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eTrends - Defense Contractors and Subs Barred From Mandatory Arbitration of Certain Employment Claims

06.24.2010

A recent Department of Defense interim rule bars defense contractors and subcontractors from requiring employees or independent contractors to arbitrate claims under Title VII of the Civil Rights Act of 1964 (prohibiting discrimination on the basis of race, color, religion, national origin or sex) or torts arising out of sexual assault or harassment. The rule is effective May 19, 2010 and prohibits funds under the 2010 defense appropriations law (Public Law No. 111-118) to be used for any contract in excess of $1 million unless a contractor agrees not to require such mandatory arbitration. Such funds also may not be extended after June 17th unless the contractor certifies that it requires covered subcontractors to agree not to enter or enforce such arbitration agreements. The interim rule can be viewed at 75 Fed. Reg. 27946.

Please contact Kim Korando with any questions.

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Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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