Lawsuits against Enterprise Rent-A-Car and its parent Enterprise Holdings have produced more than $24 million in recorded regulatory penalties and settlements since 2000, spread across at least 20 separate matters. The cases involve a fatal crash in a recalled rental car, overcharging customers for damage and insurance, overbilling the federal government, age and racial discrimination in hiring, unpaid overtime for lower-level managers, and mass layoffs during the COVID-19 pandemic.
The Houck Sisters and the Recalled PT Cruiser
The most consequential lawsuit against Enterprise came out of a 2004 crash in Santa Cruz, California. Sisters Raechel and Jacqueline Houck were killed when a leaking power steering hose caused a fire in the 2004 Chrysler PT Cruiser they had rented. DaimlerChrysler had issued a safety recall for that exact defect the month before. The car had never been repaired, and Enterprise had rented it out four times after the recall notice went out.
Enterprise first tried to blame Raechel Houck for the crash and offered to settle for a few million dollars if the family agreed to keep the facts secret. The parents refused. In May 2010 Enterprise admitted it was negligent and that its negligence was the sole cause of the deaths. A jury awarded the family $15 million in June 2010.
A sworn declaration from a regional manager, introduced during the litigation, stated that company philosophy allowed renting recalled vehicles when they were the only inventory available, and that “the whole company did it.” Another company official said Enterprise had no plans to change its policies on recalled cars.
Cally Houck, the sisters’ mother, then campaigned for federal legislation. The Raechel and Jacqueline Houck Safe Rental Car Act was signed into law by President Obama on December 4, 2015, and took effect June 1, 2016. It bars rental companies with fleets of 35 or more vehicles from renting, loaning, or selling cars under a safety recall until the defect is fixed. Enterprise and other major rental companies initially opposed the bill before eventually joining consumer advocates in supporting it.
Overcharging for Vehicle Damage
A class action filed in Pennsylvania alleged that Enterprise billed customers for both “diminishment of value” and “cost of repair” when damage to a rental exceeded $500. The plaintiffs argued that laws in Pennsylvania, New York, Illinois, and California require customers to pay only the lesser of the two. They also claimed Enterprise’s rental agreement did not clearly disclose that both charges would be imposed, and that the contract was an unreasonable “take it or leave it” agreement. As of early 2026 the ClassAction.org investigation was listed as complete, with no active settlement or final ruling publicly reported.
New Jersey brought its own action. In October 2021 the state’s Division of Consumer Affairs announced an investigation alleging that Enterprise had failed to let customers fully inspect vehicles for pre-existing damage, misrepresented that customers would not be liable for prior damage while later billing them for it, and charged customers for damage that predated their rentals. Enterprise entered an Assurance of Voluntary Compliance, paying $50,000 and agreeing to overhaul damage-inspection procedures at all New Jersey locations. The required changes include documenting pre-existing damage with customer signatures, notifying customers of observable damage within five business days of return, and using binding arbitration to resolve affected complaints for two years.
Insurance and Government Billing
In 2003, then–New York Attorney General Eliot Spitzer settled a lawsuit alleging Enterprise had failed to give customers the minimum liability coverage required by state law. According to the AG’s office, Enterprise told customers it provided no insurance, prompting them to buy supplemental liability protection at $6.95 to $7.95 per day for coverage they were already legally entitled to. Enterprise agreed to refund about $2 million to roughly 100,000 New York customers who bought the supplemental protection between April and August 2001, and to pay $200,000 in costs to the state. Enterprise denied wrongdoing, calling the refund a “pragmatic and cost-effective course of action.”
Similar billing practices later drew federal scrutiny. In May 2020 Enterprise Holdings paid $3 million to settle allegations that it had improperly billed the federal government for collision damage waiver and supplemental liability protection fees on government rental contracts between October 2010 and December 2018. Investigators also found Enterprise had charged one-way travel as a fixed fee instead of the contractually required per-mile rate. The case was worked jointly by the U.S. Air Force Office of Special Investigations and the U.S. Army Criminal Investigation Division Command.
Age Discrimination in Hiring
In September 2025, Enterprise Leasing Company of Florida agreed to pay $1.8 million to settle an age discrimination case brought by the Equal Employment Opportunity Commission. The EEOC alleged that since at least 2019 Enterprise had systematically refused to hire applicants 40 and older for its management trainee positions, in violation of the Age Discrimination in Employment Act. Roughly 15 percent of applicants were over 40, but they made up less than 3 percent of hires. More than 125 witnesses reported being asked about their age or college graduation year during interviews, or being told most candidates were “fresh out of college.”
The consent decree, signed by Judge Melissa Damian in the U.S. District Court for the Southern District of Florida, requires Enterprise to adopt new ADEA policies, run annual anti-discrimination training, maintain an ethics hotline, investigate future age-related complaints, and report hiring data to the EEOC every six months for three years. Enterprise denied wrongdoing.
