President Prohibits Mandatory Arbitration of Discrimination and Sexual Harassment Claims
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On July 31st, President Obama signed the “Fair Pay and Safe Workplaces” Executive Order. As part of the order, federal contractors are now forbidden from using mandatory pre-employment arbitration clauses for employment disputes related to sexual assault, harassment, or workplace discrimination violations.
Here is the relevant provision:
Sec. 6. Complaint and Dispute Transparency. (a) Agencies shall ensure that for all contracts where the estimated value of the supplies acquired and services required exceeds $1 million, provisions in solicitations and clauses in contracts shall provide that contractors agree that the decision to arbitrate claims arising under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment may only be made with the voluntary consent of employees or independent contractors after such disputes arise. Agencies shall also require that contractors incorporate this same requirement into subcontracts where the estimated value of the supplies acquired and services required exceeds $1 million.
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