Posted: February 9th, 2023

You own a local nightclub that sells alcohol

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Be sure to answer both questions: 1. You own a local nightclub that sells alcohol. You would like to advertise in college newspapers in the area. The editors and the university have no objections to your ads, but a state statute prohibits college newspapers from advertising businesses that earn more than half of their revenue from the sale of alcohol. (As a nightclub, most of your revenue comes from alcohol sales.) Does the state statute prohibiting you from advertising in the school newspaper violate your rights under the First Amendment of the United States Constitution?
2. You quit your job because you believe your employer has been retaliating against you due to your desire to form a union at your workplace. Because retaliating against employees based on their desire to unionize violates federal law, you file a lawsuit against your employer. Your employer wants to have the lawsuit dismissed, and in doing so, your employer pulls out an employment contract. The employment contract contains an arbitration clause, requiring you to submit any dispute you have with your employer to arbtration. You believe that the court should ignore the arbitration claiJse and let the lawsuit proceed. Arbitration is a procedure where a third party decides the case outside of the traditional court system. An arbitration clause is a contract clause where parties to a contract mutually agree to waive their right to go to court and instead settle the dispute in arbitration.
In arguing that the court should ignore the arbitration clause, you rely on a state law that prohibits arbitration clauses in employment contracts from being enforced unless they are agreed upon in a separate contract. Because this arbitration clause is not part of a separate contract, you believe that the court should refuse to apply the arbitration clause. In response, your employer relies on a federal law that states that arbitration clauses cannot be treated differently from any other type of contract provision. Because the arbitration clause would otherwise be valid, your employer believes that the court should enforce the arbitration agreement. The judge considering the case recognizes that if state law applies, your argument is correct, and the arbitration agreement should not be enforced. However, if federal law applies, your employer’s argument is correct, and the arbitration agreement should be enforced. Should the judge enforce the arbitration agreement in this case?
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The state statute prohibiting the advertising of businesses that earn more than half of their revenue from the sale of alcohol in college newspapers may violate the rights of the nightclub owner under the First Amendment of the United States Constitution. The First Amendment protects the freedom of speech and the freedom of the press. Advertising in a college newspaper is a form of speech and the newspaper is a form of press. Restricting the ability to advertise in a college newspaper based on the source of revenue is a content-based restriction on speech and would be subject to strict scrutiny. The state would need to show that the restriction is narrowly tailored to serve a compelling government interest. It is not clear if the state would be able to meet this standard, as the restriction may not be the least restrictive means of achieving the state’s goal of limiting the promotion of alcohol to college students.
The judge in this case will likely have to determine which law applies, state or federal, to decide whether to enforce the arbitration clause in the employment contract. If state law applies, the judge should not enforce the arbitration agreement, as it does not meet the requirement of being agreed upon in a separate contract. However, if federal law applies, the judge should enforce the arbitration agreement as arbitration clauses cannot be treated differently from any other type of contract provision. The question of which law applies will depend on the specific facts of the case and the judge will have to consider the relevant federal and state laws as well as any prior court decisions that may be relevant.

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