Boilermakers v. Chevron: Are Board Adopted Arbitration Bylaws Valid Under the Delaware General Corporation Law?
Michael Van Gorder
In recent years, corporations have been flooded with shareholder lawsuits, many of which are filed in multiple forums throughout the country. In response, corporations have attempted to quell these difficult and costly lawsuits through various provisions in their governing documents. In Boilermakers v. Chevron, the Delaware Court of Chancery held that under the Delaware General Corporation Law, a board of directors may unilaterally adopt a forum selection clause within the corporation’s bylaws. This opinion has given corporations a green light to adopt forum selection bylaws, but it also invites the question: What else may a board of directors put in the bylaws in order to combat the difficulty and costs of intra-corporate disputes with shareholders?
This Comment analyses the reasoning behind the Boilermaker’s decision, applies the reasoning to an arbitration provision, and finds that unilaterally adopted arbitration provisions would also be upheld under the Delaware General Corporation Law. This Comment then goes on to discuss some of the potential roadblocks a corporation may encounter when considering or implementing an arbitration provision. Ultimately, this Comment concludes that an arbitration provision is a viable option to a corporation that has been saddled with shareholder disputes in multiple forums.