No Laughing Matter for Defense Contractors

As part of the newly enacted Defense Appropriations Act, the Franken Amendment has important implications for federal defense contractors and subcontractors that have implemented arbitration agreements with their employees.  The Act prohibits the federal government from awarding funds appropriated by the Act for any federal contract over $1,000,000 if a contractor requires its employees or the employees of an independent contractor to arbitrate claims under Title VII of the Civil Rights Act of 1964, or 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 contractor also must agree not to take any action to enforce any agreement by an employee or independent contractor to arbitrate such claims.  The provision covering contractors applies to contracts awarded after February 17.

A number of questions remain about the implementation of the arbitration restrictions.  For example, if employers allow employees to opt out of arbitration, will that be sufficient to show that arbitration is not a condition of employement?  Also how will the Secretary of Defense interpret and apply the national security waiver?  In light of this Act, defense contractors need to caefully evaluate thier arbitration agreements with their employees and independent contractors.

To read the summary of the Franken Amendment, click here.

To read the complete text of the Franken Amenment, click here.

To read about ADR in the workplace, click here.


Financial Crisis Fallout and the Consulting Industry

Fallout from the financial crisis that began in late 2007 has led to a renewed legislative focus on corporate governance issues. While the current Congress has concentrated primarily on broader financial regulatory reform, pending legislation could result in the most dramatic changes in U.S. corporate governance practices since passage of the Sarbanes-Oxley Act in 2002.

Click here to read more about how this could affect the consulting industry.

Americans with Disabilities Act Amendments Act Proposed Regulations

On September 23, 2009, the Equal Employment Opportunity Commission (the "EEOC" or the "Commission") opened the notice and comment period for its regulations implementing the ADA Amendments Act of 2008 (the "ADAAA" or the "Act") and revisions to its Interpretive Guidance. The ADAAA, which took effect on January 1, 2009, delegated rulemaking authority to the EEOC to interpret the term "disability," ending the debate as to whether the EEOC originally had been denied this authority in the Americans with Disabilities Act ("ADA"). The EEOC's proposed regulations would expand the protections for employees under the ADA and may increase the burdens on employers. By the EEOC's conservative estimate, over one million new Americans will meet the definition of disability because of the proposed regulations.

Specifically, the proposed changes:

• Loosen the standard for whether an impairment is "substantially limiting"; impairment no longer needs to be a "significant" or a "severe" restriction of a major life activity.
• Limit individualized assessments by creating categories of conditions, and including conditions that previously required an individualized assessment in the category that "will consistently" meet the definition of disability.
• Expand the definition of "major life activities.

The full text of the regulations are available at: http://edocket.access.gpo.gov/2009/pdf/E9-22840.pdf

Consider Submitting a Written Comment to the EEOC: Interested parties will have until November 23, 2009 to provide comments. At the close of this period, the EEOC will evaluate all of the comments and make revisions to the regulations in response to those comments.