New York S 2151: Prohibits mandatory arbitration agreements in consumer and employment contracts; repealer

Bill Text

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S02151 Summary:

BILL NOS02151 

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SAME ASNo Same As

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SPONSORCOMRIE

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COSPNSRSEPULVEDA

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MLTSPNSR

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Rpld & add §399-c, Gen Bus L

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Prohibits mandatory arbitration agreements in consumer and employment contracts; repeals existing provisions prohibiting mandatory arbitration clauses in certain consumer contracts.

Go to top S02151 Actions:

BILL NOS02151 

&nbsp

01/15/2025REFERRED TO CONSUMER PROTECTION

01/07/2026REFERRED TO CONSUMER PROTECTION

Go to topS02151 Committee&nbspVotes:

Go to topS02151 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topS02151 Text:

 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 Section 399-c of the general business law is REPEALED and a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, railro