New York Senate Bill S02151 Latest Draft

   
  STATE OF NEW YORK ________________________________________________________________________ 2151 2025-2026 Regular Sessions  IN SENATE January 15, 2025 ___________ 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 Section 399-c of the general business law is REPEALED and a 2 new section 399-c is added to read as follows: 3 § 399-c. Prohibited mandatory arbitration agreements. 1.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. LBD00889-01-5 
 S. 2151 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 mariners, railroad employees or any other class of 22 workers engaged in foreign or interstate commerce is unenforceable and 23 void. Any such arbitration agreement shall be considered severable, and 24 all other provisions of the employment contract shall remain in effect 25 and 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.