Assembly Bill A1450

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1450
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 11, 2021
                                ___________
 
 Introduced by M. of A. DINOWITZ, GALEF, WILLIAMS, COLTON, DICKENS, GOTT-
   FRIED,  SEAWRIGHT,  ZEBROWSKI,  REYES -- read once and referred to the
   Committee on Consumer Affairs and Protection
 
 AN ACT to amend the general  business  law,  in  relation  to  requiring
   notice of 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,  as  added  by
 chapter 946 of the laws of 1984, is amended to read as follows:
   §  399-c.  Mandatory arbitration clauses in certain consumer contracts
 [prohibited]. 1. Definitions.
   a. The term "consumer" shall mean a natural person  residing  in  this
 state.
   b. The term "consumer goods" shall mean goods, wares, paid merchandise
 or  services  purchased  or  paid  for by a consumer, OR EMPLOYMENT, the
 intended use or benefit of which is intended for the personal, family or
 household purposes of such consumer.
   c. The term "mandatory  arbitration  clause"  shall  mean  a  term  or
 provision  contained  in  a written contract for the sale or purchase of
 consumer goods  OR  EMPLOYMENT,  which  requires  the  parties  to  such
 contract  to  submit  any  controversy  thereafter  arising  under  such
 contract to arbitration prior to the commencement of any legal action to
 enforce the provisions of such contract and which also further  provides
 language  to  the effect that the decision of the arbitrator or panel of
 arbitrators in its application to the consumer party shall be final  and
 not subject to court review.
   d.  The  term  "arbitration"  shall  mean the use of a decision making
 forum conducted by an arbitrator or  panel  of  arbitrators  within  the
 meaning  and  subject  to  the provisions of article seventy-five of the
 civil practice law and rules.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05294-01-1
              

 A. 1450                             2
 
   E. THE TERM "REPRESENTATIVE" SHALL MEAN AN  EMPLOYEE  OR  AGENT  OF  A
 COMPANY  WHO  IS  RESPONSIBLE  FOR ADMINISTERING A CONTRACT FOR CONSUMER
 GOODS, SERVICES, OR EMPLOYMENT TO A CONSUMER.
   2.  a.  Prohibition.  No  written contract for the sale or purchase of
 consumer goods, entered into on or after  the  effective  date  of  this
 section, to which a consumer is a party, shall contain a mandatory arbi-
 tration  clause. Nothing contained herein shall be construed to prohibit
 a non-consumer party from incorporating a provision within such contract
 that such non-consumer party agrees that the decision of the  arbitrator
 or  panel  of arbitrators shall be final in its application to such non-
 consumer party and not subject to court review.
   b. Mandatory arbitration clause null and void.  The  provisions  of  a
 mandatory  arbitration  clause  shall be null and void. The inclusion of
 such clause in a written contract for the sale or purchase  of  consumer
 goods  shall  not  serve  to  impair  the  enforceability  of  any other
 provision of such contract.
   3. IN THE EVENT THAT A CONSUMER IS REQUIRED TO  SIGN  A  CONTRACT  FOR
 CONSUMER  GOODS,  SERVICES,  OR  EMPLOYMENT CONTAINING A MANDATORY ARBI-
 TRATION CLAUSE THE REPRESENTATIVE SHALL  DISCLOSE  THE  MANDATORY  ARBI-
 TRATION  CLAUSE  TO THE CONSUMER AND CLEARLY EXPLAIN, IN PLAIN LANGUAGE,
 WHAT AN ARBITRATION CLAUSE IS. IF THE CONSUMER IS AGREEING TO A CONTRACT
 BY ANY FORM OF CONTACT THAT IS NOT PERSONAL, INCLUDING BUT  NOT  LIMITED
 TO,  ELECTRONICALLY,  USING  THE  INTERNET  OR  THROUGH  THE  MAIL, SUCH
 CONTRACT SHALL HAVE, AT THE END OF SUCH CONTRACT, INFORMATION  INFORMING
 THE CONSUMER THAT THEY ARE SIGNING A MANDATORY ARBITRATION CLAUSE AND AN
 INTERNET  LINK TO A VALID AND PLAIN WRITTEN EXPLANATION OF WHAT AN ARBI-
 TRATION CLAUSE IS.
   § 2. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.