Customer Contracts: Fellman Guides Laundry Operators

Posted February 9, 2018 at 1:02 pm



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Attorney and longtime TRSA General Counsel Steve Fellman gave an overview of contract law and antitrust compliance issues during a recent webinar titled “Customer Contracts: The Good, The Bad and The Ugly.” The webinar was presented by TRSA’s Education Committee.

Fellman said that a contract between a linen, uniform and facility services company and its customer should set terms for the type of service provided for a set period in plain language that both sides agree to and can follow. Otherwise, the linen, uniform or facility services provider may find that if the customer violates the terms of the contract and the matter ends up in court, a judge may determine that the contract is unreasonable and, therefore, unenforceable.

Laundries can avoid these problems with clear language and reasonable terms. Contracts should be concise, current and signed by the current customer. “We want first to have a relationship between our customers that’s a meaningful relationship that protects our investment and allows us to perform a service and have a happy customer,” Fellman said. “Second, we want a document that we can take into court and enforce.”

While it’s illegal to induce a customer to break a contract, any attempt by laundries to avoid vigorously competing for business can lead to a different kind of legal issue – a violation of antitrust laws. Fellman pointed out that any attempt by laundries to set aside territory, fix prices between competing firms or similar actions can lead to jail terms for laundry operators. One way to defend against this illegal activity is to have an antitrust compliance policy on file with the company that explicitly states that no employee is permitted to engage in any practice that restricts competition.

Fellman suggested that companies work with their counsel or TRSA to put together such a compliance document. Once it’s finalized, they should have every employee sign the document. Taking this action can provide affirmative evidence if law enforcement authorities take legal action against an employer on charges of violating antitrust rules.

TRSA has an on-demand learning library that will allow you to “live stream” all of the association’s webinars, including this latest edition. TRSA members can purchase webinars, and other training and educational resources at a reduced member price. Visit www.trsa.org/ondemand to go to TRSA’s On-Demand Learning portal to view this webinar and more.

TRSA has an exciting lineup of educational webinars in the works for the remainder of 2018. The next webinar is titled “Mobile Device Functionality for Route Sales Representatives,” and will be held on Feb. 28 from 2-3 p.m. EST. The webinar will be presented by TRSA’s Industrial/Uniform Committee. Thanks to Monarch Brands, Philadelphia, for its support of TRSA’s webinars.