The following question was recently asked of the Ms. Whitney Brewster, Executive Director, TxDMV:

I would appreciate the agency’s viewpoint—not formal or informal opinion--regarding the exception stated in Occupations Code §2301.453(d)(4). The statute provides that if a franchised dealer fails to conduct its customary sales and service operations during its customary business hours for seven consecutive business days, notice may be given for termination or discontinuance no later than 15 days to effect the termination or discontinuance.

The statute also provides that termination is not applicable for a failure to conduct customary sales and service if the failure is caused by:
    1. An act of God;
    2. A work stoppage or delay because of a strike or labor dispute;
    3. An order of the board; or,
    4. Another cause beyond the control of the dealer.

The COVID-19 and the response that businesses are taking because of government recommendations and workplace necessity may dictate certain dealerships to close for a period of time. I am not aware of any dealership that is not operational at this time; however, the issue may arise.

In addition, the GDN rules state that a retail dealer’s office facility shall be open at least four days per week for at least four consecutive hours per day (43 TAC §215.140(1)(A)), which may impact the independent as well as franchised dealer.

Director Brewster’s Response

“Thank you for reaching out to me about the concerns your members are having during this unprecedented time. We would like to reassure you that during the current crisis, dealers will not be penalized by the department for closures necessitated by government recommendations and concern for employee health. We have also reached out to manufacturers who had advised us that they do not intend to terminate dealerships based on closures due to acts of God. Please do not hesitate to reach out again with additional questions as circumstances develop. We will continue to support our stakeholders while we assist our state and local governments in addressing this public health crisis.”