The Eleventh Circuit Court of Appeals, in the case of Lindo v. NCL, rendered an opinion which severely restricts seamen’s rights to recovery for personal injuries suffered in the course and scope of their employment. The decision surprisingly ignored prior case law which clearly stated that a seaman’s employer, who enjoys a relationship where they can write just about anything they want into a contract of employment with the seaman, cannot contract away the applicability of the Jones Act, a federal statute granting seamen the right to sue their employer for negligence.
The cruise ship companies, who hire from third world countries, have recently been inserting mandatory arbitration clauses in seamen’s employment agreements. The mandatory arbitration agreements require seamen to pursue their claims in binding arbitration. However, under the federal statute which granted seamen a right of negligence against their employer in 1920, called the Jones Act, seamen are entitled to sue their employer for negligence, with a right to a jury trial. The statute is liberally interpreted for the protection of seamen, who have historically been recognized by the courts as deserving of special protection because of the situation they are in. The courts have recognized that the ship owners exercise tremendous power over the seamen. Seamen must follow orders. It is one of the few types of employment where an individual loses their personal freedom once they step onboard the ship. They are subject to the rules and discipline of the ship, 24 hours per day. They work 7 days a week, often times 12 to 14 hours per day. They work for meager wages. Their working conditions are often described as horrible. They are overworked. Ship owners assign crewmembers to a multitude of tasks, many of which they are not qualified for, resulting in many serious accidents with serious injuries.
Recognizing the need to protect seamen, Congress granted seamen a right to sue their employer for negligence, and to hold their employer liable for the negligent acts of the employer’s agents and for the negligence of fellow employees. The agents have included doctors who are hired to treat the seamen once they become injured or ill. This has somewhat tempered the temptation on the part of ship owners to send the crewmembers off the ship without needed medical treatment, or ignore the medical needs of crewmembers. In addition, holding the ship owner liable for the negligent acts of the doctors they choose also helps put some incentive on the ship owner to select competent physicians to treat their seamen. However, historically, the shipping companies have still chose to save money by sending crewmembers to third world countries for medical care and treatment, which has resulted in many claims for improper medical care and treatment. Our firm recently obtained a 2.9 million dollar verdict against a cruise line in a case where the company chose to send a crewmember to Managua, Nicaragua to be treated for a knee problem. The doctor then performed an arthroscopy surgery, which was done improperly, leading to a total knee replacement.
The Jones Act is a major vehicle for seamen to enforce their rights. They have very little rights once they step onboard the ship. They have no one to protect them. The ship owner does nothing to inform them of their legal rights. The crewmember is often times afraid to report an accident with the fear that they’ll be fired, and sent home to their third world country without any money or medical treatment.
The Jones Act allows a crewmember to stand up against big corporations like Carnival Cruise Lines, Royal Caribbean Cruise Lines and Norwegian Cruise Lines. The Jones Act has always given the seamen the opportunity to go into a court of law, and be on equal footing with the cruise ship company. Recognizing that the Jones Act is designed to provide a remedy to seamen injured in the course and scope of their employment, the courts have said it is to be given a liberal interpretation, and the standard of causation that it is applied in cases under the Jones Act is much different than the regular causation standard in general negligence cases. In a seaman’s case, any negligence, no matter how small, which contributes in any manner to the seaman’s injury, is a basis for the seaman to recover. At least, prior to this Lindo v. NCL decision in the Eleventh Circuit Court of Appeals, which simply ignored prior case law, not only by its own court, but also case law of the Supreme Court of the United States.
In Lindo v. NCL, the seaman had an employment agreement that required him to arbitrate his disputes in his home country, (Lindo was from Nicaragua), and that the law of the Bahamas would be applicable to any of his claims. The seaman argued in the lower court that this was an improper attempt on the part of the ship owner to deprive the seaman of his rights under the United States laws, including the Jones Act, and also argued that the Jones Act provided a right to a jury trial. The seaman argued his employer could not force binding arbitration on him in the contract of employment.
The lower court dismissed the case and compelled arbitration. The seaman appealed.
The Eleventh Circuit Court of Appeals, shockingly, not only stated that a seaman can be required to arbitrate his claims against his employer, but also ruled that the choice-of-law clause in the employment agreement applied. The Court paid little attention to their previous decision in Thomas v. Carnival Corp. 573 F3d 1113 (11th Cir.2009), which had held that although a seaman can be required to arbitrate claims against his employer, the employer could not deprive the seaman of his United States statutory claims. In Thomas, the United States statutory claims involved a wage claim under the Penalty Wage statute that applies to seamen.
