S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2842
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 23, 2017
                                ___________
 
 Introduced by M. of A. DINOWITZ, COOK, MAGNARELLI, SIMON, BLAKE, HOOPER,
   MOSLEY,  ORTIZ,  GOTTFRIED, OTIS, SEPULVEDA, BICHOTTE, STECK, ABINANTI
   -- Multi-Sponsored by -- M. of A. GLICK -- 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03788-01-7

 A. 2842                             2
 
 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
 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.
   § 2. This act shall take effect immediately and shall apply  to  state
 contracts entered into on and after such date.