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Injured_Seafarer_Arbitration-300x200Arbitration agreements are prevalent in cruise line seafarer contracts today.  This practice deprives the injured crewmembers of the fundamental right of a jury and sometimes precludes them of their statutory negligence causes of action provided to them under the Jones Act.  However, given the unique nature of maritime employment, in certain situations seafarers can avoid arbitrating personal injury despite the employment contracts requiring arbitration.

Facts of the Case

Recently a Florida Federal Court held that an arbitration provision found in a cruise line seafarer’s employment contract did not govern her on-the-job personal injury dispute.  In this case, the seafarer’s contract employer was not the owner or operator of the cruise ship.  In other words, the seafarer contracted with one company and then sent to work aboard a cruise ship owned and operated by other companies.  Once the seafarer started working aboard the cruise ship, she was managed and directed by the cruise ship’s owner and operator not the company of which she was technically employed by.  This unique set of facts allowed the seafarer to allege she was the borrowed servant of the cruise ship owner and operator who were not parties to the employment contract which contained the arbitration provision.

Cruise-Arbitration-Agreement-300x200According to court records, Michelle Haasbroek was employed by Steiner Transocean Limited and worked as a spa facialist on board the M/S Crown Princess, a vessel owned and operated by Princess Cruise Lines, Ltd.  Ms. Haasbroek alleges in court filings that she was raped by Eddie Yamile Santa Cruiz Reyes (“Reyes”), a cruise line employee, while off duty in a crewmember residential cabin.  As a result of the rape, Ms. Haasbroek became pregnant and gave birth to a child.

Ms. Haasbroek signed an employment agreement with Steiner which provided that her duties were “to perform services in the company’s spa, salon or fitness facility on the vessel.”  Pursuant to the employment agreement.  Ms. Haasbroek agreed to resolve any and all disputes by final and binding arbitration in Nassau, The Bahamas.

Per court filings, Ms. Haasbroek met Reyes at the church aboard the vessel and she considered him strictly a platonic friend.  On the day of the incident, Ms. Haasbroek went to Reyes’ cabin to pick up his computer so she could bring it ashore for him to be repaired and he assaulted and raped her.

Cruise-Arbitration-Agreement-300x200The major cruise lines insert a provision into their crewmember employment contracts requiring any dispute between them and their seamen employees, including personal injury claims, to resolved at arbitration. Often times these employment contracts require the arbitration to occur outside the United States and to apply foreign law. This means that if a crewmember is injured on the job, he or she will have to bring an arbitration claim in a myriad of foreign locations, but not in the United States and not under United States law. The reason cruise lines are forcing their crewmembers to foreign arbitration is because it is more likely that the arbitrators, who are compensated by the cruise lines, will favor the cruise lines position and will be reluctant to give the injured seamen high money awards.

A treaty called the New York Convention on the Enforcement of Foreign Arbitration Awards allows the cruise lines to compel personal injury claims to arbitration where there is a written agreement to arbitration between citizens of two different countries or where the contract contemplates foreign performance. However, after the parties arbitrate, the treaty provides that a court of competent jurisdiction can review the arbitration award and vacate or find it unenforceable on various grounds including public policy.

A recent case filed in the United States District Court for the Southern District of Florida challenges such an arbitration award. In that case, the crewmember brought a claim against a cruise line for an injury sustained by the medical malpractice of the doctor selected by the cruise line to fulfill its obligation to provide medical care to the seaman. The employment contract required the seaman to arbitrate his claim in Monaco under Panamanian law. The arbitration went forward in Monaco and the seaman’s claim was dismissed under Panamanian law. The crewmember filed an action in the Southern District of Florida asking the Federal Court to vacate or, alternatively, refuse to recognize the award the arbitration award.

Injured Crew Member.jpgThe United States Fifth Circuit Court of Appeals recently held crew members may seek punitive damages in personal injury claims if they can prove the ship owner’s misconduct in causing a ship to become unseaworthy was willful, wanton or reckless. This decision is one of an emerging trend to provide injured maritime workers with a wide range of damages as well as to fashion a way to dissuade employers and ship owners from engaging in reckless conduct which is likely to result in injury.

Historical Background

Maritime law historically afforded ill and injured crewmembers only two causes of action against ship owners and employers. If a crewmember became ill or injured while in the service of the ship, the employer and the ship’s owner owed him room and board (“maintenance”) and medical care (“cure”) without regard to fault, and, if not provided, the crewmember had a claim against them for “maintenance and cure.” If a crewmember was injured by a ship’s operational unfitness, the seaman had a cause of action for “unseaworthiness.” Maritime law did not provide crewmembers with a separate cause of action for personal injury resulting from employer negligence, nor did it permit wrongful death or survival claims on behalf of seamen killed during the course of their employment. To remedy those gaps, Congress in 1920 enacted the Jones Act and the Death on the High Seas Act. Congress, however, specifically limited the damages available to those that would compensate the injured seaman for pain and suffering, lost wages and medical expenses. By limiting recovery to “Compensatory” damages, Congress precluded seamen injured by their employers’ negligence or died on the high seas from seeking punitive damages.

Cruise Arbitration Agreement.jpgMore and more courts are finding cruise line’s personal injury arbitration agreements unenforceable when it comes to American crewmembers. The latest case comes from the Middle District of Florida wherein an American ice skater employed by Royal Caribbean Cruises was injured while performing aboard the Voyager of the Seas off the coast of Mexico. The injured seafarer filed a lawsuit against the cruise line asserting claims for Jones Act negligence, Unseaworthienss and Failure to Provide Maintenance and Cure in a Florida state court. As typical with employee claims, Royal Caribbean removed the case to Federal court located in Tampa and filed a motion to compel enforcement of an agreement to arbitration pursuant to the United National Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Compelling Arbitration Under the U.N. Convention

In order for a cruise line to compel arbitration under the U.N. Convention, it must show (1) there exists a written agreement to arbitrate; (2) the agreement provides for arbitration in the territory of a signatory of the Convention; (3) the agreement arises out of a commercial legal relationship; and (4) a party to the agreement must not be an American citizen, or the commercial relationship must have some reasonable relation with one or more foreign countries.

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