Colonial dealerships asked staff to work without pay while on benefits, AG finds

Jan 15, 2021

This article was updated to include the number of cars sold by furloughed employees in Dartmouth and at each Dartmouth Colonial dealership, as stated by the AG’s Office.

Colonial car dealerships across the commonwealth — including three in Dartmouth — took advantage of state benefits during the Covid pandemic to encourage employees to work without pay, according to a Jan. 15 press release from the Massachusetts Attorney General’s Office.

Attorney General Maura Healey has reached an agreement with Colonial Automotive Group, Inc. in which the company will pay $1 million in penalties for encouraging furloughed staffers to apply for unemployment benefits and then requesting that they continue to work.

According to the release, Colonial violated the state’s False Claims Act by asking sales employees at all 16 of its dealerships in Massachusetts to call prospective leads, set appointments with prospective customers, deliver cars to customers, and finalize sales while furloughed and collecting unemployment.

The company “did not pay these employees’ salaries for the work they performed during this period,” the release stated. 

After the state closed car dealership showrooms in the spring of 2020, Colonial employees who were on furlough and collecting unemployment benefits at the time allegedly sold 821 cars in April and May, according to the Attorney General’s Office.

Of these 821 cars, 111 were sold at the three Colonial car dealerships in Dartmouth, according to a separate communication from the AG’s Office.

Furloughed employees at Colonial Honda of Dartmouth sold 102 cars during this time, while five were sold at Colonial South Chrysler Jeep Dodge Ram and four were sold at Colonial South Chevrolet.

Management at all three dealerships declined to comment, and an appointed Colonial spokesperson did not answer the phone.

“Colonial Automotive planned and carried out an illegal scheme to cheat our unemployment system and avoid paying its workers in order to maximize its profits during the Covid-19 crisis,” AG Healey said. “This is a brazen attempt at exploiting workers and the state’s unemployment system, and we will take action against those who defraud our state agencies and try to steal taxpayer dollars.”

Under the terms of the agreement with the Attorney General, Colonial will pay $1 million into the state’s general fund.

The company also agreed to enact policies to ensure that furloughed employees do not perform any work for Colonial or if they do, they will be compensated accordingly.