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Legislative Memo

Cate Tully
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

A.5248 (Dinowitz)

Support

SUBJECT:

Requires Notice of Arbitration Clauses in Consumer and Employment Contracts

 

DATE:

March 27, 2017

 

The Business Council opposes A.5248 (Dinowitz), which would require notice of mandatory arbitration clauses in consumer and employment contracts.

Arbitration is an important tool benefiting consumers by providing a fair and accessible means for resolving disputes. The Federal Arbitration Act, 9 U.S.C. §2 states that a written provision in a contract providing for arbitration as a means to settle disputes “…shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The United States Supreme Court has consistently ruled that federal and state courts must enforce the Act and “reflects an emphatic federal policy in favor of arbitral dispute resolution" Marmet Health Care Center, Inc. v. Brown, 132 S.Ct.1201 (1202) quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213,217 (1985).

Arbitration enables consumers with grievances to obtain redress for the vast majority of disputes they are likely to have – small, individualized claims for which litigation in court is impractical. It also serves the court system by providing an alternative means of resolution thus freeing up the already overburdened state court system.

The American Arbitration Association (AAA) administers consumer arbitrations and has implemented rules and policies tailored for the resolution of consumers’ and employees’ disputes, which provide basic requirements of procedural fairness and afford strong protections for consumers and employers.

For these reasons The Business Council opposes A.5248 (Dinowitz).