Carnival Cruises’ attempt to prohibit an injured American crewmember from bringing a lawsuit under United States law and having a jury decide his case has been defeated by the Brais Law maritime lawyers.
Over the past few years, Carnival and other cruise lines have been taking advantage of an obscure law called the United Nations Convention on the Enforcement of Foreign Arbitral Awards. This treaty allows companies in certain situations to avoid jury trials of personal injury claims brought by their employees’ by burying arbitration / choice of law clauses in employment contracts. Cruise lines had great success in convincing courts to apply this international treaty to personal injury claims of Non-American crewmembers. Enforcement of these arbitration / choice of law clauses resulted in hundreds of crewmembers being compelled to arbitrate their claims before an arbitrator(s) under foreign law instead of having a jury decide their rights in a court of law under United States law. This is a big victory for the cruise lines as they can now avoid United States law which favors seafarers and avoid potential high jury awards even though the cruise lines are headquartered in the United States, operate their ships from United States ports and market to United States citizens. Amazingly cruise lines stand alone in being able to take advantage of this legal loophole as other domestic vacation resorts and hotels must follow United States labor laws.
Even though cruise lines have almost uniformly been allowed to compel foreign arbitration for their non-American crewmembers, the issue of whether this foreign treaty can be used to take away American crewmembers’ right to sue their employers under United States law in an American courtroom has not often been addressed by the courts. As shown in this article, it appears the courts are drawing the line on the preferential treatment cruise lines have been enjoying of late when it comes to their attempt to restrict the rights of American crewmembers.
Thomas Hines, a lighting technician from Ohio, worked aboard Carnival cruise ships for several years. Unfortunately his shoulders where injured while performing his job at sea. These injuries required multiple shoulder surgeries. Brais law, on behalf of Mr. Hines, filed a lawsuit under the Jones Act and United States maritime law against Carnival in Miami, Florida State Court (the location of the cruise line’s corporate headquarters). Carnival, not wanting the case to be decided under United States law or by a jury, removed the case to Federal Court and asked the judge to dismiss the lawsuit and compel arbitration in Panama. The cruise line argued the arbitration agreement within Mr. Hines’ employment contracts required him to arbitrate his personal injury claims in Panama under Panamanian law. Despite Carnival being headquartered in the United States and Mr. Hines being a United States citizen, the cruise line insisted the foreign treaty applied to eviscerate the American seaman’s United States legal protections. Brais Law argued in order for arbitration to be enforceable under the treaty, the contract must call for performance aboard. Nowhere in the employment agreement does it mention foreign performance. Furthermore, the ships Ms. Hines worked aboard left from and return to United States ports and at no time did Mr. Hines ever perform his duties on foreign soil. The Court agreed with Brais Law’s analysis and found the arbitration provision unenforceable. The case was sent back to the State Court where the dispute can be decided by a jury under United States law.
This is a significant ruling. If the arbitration provision was held enforceable, over 200 years of Supreme Court’s precedent and Congressional laws designed to protect American seamen would vanish by the stroke of a pen. This decision is perhaps an indication that American Courts will remain open to and will protect American seafarers from large sophisticated shipping companies. The Court’s order denying Carnival’s Motion to Compel Arbitration can be read by clicking this link.