This memo will focus on select provisions that may implicate automobile dealership operations as affected by county emergency health orders set forth below. At this point all orders being issues are basically the same as a result of a Governor Laura Kelly's
Executive Order 20-15
Members should review the actual order for the county in which their dealership is located. It would be repetitive to view each order, so we will focus on the key issues in this memo.
For dealers who choose to operate with limited sales operations, KADA’s recommendations are that dealers should shut down the primary showroom, conduct sales by appointment, have no more than 10 people in that area, practice social distancing in every area (remain 6 feet apart), do as much as you can do via phone and email, limit hours of operation, and limit as much person to person contact as it practical. There is no question that you should be extremely proactive and implement responsible sales practices.
If you do not act proactively, someone will turn you into the county health department because people do not understand the order and comment on social media. KADA believes dealers need to get out in front and show they have the safety and health of their customers and employees in mind.
Characteristics of All Orders—Model Order
At this point it is clear that the order in use for all counties started in the Kansas City area and is probably off of a form distributed throughout the country. All businesses and other operations, except as exempted by the order, are required to cease all in-person operations. Non-essential businesses and other operations may continue operations consisting exclusively of employees, contractors, or other agents of businesses performing activities at their own residences or places of rest. As such, to the extent you can structure operations to take this provision into account, it may continue. Such items would be expected to include internet sales and the like to the extent they may be done remotely, and subject to the other discussion herein.
Essential activities include, without limitation:
Activities or performance of tasks essential to an individual’s health and safety, or to the health and safety of their family or household members (including, but not limited to, pets),
or close personal acquaintances;
To obtain necessary services or supplies for themselves and their family or household members,
or close personal acquaintances, or to deliver those services or supplies to others;
To engage in outdoor activity, provided the individuals comply with Social Distancing Requirements as defined in the orders; and
To perform work providing essential products and services at an essential business or to otherwise carry out activities specifically permitted in the order, including minimum basic operations, as defined in the order about non-essential businesses.
This memo deals with dealers in terms of their essential authorized business and that which may be deemed non-essential, which is primarily direct in house public sales as noted below.
Dealers would appear to be able to serve individuals who bring themselves within the above exceptions, provided social distancing and sanitation requirements and recommendations continue to be met. Each of the above categories contains examples which would normally limit their meaning, but in this case they also contain language that states those examples are included, but not limited to what falls under the broad categories described. However, it is a provision that deals with the ‘stay at home’ features of the order amending provisions on group events (typically limited to 10 people with social distancing practices), so is most likely directed at activities initiated by individuals rather than businesses.
Essential Business Activity
There are provisions that clearly deal with vehicle dealership operations as well as those which may do so. They are:
- Auto-supply, auto-repair and related facilities;
- Businesses that supply other essential businesses with the support or supplies necessary to operate;
- Businesses that ship or deliver goods or services directly to residences;
- Private transportation services necessary for essential activities and other purposes authorized in the order, as well as transportation maintenance services such as mechanics necessary to keep transportation services operational.
While there are other items which upon review of the order may qualify a dealer to fall within, these are the most likely. You can serve other essential businesses and infrastructure, too, as they are categorically exempt.
Sales Activities and Those Related to “Auto Supply” Terminology
General sales activities are not clearly limited, but there is widespread agreement normal vehicle sales activities are halted.
We interpret “auto supply” to mean that the availability of motor vehicles for anyone who needs transportation should be honored by dealers based upon an essential needs test, including needs of first responders, for any person whose vehicle is damaged and is concerned about the reliability of their current vehicle, expiring leases and otherwise needs for a replacement or additional vehicle, all of which supports transportation as an essential and critical link in the transportation infrastructure.
Business operations must take advance measures now to ensure compliance with the Social Distancing Requirements, including the following where possible:
- Designate six-foot distances. Designating with signage, tape, or by other means six-foot spacing for employees and customers in line to maintain appropriate distance;
- Hand sanitizer and sanitizing products. Having anti-microbial soap and water or hand sanitizer and sanitizing products readily available for employees and customers;
- Separate operating hours for vulnerable populations. Implementing separate operating hours for elderly and vulnerable customers; and
- Online and remote access. Posting online whether a facility is open and how best to reach the facility and continue services by phone or remotely.
KADA also recommends the following practices with regard to dealership sales operations:
- Dealership sales departments should not generally be open to the public. Instead, sales activities should be conducted only by appointment with appointments made online or by phone.
- All dealership employees and customers who are allowed into showrooms must follow the Centers for Disease Control's (CDC) Coronavirus prevention guidelines.
- Dealership personnel and customers should be careful to adhere to social distancing throughout your sales and service operations. Have no more than 10 people in an area and remain at least 6 feet apart. Eliminate personal contact, such as shaking hands.
- Every effort should be made to serve customers remotely by picking up and dropping off vehicles, after they have been disinfected.
Throughout all of these orders there are bits and pieces of provisions that could be used to construct potentially compliant sales operations. Repair operations are clearly dealt with, but the farther away one goes from that activity the less certain the degree to which operations may continue. Workable solutions appear to be those which are telephonic and internet based which can provide for delivery and sanitation of vehicles in circumstances the order covers. Innovation may also mean that sales can be made without personal contact similar to ‘spot delivery’ arrangements, with provisions made for handling paper work electronically or by some other form of delivery, vehicle delivery or pick up and the like. Each dealership will have its own circumstances so while these ideas are set out, it is still emphasized that you consult your own counsel as to arrangements of this nature which you seek to develop. Some parts are clearly allowed, such as work at home and internet operations that could be so conducted, but the parameters all are focused on support of repair and supply operations and anything beyond that is not clearly delineated.
Additionally, it is recommended that employees have some form of identification with your essential business operation in case they are detained or need to show why they are doing their job. This can be an identification card of some sort (though I wouldn’t suggest sales personnel use their license) or a letter. A brief sample letter is set forth below.
Given the nature of these orders and local nuances and operations, members are advised to consult with their own counsel on compliance and how to structure it in specific circumstances. This memo is not intended to provide legal advice or suggest that it resolves issues which may arise with respect to individual dealer operations and is only a summary and discussion of the ideas conveyed by each.
Additional sources can be found here:
KADA will continue to provide updates on critical legislative and regulatory measures as they become available. They will also be posted on