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Legal Memorandum: Entitlement to Arbitration in VI

Issue: When should a court find that the party demanding arbitration has failed to comply with 24 V.I.C. 74a and is not, therefore, entitled to arbitration?

Area of Law: Alternative Dispute Resolution, Employee Law, Litigation & Procedure
Keywords: Arbitration; Employment contract
Jurisdiction: Virgin Islands
Cited Cases: 906 A.2d 1205; 918 A.2d 1266; 935 S.W.2d 625
Cited Statutes: 24 V.I.C. § 74a
Date: 09/01/2007

In 2002, the Virgin Islands Legislature added section 74a to Title 24 of the V.I. Code.  Section 74a provides:

§ 74a   Arbitration

(a)        Notwithstanding an employment contract that provides for the use of arbitration to resolve a controversy arising out of or relating to the employment relationship, arbitration may be used to settle such a dispute only if:

(1)        the employer or employee submits a written request after the dispute arises to the other party to use arbitration; and

 

(2)        the other party consents in writing not later than sixty (60) days after the receipt of the request to use arbitration.

(b)        An employer subject to this chapter may not require an employee to arbitrate a dispute as a condition of employment.

24 V.I.C. § 74a (2004).  The plain reading of subpart (a) requires a party wishing to initiate arbitration to submit a written request to the other party after the dispute arises.  If the other party refuses to consent, the claims are not subject to arbitration.

Recently, the Superior Court of the Virgin Islands rejected an argument in two separate cases that the defendant was not entitled to compel arbitration because it had not complied with the procedural requirements of 24 V.I.C. § 74a.  Matos v. HOVENSA, LLC, No. SX-03-CV-0000204 (V.I. Super. Ct. July 27, 2007); Gordon v. Walters, No. SX-04-CV-0000155 (V.I. Super. Ct. July 30, 2007).  It found “no need to examine Defendant’s compliance with section 74a […]

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