Mayor Zohran Mamdani is proposing to give workers, consumers, tenants and small businesses a new right to sue companies over unfair and abusive business practices, drawing immediate pushback from major city business groups that warn the measure could drive up costs and expose small companies to costly litigation.
The proposed POWER Act would create a municipal private right of action under New York City consumer protection law, allowing individuals and organizations to pursue alleged unfair and abusive practices themselves rather than relying on government enforcement alone.
City Hall says the legislation would allow lawsuits over unfair methods of competition and unfair, deceptive, abusive or unlawful business practices. The administration says that could include tenant unions suing landlords over deceptive trade practices, taxi drivers challenging financing companies over unconscionable loan terms and consumers seeking relief from predatory for-profit schools.
The measure is scheduled to be introduced on the mayor’s behalf by Council Member Harvey Epstein (D-Manhattan), chair of the Council’s Committee on Consumer and Worker Protection, at the Council’s Oct. 8 stated meeting.
“New York City is a working-class city. Yet for far too long we’ve trailed the country when it comes to giving working people the power to take on corporations that violate their rights and try to cheat them,” Mamdani said in announcing the proposal.
The mayor said the legislation would give New Yorkers “a legal pathway to seek recourse for unfair business practices” and allow tenants, small businesses and seniors targeted by scams to pursue relief directly.
But the proposal was already drawing opposition Tuesday from business groups that warned a broader right to sue could expose companies, including small businesses, to costly litigation.
“The Mayor is wrong on this, and New York City’s businesses are not the enemy,” said Steven Fulop, president and CEO of the Partnership for New York City.
Fulop said the proposal would make it more expensive to operate, invest, hire and grow in New York and argued that litigation costs would ultimately result in fewer jobs, less investment and higher prices.
“This proposal should not move forward,” he said.
Jessica Walker, president and CEO of the Manhattan Chamber of Commerce, took a more measured position, saying the organization supports holding bad actors accountable but wants safeguards for smaller businesses.
“A broad, loosely defined standard that’s enforced through private lawsuits instead of clear rules could put a neighborhood restaurant or a family-owned shop at the same risk as a multinational,” Walker said. “Even one frivolous lawsuit can sink a small business that did nothing wrong.”
Walker said the Chamber wants the legislation to contain clear definitions, give businesses an opportunity to correct problems before a lawsuit is filed and include protections for small businesses.
City says business reform ‘never been more urgent’
Under current state law, unfair, deceptive and abusive business practices are prohibited, but the private right of action available to individuals applies to deceptive practices. The POWER Act would create a separate city-level right allowing private plaintiffs to also pursue claims involving unfair or abusive conduct, according to the administration.
The legislation would allow workers, tenants, small businesses and nonprofit organizations to bring claims, City Hall said. Nonprofits would also be allowed to bring claims on behalf of themselves, their members and the public.
Department of Consumer and Worker Protection Commissioner Sam Levine called the proposal “one of the single greatest expansions of consumer and worker rights in New York City history.”
“Establishing a broad private right of action has never been more urgent, especially as the federal government retreats from protecting working people,” Levine said.
Epstein said the measure was intended to expand the reach of the city’s Consumer Protection Law and create “a more swift path to justice” for workers, small businesses and unions.
The proposal also drew support from the American Economic Liberties Project, which said allowing private lawsuits would give New Yorkers another way to enforce consumer protections when government agencies lack the resources to pursue every case.
“No enforcement agency — not a city department, not a state AG, not the federal government — has the resources to police every corporation that breaks the law,” said Nidhi Hegde, the group’s executive director.
The POWER Act is part of a three-bill consumer protection package Mamdani plans to send to the Council.
A separate Truth in Pricing Act, sponsored by Epstein and Council Member Carmen De La Rosa (D-Manhattan), would simplify city pricing rules by allowing businesses to display prices either on individual items or on store shelves.
Another measure, sponsored by Council Member Chi Ossé (D-Brooklyn), would ease existing restrictions on when the Department of Consumer and Worker Protection can challenge a business practice as unconscionable. City Hall says the change would eliminate a lengthy rulemaking requirement and allow the agency to respond more quickly to serious misconduct.
City Hall described the POWER Act as a first-in-the-nation measure that would give New York City the strongest consumer and worker protections in the country.