•  Summary 
  •  
  •  Actions 
  •  
  •  Committee Votes 
  •  
  •  Floor Votes 
  •  
  •  Memo 
  •  
  •  Text 
  •  
  •  LFIN 
  •  
  •  Chamber Video/Transcript 

S00684 Summary:

BILL NOS00684
 
SAME ASSAME AS A00683
 
SPONSORCOMRIE
 
COSPNSRSEPULVEDA
 
MLTSPNSR
 
Rpld & add §399-c, Gen Bus L
 
Prohibits mandatory arbitration agreements in consumer and employment contracts; repeals existing provisions prohibiting mandatory arbitration clauses in certain consumer contracts.
Go to top    

S00684 Actions:

BILL NOS00684
 
01/06/2023REFERRED TO CONSUMER PROTECTION
01/03/2024REFERRED TO CONSUMER PROTECTION
Go to top

S00684 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           684
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                     January 6, 2023
                                       ___________
 
        Introduced by Sens. COMRIE, SEPULVEDA -- read twice and ordered printed,
          and  when  printed  to  be  committed  to  the  Committee  on Consumer
          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 Section 399-c of the general business law is REPEALED and a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

        S. 684                              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.
Go to top