Significant Limitations on Pre-Dispute Arbitration Agreements

Significant Limitations on Pre-Dispute Arbitration Agreements Significant Limitations on Pre-Dispute Arbitration Agreements[/caption]

President Barack Obama signed the Fair Pay and Safe Workplaces Executive Order (“Executive Order”), which obligates most federal contractors and subcontractors to disclose labor law violations, to provide employees with detailed information about their paychecks, and limits the circumstances under which certain claims may be arbitrated.

Employers with federal contracts or subcontracts for supplies or services valued in excess of $1 million (but excluding contracts or subcontracts solely for the purchase of commercial items or commercially available off-the-shelf items) are now prohibited from entering into agreements with employees or independent contractors to arbitrate claims arising under Title VII, or any tort relating to sexual assault or harassment, unless the agreement is made with the employee’s or independent contractor’s voluntary consent after the dispute arises.  The Executive Order additionally requires that employers incorporate this requirement into any subcontracts similarly exceeding $1 million.

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