Lost in the shuffle of the COBRA subsidy extension have been new restrictions that prohibit some defense contractors from using mandatory arbitration provisions with their employees.

The Washington Employment Law Update does an excellent job at recapping the relevant provisions and points out that there will be new certification requirements for such contractors in mid 2010.

The key text of the new law is as follows:

(a) None of the funds appropriated or otherwise made available by this Act may be expended for any Federal contract for an amount in excess of $1,000,000 that is awarded more than 60 days after the effective date of this Act, unless the contractor agrees not to:

(1) enter into any agreement with any of its employees or independent contractors that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim 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; or

(2) take any action to enforce any provision of an existing agreement with an employee or independent contractor that mandates that the employee or independent contractor resolve through arbitration any claim 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. 

Since Connecticut has its fair share of defense contractors, employers should conduct a self-audit to determine the extent (if any) of their usage of mandatory arbitration provisions in their employment law contracts and consider modifying them as needed.