Hollander v. Allied Van Lines, Inc., 17 N.Y.2d 384 (1966)
An arbitration clause covering “any dispute” is broadly enforceable, but arbitration is improper where the core issue involves antitrust concerns, unless specific, severable issues exist that can be resolved independently.
Summary
Hollander, an agent for Allied Van Lines, sought arbitration when Allied approved a new branch in his territory. Hollander argued this violated his agency contract. Allied resisted arbitration, claiming the agreement only covered termination disputes and that the matter raised antitrust issues due to its potential impact on competition. The court held that while the arbitration clause was broad, encompassing “any dispute,” the primary issue—restricting competition through territorial exclusivity—implicated antitrust law, rendering it non-arbitrable. However, a specific claim regarding Allied’s internal procedures for approving new branches (Rule 26) could be arbitrated separately, as it concerned contract interpretation without directly addressing competitive restraints.
Facts
Hollander was an exclusive agent for Allied Van Lines in a Chicago suburban area. Allied approved a new branch agency in the same territory for American Imperial Movers, Inc. Hollander contended this breached his agency contract. The agency contract contained a broad arbitration clause covering “any dispute” between the parties.
Procedural History
Special Term initially denied Allied’s motion to stay arbitration, interpreting the arbitration clause as broad and all-encompassing. The Appellate Division reversed, finding the arbitration clause limited to termination disputes and holding that the dispute raised substantial antitrust questions warranting a stay. The case was appealed to the New York Court of Appeals.
Issue(s)
1. Whether the arbitration clause in the agency contract was limited to disputes involving termination of the contract.
2. Whether the dispute, concerning territorial exclusivity, raised antitrust issues that precluded arbitration.
Holding
1. No, because the arbitration clause was clear and unambiguous, covering “any dispute” between the parties, not solely termination-related issues.
2. Yes, in part, because the primary issue of territorial exclusivity implicated antitrust concerns, but a separate claim regarding Allied’s internal procedures for approving new branches (Rule 26) could be arbitrated separately.
Court’s Reasoning
The court emphasized the broad language of the arbitration clause, stating it applied to “[a]ny dispute between the parties.” The court rejected Allied’s argument that the clause was limited to termination disputes, finding no such restriction on the face of the agreement. The court noted that the parties could have easily limited arbitration to specific breaches warranting termination if that had been their intent.
Regarding antitrust concerns, the court recognized that revoking American’s branch agency would restore the status quo and relieve Hollander of competition, potentially violating antitrust laws. The court cited Matter of Aimcee Wholesale Corp. (Tomar Prods.), stating that antitrust issues are generally not arbitrable. The court found that most of Hollander’s claims were intertwined with the issue of territorial exclusivity and, therefore, implicated antitrust law.
However, the court carved out an exception for Hollander’s claim that Allied violated the contract by failing to provide notice and a hearing under Rule 26 when approving the new branch. The court stated this issue presented a matter of contract construction that could be resolved without reference to antitrust complications. “Of course, it may be assumed that the arbitrators will not render an award which would require the doing of an act prohibited by law or offensive to public policy. If there is such an award, the court has the power to vacate it.” (Matter of National Equip. Rental [American Pecco Corp.], 35 A D 2d 132, 135, affd. 28 Y 2d 639, mot. for rearg. den. 28 Y 2d 859).
The court concluded that Hollander was only entitled to arbitration on the limited issue of whether Allied breached the contract by promulgating Rule 26 without providing for notice and hearing and by granting American’s application pursuant to a defective rule.