An End to Mandatory Arbitration Clauses?

In the recent past, I have written about the shortcomings of arbitration as a dispute-resolving format for hotel franchise agreements. (see Hotel Online, “Nobody Asked Me, But… No. 27”).  In my estimate, mandatory binding arbitration protects franchisor interests while diluting franchisee remedies.

A recent issue of the Wall Street Journal reported that the Arbitration Fairness Act of 2007, is being reviewed by the Senate Judiciary Committee.  The proposed legislation doesn’t prohibit arbitrating a dispute, but it would prevent one party with greater bargaining power, typically the franchisor, from contractually forcing individuals into arbitration.

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Stanley Turkel, MHS, ISHC, is a New York-based hotel consultant specializing in hotel franchising issues, asset management and litigation support services. He is also available for due diligence studies for an acquisition, a third-party audit of a marketing or operational problem, an expert review of a management contract or a franchise agreement, or litigation support. Mr. Turkel is a member of the International Society of Hospitality Consultants and can be reached at 917-628-8549 or email at stanturkel@aol.com