This legislation for some reason solely applies to motor vehicle manufacturers and dealers. This is particularly ironic given the fact that a growing number of businesses including auto dealers are using MBACs with their customers. There is simply no reason for Congress to carve out an exemption for a specified class and as a result to interfere with existing agreements and potentially prohibit parties from pursuing or being protected by their established rights under the terms of these contracts. Proponents of S. 1020 argue that MBAC allows manufacturers to circumvent laws specifically enacted to safeguard small business dealers from unfair automobile manufacturer practices. This is simply not the case.
Arbitration is a fair process for resolving disputes and maintaining business relationships.
Moreover, state law is just as likely to be applied by arbitrator as it is by the state and federal courts. Some states including Wisconsin and Texas, specifically require that state law be applied in arbitration. The automobile industry has changed dramatically in last few years. Most dealers are sophisticated businesses which now include large public companies openly traded on the stock exchanges. The future of the industry will undoubtedly involve further dramatic changes.