ARBITRATION: A SEAMAN'S DILEMMA; NOT ALL PERILS ARE OF THE SEA.

• Author: Sins, Joshua E.

TABLE OF CONTENTS I. Introduction 240 II. Arbitration: A Seaman's Dilemma 241 III. Jones Act Seaman 242 IV. Pre-Injury 243 A. Buckley v. Nabors Drilling USA, Inc 244 B. Brown v. Nabors Offshore Corp 246 C. In re Oil Spill by the Oil Rig "Deepwater Horizon" in Gulf of Mexico 248 V. Post-Injury 251 A. Schreiber v. K-Sea Transp. Corp 251 B. Barbieri v. K-Sea Transp. Corp 254 C. Harrington v. Atlantic Sounding Co 258 VI. Conclusion 263 I. INTRODUCTION

Navigation has come a long way since having to rely on the stars. Advancements in instrumentation which help seamen traverse the seas from port to port have grown by leaps and bounds over the last century. With navigation instruments being so important to a seaman's safe return to harbor, why has there not been a similar legal leap forward when dealing with issues affecting seamen on dry land? Having legal counsel, like a compass, is essential in navigating the perils confronting seamen vis-a-vis the employer. Arbitration, for instance, could hit a seaman like a rogue wave could swamp a vessel. Both could spell disaster. However, with the proper tools and systems in place, the rogue wave may not be as problematic as it once was. If a ship can possess these tools to get a seaman to shore safely, there should be similar tools to help a seaman navigate issues that arise in the seaman's relationship with the employer to get him back to the sea safely again.

This comment explores the various ways the courts have approached the Federal Arbitration Act, specifically Section 1 of the act, and the seaman's ability to void arbitration contracts. Attorneys for seamen need to be wary of the hazards encountered due to the distinction courts draw between the employment agreement and arbitration provisions upon which the seaman's employment is not contingent.

2. ARBITRATION: A SEAMAN'S DILEMMA

   Arbitration is a form of alternative dispute resolution where two or more parties agree to submit their dispute to a private third party, institution, or panel, which will listen to the problem and then make a binding decision. (1) Arbitration removes an otherwise judicial dispute to a private forum where the applicable law is or should be applied and an award is issued for those involved. (2) This alternative dispute avenue was adopted by Congress in 1925 with the enactment of the Federal Arbitration Act. (3) This act further stated:

   A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (4)

   Thus, any arbitration agreement that has been established in writing is essentially binding. Courts apply state contract law in resolving any issues arising from the contract formation. (5) For example, in Louisiana, fraud, error, or duress can vitiate consent to a contract. (6) Therefore, in the absence of either fraud, duress, or error, a person is bound to the provisions of the contract. (7)

   Likewise, when there is a valid formation of an arbitration contract, federal courts are required to compel arbitration. (8) When considering a motion to compel arbitration, the courts apply three rules as established in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth: (9) First, whether a valid agreement to arbitrate exists between the parties; (10) second, if the dispute in question falls within the scope of the arbitration contract; (11) third, in the event that the two questions above are answered in the affirmative, the court must then consider whether there is any federal statute or policy that renders the arbitration contract non-arbitrable. (12)

   The final question is where a Jones Act seaman finds himself in the most peril outside the sea. With the ruling by the Supreme Court in Circuit City Stores, Inc., v. Adams, employers are legally allowed to require employees to submit to arbitration as a condition of the employment contract (13) However, according to the Federal Arbitration Act, arbitration agreements shall not apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. (14) Thus seamen, railroad workers, and those of like kind are exempt from arbitration--and the ruling from Circuit City Stores--as a condition of employment.

