Opinion ID: 202158
Heading Depth: 3
Heading Rank: 3

Heading: The labor rate dispute

Text: 22 As set forth above, WINS evaluates the labor reimbursement portion of a warranty claim based on each dealer's pre-approved warranty labor rate multiplied by the GM labor time guideline for the particular repair. In situations where a dealer, like Darling's, charges a different retail labor rate depending on the type of repair, WINS uses a single rate based on the weighted average of the dealer's actual customer-pay experience. To make this calculation, GM requests that the dealership submit 100 sequential repair orders that reflect the labor rates actually charged to customers. The average of these charges becomes Darling's effective labor rate for purposes of the initial WINS reimbursement. 23 In September 2000, Darling's requested GM to increase its effective labor rate from $48.95 to $52.00 per hour to match its posted retail rate. Several months later, Darling's submitted a warranty labor rate adjustment application together with supporting documentation (i.e., a form detailing 100 sequential repair orders). This documentation revealed that the average rate Darling's actually charged customers was only $51.58. It was lower than the posted rate because Darling's provides discounts on certain repairs. As a result, GM denied Darling's request for a labor rate increase. After Darling's protested the outright denial, GM advised that it would increase Darling's effective labor rate to $51.58 upon receipt of a revised warranty labor rate adjustment application. GM did not require Darling's to resubmit the supporting documentation. Darling's refused to submit a revised application, so its WINS labor rate remained at $48.95. Nonetheless, under GM's reimbursement scheme, Darling's continued to receive the difference between the WINS rate and its posted retail labor rate in response to supplemental claims.