Congress Limits Arbitration of Employment Disputes by Defense Contractors and Subcontractors
Client Alert | 1 min read | 12.23.09
On December 22, President Obama signed into law the 2010 Department of Defense Appropriations Act (H.R. 3326). The spending bill includes a significant amendment, offered by Senator Al Franken of Minnesota, prohibiting certain government contractors from entering into or enforcing arbitration clauses in employment agreements.
The amendment, Section 8116 of the Act, specifies two conditions for receipt of contracts in excess of $1 million from "funds appropriated . . . by this Act." First, defense contractors and other entities receiving funds pursuant to the DoD Appropriations Act must, as a condition of receiving such funds, refrain from entering into any agreement with their employees or independent contractors that contains a mandatory arbitration clause for claims under Title VII of the Civil Rights Act of 1964 or for certain torts related to sexual assault or harassment. Second, such contractors must refrain from enforcing such arbitration provisions in existing employment agreements. In addition, in 180 days, covered contractors will be required to certify that any subcontractor holding subcontracts in excess of $1 million has agreed to abide by these restrictions.
Approval of the DoD Appropriations Act with Senator Franken's amendment may be just the first volley in a broader Congressional battle over mandatory arbitration of employment disputes. The Arbitration Fairness Act of 2009 is pending before the Judiciary Committees of both the Senate and the House. The Act, introduced in the House by Rep. Johnson of Georgia and in the Senate by Sen. Feingold of Wisconsin, would dramatically revise the Federal Arbitration Act by prohibiting the enforcement of nearly all pre-dispute agreements to arbitrate employment, civil rights, franchise, or consumer matters. All employers who are utilizing, or are considering moving to, mandatory arbitration of employment disputes have a stake in the battle that will resume in 2010.
Contacts
Insights
Client Alert | 5 min read | 12.12.25
Eleventh Circuit Hears Argument on False Claims Act Qui Tam Constitutionality
On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument.
Client Alert | 8 min read | 12.11.25
Director Squires Revamps the Workings of the U.S. Patent Office
Client Alert | 8 min read | 12.10.25
Creativity You Can Use: CJEU Clarifies Copyright for Applied Art
Client Alert | 4 min read | 12.10.25
Federal Court Strikes Down Interior Order Suspending Wind Energy Development
