S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  9523

                          I N  A S S E M B L Y

                             March 10, 2016
                               ___________

Introduced  by M. of A. DINOWITZ, WEINSTEIN -- read once and referred to
  the Committee on Governmental Operations

AN ACT to amend the state finance law, in relation to prohibiting  state
  agencies  from  entering  into  contracts  with entities which enforce
  mandatory arbitration clauses in contracts with consumers and  employ-
  ees

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 165 of the state finance law is amended by adding a
new subdivision 9 to read as follows:
  9. MANDATORY  ARBITRATION CLAUSES PROHIBITED. A. FOR THE  PURPOSES  OF
THIS  SUBDIVISION  "MANDATORY  ARBITRATION  CLAUSE" SHALL MEAN A TERM OR
PROVISION CONTAINED IN A WRITTEN CONTRACT FOR THE SALE  OR  PURCHASE  OF
CONSUMER GOODS WHICH REQUIRES THE PARTIES TO SUCH CONTRACT TO SUBMIT ANY
CONTROVERSY  THEREAFTER ARISING UNDER SUCH CONTRACT TO ARBITRATION PRIOR
TO THE COMMENCEMENT OF ANY LEGAL ACTION TO  ENFORCE  THE  PROVISIONS  OF
SUCH  CONTRACT  AND  WHICH  ALSO FURTHER PROVIDES LANGUAGE TO THE EFFECT
THAT THE DECISION OF THE ARBITRATOR  OR  PANEL  OF  ARBITRATORS  IN  ITS
APPLICATION  TO  THE  CONSUMER  PARTY  SHALL BE FINAL AND NOT SUBJECT TO
COURT REVIEW. THIS SHALL NOT INCLUDE ARBITRATION THAT IS MANDATED  BY  A
COLLECTIVE  BARGAINING AGREEMENT BETWEEN SUCH VENDOR AND EMPLOYEE AND/OR
INDEPENDENT CONTRACTOR.
  B. STATE AGENCIES SHALL NOT CONTRACT OR DO BUSINESS FOR THE SUPPLY  OF
COMMODITIES,  SERVICES OR CONSTRUCTION WITH ANY CONTRACTOR OR VENDOR, OR
THE PARENT COMPANY OR ANY SUBSIDIARY OF SUCH CONTRACTOR OR  VENDOR,  WHO
INCLUDES  AND  ENFORCES  MANDATORY ARBITRATION CLAUSES IN CONTRACTS WITH
ITS EMPLOYEES OR CONSUMERS. WHERE MANDATORY ARBITRATION CLAUSES EXIST IN
ANY SUCH CONTRACTS THE CONTRACTOR OR VENDOR SHALL,  WITHIN  ONE  HUNDRED
EIGHTY  DAYS  BEFORE  DOING  BUSINESS WITH THE STATE, PROVIDE REASONABLE
NOTICE TO ITS CONSUMERS OR EMPLOYEES THAT IT WILL CEASE ENFORCING  ARBI-
TRATION CLAUSES IN CONSUMER OR EMPLOYMENT CONTRACTS.
  C.  A  PERSON  "DOES  BUSINESS  WITH  THE STATE" WHEN IT OR ANY OF ITS
SUBSIDIARIES OR PARENT  ENTITIES  RECEIVES  STATE  FUNDS  EXCEEDING  ONE
HUNDRED  THOUSAND  DOLLARS IN EXCHANGE FOR GOODS OR SERVICES PROVIDED TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD14089-03-6

A. 9523                             2

THE STATE OR A THIRD PARTY. PERSONS  "DOING  BUSINESS  WITH  THE  STATE"
INCLUDE, BUT ARE NOT LIMITED TO, PERSONS PERFORMING PUBLIC WORK ON STATE
CONTRACTS,  MERCHANTS  OF  GOODS OR SERVICES PURCHASED BY THE STATE, AND
PERSONS  PROVIDING  SERVICES  TO  THIRD  PARTIES  IN  EXCHANGE FOR FUNDS
PROVIDED DIRECTLY FROM THE STATE.
  D. UPON RECEIVING INFORMATION THAT A CONTRACTOR IS IN VIOLATION OF THE
PROVISIONS OF THIS SECTION, THE STATE ATTORNEY GENERAL SHALL REVIEW SUCH
INFORMATION AND OFFER THE CONTRACTOR AN OPPORTUNITY TO RESPOND.  IF  THE
ATTORNEY GENERAL FINDS THAT A VIOLATION HAS OCCURRED, IT SHALL TAKE SUCH
ACTION  AS MAY BE APPROPRIATE AND PROVIDED FOR BY LAW, RULE OR CONTRACT,
INCLUDING, BUT NOT LIMITED TO, IMPOSING SANCTIONS,  SEEKING  COMPLIANCE,
RECOVERING DAMAGES OR DECLARING THE CONTRACTOR IN DEFAULT.
  E.  BEFORE CONTRACTING WITH ANY VENDOR OR CONTRACTOR, THE STATE AGENCY
SHALL CONFIRM THAT SUCH CONTRACTOR OR VENDOR, OR ITS PARENT ENTITIES AND
ITS SUBSIDIARIES, DOES NOT  INCLUDE  OR  ENFORCE  MANDATORY  ARBITRATION
CLAUSES WITH CONSUMERS OR EMPLOYEES, AND SHALL ENSURE, WHEN APPROPRIATE,
THAT  A  CONTRACT BETWEEN THE STATE AGENCY AND THE CONTRACTOR INCLUDES A
PROVISION PROHIBITING THAT  CONTRACTOR,  ITS  PARENT  ENTITIES  AND  ITS
SUBSIDIARIES, FROM INCLUDING OR ENFORCING MANDATORY ARBITRATION CLAUSES.
  S  2.  This act shall take effect immediately and shall apply to state
contracts entered into on and after such date.