BEST PRACTICES If your dealership is adopting or updating an arbitration program, my recommendations are as follows: ∙ Use a standalone arbitration agreement rather than burying it in a retail installment contract or employee handbook. I realize we have to use the lender’s arbitration agreement in the retail installment contract. Let’s consider having a standalone arbitration agreement that is consistent with the lender’s agreement, which mostly uses the American Arbitration Association as their commercial service provider. ∙ Draft the arbitration provision under the FAA and make sure it clearly addresses: ∙ Which claims and parties are covered ∙ Explicit exclusions for non-arbitrable claims ∙ A delegation clause (letting the arbitrator decide arbitrability disputes) ∙ A class action waiver ∙ Plan for mass arbitration risk up front, rather than discovering it after a wave of demands arrives. ∙ Track which version of the agreement each employee signed, confirm signatures are on file and set a clear document retention policy. Agreements that can’t be proven to exist or be signed are agreements that can’t be enforced. If you use a commercial arbitration service, you will need to pre-file your arbitration provision with the service. If you have an arbitration provision, be careful about deciding not to use it all the time. Plaintiff’s counsel has been arguing that such waivers void the arbitration provision. This creates another issue to address when having to file a motion to compel arbitration. BOTTOM LINE For dealership owners, arbitration agreements remain a strong strategic tool. The data shows faster resolution and dramatically reduced exposure to large jury verdicts compared to litigation. But they only deliver those benefits when built correctly: standalone, FAA-compliant, clear about exclusions and actively maintained. A poorly drafted or poorly tracked agreement can cost you the very protection you hoped to gain. Before rolling out or revising an arbitration program, loop in experienced counsel to make sure your agreement reflects current law in every state you operate, but particularly West Virginia. The federal and state landscape shifts often, and what worked five years ago may need updating today. As always, the West Virginia Automobile Dealers Association is ready to assist you. Please do not hesitate to reach out to Jared Wyrick or myself for any help. WVADA NEWS 9 Learn more at BankWithUnited.com Member FDIC / Subject to credit and underwriting approval. United Bank specializes in tailoring a combination of financial products and auto-dealer services to best meet the specific needs and goals of your automotive dealership. Floor Plan Line of Credit Term Financing Indirect Financing Cash Management Services GET MORE BANK FOR YOUR DEALERSHIP
RkJQdWJsaXNoZXIy MTg3NDExNQ==