Appeals Court Holds Arbitration Provision In Company’s Promotional Program To Be Unenforceable

In Soliman v. Subway Franchisee Advertising Fund Trust, Ltd., the Second Circuit recently reviewed in detail the circumstances in which an arbitration provision indirectly referenced in a company’s promotional materials will be enforced. Soliman involves a putative class action alleging a violation of the Telephone Consumer Protection Act predicated on allegations that the defendant failed to comply with a consumer’s request to unsubscribe from a promotion.

The defendant moved to compel arbitration based upon terms and conditions found in a website to which the consumer was ostensibly referred by a hard copy, in store announcement of the promotion. The Second Circuit affirmed the lower court’s denial of the motion to compel for the reason that the arbitration provision was not “reasonably conspicuous” as required by applicable precedent. The decision, reviewing and distinguishing various precedents, provides an informative tutorial for companies seeking to provide for arbitration in their promotional programs and attorneys representing clients regarding the enforceability of arbitration provisions.