New Jersey Senate Bill S2139

New Jersey 2022-2023 Regular Session

• Introduced: 3/7/22
• Refer: 3/7/22

Caption

Provides State agencies will not enter into contracts with business entities that require persons or public entities to submit disputes to binding arbitration.

Impact

By preventing state agencies from engaging with businesses that impose binding arbitration clauses, SB 2139 has the potential to alter the landscape of state contracting. The bill may encourage more businesses to adopt practices aligned with public interest, as they will need to consider how their contractual obligations may impact future business with the state. Additionally, this measure may lead to an increase in litigation, as disputes that might have previously been resolved through arbitration are now likely to proceed through the courts.

Summary

Senate Bill 2139 seeks to prohibit state agencies in New Jersey from entering into contracts with business entities that mandate binding arbitration for disputes arising after the contract is signed. This legislation is designed to ensure that individuals and public entities retain their legal rights and remedies in a court of law, rather than being forced into arbitration, which can limit recourse options. The motivation behind the bill is to enhance transparency and accountability in state contracting practices, particularly in relation to dispute resolution processes.

Contention

Notably, the bill may face opposition from business groups that advocate for arbitration as a faster and more cost-effective means of resolving disputes. Critics of the legislation may argue that this restriction could deter businesses from seeking contracts with the state, potentially leading to reduced competition and higher costs. However, proponents assert that the bill protects the rights of individuals and entities to have access to the courts, thus improving the fairness and transparency of the contracting process.