3. JONES ACT SEAMAN

   One must first be a seaman under the Jones Act in order to raise the prohibition against arbitration agreements under Section 1 of the Federal Arbitration Act. (10) The Supreme Court has addressed the requirements to establish Jones Act status in several cases. The first factor is whether "an employee's duties contribute to the function of the vessel or to the accomplishment of its mission." (16) Secondly, a seaman must have a sufficient connection to a vessel in navigation or to a fleet of vessels under common ownership. (17) Furthermore, a sufficient connection is defined as nothing less than thirty percent (30%) of his time in the service of a vessel or fleet of vessels under common ownership. (18) Therefore, when a seaman works in the service of a vessel in navigation or fleet of vessels under common ownership for at least thirty percent of the time, he is a Jones Act seaman. As such, a Jones Act seaman is afforded the protections and privileges that the act provides: (19)

   A seaman injured in the course of employment or, if the seaman dies from the injury, the personal representative of the seaman may elect to bring a civil action at law, with the right of trial by jury, against the employer. Laws of the United States regulating recovery for personal injury to, or death of, a railway employee apply to an action under this section. (20)

   The issue that must be raised for Jones Act seamen is whether or not an arbitration agreement can be included in the contract of employment. While it appears at first blush that the statute prohibits or makes voidable arbitration agreements in seamen employment contracts, the jurisprudence has made certain distinctions between arbitration agreements included and agreed to before employment rather than during employment. Courts have also made distinctions regarding agreements that were established pre-injury rather than post-injury. Thus, the question becomes: Is a Jones Act seaman's employment contingent on signing or agreeing to a contract that requires submitting all disputes to arbitration?

4. PRE-INJURY

   Whether or not an arbitration agreement is part of an employment contract is not always clear. In order to see through the fog, there are a few questions that need to be answered: (a) when was the arbitration clause or contract agreed to; (b) was the arbitration agreement attached to a component part of the employment contract; and--the most important question--(c) was the employment contingent on the signing of the arbitration agreement?

   1. Buckley v. Nabors Drilling USA, Inc.

      In order to understand how the courts answer these questions we need to look at sparse case law, starting with Buckley v. Nabors Drilling USA, Inc. (21) Terry Buckley (hereinafter referred to as "Buckley") was unquestionably a Jones Act seaman working for Nabors Drilling USA, Inc. (hereinafter referred to as "Nabors") aboard an offshore drilling rig, the RANGER V. (22) Nabors adopted the "Nabors Dispute Resolution Program" (hereinafter referred to as "NDRP") on April 15, 2001, effectively requiring all employees to accept an arbitration clause. (23) The NDRP obligated all employees to enter binding arbitration for any personal injury allegedly incurred in or about the work place. (24) Nabors mailed a copy of its new policy detailing the NDRP along with each employee's paystubs. (25) Mr. Buckley never signed the NDRP agreement and continued to work for Nabors. (26) Likewise, Nabors never tried to reach out to Buckley again regarding the NDRP agreement. (27) Buckley was allegedly injured on June 6, 2001, while working for Nabors aboard the RANGER V. (28) His injuries consisted of severe injuries to his lower back, right leg and shoulder. (29) Buckley filed a suit against Nabors for negligence and unseaworthiness of the RANGER V; however, Nabors responded with a motion to compel arbitration. (30)

      The court immediately looked to and applied the three rules established by Mitsubishi in order to determine if the arbitration agreement was enforceable. (31) However, recognizing the prohibition in the Federal Arbitration Act related to seamen, the court decided that it need only determine whether or not a valid arbitration agreement existed. (32)

      The court recognized that when an arbitration contract has been reduced to writing and signed by both parties, any controversy arising out of and covered by the agreement shall be valid, irrevocable and enforceable, except when there exists controversy at law or in equity for the revocation of any contract. (33) However, Buckley's status as a Jones Act seaman could have made the agreement voidable under the FAA. (34) "Section 1 of the FAA excludes from the Act's coverage any 'contracts of employment of seamen, railroad employees, of any other class of workers engaged in foreign or interstate commerce.'" (35) However, Nabors argued that Section 1 of the Federal Arbitration Act should only exempt those persons involved in the transportation of goods. (36) Its argument relied on Circuit City's rule of statutory interpretation "where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words." (37)

      The court wholeheartedly...