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Legal Memorandum: Ground for Denial of a Motion to Compel Arbitration

Issue: Under the law of the Virgin Islands, must a motion to compel arbitration be denied if a party failed to comply with 24 V.I.C.  74a?

Area of Law: Alternative Dispute Resolution, Employee Law
Keywords: Motion to compel arbitration; Employment contract; Condition of employment
Jurisdiction: Virgin Islands
Cited Cases: 360 F.3d 322; 411 F.3d 1289; 352 F. Supp. 2d 903; 517 U.S. 681
Cited Statutes: 24 V.I.C. 74a, 74a(b)
Date: 03/01/2006

  In 2002, the Virgin Islands Legislature added § 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.

Id. (emphasis added). 

To require signing an arbitration agreement as a condition of employment constitutes economic coercion.  The employee in such a situation is forced to give up his or her right to a jury trial in civil disputes as a condition of employment.  Likewise, the Virgin Islands Legislature’s enactment of 24 V.I.C. § 74a(b) is a legislative recognition that an arbitration agreement, like any other type of agreement on which employment is made contingent, is necessarily unconscionable.  Section 74a(b) is consistent with the Federal Arbitration Act (“FAA”) and is an expression of Virgin Islands law as to what constitutes unconscionability.

In Reed v. Turner, No. Civ.2003/0095 (D.V.I. Mar. 28, 2005), the court rejected […]

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