Senate Bill S86

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   86--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 Introduced by Sen. SEPULVEDA -- read twice and ordered printed, and when
   printed  to  be committed to the Committee on Judiciary -- recommitted
   to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8
   -- committee discharged, bill amended, ordered  reprinted  as  amended
   and recommitted to said committee
 
 AN ACT to amend the civil practice law and rules, in relation to grounds
   for  vacating  an  arbitration award on the basis of partiality of the
   arbitrator
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Article 75 of the civil practice law and rules is amended
 by adding a new section 7500 to read as follows:
   § 7500. DEFINITIONS. AS USED IN THIS ARTICLE:
   (A) "ARBITRATION" MEANS THE USE OF A DECISION-MAKING  FORUM  CONDUCTED
 BY  AN ARBITRATOR OR PANEL OF ARBITRATORS WITHIN THE MEANING AND SUBJECT
 TO THE PROVISIONS OF THIS ARTICLE.
   (B) "NEUTRAL THIRD PARTY ARBITRATOR" MEANS AN ARBITRATOR WHO DOES  NOT
 HAVE  AN UNDISCLOSED KNOWN, DIRECT, AND MATERIAL INTEREST IN THE OUTCOME
 OF THE ARBITRATION PROCEEDING OR  A  KNOWN,  EXISTING,  AND  SUBSTANTIAL
 RELATIONSHIP WITH A PARTY, COUNSEL, OR REPRESENTATIVE OF A PARTY.
   (C)  "EMPLOYMENT"  MEANS  A  RELATIONSHIP  BETWEEN  AN EMPLOYER AND AN
 EMPLOYEE, AS DEFINED IN SECTION THREE OF THE FAIR LABOR STANDARDS ACT OF
 1938 (29 U.S.C. § 203) BUT WHO IS NEITHER AN OFFICER NOR EMPLOYED PURSU-
 ANT TO AN INDIVIDUALIZED, MUTUALLY-NEGOTIATED EMPLOYMENT CONTRACT.
   (D) "CONSUMER" MEANS A NATURAL PERSON RESIDING IN THIS  STATE  WHO  IS
 INVOLVED IN A CONSUMER DISPUTE.
   (E) "CONSUMER DISPUTE" MEANS A DISPUTE BETWEEN AN INDIVIDUAL WHO SEEKS
 OR  ACQUIRES  REAL  OR  PERSONAL  PROPERTY, SERVICES (INCLUDING SERVICES
 RELATING TO SECURITIES AND OTHER  INVESTMENTS),  MONEY,  OR  CREDIT  FOR
 PERSONAL,  FAMILY  OR  HOUSEHOLD  PURPOSES AND THE SELLER OR PROVIDER OF
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00651-03-6
 S. 86--A                            2
 
