Bill Text: NY A02301 | 2019-2020 | General Assembly | Introduced


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 13-0)

Status: (Introduced - Dead) 2020-07-17 - reported referred to rules [A02301 Detail]

Download: New_York-2019-A02301-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          2301
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 22, 2019
                                       ___________
        Introduced  by M. of A. DINOWITZ, WEINSTEIN, SEAWRIGHT, GALEF, WILLIAMS,
          M. G. MILLER,  GOTTFRIED,  ABINANTI,  D'URSO,  JAFFEE,  ZEBROWSKI   --
          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 Section 399-c of the general business law is REPEALED and a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
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01197-01-9

        A. 2301                             2
     1  consumers and employee disputes are contrary to the  established  public
     2  policy  of  this  state. Because employees and consumers are required to
     3  assent to these agreements as  a  condition  of  being  an  employee  or
     4  consumer  before  any  dispute has arisen with the employer or merchant,
     5  these agreements do not  offer  employees  and  consumers  a  meaningful
     6  choice  about  how  to  resolve  their  disputes  with  the  employer or
     7  merchant. In addition, mandatory arbitration agreements prevent  employ-
     8  ees  and consumers from effectively vindicating their rights under state
     9  law. For these reasons, except when inconsistent with federal  law,  the
    10  state  prohibits  the formation and enforcement of mandatory arbitration
    11  agreements in employment and consumer contracts.
    12    4. Prohibition of mandatory arbitration clauses  in  insurance  agree-
    13  ments.   A mandatory arbitration agreement within or part of any written
    14  contract for insurance  with  a  consumer  or  other  written  agreement
    15  involving the offering of insurance to a consumer is invalid, unenforce-
    16  able and void. Any such arbitration agreement shall be considered sever-
    17  able,  and  all  other  provisions  of  the contract for insurance shall
    18  remain in effect and given full force.
    19    5.  Prohibition  of  mandatory  arbitration  clauses   in   employment
    20  contracts  for workers exempted from the Federal Arbitration Act.  (a) A
    21  mandatory arbitration agreement within or part of any  written  contract
    22  of  employment of seamen, railroad employees or any other class of work-
    23  ers engaged in foreign or interstate commerce is unenforceable and void.
    24  Any such arbitration agreement shall be considered  severable,  and  all
    25  other  provisions  of the employment contract shall remain in effect and
    26  given full force.
    27    (b) The provisions of this section shall not apply to agreements nego-
    28  tiated with any labor union through collective bargaining.
    29    6. Prohibition of mandatory arbitration clauses that are not  governed
    30  by  federal law.  Any mandatory arbitration agreement, or portion there-
    31  of, in an employment or consumer contract is invalid, unenforceable  and
    32  void,  when  the  enforceability  of  such arbitration agreement, or the
    33  portion at issue, is governed by state law. Any such arbitration  agree-
    34  ment  shall  be  considered  severable,  and all other provisions of the
    35  employment contract shall remain in effect and given full force.
    36    § 2. This act shall take effect on the one hundred eightieth day after
    37  it shall have become a law.
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