US VIRGIN ISLANDS Law and Practice Contributed by: Marjorie (Jorie) Roberts, Duncan J.J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
meetings of shareholders and directors and failure to appoint officers on a consistent basis). In such situ - ations, courts in the USVI do allow a suit against a corporation’s stockholders if doing so prevents fraud or gross injustice to third parties. USVI courts have adopted the equitable remedy of “piercing the corporate veil”, with the seminal case for the current remedy being Donastorg v Daily News Publishing Co ., Inc ., 63 V.I. 196 (2015). However, USVI courts view it as an extraordinary remedy that must be proved by the injured party by clear and convinc - ing evidence and only when the case involves fraud, would promote injustice and/or involved an unlawful act that directly harmed the plaintiff. Statutory law governing employment and employer– employee relations is the basis of the employment relationship. The USVI laws governing the employ - ment relationship are derived from US federal laws, such as the Fair Labor Standards Act, and territorial statutes, rules and regulations governing occupational health and safety, labour relations and employment discrimination. Case law further provides particular guidelines in the way of equitable remedies or in situa - tions where statutory language is silent or ambiguous, such as in non-compete clauses. In 2019, the Superior Court of the Virgin Islands held in Arvidson v Buchar , 71 V.I. 277 (V.I. Super. Ct. 2019), that a covenant not to compete was invalid and unenforceable when not only did it fail to make clear what legitimate business interests it was created to protect, it did so without giving a durational restriction, a territorial restriction and a manner restriction, and it could not be equitably reformed, as supplying the time, place and manner terms would equate to the court supplying the essen - tial terms of the covenant. The USVI protects collective bargaining by employ - ees, as found by statute in 24 V.I.C. § 64, as well as protecting employees through safety, labour relations and employment anti-discrimination laws. The Virgin Islands Department of Labor (DOL) and the Virgin Islands Public Employees Relations Board are two 4. Employment Law 4.1 Nature of Applicable Regulations
territorial agencies that oversee non-union employ - er–employee relations in the USVI. Oversight of union relations is provided by the federal National Labor Relations Board, Region 12. In addition to collective bargaining and employee protection laws, employment may be limited by other laws to protect employees, such as the USVI Labor Relations Act, the USVI Plant Closing Act and, as dis - cussed in 4.4 Termination of Employment Contracts , the USVI Wrongful Discharge Act. Additionally, some labour laws in the USVI provide for preferential hiring of qualified residents of the USVI before hiring quali - fied non-residents. Lastly, any arbitration agreement must not limit the remedies that an employee would have available in court. Pre-dispute waivers of remedies or substantive protections written into an arbitration agreement by the employer are not enforceable and are against pub - lic policy. Employees retain the right to elect arbitration at the time a dispute arises, or for a reasonable time thereafter. There can be nothing in the agreement to unfairly limit the employees’ access to arbitration due to economic reasons. If an employee cannot afford arbitration, the employer must absorb the expense, if both parties agree to arbitration. Lastly, the DOL is mandated to assist resident workers in the USVI to obtain, safeguard and protect their pref - erence to be employed in occupations and industries in the USVI. One way the DOL does this is by requiring employers in the USVI to submit job openings on the Virgin Islands Electronic Workforce System (VIeWS). 4.2 Characteristics of Employment Contracts Employment contracts can be written, verbal or implied, so long as there is an offer, an acceptance and consideration. Contracts may be implied or expressed, and each party has a duty of good faith and fair dealing in performance and enforcement. Employment contracts usually state terms relating to the date of commencement of employment and date of termination of employment or terms of renewal of the contract, wages to be paid, benefits to be provid - ed by the employer to the employee, circumstances in which the employment contract may be terminated, avenues of resolution of contract dispute, language
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