Legal Memorandum: Unconscionable Employment Arbitration Agreements

Issue: What is the public policy of the Virgin Islands in holding employment-related arbitration agreements unconscionable?

Area of Law: Employee Law
Keywords: Employment related arbitration agreements; Unconscionable; Public policy doctrine
Jurisdiction: Federal, Virgin Islands
Cited Cases: 243 F. Supp. 2d 334; 325 F. Supp. 2d 1252
Cited Statutes: Restatement (Second) of Contracts § 184 & cmt. b
Date: 05/01/2006

Unconscionability is at its core a public policy doctrine.  See, e.g., Restatement § 208 cmt. a.  One of the chief reasons the ancient Greeks, whose institutions are the foundation of modern civilization, devised a system of laws was to maintain the peace by ensuring the citizens orderly means to resolve disputes.  As Aristotle wrote in 350 B.C.E., “Law is Order, and good law is good order.”  Aristotle, Politics, Part IV.  When workers are deprived of a fair and readily accessible outlet for resolving workplace disputes, it can easily lead to dissent and disruption of public order, which is bad public policy.

One needs only look to a turning point in Virgin Islands history for a clear example of this.  The Fireburn of 1878, which led to many deaths and the destruction of much of the island of St. Croix, resulted from the efforts of greedy and overreaching “employers” to take advantage of their superior bargaining position by enforcing meager and grossly unfair annual labor “contracts” on workers.  It was as true in 1878 as it is today:  calling an unfair, one-sided arrangement a “contract” does not make it fair or change its onerous character.  In 1878, emancipated slaves had no choice but to sign labor contracts on “contract day” each year if they wanted to work.  The onerous one-sided terms of these mandatory contracts eventually led to a full-scale island wide revolt against the extreme unfairness of such a system in an isolated and insular community where workers had […]

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