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No Arbitration for|$1M Defense Contracts

WASHINGTON (CN) - The Defense Department is prohibiting the use of funds from its fiscal year 2010 appropriations act for any contract worth more than $1 million if the contractor restricts its employees to arbitration for certain claims.

The employees must not be restricted to arbitration for claims under title VII of the Civil Rights Act of 1964 or torts related to sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision or retention.

However, the Secretary of Defense may waive this requirement, "if it is determined to be necessary to avoid harm to national security."

Applicable contracts include task or delivery orders and bilateral modifications adding new work to existing contracts. It does not apply the purchasing of commercial items. After June 17, 2010, the contractor must certify compliance by subcontractors.

The department has put this requirement in place with an interim rule, and will accept written comments until July 19.

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