A bill sitting on the path to Governor Hochul's desk could void the fine-print clauses that stop New York workers from banding together in class or collective actions. The catch: a federal law and the governor's signature both stand between the bill and any real-world effect.
What Happened
The New York State Legislature has passed the Anti-Waiver of Employment Rights Act — Senate Bill S4424-A — a measure that could sharply limit the enforceability of class action waivers in the employment context. The bill has not yet been signed into law. Under New York's legislative process, it may not be delivered to Governor Kathy Hochul until later in 2026, at which point she will have to sign or veto it. Until that happens, nothing changes for existing employment agreements.The bill has drawn attention because class and collective actions are one of the main ways groups of employees pursue wage-and-hour, discrimination, and other workplace claims — and "class action waivers," often bundled into arbitration clauses, are the tool employers use to head those group cases off. A New York law disfavoring those waivers would be a notable shift, which is why employment lawyers on both sides are watching it closely.
What the Bill Would Do
S4424-A would amend the New York Labor Law and the Executive Law to declare void any express or implied contractual provision that waives or limits an employee's substantive or procedural rights, remedies, or claims under those statutes. Read broadly, that language could reach clauses requiring employees to give up the ability to bring or participate in a class or collective action for covered claims. In other words, a waiver that today blocks a group case might be treated as unenforceable for the rights the statute protects.The bill also reportedly includes carve-outs — for example for bona fide settlement agreements, certain post-employment agreements, and collective bargaining agreements. The precise reach depends on the final enacted text and any amendments.
The Federal Arbitration Act Problem
The most important limitation is not in the bill's wording but in federal law. The Federal Arbitration Act (FAA) broadly preempts state rules that single out or disfavor arbitration, and the U.S. Supreme Court has repeatedly upheld class action waivers inside arbitration agreements against state-law challenges. For employees whose agreements are governed by the FAA, courts may well find the FAA preempts New York's law as applied to arbitration-based class waivers. The bill could carry more weight for employees or agreements that fall outside the FAA's reach. Exactly where that line falls would almost certainly be fought out in court.Why It Matters for Class Actions
For more than a decade, arbitration clauses with class action waivers have been the single biggest reason many consumer and employment disputes never become class actions at all. A state law that narrows those waivers — even partially, for workers outside the FAA — would expand the set of workplace disputes that can proceed as group cases in New York. That is why this bill is being framed as a potential shift in the balance between individual arbitration and collective litigation. For background on the mechanism itself, see OCA's explainer on the class action waiver and on mass arbitration.What Happens Next
The bill must be delivered to Governor Hochul and signed before it becomes law, and its effective date and final scope will depend on the enacted text. Even if signed, expect immediate legal challenges over FAA preemption that will shape how much the law actually changes in practice. OCA will update this page as the bill moves — including if it is signed, vetoed, amended, or challenged in court.Note: This article is informational and is not legal advice. Workers or employers with specific questions about an arbitration clause or class action waiver should consult a qualified attorney.
Frequently Asked Questions
Did New York ban class action waivers?
Not yet. The New York State Legislature passed the Anti-Waiver of Employment Rights Act (Senate Bill S4424-A) in 2026, but it has not been signed into law. Under New York procedure, the bill may not be delivered to the governor until later in 2026, at which point she must sign or veto it. It is not in effect and may still be vetoed or changed.
What would the bill actually do?
S4424-A would amend the New York Labor Law and Executive Law to make void any express or implied contract provision that waives or limits an employee's substantive or procedural rights, remedies, or claims under those statutes. In practice, that could reach clauses that force employees to give up the ability to bring or join class or collective actions for covered claims.
Does this override arbitration agreements?
This is the key limitation. The Federal Arbitration Act (FAA) broadly preempts state laws that single out or disfavor arbitration. For employees whose agreements are governed by the FAA, courts may find the FAA preempts New York's law as applied to class action waivers in arbitration agreements. The bill could have more force for employees or agreements not covered by the FAA. How courts draw that line would be litigated.
Are there exceptions in the bill?
As reported, the bill includes carve-outs — for example for bona fide settlement agreements, certain post-employment agreements, and collective bargaining agreements. The exact scope depends on the final text and any amendments before it becomes law.
Is there anything to claim here?
No. This is proposed legislation, not a lawsuit or settlement. There is nothing to file. This page is informational and is not legal advice; workers or employers with specific questions should consult a qualified attorney.
Sources
• New York State Senate — Bill S4424 (Anti-Waiver of Employment Rights Act)• Ogletree Deakins — Will New York ban class action waivers? Lawmakers pass bill, governor's approval unclear
• Thompson Coburn LLP — NY State Legislature passes Anti-Waiver of Employment Rights Act
• Paul Hastings LLP — New York State Legislature passes Anti-Waiver of Employment Rights Act
Free settlement alerts
Get notified when new class actions open to claims
Join thousands of readers who get the latest class action settlements you may qualify for — delivered straight to your inbox.
