Reinsurance & Arbitration Focus

The defendants in Geneva Enterprises LLC v. Chavez are 31 former employees of plaintiffs Geneva Enterprises and AV Automotive (together, “Geneva”) who filed a “mass arbitration” with the American Arbitration Association (AAA) against Geneva alleging various wage-related claims under the Virginia Wage Payment Act and, for one claimant, a claim under the Fair Labor Standards Act. Geneva refused to pay the prescribed AAA arbitration fees on the grounds that the former employees had failed to comply with conditions precedent to filing an arbitration and commenced an action against the plaintiffs seeking both an injunction against the arbitrations under Virginia law and the Federal Arbitration Act (FAA) and declaratory relief regarding the scope of the arbitration agreements.

The case was removed to federal district court by the former employees pursuant to federal question jurisdiction under 28 U.S.C. § 1331. The former employees then filed a petition under Section 4 of the FAA seeking to compel arbitration before the AAA and to stay Geneva’s district court action. In response, Geneva sought an injunction of the AAA arbitration. In June 2024, the district court entered an order denying Geneva’s motion for an injunction and granted the former employees’ request for a stay of the federal court action pending resolution of the arbitration. When the parties returned to the AAA, Geneva again refused to pay the arbitration initiation fees, and the former employees returned to federal court, filing a motion captioned “Combined Motion to Lift Stay and Renewed Motion to Compel Arbitration.” In March 2025, the court denied the motion on the grounds that the case had already been referred to arbitration and stayed by the June 2024 order. The court also declined the former employees’ request to compel Geneva to pay the arbitration fees to the AAA.

The former employees then filed an appeal of the court’s March 2025 order with the Fourth Circuit Court of Appeals, contending they are entitled to an order compelling Geneva to pay the necessary arbitration fees to the AAA. Geneva opposed the appeal as legally improper under the FAA, contending that the court “lacked subject-matter jurisdiction — i.e., federal question jurisdiction — over this action, pursuant to 28 U.S.C. § 1331.” The Fourth Circuit agreed with Geneva, noting that Section 16(b) of the FAA expressly provides that an interlocutory appeal may not be taken from an interlocutory order (1) granting a stay of any action; (2) directing arbitration to proceed; (3) compelling arbitration; or (4) refusing to enjoin an arbitration that is subject to the FAA. It found the March 2025 order, which was the subject of the appeal, was “unmistakably an order granting a stay of the action pending arbitration” and thus subject to Section16(b)(1). The court concluded it lacked appellate jurisdiction and dismissed the appeal.

Geneva Enterprises, LLC v. Chavez, No. 25-1469 (4th Cir. Apr. 10, 2026).