Prevents institutions from implementing contingencies on the receipt of state funding by preventing the use of language in agreements regarding mandatory arbitration, internal dispute processes, prohibiting class actions and prohibiting the disclosure of any information in the agreement to anyone.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8838 REVISED 01/08/2020
TITLE OF BILL:
An act to amend the education law, in relation to preventing insti-
tutions from implementing contingencies on the receipt of state funding
PURPOSE OR GENERAL IDEA OF BILL:
To prohibit institutions of higher education from participating in state
award programs if they require students to submit to mandatory arbitra-
tio n and/or other policies that limit students' ability to resolve
complaints in our court system, with state agencies, or other govern-
SUMMARY OF PROVISIONS:
Section 1 amends subdivision 1 of section 665-a of the education law by
requiring participation agreements between the Higher Education Services
Corporation (HESC) and institutions wishing to participate in award
programs described in article 14 of the education law to include terms
and conditions making participation in award programs conditional on an
institution's agreement to not require students:
-to submit to mandatory arbitration before the commencement of any legal
-resolve a complaint through an internal dispute process waive any
rights, forum, or procedure including the right to file civil action or
-refrain from disclosing the terms of the agreement or any violation
Institutions are prohibited from threatening or discriminating against
students who are eligible for an award program described in article 14
of the education law who refuse to consent to mandatory arbitration or
other policies that limit their ability to resolve complaints in our
court system, with state agencies, or other governmental entities.
Institutions who wish to participate in award programs described in
article 14 are prohibited from requiring students to enter agreements
that require them to take an affirmative action to preserve their
Courts can award attorneys' fees to a prevailing plaintiff enforcing
Nothing in the paragraph is intended to invalidate arbitration agree-
ments enforceable under the Federal Arbitration Act.
An institution's violation of the terms of its participation agreement
or any other applicable laws, rules, or procedures could result in the
termination of its participation in state award programs after a hearing
process carried out in accordance with the State Administrative Proce-
Section 2 provides the effective date
Forced arbitration agreements make it easier for people to get away with
wrongdoing undetected because arbitration lacks transparency and because
arbitration chills people from coming forward to file claims. Because
the state of New York has limited public funds, we must ensure those
funds are spent on good and safe products, like quality education.
Forced arbitration would make it easier for any school to conceal that
its product wasn't good and safe. Therefore, we don't want to spend
public funds on schools that use forced arbitration.
PRIOR LEGISLATIVE HISTORY:
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
180 days after becoming law.
STATE OF NEW YORK
2019-2020 Regular Sessions
December 18, 2019
Introduced by M. of A. EPSTEIN -- read once and referred to the Commit-
tee on Higher Education
AN ACT to amend the education law, in relation to preventing insti-
tutions from implementing contingencies on the receipt of state fund-
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 665-a of the education law, as
2 amended by chapter 681 of the laws of 1986, is amended to read as
4 1. Participation agreement. (a) No institution may participate in the
5 general, academic or other award programs described in this article
6 unless it shall have entered into a written agreement with the corpo-
7 ration under which it shall be bound to comply with all laws and rules
8 applicable to such programs. Each participation agreement shall include
9 the following terms and conditions:
10 (i) An institution shall not, as a condition of any award or loan
11 pursuant to this article, require any student:
12 (1) submit to mandatory arbitration to resolve any matter thereafter
13 arising under such agreement prior to the commencement of any legal
14 action to enforce the provisions of such agreement;
15 (2) resolve a complaint through an internal dispute process;
16 (3) waive any right, forum, or procedure for a violation of any
17 provision of this chapter, including the right to file and pursue a
18 civil action, class action or a complaint with, or otherwise notify, any
19 state agency, other public prosecutor, law enforcement agency, or any
20 court or other governmental entity of any alleged violation; and
21 (4) be prohibited from disclosing, discussing, describing or comment-
22 ing upon the terms of the agreement or any violation thereof.
23 (ii) An institution shall not threaten, retaliate or discriminate
24 against any student eligible for such award or loan because of the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 8838 2
1 refusal by such student to consent to mandatory arbitration, to resolve
2 a complaint through an internal dispute process, to waive any right,
3 forum, or procedure for a violation of this chapter, including the right
4 to file and pursue a civil action, class action or a complaint with, or
5 otherwise notify, any state agency, other public prosecutor, law
6 enforcement agency, or any court or other governmental entity of any
7 alleged violation, or not to disclose, discuss, describe or comment upon
8 the terms of the agreement or any violation thereof.
9 (iii) For purposes of this paragraph, an agreement that requires a
10 student to opt out of a waiver or take any affirmative action in order
11 to preserve their rights is deemed a condition of any award or loan
12 pursuant to this article.
13 (iv) In addition to injunctive relief and any other remedies avail-
14 able, a court may award a prevailing plaintiff enforcing their rights
15 under this paragraph reasonable attorneys' fees.
16 (v) Nothing in this paragraph is intended to invalidate a written
17 arbitration agreement that is otherwise enforceable under the Federal
18 Arbitration Act.
19 (b) The participation agreement may contain such other terms and
20 conditions, consistent with such applicable laws, rules and procedures,
21 as the president may require in accordance with rules adopted for this
22 purpose by the board and shall be developed in consultation with the
23 commissioner of education.
24 (c) In accordance with rules adopted by the board for this purpose,
25 the president, may suspend, limit or terminate an institution's partic-
26 ipation in these programs in the event it shall be determined after a
27 hearing conducted in accordance with the state administrative procedure
28 act that the institution has violated any applicable laws, rules or
29 procedures provided for under the agreement in accordance with law and
30 the rules of the board.
31 § 2. This act shall take effect on the one hundred eightieth day after
32 it shall have become a law. Effective immediately, the addition, amend-
33 ment and/or repeal of any rule or regulation necessary for the implemen-
34 tation of this act on its effective date are authorized to be made and
35 completed on or before such effective date.