MALONE — Casella Waste Systems Inc., which provides waste hauling services throughout the north country, agreed to change its business practices to enhance competition under a settlement announced Monday by state Attorney General Eric T. Schneiderman.
The settlement came after concerns were raised that the waste hauling firm has been “unlawfully” restraining competition in the north country and Southern Tier, according to a press release from Schneiderman’s office.
According to the release, Mr. Schneiderman said Casella has been creating a noncompetitive situation in areas it serves through restrictive contracts, “market dominance and [a] pattern of acquisitions of smaller competitors.”
Casella is now required to change its contracts to make it easier for its customers to switch to other companies and will “reduce the legal and financial obstacles” that have been faced by customers, according to the release.
“The Attorney General’s Office found that Casella’s contracts with its customers required that Casella serve as the exclusive provider of all customers’ waste hauling services for as long as five years,” the release states. “Customers faced severe consequences for early cancellation of their contracts, due to provisions requiring that they pay Casella an amount equal to six times their monthly bill upon early termination.”
The release also said the contracts allowed Casella to match competing offers. “The Casella contracts in question involved the collection and disposal of solid waste from dumpsters,” the release said.
Casella Waste Systems spokesman Joseph S. Fusco said the agreement is for commercial customers only in certain counties, more specifically rural counties.
Mr. Fusco said there was nothing illegal with the contract, but noted that Mr. Schneiderman was more comfortable with agreeing to have a two-year contract, plus a one-year renewal.
Casella also agreed to reduce its penalty for early termination, the release said. “In addition, Casella agreed to notify the attorney general if it acquires a competitor of a minimum size in certain key upstate counties.”
Casella “has the strongest market presence” in the following counties: Franklin, Clinton, St. Lawrence, Chautauqua, Cattaraugus, Allegany, Steuben, Schuyler, Chemung, and Tompkins, according to the release.
“These changes are expected to rejuvenate competition by reducing customers’ switching costs and facilitating new market entry,” the release said. “The settlement also requires Casella to report certain future acquisitions of competitors to the attorney general’s office.”
The company will also pay New York state $100,000.
In 2002 and 2011, Casella entered into similar settlements with the Vermont attorney general’s office, the release said.