Arbitration of Discrimination Claims upheld by U.S. Supreme Court

The United States Supreme Court upheld a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Accordingly, there is no legal basis for the Court to strike down an arbitration clause in a collective bargaining agreement, which was freely negotiated by a union and company, and which clearly and unmistakably requires employees to arbitrate the age-discrimination claims. However, the Court declined to rule on specific factual issued related to whether the waiver of discrimination claims under the contract by employees' in this case was clear and unmistakable. It also would not rule on whether the contract waived substantive rights protected by federal law which could not be vindicated in an arbitration. These issues were not properly before the Court.

The decision in 14 Penn Plaza LLC v. Pyett has important implications for unionized employers who face employment discrimination charges and lawsuits. These claims may be forced into the arbitration forum and out of court depending on the language in the contract. The scope of the arbitration clause including any limitations will be an important focus of future litigation.

E-Verify Final Regulations Issued Requiring Government Contractors and Subcontractors to Verify Employment for New and Existing Employees who Perform Contract Work

Federal government contractors and subcontractors will be required to begin using the U.S. Citizenship and Immigration Services’ E-Verify system starting Jan. 15, 2009 (now 5/21/09), to verify their employees’ eligibility to legally work in the United States.  The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council amended the Federal Acquisition Regulation (FAR) to reflect this change.  E-Verify must be used to verify all new employees and all employees who work on the covered government contract unless the employees were previously verified or commenced work for the employer before the June 6, 1986 the effective date of the Immigration Reform and Control Act.  Contract Officers will insert clauses in new contracts and solicitations.  In addition, certain existing government contracts may be amended to include the requirements.

E-verify provisions on covered contracts apply to all government contractors and subcontractors with limited exceptions detailed in the final regulations. Each covered contractor and subcontractor must: 

  • Enroll in the E-Verify Program within 30 days of the award of a contract, if not already enrolled.
  • Those employers already enrolled in E-Verify for 90 days as of the effective date of the new regulations must verify all new employees with 3 days of hire.
  • Those employers not enrolled in E-Verify must begin to verify all new employees within 90 calendar days of E-Verify enrollment whether or not such employee performs work on the government contract or subcontract within 3 days of the date of hire.
  • Verify each existing employee assigned to the contract within the later of 90 calendar days of E-Verify enrollment or 30 calendar days after the employee's assignment to the contract
  • Employees previously verified through E-Verify are exempt.
  • Elect to verify all employees hired after June 6, 1986 whether or not assigned to the contract.
  • The phrase “employee assigned to the contract” refers to individuals who were hired after June 6, 1986 who are “directly performing work under the contract,” and to exclude employees who normally perform support work, or who do not perform any substantial duties applicable to an individual contract.
  • Subcontracts must include a clause requiring compliance by the subcontractor.
  • A new Memorandum of Understanding (MOU) will be published shortly.

The Final Regulations are summarized by the Office of Acquisition Policy and appear on the DHS website with a Small Entity Compliance Guide.

Final Regulations in .pdf: FAR Employment Eligibility Verification

DHS Website: Frequently Asked Questions: Federal Contractors and E-Verify

 

UPDATE:  Mandatory use of E-Verify for Government Contractors delayed again to May 21, 2009