Court Rejects Arbitration Clause in Gang-Rape Case

Jamie Leigh Jones' claim that she was gang-raped by co-workers in Iraq four years ago has become a rallying cry for congressional efforts to ban the mandatory binding arbitration clauses that thousands of companies insert into their employment contracts.

Jones is part of a growing political lobby spearheaded by the plaintiffs' bar and consumer advocates against pre-dispute mandatory arbitration. Their cause got a legal boost recently when the 5th Circuit affirmed that Jones may sue her ex-employer, Halliburton Co./KBR Kellogg Brown & Root, even though she signed an employment contract with wholly owned subsidiary Overseas Administrative Services Ltd. that requires virtually all disputes to be privately arbitrated.

Halliburton's broadly worded arbitration clause stipulated that "any and all claims that you might have against employer related to your employment" and "any and all personal injury claim[s] arising in the workplace" must go to binding arbitration rather than court.

The 5th Circuit found the claim exceeded the "outer limits" of even that expansive wording because the alleged torts occurred while Jones was off duty and, moreover, they didn't "arise in the workplace."

Cristin Schmitz

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