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HOVENSA HIRES NOW MUST SIGN ARBITRATION PACT

July 8, 2002 – In June, U.S. District Judge Raymond Finch ruled that it is legal for a Hovensa subcontractor to require that prospective employees agree in writing to have all labor-management disputes resolved by binding arbitration. Now, the refinery itself has instituted a dispute-resolution requirement for all applicants and new hires for non-unionized positions.
And, current non-union personnel also will "be provided an option to enroll" in what is formally called Hovensa's Dispute Resolution Program.
Alex A. Moorhead, Hovensa vice president for government affairs and community relations, said each current non-union employee is "being presented with a copy of the complete program and requested to enroll in the program." The workers are being asked to decide by September, he said.
Moorhead said about 530 current Hovensa employees are eligible, compared to about 460 workers who are represented by unions that have collective bargaining agreements with the refinery.
The program is exclusively for Hovensa's own employees, he said, and will not impact on its subcontractors. It became mandatory for applicants as of July 1.
"The program requires that any disputes concerning a right protected by federal or Virgin Islands law be resolved by binding arbitration if it cannot be resolved within the company," Moorhead said. "The dispute would be heard by an arbitrator selected by the parties from a list of qualified and impartial arbitrators provided by the American Arbitration Association, and it would be decided in accordance with applicable law."
According to a Hovensa release, dispute resolution options under the program include open door, mediation and, for legally protected rights, arbitration.
From the corporate perspective, Moorhead said, the advantage of mandatory binding arbitration is "the more expeditious resolution of disputes between employees and the company, thereby avoiding the cost of lengthy litigation which could involved appeals to as many as three courts and animosity that can arise between the parties during that lengthy period of time."
That represents an advantage for employees, too, Moorhead said, providing a means for resolving disputes "within a period of several months, rather than three to five years, as is the case for lawsuits filed in the Territorial Court or U.S. District Court." He also said that during the process, employees would be in a position for "maintaining a harmonious relationship with the company."
Workers in hourly positions covered by collective bargaining agreements at the refinery "have for years resolved disputes under grievance/arbitration procedures" contained within their contracts, the release noted. And, Moorhead, said, "Binding arbitration is the final step in that procedure."
Under the program now mandatory for new hires, he said, employees will not be "giving up any substantive legal rights or remedies that they have under applicable law." A means for resolving disputes "quickly and amicably," he said, is an advantage for all concerned. "In today's competitive business environment," he added, "maintaining a harmonious relationship in the workplace is essential to the efficient conduct of business by an enterprise where hundreds of employees have to work together as a team."
Last year, Wyatt V.I. Inc., a Hovensa subcontractor, began requiring job applicants to sign an agreement to put all employee-management disputes before a neutral arbiter whose decision would be binding. The agreement provided for arbitration to be conducted under the rules of the America Arbitration Association, with Wyatt covering most of the costs after the employee seeking relief paid a $50 filing fee.
Wyatt took the matter to court after Labor Commissioner Cecil Benjamin ordered the company to stop making the agreement a condition for employment and Attorney General Iver Stridiron issued an opinion backing Benjamin's position. Stridiron's opinion called the agreement "unconscionable," "coercive," "contrary to public policy" and "ripe for injunctive relief."
Finch, however, found it neither "unconscionable" or "unenforceable." In fact, he said, the law is clear that such agreements are valid.
Labor and V.I. Justice Department attorneys argued that prospective Wyatt employees were being coerced into signing the agreement and that it was in violation of the territory's Wrongful Discharge Act. Finch said the act "makes no mention whatsoever" of the validity or enforceability of arbitration agreements. He added that the U.S. Supreme Court has held that under the federal Arbitration Act, mandatory agreements are valid, provided that the act is not in direct conflict with state laws.

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