New Legislation Bans Arbitration In Federal Defense Contracts
As Congress ended its last session, a legislative victory for employee rights advocates came with it. 
The bill, signed by President Obama at the end of December, came about because of the horrible story involving Jamie Leigh Jones. Here's one description of what happened as reported in September by Think Progress:
In 2005, Jamie Leigh Jones was gang-raped by her co-workers while she was working for Halliburton/KBR in Baghdad. In an apparent attempt to cover up the incident, the company then put her in a shipping container for at least 24 hours without food, water, or a bed, and “warned her that if she left Iraq for medical treatment, she’d be out of a job.”
Even more insultingly, the DOJ resisted bringing any criminal charges in the matter. KBR argued that Jones’ employment contract warranted her claims being heard in private arbitration — without jury, judge, public record, or transcript of the proceedings. After 15 months in arbitration, Jones and her lawyers went to court to fight the KBR claims. Yesterday, a court ruled in favor of Jones.
The tragedy spurred the bill which became known as both the "Franken Amendment" and the"Jamie Leigh Jones Amendment" (to the Defense Appropriations Act for 2010) . It's the first federal legislation that prevents employees from forcing binding arbitration on their employees as a forum for resolving employment disputes.
In recent years, many companies have required employees to sign contracts, handbooks, and other documents which require them to go to arbitration to resolve their employment disputes.
When employees sign -- which they are forced to do to either get the job or keep the job -- they give up their right to take claims against their employers to court. Cases involving discrimination and sexual harassment, to name a few, are compelled to go to arbitration instead.
An arbitration is generally held before three arbitrators and is commonly viewed as a favorable forum for employers versus employees.
Without binding arbitration, employees have the right to take their discrimination cases to court, and with sufficient evidence, in front of a jury. It is this precious right to a jury trial which is at the heart of this issue.
The Franken Amendment prohibits the award of Department of Defense contracts of over one million dollars to any company that forces its employees or independent contractors to submit to pre-dispute binding arbitration of Title VII and sexual assault-related tort claims
Under the bill, defense contractors:
- with over $1 million (which is most) that are funded by 2010 appropriations will not be able to force arbitration of Title VII and sexual assault-related tort claims
- will not be able to enter into forced arbitration agreements with their employees or independent contractors or enforce any agreements that have such provisions.
The list of covered sexual assault-related tort claims covers:
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 Franken Amendment will protect hundreds of thousands of employees around the country from being forced to arbitrate their Title VII claims. It also provides persuasive authority for employee advocates to strike down forced arbitration clauses in other federal contracts.
It's also a step forward to getting rid of forced arbitration in other employment settings.
All in all, it's a great victory on a critical issue for employee advocates and we thank Senator Franken for his efforts on behalf of employee rights.
Surfing through the net and came upon your blog. There is more to the Jamie L. Jones case than meets the eye. In that case the plaintiff argued arbitration should not be forced on someone when the conduct that gives rise to an injury is outside of the scope of employment and hence an arbitration agreement coverage. CA5 agreed and refused to compel arbitration. The problem in Jones is that now the employer KBR is off of the hook for the injury comp because the injury was caused by an act outside the scope of employment and now there is no deep pocket for Jones to collect from. I went to arbitration in Barker v. KBR as lead counsel and won a 2.93 million dollar verdict in that employee rape case last Fall. Barker is the companion case to Jones. That event was the second time I won an arbitration case against KBR in that genre. Because of my experience I can say there is a lot of mystery about arbitration, and some critism which is valid. But there is a way to handle those cases and win big. Picking the right arbitrator from the AAA list of 30 candidates is the starting point. You can always get a jury full of rednecks who will screw your client out of a judgment just as a bad Arb could but the key to avoiding trouble is knowing how to pick the Arb and present the case. When I weigh picking an Arb I first run a background check on him, for example. I suppose I can write an article about this stuff if I ever get some time. But I dont think I will ever get some time being a solo with a full case load. Anyway, I enjoy reading your blog and hope to talk cases with you sometime. -Mike Conway, Esq.