Racial Discrimination Cases
Enterprise has faced racial discrimination claims in more than one region. In October 2000, eight plaintiffs sued Enterprise Leasing Co. of St. Louis in federal court over hiring and promotion practices. The case settled for $2.325 million: $575,000 for the eight named plaintiffs, $700,000 for Black employees from October 1995 through December 2001, and $500,000 for Black applicants during the same period. Enterprise agreed to change its hiring and promotion practices, including job postings, career counseling, and formal job qualifications.
A much larger case came out of Baltimore. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs found that Enterprise RAC Company of Baltimore had discriminated against African American applicants for management trainee positions during two periods, 2007 to 2012 and 2013 to 2017. In 2019 Administrative Law Judge Morris Davis ordered Enterprise to pay more than $6.6 million in back wages and benefits to over 2,300 applicants, extend job offers to 182 of those rejected, and face indefinite debarment from federal contracts. DOL described it as the largest back-wage award in the history of its federal contract compliance program. Internal audits at Enterprise had shown an “ongoing disparate impact on minority applicants since 2007,” which the company failed to address.
The outcome did not hold. In November 2021 the DOL’s Administrative Review Board unanimously reversed Judge Davis, finding he had “misunderstood and misapplied” both the disparate impact and disparate treatment theories of discrimination law. The Board noted that Enterprise had articulated legitimate, non-discriminatory reasons for its hiring decisions through documented behavioral interviewing codes. The case was remanded to a new administrative law judge, and no final resolution has been publicly announced.
Unpaid Overtime for Assistant Managers
Enterprise has been sued repeatedly over unpaid overtime for lower-level managers. The largest was a nationwide multidistrict litigation consolidated in the Western District of Pennsylvania, in which assistant branch managers alleged they had been misclassified as exempt from overtime under the Fair Labor Standards Act. That case settled for $7.75 million. A pair of proposed class actions in California, covering unpaid overtime and uncompensated training time for assistant managers, settled for $1.125 million.
A related question reached the Third Circuit: could Enterprise Holdings, the parent company, be held liable as a “joint employer” alongside its regional subsidiaries? In June 2012 the court said no, laying out what became known as the “Enterprise test” for joint employer status under the FLSA.
A separate California case, Gomez v. Enterprise Rent-A-Car Company of Los Angeles, was filed in 2010 by a former management trainee who alleged unpaid overtime, denied meal and rest breaks, and unpaid “working interviews” during on-the-job training. That case was terminated in September 2012, though the terms of the resolution are not publicly detailed.
Pandemic Layoffs and the WARN Act
When COVID-19 collapsed travel demand in spring 2020, Enterprise laid off hundreds of employees with little or no notice. A class action in the U.S. District Court for the Middle District of Florida alleged that Enterprise violated the Worker Adjustment and Retraining Notification Act by failing to give the required 60 days’ notice before terminating workers on or around April 24, 2020. The lead plaintiff, a 34-year Enterprise employee, argued the company had known since at least mid-March that its business was deteriorating, when furloughs began.
Enterprise moved to dismiss, invoking the WARN Act’s exceptions for unforeseeable business circumstances and natural disasters. Judge Roy B. Dalton denied the motion in January 2021, holding that whether Enterprise had provided “as much notice as is practicable” was a factual question. The case settled for $175,000, with preliminary approval in January 2022; more than 320 individuals filed claims.
ADA, Environmental, and OSHA Actions
Enterprise’s legal exposure extends beyond consumer and employment claims.
- In 2014 Enterprise entered a settlement with the U.S. Department of Justice after an investigation found the company had denied equal access to customers with disabilities by failing to provide reserved vehicles equipped with hand controls. Enterprise agreed to pay $6,000 to three complainants and to overhaul its policies on adaptive driving devices at no additional cost, with delivery timelines ranging from 8 hours at major airports to 48 hours at other locations.
- In 2014 the California Air Resources Board assessed Enterprise $560,000 for renting California vehicles labeled “US EPA certified” rather than carrying the required California emissions certification. An inspection turned up an out-of-state vehicle with fewer than 7,500 miles that lacked the proper label. Enterprise issued an internal directive barring California locations from renting vehicles with only federal emissions labels.
- Enterprise subsidiaries have drawn multiple OSHA penalties, including $18,500 against Enterprise Rent-A-Car Company of Los Angeles in 2023, along with smaller penalties in 2020 and 2021.
How Enterprise Handles Disputes Now
Many of these disputes now play out against the backdrop of Enterprise’s mandatory arbitration clause. The company’s terms of use require customers to resolve disputes through binding arbitration administered by the American Arbitration Association, waiving the right to a jury trial and to class action participation. The clause covers “any and all claims, controversies or disputes of any kind” related to Enterprise’s products, services, charges, or rental vehicles.
Its enforceability was tested in Kramer v. Enterprise Holdings, a proposed class action alleging that Enterprise improperly stored personal data pulled from customers’ phones when they paired their devices with rental cars. Enterprise moved to compel arbitration. In November 2020 the Ninth Circuit affirmed the lower court’s decision to enforce the arbitration agreement and dismiss the class action, rejecting the argument that the clause improperly waived the plaintiff’s right to seek public injunctive relief under California law. The court found the requested remedy was private rather than public. For most customers with a complaint against Enterprise today, that arbitration clause is the first hurdle.