Arbitration: Federal Contractors

 

Included in the Department of Defense Appropriations Act, signed into law by President Obama in December 2009, was the Franken Amendment. Covered are Department of Defense contractors with a contract of over $1 million. This Amendment limits the use of arbitration agreements for certain claims brought by any employee of a covered contractor. The Amendment prohibits arbitration of (1) claims under Title VII of the Civil Rights Act of 1964, or (2) any tort related to or arising out of sexual assault or harassment. As a result, covered contractors or employers should (1) review and modify their employment or independent contractor agreements to omit terms requiring arbitrations of these claims, (2) refrain from enforcing existing contracts with an arbitration agreement related to these claims, and (3) ensure that their subcontractors do not impose or enforce such agreements.  Compliance is required by February 17, 2010 for covered contractors and by June 17, 2010 for its subcontractors.  

 

A recent decision by the 11^th Circuit Court of Appeals held that an applicant need not be disabled as defined by the Americans with Disabilities Act to sue a prospective employer for making a prohibited, pre-offer medical inquiry. According to the 11^th Circuit, employers may not conduct a medical examination or inquiry to determine if the applicant has a disability, or the nature or severity of a disability. The case involved drug test results for a prospective employee. While the law allows employers to conduct follow up questions in response to a positive drug test, which is not normally considered a medical exam, employers

 

The 8^th Circuit Court of Appeals held that a front desk hotel clerk, who was criticized for her lack of "Midwestern girl look" and "prettiness" before she was terminated, can sue her employer under Title VII of the Civil Rights Act which protects against adverse action on the basis sexual stereotyping. The Court said that a woman filing a claim under the law does not need to prove she was treated differently than similarly situated males, only that the decision was based on a stereotype. This decision should serve as a caution to employers not to make "gender-stereotype" based employment decisions, as such action may constitute a violation of Title VII.