New Legislation Restricts Use of Mandatory Arbitration Agreements by Defense Contractors
By Mark Spring
The Arbitration Fairness Act (HR 1020) (http://www.govtrack.us/congress/bill.xpd?bill=h111-1020), which would ban pre-dispute mandatory arbitration agreements in non-union employment, remains stalled in Congress. It likely will not get looked at further until the healthcare bill debate is resolved.
However, Congress and President Obama did act last month to restrict pre-dispute mandatory arbitration for non-union workers employed by certain government contractors. Buried in the Fiscal Year 2010 Department of Defense Appropriations Act (HR 3326)(http://www.govtrack.us/congress/bill.xpd?bill=h111-3326), signed by Obama in mid-December, is language that prohibits any employer that receives more than one million dollars from the Department of Defense from requiring employees or independent contractors working for them to sign agreements that require that disputes under Title VII of the Civil Rights Act of 1964 be subject to mandatory binding arbitration. Section 8116 of the Act provides
(a) None of the funds appropriated or otherwise made available by this Act may be expended for any Federal contract for an amount in excess of $1,000,000 that is awarded more than 60 days after the effective date of this Act, unless the contractor agrees not to:
(1) enter into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention; or
(2) take any action to enforce any provision of an existing agreement with an employee or independent contractor that mandates that the employee or independent contractor resolve through arbitration any claim under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.
In addition, there is also language requiring contractors that are covered by this provision to certify that their subcontractors also will abide by these restrictions. The Act gives the DOD the ability to waive these requirements, but only if waiver is necessary for national security interests.
This amendment was added by Senator Al Franken of Minnesota. In a clear example of bad facts make bad law, the motivating factor for this amendment was the case of Jamie Leigh Jones. Jones worked for Halliburton in Iraq and alleged that she was gang raped by co-workers in 2005. A pre-dispute mandatory arbitration agreement was used by Halliburton to try to keep Jones from filing a Title VII claim. Although the 5th Circuit Court of Appeals ultimately ruled that the arbitration agreement did not apply to the gang rape, it took almost three years of court battles for Jones to simply be able to move forward with her claims. For a complete copy of the Court of Appeals opinion, issued in September, click here: http://www.ca5.uscourts.gov/opinions%5Cpub%5C08/08-20380-CV0.wpd.pdf