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Novation Trap For The Unwary

Client Alert | 1 min read | 02.04.11

In Raytheon Co. v. U.S. (Jan. 26, 2011), the Court of Federal Claims held that a contractor's claim for the pension cost adjustment due under CAS 413 for pension plans with funding deficits at the time of a "segment closing" could be barred by the standard language required in novation agreements providing that the contractor "waives any claims and rights against the Government that it now has or may have in the future in connection with the [novated] contracts."  Because the Government takes the position that its agreement to novate contracts is completely within the untrammeled discretion of the Government, the Government could effectively negate the requirements of CAS 413 if this decision is correct by refusing to novate contracts unless the contractor agrees to waive its rights to an adjustment under CAS 413. 

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Client Alert | 3 min read | 06.12.26

DOJ Guidance Backs Away From Disparate Impact Liability

On June 9, 2026, the U.S. Department of Justice (DOJ) issued a formal opinion concluding that the Equal Opportunity Employment Commission’s (EEOC) existing interpretations of Title VII of the Civil Rights Act of 1964 (Title VII) disparate-impact liability, including the Uniform Guidelines on Employee Selection Procedures (UGESP), are unconstitutional. According to the opinion, EEOC’s prior interpretations contemplate liability based on disproportionately adverse effects alone, without regard to an employer’s likely intent, rather than treating disparate impact as an evidentiary mechanism to “smoke out” intentional discrimination. DOJ found that this approach functions as a “qualified racial-proportionality mandate” that places “a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes.” The opinion fulfills one mandate of Executive Order 14281, which rejected disparate-impact liability insofar as it “creates a near insurmountable presumption that unlawful discrimination exists wherever there are any differences in outcomes among different [demographic groups].”...

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