In Lindo, the Court said that forum selection clauses, arbitration agreements and choice-of-law clauses, are generally valid under the maritime law, and enforceable. However, the Court ignored prior case law recognizing that because seamen are a unique class subject to be taken advantage of by their employers, any agreement with a seaman and an employer should be scrutinized, and not lightly enforced. The Court should recognize the unequal bargaining power, and the fact that these agreements are a take it or leave it employment agreement. These contracts of employment are signed under duress, economic duress at the very least. These agreements are signed without any knowledge of their rights. However, the Lindo court simply did not care. The Court did not care about the general principle in admiralty, which is that a seaman is a ward of the Court, which means that the Court should provide special protection for the seaman, recognizing that they are a class of people that are disadvantaged and taken advantage of.
The Lindo court enforced the arbitration agreement and choice-of-law clause, requiring the seaman to go to Nicaragua to arbitrate his claims under Bahamian law. What happened to the Jones Act? What happened to Lindo’s rights to a jury trial? What happened to the principle that Lindo is a ward of the court entitled to special protections? What happened to recognizing that ship owners are able to put whatever they want in employment agreement? It is simply unconscionable to allow the cruise ship companies to escape their obligations under the applicable United States law by the stroke of a pen! None of this bothered the Eleventh Circuit Court of Appeals in rendering the Lindo decision.
This is a severe blow to seamen’s rights. Seamen have relied on the Jones Act since 1920 to seek recovery for their personal injuries suffered in the course and scope of their employment. It is a mechanism for them to make the workplace safer for all seamen. By holding the ship owner accountable under the Jones Act, ship owners have an incentive to try to make the workplace safer for everyone. Seamen are hired from third world countries. They leave their families behind. They make tremendous sacrifices to try to provide for their families. They give up everything to come work onboard a ship and spend 9 to 10 months a year away from their families. When they suffer an injury at work, they are most likely never going to work again onboard a ship. They lose their capacity to earn money. It is a life changing experience for them. They are now faced with the prospect of losing the main mechanism they have always had to seek compensation for their injuries. This decision is extremely unfair, and the reasoning of the decision makes no sense. The Court does not refer to the prior United States Supreme Court decision in Hellenic Lines Ltd. v. Rhoditis, 398 US 306, 310 (1970) which dealt with the issue as to when United States law applied to seamen claims that involve a foreign seaman suing a foreign ship owner and a foreign flag vessel. Most of the shipping industry now flies foreign flags, and all of the cruise ship companies do. Cruise ship companies, even though their base of operations are in the United States, fly foreign flags, such as the flag of the Bahamas or Panama. They do so to escape United States taxes and labor laws, and other regulations of the United States. They benefit tremendously from being able to do this. The Supreme Court in Rhoditis said if you are going to enjoy the benefits of operating in the United States, and the associated profits, then you must be subject to the obligations of the United States law.
Accordingly, in Rhoditis, even though there was a choice-of-law clause in the seaman’s employment agreement that required him to bring his case in the country of Greece, under the Greek compensation system, the Supreme Court of the United States held that the Jones Act was applicable due to the substantial base of operation the ship owner had in the United States. This has always been the law. The cruise ship companies are subject to the United States law, including the Jones Act, based on their substantial base of operations in the United States. This Lindo decision appears to allow the ship owner to insert a provision in the contract which relieves the ship owner of its obligations under the Jones Act, which is a very special statute enacted for the protection of seamen.
The Lindo decision was a two to one decision, and the decent is definitely worth reading, and is well written and reasoned. Hopefully, the Eleventh Circuit, on a re-hearing, will consider hearing the case banc, having the entire Eleventh Circuit Court panel listen to these issues and hopefully revisit the conclusions made by the Lindo panel. This decision is simply wrong, and contrary to prior case law, and contrary to the expressed language of the federal statute, the Jones Act.
We will keep a close eye on further developments. We understand that the seaman’s attorney is going to move a re-hearing, and a re-hearing banc. We anticipate the next step after that, if the re-hearing route is unsuccessful, will be an attempted visit to the Supreme Court of the United States regarding these issues.
Our firm continues to be safety advocates for both passengers and crewmembers injured at sea.