On Dec. 19, 2009, President Obama signed the Department of
Defense appropriations bill H.R. 3326. The final enacted bill
includes a controversial amendment introduced by Senator Al Franken
(D-Minn.), which prevents the Department of Defense from granting
federal contracts in excess of $1 million to entities that require
their employees to resolve certain claims through arbitration. The
amendment applies expressly to "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." The amendment
prohibits covered entities from entering into new agreements with
any employees or independent contractors that require arbitration
of such claims as a condition of employment, and also precludes
covered entities from enforcing any such provision in existing
agreements. It's important to note that the Secretary of
Defense may waive the application of the above to particular
contractors or subcontractors where it is in the interest of
national security.
Franken's amendment is a response to the sexual assault of
Jamie Leigh Jones, which allegedly occurred during her employment
with government contractor KBR. Following the incident, Jones
learned that her employee contract stipulated that arbitration was
her only recourse for the assault. The amendment does not preclude
employees from voluntarily agreeing to arbitrate the covered claims
and supporters of this amendment argued that the measure merely
provides employees with a fair choice of venue.
The controversy surrounding Franken's measure centers on its
potential applicability beyond Title VII claims pertaining to
sexual assault or harassment. Opponents contend that its language
may be interpreted to include all Title VII claims, not just those
related to or arising out of sexual assault or harassment. If a
broad interpretation is adopted, government contractors subject to
the amendment will be forced to decide between valuable federal
contracts or risk the cost of litigation associated with a broad
array of employment claims. While the scope of the amendment
remains to be seen, this legislation will most clearly affect major
and many minor government contractors.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
