Employment Law Watch : Employment & Labor Lawyer & Attorney : Reed Smith Law Firm

President Obama has signed the Department of Defense Appropriations Act for Fiscal Year 2010 (H.R. 3326). Section 8116 of that Act significantly restricts the ability of defense contractors and subcontractors to enter into or enforce agreements that require employees or independent contractors to arbitrate certain claims.

In particular, section 8116 provides that no funds appropriated under the Act may be spent on any federal contract in excess of $1 million that is awarded 60 or more days after the effective date of the 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.

Section 8116 also provides that no funds appropriated by the Act may be spent on any federal contract in excess of $1 million that is awarded 180 or more days after the effective date of the Act, unless the contractor certifies that each of its subcontractors that has a subcontract worth more than $1 million has agreed not to enter into or seek to enforce any provision of any agreement described above with respect to any employee or independent contractor who is or will be performing work related to the subcontract.

The Secretary of Defense may waive the application of these provisions to a particular contractor or subcontractor for the purposes of a particular contract or subcontract if the Secretary or the Deputy Secretary personally determines, with a specific explanation, that the waiver is necessary to avoid harm to national security interests of the United States, and that the term of the contract or subcontract is not longer than necessary to avoid such harm.

Congress is considering more sweeping restrictions on arbitration that would apply to every employer. The Arbitration Fairness Act (H.R. 1020, S. 931), which now has 106 cosponsors in the House and 11 cosponsors in the Senate, would prohibit the enforcement of all pre-dispute agreements to arbitrate employment disputes (other than in collective bargaining agreements), civil rights disputes, consumer disputes, or franchise disputes, and would require courts, rather than arbitrators, to decide the validity or enforceability of any such agreement.

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In Ladele v The London Borough of Islington and Liberty, the Court of Appeal has confirmed the decision of the Employment Appeal Tribunal (EAT) that Ms Ladele, a Registrar of Births, Marriages and Deaths at Islington Council who held strong Christian beliefs, had not suffered discrimination on the grounds of her religion or belief when she was required by the Council to perform same sex civil partnership ceremonies. The Court made it clear that the Council had a legitimate aim to provide the full range of civil partnership services without discrimination and so was entitled to require Ms Ladele to perform the ceremonies despite her objections to doing so based on her Christian belief. Moreover, having been designated a Registrar, it was unlawful under the Equality Act (Sexual Orientation) Regulations 2007 for the Ms Ladele to refuse to perform such ceremonies.

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Introduction

On October 9, 2009, Gov. Rendell signed into law Act 51 of 2009 (“Act 51”), which removed the 100 percent Killed-in-Service benefit from Act 600 and created a similar but not identical benefit under the Emergency and Law Enforcement Personnel Death Benefits Act (“Death Benefits Act”), 53 P.S. § 891 et seq. While the Death Benefits Act creates a 100 percent survivor benefit for firefighters, ambulance service or rescue squad members, and police officers who die in the line of duty, only borough and township police officers, under Act 600, previously had a Killed-in-Service benefit guaranteed by state pension law. This article is limited to the interplay between Act 600 and Act 51. While a cursory reading of the new law suggests a limited change to the existing benefit, Act 51 significantly impacts the current benefit available to surviving spouses and creates challenges for municipal employers in eliminating the now-illegal benefit from an Act 600 Pension Plan. This brief analysis reviews the Act 600 survivor benefits available prior to the passage of Act 51, the new benefit created by Act 51, and identifies the issues that must be addressed in order to transition safely to the new Act 51 benefit.

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In Grainger plc and others v Nicholson the EAT has given guidance on what might qualify as a ‘philosophical belief’ for the purposes of the Employment Equality (Religion or Belief) Regulations 2003 (the “Regulations”). In the case, the Employment Appeal Tribunal (“EAT”) held that a belief in the existence of man-made climate change and the need to cut carbon emissions was capable of amounting to a philosophical belief which would qualify an employee holding that belief for protection from discrimination under the Regulations. However, importantly, the EAT made clear that it would be necessary for any claimant to establish that their adherence to the philosophical belief in question is genuine.

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As employers seek to avoid substantial exposure for alleged violations of wage and hour laws, including the continuing flood of class actions, many are asking outside counsel to review or audit their pay practices so that any problems can be fixed to minimize such risks. In a welcome development, the California Supreme Court recently rejected an effort to force an employer to disclose the results of such a review to managers who had sued, affirming that such advice is protected by the attorney-client privilege.

For more information on this recent ruling, please see the following client alert.

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