Waste Management Company Agree to Change Contracting Practices

On July 14, 2014, New York State Attorney Eric Schneiderman announced that Casella Wastes (“Castella”), a waste management company based in Vermont but also serving New York, agreed to change its existing contracting practices in the face of antitrust scrutiny.

Casella was found to have unlawfully restricted competition through its acquisition of smaller competitors and restriction on contract terms that ties customers to its services. These contracts involved the collection and disposal of solid waste from dumpsters.  Casella’s contracts required that it serve as the sole provider to all of a customer’s waste disposal needs for at least five years. Early termination of the contract would cost the customer the equivalent of six times the amount on their monthly bill.  In addition, Casella also reserved the right to match competing offers from rivals, effectively discouraging competitors from bidding for Casella’s business.

The terms of the settlement reduced the customer’s burden of terminating a Casella contract: the customer is now only expected to pay the equivalent of two months of service if the contract is within its first year, and the equivalent of one month of service if the contract is beyond the first year.  In addition, Casella’s contract length is also to be capped at two years.

Mark Ye
202-589-1834
mye@dbmlawgroup.com