Frederic P. Houston is vice president and general counsel of the New York Board of Trade, and former counsel, Textile Fabrics Association (now Textile Distributors Association); a member of the Commercial Section of the Arbitration Law Committee of the American Arbitration Association; an associate member of the American Textile Manufacturers Institute; and a member of the law firm of Otterbourg, Steindler, Houston & Rosen, P.C. (general counsel to the American Yarn Spinners Association and affiliated yarn associations).
The textile and apparel industry is the largest employer (after food) in the United States. Its most important marketing center is in New York City. In 1978, the New York State Court of Appeals, in the landmark case of Marlene Industries Corp. v. Carnac Fabrics, Inc. ruled illegal the enforcement of written agreements containing an arbitration clause unsigned by the parties. This ruling, the author claims, is contrary to the Uniform Commercial Code, the New York State arbitration statute, and the United States Arbitration Act. He provides a comprehensive review of textile practice and an analysis of decisions used as precedent in Marlene. He suggests several courses of action, among them legislation to support the position that a provision for arbitration does not materially alter an offer or sales agreement in an industry where arbitration is well accepted or, alternatively, the courts' reversal of its policy in subsequent cases.