BILL NUMBER: S8126
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the general business law, in relation to enacting the
"mandatory arbitration and business licensing act (MABLA)"
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill prohibits the state and local governments from issuing busi-
ness licenses to transportation, food service, health care and firearms
companies that require employees or consumers to agree to a mandatory
arbitration clause to resolve disputes.
 
SUMMARY OF PROVISIONS:
Section one of the bill entitles the act as the "Mandatory Arbitration
And Business Licensing Act."
Section two of the bill:
*adds a new section 399-c of the general business law that prohibits the
state and local governments from issuing business licenses to transpor-
tation, food service, health care and firearms companies that require
employees or consumers to agree to a mandatory arbitration clause to
resolve disputes;
*lists exceptions to the above provision and states that nothing in this
act shall prevent the enforcement of any mandatory arbitration clause
nor render unenforceable any mandatory arbitration clause;
*empowers licensing agencies of the state and local governments to issue
regulations to effect the purposes of this act; and
*contains a severability clause.
Section three of the bill states that this act shall take effect imme-
diately and shall only apply to covered licenses issued or renewed after
the effective date of this legislation.
 
JUSTIFICATION:
New York should not issue business or operating licenses to businesses
that require consumers or employees to enter into mandatory arbitration
clauses when such clauses jeopardize the health and safety of New York-
ers. This is the case in regard to mandatory arbitration clauses
required by businesses that provide transportation, food services,
firearms, and health care services.
Mandatory arbitration clauses-often buried in employment and consumer
contracts in connection with transportation, food, and health care
services-jeopardize the health and safety of consumers and employees by
restricting access to the legal system, discouraging corporate account-
ability, and undermining public and employee safety standards. These
clauses, which force consumers and employees to resolve disputes through
private arbitration rather than courts, disproportionately benefit
corporations at the expense of individuals, often leaving serious griev-
ances such as unsafe food, negligent medical care, hazardous transporta-
tion, and/or dangerous and unsanitary worksites unexposed and unad-
dressed.
When workers and consumers suffer harm due to negligent or illegal
corporate practices they should have the right to seek legal recourse
through the courts. Mandatory arbitration, however, strips them of this
right, often imposing prohibitive costs on filing an action, limiting
fact-finding even if an action is filed, and secret proceedings. Indeed,
such clauses typically deprive a consumer or employee of the right to
participate in or file a class action, sometimes the only practical way
for victims or whistleblowers to seek redress and alert the public or
the government to wrongdoing.
When companies know that they will not face public lawsuits, they have
less incentive to follow fair, safe, and legal business practices,
including, of course, by complying with licensing requirements related
to health and safety.
State licensing requirements in transportation, food service, firearms,
and health care exist to protect the heath and safety of the public. The
government has limited resources to police the tens of thousands of
companies in New York that obtain business licenses in these areas, and
has long relied on the civil justice system and open trials as a key
pillar of compliance and enforcement. Limiting business licenses to such
businesses that choose to subject themselves to the public scrutiny and
accountability provided by the civil justice system is imperative to
protect the health and safety of New Yorkers.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
N/a
 
EFFECTIVE DATE:
This act shall take effect immediately and shall only apply to covered
licenses issued or renewed after the effective date of this legislation.