Tuesday, December 29, 2009

Defense Approporation Act Contains Restriction on Arbitration

Section 8116 of PL 111-118, the Department of Defense Appropriations Act, 2010 will prevent military contractors from enforcing mandatory arbitration clauses in some employment contracts. Section 8116 provides that no funds may be expended for military contracts unless the contractor agrees not to enter into or enforce any employment contract “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.”

The provision was, in part, an attempt to ensure that future military contractor employees do not find themselves in situations similar to that of Jamie Jones. Jones, a former employee of defense contractor Kellogg Brown & Root, reported being raped by her coworkers in Iraq. KBR, along with its former owner Haliburton, sought to handle her case in arbitration, but the U.S. Court of Appeals for the 5th Circuit ruled that some of the claims were not subject to arbitration. Minnesota Senator Al Franken, sponsor of the provision, spoke about Jones’ case on the Senate floor.

Hat tip to BLT: the Blog of the Legal Times