New Act Voids Arbitration Clauses, Expands Whistleblower Protection for All Federal Contractors and Subcontractors

This bill, the Expanding Whistleblower Protections for Contractors Act of 2025, is a major update to how people working on federal contracts can report waste and abuse without fear of losing their jobs. Essentially, it takes existing whistleblower laws for federal contractors and beefs them up considerably—especially for those working with the Department of Defense (DoD) and NASA. The core change is broadening who counts as a “protected individual” and explicitly voiding any pre-dispute agreements, like mandatory arbitration clauses, that try to make you sign away these rights.

Who Gets the New Shield: From Employee to 'Protected Individual'

If you work for a company that has a contract or grant with the federal government—whether you’re a direct employee, a subcontractor, or even a personal services contractor—this bill is aimed at you. The law is moving past the narrow term “employee” to cover practically anyone involved in carrying out a federal contract or grant, including those working for state and local governments receiving federal funds (Sections 2 & 3). This means if you’re a software developer working on a DoD system for a third-tier subcontractor, or an engineer at a NASA grantee, you now have the same legal shield as a direct federal contractor employee.

Speaking Up Without Getting Sidelined

What can you report? The protections are expanded to cover a few key areas that hit close to home for anyone working in a regulated environment. First, you are protected if you refuse to follow an order that you reasonably believe would violate a law, rule, or regulation related to the contract (Sections 2 & 3). Second, you are protected for disclosing information about gross mismanagement, waste, abuse of authority, or any substantial and specific danger to public health or safety related to the contract or grant. Think of the person on the factory floor who sees a safety shortcut being taken on a piece of equipment destined for a military base, or the accountant who spots millions in questionable billing on a government project—they are now much safer when raising the alarm.

The Fine Print That Matters: Arbitration is Out

This is the provision that will likely cause the biggest stir in corporate legal departments. The bill explicitly states that the rights, legal forums, and remedies provided under this new protection cannot be waived by any agreement, policy, or form, including any pre-dispute arbitration agreement (Sections 2 & 3). For the average worker, this is huge. It means if your employer retaliates against you for blowing the whistle, you can take your case to the designated government forum, regardless of whether you signed an employment contract requiring all disputes to go through private, mandatory arbitration. It ensures that the protections are real and enforceable.

Government Officials Are Now On the Hook, Too

It’s not just the contractors who are prevented from retaliating. The bill makes it clear that executive branch officials cannot request or encourage a contractor or grantee to retaliate against a protected individual. Even better, if an investigation finds that a government official did request that prohibited retaliation, the investigating body must recommend appropriate disciplinary action against that official (Sections 2 & 3). This adds a layer of accountability directly to the federal side of the contract relationship, making it riskier for federal managers to quietly pressure contractors to fire the person who reported the problem.