Bill Text: NY A00683 | 2023-2024 | General Assembly | Introduced

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Bill Title: Prohibits mandatory arbitration agreements in consumer and employment contracts; repeals existing provisions prohibiting mandatory arbitration clauses in certain consumer contracts.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced) 2024-01-03 - referred to consumer affairs and protection [A00683 Detail]

Download: New_York-2023-A00683-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                           683

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    January 11, 2023
                                       ___________

        Introduced  by  M. of A. DINOWITZ, SEAWRIGHT, WILLIAMS, ZEBROWSKI, REYES
          -- Multi-Sponsored by -- M. of A. SIMON -- read once and  referred  to
          the Committee on Consumer Affairs and Protection

        AN  ACT  to  amend  the  general business law, in relation to prohibited
          mandatory arbitration agreements; and to repeal section 399-c of  such
          law  relating  to prohibiting mandatory arbitration clauses in certain
          consumer contracts

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. Section 399-c of the general business law is REPEALED and a
     2  new section 399-c is added to read as follows:
     3    § 399-c. Prohibited mandatory arbitration agreements.  1. Definitions.
     4  (a) The term "consumer dispute" shall mean a dispute between an individ-
     5  ual who seeks or acquires real or personal property, services (including
     6  services relating to securities and other investments), money, or credit
     7  for personal, family or household purposes and the seller or provider of
     8  such property, services, money or credit.
     9    (b)  The  term  "employment  dispute"  shall mean a dispute between an
    10  employer and employee arising out of the relationship  of  employer  and
    11  employee as defined in section 3 of the Fair Labor Standards Act of 1938
    12  (29 U.S.C. 203).
    13    (c)  The  term "mandatory arbitration agreement" shall mean any agree-
    14  ment to arbitrate a dispute that had not yet arisen at the time  of  the
    15  making of the agreement.
    16    2.  Prohibited  mandatory  consumer  and employment arbitration agree-
    17  ments.  Notwithstanding any other provision of this article, no mandato-
    18  ry arbitration agreement shall be valid or enforceable  if  it  requires
    19  arbitration of an employment dispute or consumer dispute.
    20    3.   Prohibition of effect of certain mandatory arbitration clauses or
    21  agreements.    Mandatory  arbitration  clauses  or  agreements  covering
    22  consumers  and  employee disputes are contrary to the established public

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00593-01-3
        A. 683                              2

     1  policy of this state. Because employees and consumers  are  required  to
     2  assent  to  these  agreements  as  a  condition  of being an employee or
     3  consumer before any dispute has arisen with the  employer  or  merchant,
     4  these  agreements  do  not  offer  employees  and consumers a meaningful
     5  choice about  how  to  resolve  their  disputes  with  the  employer  or
     6  merchant.  In addition, mandatory arbitration agreements prevent employ-
     7  ees and consumers from effectively vindicating their rights under  state
     8  law.  For  these reasons, except when inconsistent with federal law, the
     9  state prohibits the formation and enforcement of  mandatory  arbitration
    10  agreements in employment and consumer contracts.
    11    4.  Prohibition  of  mandatory arbitration clauses in insurance agree-
    12  ments.  A mandatory arbitration agreement within or part of any  written
    13  contract  for  insurance  with  a  consumer  or  other written agreement
    14  involving the offering of insurance to a consumer is invalid, unenforce-
    15  able and void. Any such arbitration agreement shall be considered sever-
    16  able, and all other provisions  of  the  contract  for  insurance  shall
    17  remain in effect and given full force.
    18    5.   Prohibition   of  mandatory  arbitration  clauses  in  employment
    19  contracts for workers exempted from the Federal Arbitration Act.  (a)  A
    20  mandatory  arbitration  agreement within or part of any written contract
    21  of employment of seamen, railroad employees or any other class of  work-
    22  ers engaged in foreign or interstate commerce is unenforceable and void.
    23  Any  such  arbitration  agreement shall be considered severable, and all
    24  other provisions of the employment contract shall remain in  effect  and
    25  given full force.
    26    (b) The provisions of this section shall not apply to agreements nego-
    27  tiated with any labor union through collective bargaining.
    28    6.  Prohibition of mandatory arbitration clauses that are not governed
    29  by federal law.  Any mandatory arbitration agreement, or portion  there-
    30  of,  in an employment or consumer contract is invalid, unenforceable and
    31  void, when the enforceability of  such  arbitration  agreement,  or  the
    32  portion  at issue, is governed by state law. Any such arbitration agree-
    33  ment shall be considered severable, and  all  other  provisions  of  the
    34  employment contract shall remain in effect and given full force.
    35    § 2. This act shall take effect on the one hundred eightieth day after
    36  it shall have become a law.