A bill to amend title 38, United States Code, to improve the protection and enforcement of employment and reemployment rights of members of the uniformed services, and for other purposes.

Summary: Servicemember Employment Protection Act of 2012 - Makes unenforceable any clause of an agreement between an employer and employee requiring arbitration of a dispute arising under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Provides an exception when both parties voluntarily agree to arbitration. Requires any issue as to whether such requirement applies to an arbitration clause to be determined by federal law and the validity or enforceability of an agreement to arbitrate to be determined by a court rather than an arbitrator.

Protects under USERRA an individual who is absent from employment in order to receive medical or dental treatment for an injury or illness incurred or aggravated in the line of duty.

Authorizes the suspension, termination, or debarment of federal contractors for repeated failures or refusals to comply with USERRA protections.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Servicemember Employment Protection 
Act of 2012''.

SEC. 2. UNENFORCEABILITY OF AGREEMENTS TO ARBITRATE DISPUTES ARISING 
              UNDER USERRA.

    (a) In General.--Subchapter III of chapter 43 of title 38, United 
States Code, is amended by adding at the end the following new section:
``Sec. 4328. Unenforceability of agreements to arbitrate disputes
    ``(a) Protection of Employee Rights.--Notwithstanding any other 
provision of law, any clause of any agreement between an employer and 
an employee that requires arbitration of a dispute arising under this 
chapter shall not be enforceable.
    ``(b) Exceptions.--(1) Subsection (a) shall not apply with respect 
to any dispute if, after such dispute arises, the parties involved 
knowingly and voluntarily agree to submit such dispute to arbitration.
    ``(2) Subsection (a) shall not preclude the enforcement of any of 
the rights or terms of a valid collective bargaining agreement.
    ``(c) Validity and Enforcement.--Any issue as to whether this 
section applies to an arbitration clause shall be determined by Federal 
law. Except as otherwise provided in chapter 1 of title 9, the validity 
or enforceability of an agreement to arbitrate referred to in 
subsection (a) or (b)(1) shall be determined by a court, rather than 
the arbitrator, regardless of whether the party resisting arbitration 
challenges the agreement to arbitrate specifically or in conjunction 
with other terms of the agreement.
    ``(d) Application.--This section shall apply with respect to all 
contracts and agreements between an employer and an employee in force 
before, on, or after the date of the enactment of this section.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
4327 the following new item:

``4328. Unenforceability of agreements to arbitrate disputes.''.
    (c) Application.--The provisions of section 4328 of title 38, 
United States Code, as added by subsection (a), shall apply to--
            (1) any failure to comply with a provision of or any 
        violation of chapter 43 of title 38, United States Code, that 
        occurs before, on, or after the date of the enactment of this 
        Act; and
            (2) to all actions or complaints filed under such chapter 
        43 that are pending on or after the date of the enactment of 
        this Act.

SEC. 3. EXPANSION OF EMPLOYMENT AND REEMPLOYMENT RIGHTS OF MEMBERS OF 
              UNIFORMED SERVICES TO INCLUDE PROTECTION FOR ABSENCES 
              FROM EMPLOYMENT FOR MEDICAL TREATMENT RELATING TO 
              SERVICE-CONNECTED INJURIES AND ILLNESSES.

    (a) In General.--Section 4303(13) of title 38, United States Code, 
is amended by inserting ``a period for which a person is absent from a 
position of employment for the purpose of medical or dental treatment 
for an injury or illness incurred or aggravated in line of duty during 
a period of service in the uniformed services,'' after ``for any such 
duty,''.
    (b) FMLA.--
            (1) Rule of construction.--For purposes of that section 
        4303(13) and each covered provision--
                    (A) the reference in that section 4303(13) to a 
                period for which a person is absent from a position of 
                employment for the purpose of medical or dental 
                treatment shall not be considered to be a reference to 
                a period of leave under a covered provision; and
                    (B) the person's employer shall not designate the 
                period of absence as such a period of leave,
        unless the person requests and obtains the leave under the 
        corresponding covered provision.
            (2) Definition.--In this subsection, the term ``covered 
        provision'' means--
                    (A) title I of the Family and Medical Leave Act of 
                1993 (29 U.S.C. 2601 et seq.), including the 
                application of that title under the Congressional 
                Accountability Act of 1995 (2 U.S.C. 1301 et seq.) and 
                chapter 5 of title 3, United States Code; and
                    (B) subchapter V of chapter 63 of title 5, United 
                States Code.

SEC. 4. SUSPENSION, TERMINATION, OR DEBARMENT OF CONTRACTORS FOR 
              REPEATED VIOLATIONS OF EMPLOYMENT OR REEMPLOYMENT RIGHTS 
              OF MEMBERS OF UNIFORMED SERVICES.

    (a) In General.--Subchapter III of chapter 43 of title 38, United 
States Code, as amended by section 2, is further amended by adding at 
the end the following new section:
``Sec. 4329. Suspension, termination, or debarment of contractors
    ``(a) Grounds for Suspension, Termination, or Debarment.--Payment 
under a contract awarded by a Federal executive agency may be suspended 
and the contract may be terminated, and the contractor who made the 
contract with the agency may be suspended or debarred in accordance 
with the requirements of this section, if the head of the agency 
determines that the contractor as an employer has repeatedly failed or 
refused to comply with a provision of this chapter.
    ``(b) Conduct of Suspension, Termination, and Debarment 
Proceedings.--A contracting officer who determines in writing that 
cause for suspension of payments, termination, or suspension or 
debarment exists shall initiate an appropriate action, to be conducted 
by the agency concerned in accordance with applicable law, including 
Executive Order 12549 or any superseding executive order, the Federal 
Acquisition Regulation, and any other regulations prescribed to 
implement the law or executive order.
    ``(c) Effect of Debarment.--A contractor debarred by a final 
decision under this section is ineligible for award of a contract by a 
Federal executive agency, and for participation in a future procurement 
by a Federal executive agency, for a period specified in the decision, 
not to exceed 5 years.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 43 of such title, as amended by section 2, is further amended 
by inserting after the item relating to section 4328, as added by such 
section, the following new item:

``4329. Suspension, termination, or debarment of contractor.''.
    (c) Regulations.--Not later than 180 days after the date of the 
enactment of this Act, the Federal Acquisition Regulatory Council shall 
amend the Federal Acquisition Regulation to carry out section 4329 of 
title 38, United States Code, as added by subsection (a).
    (d) Effective Date.--Section 4329 of title 38, United States Code, 
as added by subsection (a), shall apply with respect to failures and 
refusals to comply with provisions of chapter 43 of such title 
occurring on or after the date of the enactment of this Act.