Hertz is in the midst of an ongoing lawsuit in bankruptcy court over claims by more than 100 customers that they were falsely arrested and, in some cases, spent months in prison for driving legally rented cars. At a court hearing this week, Chris Shore, a lawyer representing Hertz, described the situation as an astonishing lack of emotional intelligence. Whether or not this was a tight strategy, it certainly wasn’t something any intelligent leader would want their company’s clients to hear.
The controversy revolves around claims by some tenants that Hertz reports auto theft to law enforcement if the tenant extends the lease and the temporary hold imposed on their debit or credit card fails. Many reported that Hertz told them to extend their lease and then were arrested for driving their rental cars.
At this week’s hearing, Shore, a partner at White & Case, said, “It’s a fraction of the 1% of annual police reports that are filed that turn into actual litigation.” This number, of course, does not count clients who were falsely arrested but who accepted an early settlement from Hertz, resolved the matter in arbitration, or simply decided they did not have the funds or the stamina to file a lawsuit. Shore added, “In fact, we believe that the number of legitimate claims arising from annual rents is a tiny, small, small, small, small, very small fraction.”
How many false arrests are acceptable?
Saying “small” once would be bad enough, but Shore said it six times in a row. It seemed like he thought it was okay for Hertz to cause the innocent to spend months in prison, as long as it didn’t happen too often. Justin Nelson, the attorney for the tenants, replied, “It is not surprising that Mr. Shore and I disagree on whether this is a small problem or a big one.”
Did the repetition of the word “small” help the Chief Justice’s case? not clear. The outcome of the hearing was a mixed bag, but the judge allowed the lawsuit to move forward with discovery, when Hertz should begin providing documents and records to tenants’ attorneys.
Whether it works with the judge or not, Hertz can’t help with people who rent cars. Most of them are likely to prefer a car rental company where their chances of getting into prison are zero and not slim.