 SUCH PROPERTY, SERVICES, MONEY OR CREDIT, BUT SHALL NOT INCLUDE ANY SUCH
 PROPERTY OR SERVICE, INCLUDING FINANCIAL PRODUCTS AND SERVICES WHERE THE
 TERMS OF ACQUISITION OF SUCH PRODUCT OR SERVICE ARE MUTUALLY  NEGOTIATED
 BETWEEN THE SELLER AND THE PURCHASER OF SUCH PROPERTY OR SERVICE.
   §  2.  Section 7501 of the civil practice law and rules, as amended by
 chapter 532 of the laws of 1963, is amended to read as follows:
   § 7501. Effect of arbitration  agreement.    A  written  agreement  to
 submit any [controversy] EMPLOYMENT OR CONSUMER DISPUTE thereafter aris-
 ing  or  [any] THEN existing [controversy] to arbitration is enforceable
 without regard to the  justiciable  character  of  the  controversy  and
 confers  jurisdiction  on  the  courts of the state to enforce it and to
 enter judgment on an award; PROVIDED, HOWEVER, THAT, WITH THE  EXCEPTION
 OF  ARBITRATORS DESIGNATED PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT
 BETWEEN AN EMPLOYER AND A LABOR ORGANIZATION AND EXCEPT WHERE INCONSIST-
 ENT WITH FEDERAL LAW, ANY LANGUAGE REQUIRING  THAT  SUCH  EMPLOYMENT  OR
 CONSUMER  DISPUTE BE SUBMITTED TO AN ARBITRATOR OR ARBITRATION ORGANIZA-
 TION THAT IS NOT A NEUTRAL  THIRD-PARTY  ARBITRATOR,  AS  THAT  TERM  IS
 DEFINED IN SUBDIVISION (B) OF SECTION SEVENTY-FIVE HUNDRED OF THIS ARTI-
 CLE,  SHALL BE DEEMED VOID; PROVIDED THAT IT SHALL BE VALID WITH RESPECT
 TO THE REQUIREMENT THAT THE CONTROVERSY BE ARBITRATED.  IN  ARBITRATIONS
 THAT  ARE  NOT  GOVERNED  BY A COLLECTIVE BARGAINING AGREEMENT BETWEEN A
 LABOR ORGANIZATION AND AN EMPLOYER THE REQUIREMENT THAT SUCH  EMPLOYMENT
 OR CONSUMER DISPUTE BE HEARD BY A NEUTRAL THIRD-PARTY ARBITRATOR MAY NOT
 BE  WAIVED  BY  PARTY PRIOR TO THE SERVICE ON SUCH PARTY OF A DEMAND FOR
 ARBITRATION. UPON DISCLOSURE PURSUANT TO  SECTION  SEVENTY-FIVE  HUNDRED
 FIVE-A  OF THIS ARTICLE OF A KNOWN, DIRECT, AND MATERIAL INTEREST IN THE
 OUTCOME OF THE ARBITRATION PROCEEDING OR A KNOWN EXISTING  AND  SUBSTAN-
 TIAL RELATIONSHIP WITH A PARTY, COUNSEL, OR REPRESENTATIVE OF A PARTY, A
 PARTY  SHALL BE DEEMED TO HAVE WAIVED ANY OBJECTION TO THE ARBITRATOR BY
 FAILING TO RAISE SAME WITHIN  THIRTY  CALENDAR  DAYS  OF  RECEIVING  THE
 DISCLOSURE.  In  determining  any matter arising under this article, the
 court shall not consider whether the claim with respect to  which  arbi-
 tration  is  sought is tenable, or otherwise pass upon the merits of the
 dispute.
   § 3. The civil practice law and rules  is  amended  by  adding  a  new
 section 7505-a to read as follows:
   §  7505-A.  DISCLOSURE BY ARBITRATOR. (A) BEFORE ACCEPTING APPOINTMENT
 TO ANY EMPLOYMENT OR CONSUMER DISPUTE, AN INDIVIDUAL WHO IS REQUESTED TO
 SERVE AS  AN  ARBITRATOR,  AFTER  MAKING  A  REASONABLE  INQUIRY,  SHALL
 DISCLOSE  TO  ALL  PARTIES  TO  THE AGREEMENT TO ARBITRATE AND THE ARBI-
 TRATION PROCEEDING AND TO ANY OTHER ARBITRATORS ANY KNOWN FACTS  THAT  A
 REASONABLE  PERSON  WOULD  CONSIDER LIKELY TO AFFECT THE IMPARTIALITY OF
 THE ARBITRATOR IN THE ARBITRATION PROCEEDING, INCLUDING:
   (1) A FINANCIAL OR PERSONAL INTEREST IN THE OUTCOME OF THE ARBITRATION
 PROCEEDING; AND
   (2) AN EXISTING OR PAST RELATIONSHIP WITH ANY OF THE  PARTIES  TO  THE
 AGREEMENT  TO  ARBITRATE OR THE ARBITRATION PROCEEDING, THEIR COUNSEL OR
 REPRESENTATIVES, A WITNESS, OR ANOTHER ARBITRATOR.
   (B) AN ARBITRATOR HAS A  CONTINUING  OBLIGATION  TO  DISCLOSE  TO  ALL
 PARTIES TO THE AGREEMENT TO ARBITRATE AND THE ARBITRATION PROCEEDING AND
 TO  ANY  OTHER  ARBITRATORS  ANY  FACTS THAT THE ARBITRATOR LEARNS AFTER
 ACCEPTING APPOINTMENT WHICH A REASONABLE PERSON WOULD CONSIDER LIKELY TO
 AFFECT THE IMPARTIALITY OF THE ARBITRATOR.
   (C) IF AN ARBITRATOR DISCLOSES A FACT REQUIRED BY SUBDIVISION  (A)  OR
 (B)  OF  THIS  SECTION TO BE DISCLOSED AND A PARTY TIMELY OBJECTS TO THE
 APPOINTMENT OR CONTINUED SERVICE OF THE ARBITRATOR BASED UPON  THE  FACT
 S. 86--A                            3
 
 DISCLOSED,  THE  OBJECTION MAY BE A GROUND FOR VACATING AN AWARD MADE BY
 THE ARBITRATOR IF THE COURT HOLDS THAT THE  ARBITRATOR  WAS  PARTIAL  AS
 PROVIDED FOR IN SECTION SEVENTY-FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   (D)  IF THE ARBITRATOR DID NOT DISCLOSE A FACT AS REQUIRED BY SUBDIVI-
 SION (A) OR (B) OF THIS SECTION, UPON TIMELY OBJECTION BY A PARTY  AFTER
 DISCOVERY OF SUCH NON-DISCLOSURE, THE COURT MAY VACATE AN AWARD BASED ON
 SUCH  NON-DISCLOSURE  IF THE COURT HOLDS THAT THE ARBITRATOR WAS PARTIAL
 AS PROVIDED FOR IN SECTION SEVENTY-FIVE HUNDRED ELEVEN OF THIS ARTICLE.
   (E)  THIS  SECTION  SHALL  NOT  APPLY  TO  AN  ARBITRATION  PROCEEDING
 CONDUCTED PURSUANT TO THE TERMS OF A COLLECTIVE BARGAINING AGREEMENT.
   § 4. This act shall take effect immediately.