Bill > S02151

This bill prohibits mandatory arbitration agreements in consumer and employment contracts by establishing new legal provisions that invalidate such agreements. The bill defines key terms, including "consumer dispute" (a dispute between an individual and a seller of goods or services for personal use), "employment dispute" (a conflict between an employer and employee as defined by federal labor law), and "mandatory arbitration agreement" (an agreement to arbitrate a dispute that had not yet arisen when the agreement was made). The legislation declares that mandatory arbitration clauses are contrary to public policy because they force employees and consumers to agree to arbitration before any dispute occurs, effectively denying them a meaningful choice in dispute resolution. The bill specifically prohibits mandatory arbitration in various contexts, including general consumer and employment contracts, insurance agreements, and contracts for certain workers in interstate commerce (such as mariners and railroad employees), with an exception for collective bargaining agreements. The bill renders such mandatory arbitration agreements invalid, unenforceable, and void, while ensuring that other provisions of the contract remain in effect. The new law will take effect 180 days after becoming law, giving businesses and organizations time to adjust their contract practices.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S2151