley-Davidson for incentives claimed on those bikes when the dealer received its termination notice.
Administrative law Judge Victor D. Ryerson found for the dealer, citing steps Fordyce took to fix the problems and the availability of less draconian penalties as laid out in the NRSP.
“Although [the dealer] admits the prohibited activity occurred, it offers a credible explanation of the circumstances. The sales were a result of a deliberate effort by the [dealer’s] general manger to accomplish them for his own personal financial benefit, and of his successful efforts to conceal them from the dealer principal,” the judge wrote in a summary of the decision, which was approved by the board Aug. 22.
“In addition, the prohibited sales activity was limited to an amount and duration, lasting 13 months, and was not extensive in comparison to [the dealer’s] history of successful sales performance. [The dealer] began to improve its sales procedures even before the prohibited sales were discovered, and has taken many remedial actions to prevent the recurrence of such activity since the sales came to light. The extend of its failure to comply with the terms of the franchise is insufficient to constitute good cause for termination, particularly in light of the availability of less drastic sanctions under the NRSP,” the judge stated. (story continues)