BILL NUMBER: S7799
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the civil practice law and rules, in relation to arbi-
tration clauses in employment contracts
 
PURPOSE:
This bill would require representatives of companies responsible for
administering a contract for employment to disclose the existence of any
mandatory arbitration clause contained within the contract, and clearly
explain what a mandatory arbitration clause is.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends paragraph 4 of subdivision (a) of § 7515
of the civil practice law and rules to require companies to disclose any
mandatory arbitration clause in a contract for employment to which a
party is required to sign and to clearly explain, in writing, what an
arbitration clause is. If the party agrees to a contract by a means that
is not in person, they must be provided information notifying them that
they are signing a mandatory arbitration clause and a web link to a
clear explanation of what an arbitration clause is.
Section two of the bill provides the effective date.
 
JUSTIFICATION:
As mandatory arbitration clauses in contracts for employment have become
more and more commonplace, consumers are increasingly forced to resolve
disputes via arbitration. In many cases, a party may be unaware that the
contract they are signing requires them to resolve disputes through
arbitration, and not through the court system. They are in effect
unknowingly signing away the right to their "day in court."
Questions have been raised about the fairness of the arbitration.
Private arbitration companies have a financial incentive to rule in
favor of the business that is paying for their services. Given these
questions, it is appropriate to clearly disclose the existence of an
arbitration clause in a contract and ensure that the parties signing an
contract with a mandatory arbitration clause understands the meaning and
ramification of the clause before agreeing to sign the contract.
 
PRIOR LEGISLATIVE HISTORY:
None.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effective date immediately.

Statutes affected:
S7799: 7515 civil practice law