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Legal Memorandum: Employee's Refusal to Sign an Arbitration Agreement

Issue: Under Virgin Islands law, does an employee have the right to refuse to sign an arbitration agreement?

Area of Law: Employee Law
Keywords: Arbitration agreement; Refusal to sign; Employee's right
Jurisdiction: Federal, Virgin Islands
Cited Cases: 363 U.S. 574; 169 F.3d 501; 475 U.S. 643
Cited Statutes: 24 V.I.C. § 76(c), § 304(c)(1)(C)
Date: 12/01/2008

Virgin Islands statutory law is absolutely clear that an employee has the right, without facing the threat of termination, to refuse to sign an arbitration agreement after he or she has been hired.  The Virgin Islands Wrongful Discharge Act (“WDA”) strictly limits the grounds on which an employer is entitled to dismiss an employee.  See 24 V.I.C. § 76(c).  Among the nine enumerated grounds upon which an employer may dismiss an employee without violating the WDA, none allows expressly or implicitly an employer to terminate an employee for refusing to sign an arbitration agreement or any other type of agreement.  Indeed, an employer that submits an agreement for an employee to sign after the employee is on the payroll and in a bona fide employment relationship with the employer provides no consideration for that agreement.  In contrast, of course, an employer may offer a prospective employee or applicant a job on the condition, after full disclosure and assuming an equal bargaining relationship, that he or she sign an arbitration agreement.  The prospective employee or applicant, if he or she has knowingly and voluntarily signed such an agreement, has done so in consideration of the job offer

The fact that a company’s employees are represented by a union has nothing to do with a requirement that employees sign an arbitration agreement.  Although there is a strong federal policy favoring arbitration, such a policy does not operate without regard to contracting parties’ intent.  Keymer v. Mgmt. Recruiters Int’l, Inc.,