Vermont Settlement Shows B2B Contracts Face Renewal Rules

A $60,000 settlement with UniFirst shows how state automatic-renewal enforcement can affect business contracts, customer relationships and future revenue.

Vermont is requiring UniFirst, a provider of workplace uniforms, protective clothing and facility services, to change how it handles automatic renewals in its Vermont business contracts following an investigation by the state's Attorney General.

The settlement, announced October 14, requires UniFirst to stop including automatic-renewal provisions in affected Vermont contracts, notify customers of the change and refund qualifying early termination charges. The company will also pay Vermont $60,000.

The case raises an important issue for subscription and recurring-revenue businesses. Automatic-renewal requirements can apply to contracts between businesses, including relationships managed through sales teams and account managers rather than consumer subscription systems.

Why Vermont's Law Applies to Business Contracts

Vermont's automatic-renewal law took effect in July 2019. Although it sits within the state's consumer-protection statutes, Vermont defines a consumer to include businesses purchasing goods or services for their own operations rather than for resale.

The law applies to contracts with an initial term of at least one year that automatically renew for more than one month. Companies must clearly disclose the renewal terms in bold type and obtain a separate affirmative agreement to automatic renewal.

They must also provide written or electronic notice 30 to 60 days before the earliest applicable renewal, contract termination or cancellation deadline. Customers must have an accessible way to cancel, and contracts accepted online must be terminable online.

For companies selling ongoing services to other businesses, these requirements can apply to longer-term agreements for software, professional information, equipment maintenance and other contracted services.

What the UniFirst Settlement Requires

According to Vermont Attorney General Charity Clark, UniFirst's contracting practices failed to comply with the state's automatic-renewal law.

Vermont law allows qualifying contracts to renew automatically when its requirements are met. Under this settlement, however, UniFirst must stop including automatic-renewal provisions in the affected Vermont contracts.

The company must notify customers about the change and refund businesses charged early termination fees during the period of noncompliance. The Attorney General's announcement does not identify precisely which individual requirements UniFirst failed to meet or disclose the total value of the refunds.

The settlement therefore involves more than the $60,000 payment to Vermont. UniFirst must change its contracting practices and address charges imposed under its previous renewal arrangements.

Insider Take

The $60,000 payment may not attract much attention on its own, but the required changes to UniFirst's renewal practices are worth examining. The company can no longer rely on automatic-renewal provisions in affected Vermont contracts, and customers will have an opportunity to decide whether to continue receiving its services. Vermont has not disclosed how many contracts are affected or what the total financial impact will be.

For businesses that depend on longer-term customer agreements, automatic renewal can make future revenue more predictable. But that predictability depends on meeting applicable legal requirements. When a renewal process comes under enforcement scrutiny, the consequences can include contract changes, customer notifications and refunds, along with the need to secure customers for another term.

The UniFirst settlement also arrives as subscription businesses face compliance requirements and enforcement activity at several levels of government. Federal enforcement under the Restore Online Shoppers' Confidence Act (ROSCA) continues, states are pursuing their own cases, and New York City's click-to-cancel requirements took effect October 1. These laws differ, but the attention being paid to automatic renewals extends well beyond familiar consumer subscription businesses.

For B2B operators, the case is a reminder that a signed contract containing a renewal clause is only part of the picture. The company's actual renewal practices must also meet applicable requirements. As UniFirst's settlement illustrates, addressing a compliance problem can mean changing how customer relationships continue, with consequences that go beyond the amount paid to regulators.

Sources

• Vermont Attorney General's Office. Attorney General Clark Enforces Vermont's Automatic Renewal Law. October 14, 2026.
• Vermont Legislature. 9 V.S.A. § 2454a: Consumer Contracts; Automatic Renewal.
• Vermont Legislature. 9 V.S.A. § 2451a: Definitions.
• U.S. Department of Justice. Adobe Agrees to $150 Million Settlement and Injunction to Resolve Alleged ROSCA Violations. March 13, 2026.
• New York City Department of Consumer and Worker Protection. New York City's Click-to-Cancel Rule Takes Effect. October 1, 2026.