S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 9956--A

                          I N  A S S E M B L Y

                               May 2, 2016
                               ___________

Introduced  by M. of A. DINOWITZ, WEINSTEIN -- read once and referred to
  the Committee on Consumer  Affairs  and  Protection  --  reported  and
  referred  to  the  Committee  on Codes -- reported and referred to the
  Committee on  Rules  --  Rules  Committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to the Committee on Rules

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:

  Section 1. Section 399-c of the general business law is REPEALED and a
new section 399-c is added to read as follows:
  S 399-C. PROHIBITED MANDATORY ARBITRATION AGREEMENTS.  1. DEFINITIONS.
  (A)  THE TERM "CONSUMER DISPUTE" SHALL MEAN A DISPUTE BETWEEN AN INDI-
VIDUAL WHO  SEEKS  OR  ACQUIRES  REAL  OR  PERSONAL  PROPERTY,  SERVICES
(INCLUDING  SERVICES  RELATING  TO  SECURITIES  AND  OTHER INVESTMENTS),
MONEY, OR CREDIT FOR PERSONAL, FAMILY  OR  HOUSEHOLD  PURPOSES  AND  THE
SELLER OR PROVIDER OF SUCH PROPERTY, SERVICES, MONEY OR CREDIT.
  (B)  THE  TERM  "EMPLOYMENT  DISPUTE"  SHALL MEAN A DISPUTE BETWEEN AN
EMPLOYER AND EMPLOYEE ARISING OUT OF THE RELATIONSHIP  OF  EMPLOYER  AND
EMPLOYEE AS DEFINED IN SECTION 3 OF THE FAIR LABOR STANDARDS ACT OF 1938
(29 U.S.C. 203).
  (C)  THE  TERM "MANDATORY ARBITRATION AGREEMENT" SHALL MEAN ANY AGREE-
MENT TO ARBITRATE A DISPUTE THAT HAD NOT YET ARISEN AT THE TIME  OF  THE
MAKING OF THE AGREEMENT.
  2.  PROHIBITED  MANDATORY  CONSUMER  AND EMPLOYMENT ARBITRATION AGREE-
MENTS.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, NO MANDATO-
RY ARBITRATION AGREEMENT SHALL BE VALID OR ENFORCEABLE  IF  IT  REQUIRES
ARBITRATION OF AN EMPLOYMENT DISPUTE OR CONSUMER DISPUTE.
  3.   PROHIBITION OF EFFECT OF CERTAIN MANDATORY ARBITRATION CLAUSES OR
AGREEMENTS.    MANDATORY  ARBITRATION  CLAUSES  OR  AGREEMENTS  COVERING
CONSUMERS  AND  EMPLOYEE DISPUTES ARE CONTRARY TO THE ESTABLISHED PUBLIC
POLICY OF THIS STATE. BECAUSE EMPLOYEES AND CONSUMERS  ARE  REQUIRED  TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD14401-03-6

A. 9956--A                          2

ASSENT  TO  THESE  AGREEMENTS  AS  A  CONDITION  OF BEING AN EMPLOYEE OR
CONSUMER BEFORE ANY DISPUTE HAS ARISEN WITH THE  EMPLOYER  OR  MERCHANT,
THESE  AGREEMENTS  DO  NOT  OFFER  EMPLOYEES  AND CONSUMERS A MEANINGFUL
CHOICE  ABOUT  HOW  TO  RESOLVE  THEIR  DISPUTES  WITH  THE  EMPLOYER OR
MERCHANT. IN ADDITION, MANDATORY ARBITRATION AGREEMENTS PREVENT  EMPLOY-
EES  AND CONSUMERS FROM EFFECTIVELY VINDICATING THEIR RIGHTS UNDER STATE
LAW. FOR THESE REASONS, EXCEPT WHEN INCONSISTENT WITH FEDERAL  LAW,  THE
STATE  PROHIBITS  THE FORMATION AND ENFORCEMENT OF MANDATORY ARBITRATION
AGREEMENTS IN EMPLOYMENT AND CONSUMER CONTRACTS.
  4. PROHIBITION OF MANDATORY ARBITRATION CLAUSES  IN  INSURANCE  AGREE-
MENTS.   A MANDATORY ARBITRATION AGREEMENT WITHIN OR PART OF ANY WRITTEN
CONTRACT FOR INSURANCE  WITH  A  CONSUMER  OR  OTHER  WRITTEN  AGREEMENT
INVOLVING THE OFFERING OF INSURANCE TO A CONSUMER IS INVALID, UNENFORCE-
ABLE AND VOID. ANY SUCH ARBITRATION AGREEMENT SHALL BE CONSIDERED SEVER-
ABLE,  AND  ALL  OTHER  PROVISIONS  OF  THE CONTRACT FOR INSURANCE SHALL
REMAIN IN EFFECT AND GIVEN FULL FORCE.
  5.  PROHIBITION  OF  MANDATORY  ARBITRATION  CLAUSES   IN   EMPLOYMENT
CONTRACTS  FOR WORKERS EXEMPTED FROM THE FEDERAL ARBITRATION ACT.  (A) A
MANDATORY ARBITRATION AGREEMENT WITHIN OR PART OF ANY  WRITTEN  CONTRACT
OF  EMPLOYMENT OF SEAMEN, RAILROAD EMPLOYEES OR ANY OTHER CLASS OF WORK-
ERS ENGAGED IN FOREIGN OR INTERSTATE COMMERCE IS UNENFORCEABLE AND VOID.
ANY SUCH ARBITRATION AGREEMENT SHALL BE CONSIDERED  SEVERABLE,  AND  ALL
OTHER  PROVISIONS  OF THE EMPLOYMENT CONTRACT SHALL REMAIN IN EFFECT AND
GIVEN FULL FORCE.
  (B) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AGREEMENTS NEGO-
TIATED WITH ANY LABOR UNION THROUGH COLLECTIVE BARGAINING.
  6. PROHIBITION OF MANDATORY ARBITRATION CLAUSES THAT ARE NOT  GOVERNED
BY  FEDERAL LAW.  ANY MANDATORY ARBITRATION AGREEMENT, OR PORTION THERE-
OF, IN AN EMPLOYMENT OR CONSUMER CONTRACT IS INVALID, UNENFORCEABLE  AND
VOID,  WHEN  THE  ENFORCEABILITY  OF  SUCH ARBITRATION AGREEMENT, OR THE
PORTION AT ISSUE, IS GOVERNED BY STATE LAW. ANY SUCH ARBITRATION  AGREE-
MENT  SHALL  BE  CONSIDERED  SEVERABLE,  AND ALL OTHER PROVISIONS OF THE
EMPLOYMENT CONTRACT SHALL REMAIN IN EFFECT AND GIVEN FULL FORCE.
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.