In a somewhat terse opinion, the court in Tantaros v. Fox News Network, LLC et al, 2022 WL 4614755 (S.D.N.Y. Sept. 30, 2022) held that New York’s relatively recently-enacted CPLR § 7515 is inconsistent with (and preempted by) the Federal Arbitration Act, and dismissed plaintiff’s sexual harassment case.
The court reasoned:
In interpreting the Federal Arbitration Act, the Supreme Court has stated that the purpose of the Act is to combat historical hostility toward arbitration agreements, putting agreements to arbitrate on the same footing as any other contract. See Morgan v. Sundance, Inc., 212 L.Ed. 2d 753, 759, 142 S.Ct. 1708. (citations omitted). Consequently, courts may not invent new procedural rules that favor or disfavor arbitration. Id. Just as the FAA prevents courts from interpreting rules in order to disfavor arbitration, the FAA prevents state legislatures from passing laws that exempt certain claims from arbitration. When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.” AT &T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).
N.Y. C.P.L.R. § 7515(b) reads as follows:
(i) Prohibition. Except where inconsistent with federal law, no written contract, entered into on or after the effective date of this section shall contain a prohibited clause as defined in paragraph two of subdivision (a) of this section.
(ii) Exceptions. Nothing contained in this section shall be construed to impair or prohibit an employer from incorporating a non prohibited clause or other mandatory arbitration provision within such contract, that the parties agree upon.
(iii) Mandatory arbitration clause null and void. Except where inconsistent with federal law, the provisions of such prohibited clause as defined in paragraph two of subdivision (a) of this section shall be null and void. The inclusion of such clause in a written contract shall not serve to impair the enforceability of any other provision of such contract. N.Y. C.P.L.R. § 7515(b).
Section 7515 defines prohibited clause as any clause or provision in any contract which requires as a condition of the enforcement of the contract or obtaining remedies under the contract that the parties submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.
[Cleaned up.]
The court accordingly concluded that “[b]y prohibiting the arbitration of discrimination claims, § 7515 directly conflicts with the Supreme Court’s interpretation of the FAA” and, therefore, CPLR 7515 “is displaced by the FAA in this case.”