Jarrell Cook

Bill limits arbitration agreements

By Jarrell Cook, Legislative Manager, Government Relations

Capitol Update, Jan. 20, 2017 Share this on FacebookTweet thisEmail this to a friend

SB 33 (Bill Dodd, D-Napa) recently introduced, is generating buzz now that it has moved into consideration by both the Senate Judiciary and Appropriation Committees. The bill bans contract clauses that require arbitration in disputes that arise “as a result of fraud, identity theft, or any other act related to wrongful use of personal identifying information.”

The bill is a direct response to the recent incident involving Wells Fargo, where consumers that were affected by the bank’s employees fraudulently opening accounts in their names were forced into arbitration. SB 33’s prohibition would encompass contracts entered into by all business entities. Thus peaking CMTA’s interest.

The bill’s wide scope raises concerns for manufacturers conducting business-to-business transactions when they try to save time and money by implementing arbitration agreements to settle disputes.

CMTA is surveying the impact this bill may have on our members. We will continue to meet with legislators to ensure that bills such as SB 33 that are intended to protect consumers do not unintentionally stifle manufacturers caught in their wake. 

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