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Congress passes voluntary arbitration bill

November 23, 2010

Voluntary arbitration in manufacturer-dealer disputes, the top legislative priority of the National Automobile Dealers Association, passed the U.S. Senate Oct. 3 as a rider to another bill. The House passed the measure Sept. 26. "This is a tremendous victory for new-car and -truck dealers across the country," said H. Carter Myers III, NADA chairman.

"We were persistent and we prevailed." If President Bush signs the Conference Report for the Department of Justice Reathorization bill, then automobile and truck manufacturers no longer will be able to use mandatory binding arbitration clauses in franchise contracts, to circumvent dealers' states rights. Dealers have lobbied for years for the change, arguing that mandatory binding arbitration in manufacturerwritten automobile and truck dealer franchise agreements unfairly forces dealers to waive longstanding legal rights and remedies granted under state franchise law. "On behalf of the NADA," Myers said, "I would like to thank all the dealers and state association executives who worked long and hard to pass this legislation."