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Can I require customers to sign contracts with binding arbitration clauses in New York? What are the requirements?

Requirements for Mandatory Arbitration Clauses in New York

In New York, mandatory arbitration clauses that require parties to submit to arbitration to resolve any allegation or claim of discrimination, in violation of laws prohibiting discrimination, are prohibited [1.1]. However, employers may incorporate non-prohibited clauses or other mandatory arbitration provisions in their contracts, provided that the parties agree upon them [1.1].

To be valid, mandatory arbitration clauses must meet the following requirements:

  1. The clause must be contained in a written contract.
  2. The clause must require the parties to submit any matter arising under the contract to arbitration prior to the commencement of any legal action to enforce the provisions of the contract.
  3. The clause must provide language to the effect that the facts found or determination made by the arbitrator or panel of arbitrators in its application to a party alleging discrimination, in violation of laws prohibiting discrimination, shall be final and not subject to independent court review [1.1].

If a mandatory arbitration clause violates the above requirements, the provisions of the clause shall be null and void [1.1].

Additionally, in every arbitration, after designation of the arbitrator, the board has no authority relative to an arbitrator’s relationship with the parties, hearings, adjournments, procedures, witnesses and awards, which are matters to be taken up directly with the arbitrator [2.1]. Arbitrations are governed by the provisions of article 75 of the Civil Practice Law and Rules of the State of New York [2.1].

Regarding scheduling of arbitration hearings, an oral hearing shall be scheduled no later than 35 days from the filing date, unless a later date is agreed to by both parties [3.1]. Hearings shall be scheduled to accommodate, where possible, time-of-day needs of the lessee and the holder, including evening and weekend hours [3.1]. Hearings shall also be scheduled to accommodate geographic needs of the lessee and the lessor [3.1].

Therefore, to require customers to sign contracts with binding arbitration clauses in New York, you must ensure that the clauses meet the above requirements and that the arbitration process follows the guidelines outlined in the relevant documents.

Source(s):
Jurisdiction

New York