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Can I require customers to sign contracts with binding arbitration clauses in Connecticut? What are the requirements?

Yes, you can require customers to sign contracts with binding arbitration clauses in Connecticut. The requirements for such contracts depend on the type of contract and the amount of money involved.

For insurance policies, Connecticut General Statutes § 38a-316 requires that any policy containing an arbitration clause must include a notice in 12-point boldface type informing the policyholder of the arbitration clause. If mediation by the Insurance Department Division of Consumer Affairs fails to resolve a dispute between a claimant and an insurance company, the Insurance Department examiner who examined the complaint shall refer the file to the Arbitration Unit of the Insurance Department to begin the arbitration procedure [1.1].

For non-insurance contracts, Connecticut General Statutes § 5-276a outlines the procedure for elective binding arbitration. If both parties agree to arbitration, they must jointly select an arbitrator with substantial, current experience as an impartial arbitrator of labor-management disputes. The arbitrator shall preside over hearings, take testimony, administer oaths, and summon any person whose testimony may be pertinent to the proceedings. The arbitrator shall select the more reasonable last best offer proposal on each of the disputed issues based on the factors listed in subdivision (5) of this subsection. The award of the arbitrator shall be final and binding upon the parties unless rejected by the legislature as provided in section 5-278. The arbitrator’s fees and itemized expenses, the rental, if any, of the facilities used for the hearing and the cost of the transcript, if any, of the proceedings shall be divided equally between the parties [4.1].

For disputes related to automobile warranties, Connecticut General Statutes § 42-181 outlines the procedure for arbitration. The consumer must file a request for arbitration on a form prescribed by the Commissioner along with a filing fee of fifty dollars. Upon receipt of a fully-completed request for arbitration from a consumer, the department shall provide a copy to the motor vehicle manufacturer, directing such manufacturer to provide the department a manufacturer’s statement. Upon receipt of the completed manufacturer’s statement and the filing fee of $250.00, the department shall forward copies of the consumer’s request for arbitration and the manufacturer’s statement to the appointed arbitrator [2.1].

For disputes related to extended warranty contracts or the cost of repair, Connecticut General Statutes § 42-260 outlines the procedure for arbitration. If the purchase or lease price of the item subject to the extended warranty or the cost of repair, exclusive of sales tax, is one thousand ($1,000.00) dollars or less, the Commissioner shall appoint an arbitrator from the Arbitration Unit to review written documentation from the parties and to render a written decision resolving the dispute. If the purchase or lease price of the item subject to the extended warranty or the cost of repair exceeds one thousand ($1,000.00) dollars, the Commissioner shall appoint an arbitrator from the Arbitration Unit to conduct a hearing and render a written decision resolving the dispute [3.1].

For disputes related to labor-management agreements, Connecticut General Statutes § 5-276 provides for mediation and arbitration services by the State Board of Mediation and Arbitration. The services of the State Board of Mediation and Arbitration shall be available to employers or employee organizations designated as the exclusive bargaining representative for purposes of settlement of grievances arising out of the interpretation and application of the terms of a written agreement, for mediation of impasses in contract negotiations, for purposes of arbitration of disputes over the interpretation or application of the terms of a written agreement and for arbitration of impasses resulting from negotiations over unit contracts, unit reopeners and coalition bargaining matters [4.2].

For disputes related to family child care providers, Connecticut General Statutes § 17b-705a provides for negotiation and binding arbitration. Family child care providers shall have the right to bargain collectively and shall have such other rights and obligations incident thereto as are created by sections 5-270 to 5-279, except for prohibited subjects of bargaining such as the application of state employee benefits to family child care providers, including, but not limited to, health benefits and pensions, a parent’s right to recruit, select, direct the activities of, and terminate the services of any family child care provider, and a procedure for grievance arbitration against any parent [5.1].

Therefore, to require customers to sign contracts with binding arbitration clauses in Connecticut, you must ensure that the arbitration clause is clearly stated in the contract and that the notice requirements are met. Additionally, if a dispute arises and mediation fails, you must follow the arbitration procedure outlined in the relevant statutes.

Source(s):
Jurisdiction

Connecticut