COUNSELOR’S CORNER Johnnie Brown, Esq. Consumer and employment lawsuits are unpredictable liabilities in dealerships. Dealers can go years without any significant lawsuits and then be surprised by multiple suits in a short time frame. For years, mandatory arbitration agreements have been thought to be a panacea for controlling that exposure. But plaintiffs’ attorneys have gotten more aggressive about fighting to stay out of arbitration, and jury verdicts against dealerships have grown sharply larger. The question dealership owners should be asking in 2026 isn’t, “Should we use arbitration agreements?” The question should be, “Is our arbitration provision actually working, and are they worth the trade-offs?” Here’s a summary of the real advantages, the genuine downsides and what a well-built program looks like. BRIEF LEGAL BACKGROUND Arbitration agreements are governed primarily by the Federal Arbitration Act (FAA), and the United States Supreme Court and West Virginia Supreme Court spent the last three decades steadily strengthening employers’ ability to enforce them. If the FAA is not used, West Virginia also enacted an updated arbitration statute in 2015. The trend line is clear with arbitration; courts have consistently sided with businesses who structure their agreements correctly. For example, an estimated 80% of Fortune 100 companies have used employment arbitration agreements since 2010, largely in response to the rise of employment cases, but the same considerations can be examined by West Virginia auto dealers with both employment and consumer claims and lawsuits. THE ADVANTAGES ∙ Class action waivers are the single biggest win. Eliminating even one class action can meaningfully cut a dealership group’s litigation costs — and it can also lower your profile with the plaintiffs’ employment bar, which tends to target companies known for large exposure. ∙ Lower overall cost of resolution. Studies show that well-run arbitration programs tend to reduce class litigation exposure, limit discovery and push cases toward earlier, lower settlements with a more streamlined process than court litigation. However, I personally find this questionable Arbitration Agreements: Advantages and Disadvantages WVADA NEWS 6
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