Arbitration Agreements in Seamen’s Employment Contracts

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention, incorporated into federal law via the Federal Arbitration Act (FAA)), specifically excludes its applicability to seamen’s employment contracts, stating that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Lately, some federal district courts have concluded that if a seaman’s contract of employment notes that to whatever extent the FAA does not apply, a particular state’s law should be used in its stead, and to the extent that a state’s law allows arbitration in employment contracts of seamen, that a seaman’s Jones Act dispute should therefore be considered arbitral.  

This approach may see selective success across some States, but should not be considered as a green light for arbitration clauses in US seamen’s contracts of employment going forward, because, inevitably, these arbitration clauses will face federal and Constitutional challenges, which should pre-empt any particular state’s law’s application.  

A Federal Court in Massachusetts Applied New York State Law to Enforce Arbitration  

In Trejo v. Sea Harvest, Inc., the United States District Court for the District of Massachusetts determined that a commercial fisherman’s Jones Act complaint was subject to arbitration under New York State law. The Court granted the defendant-employer’s motion to compel arbitration and allowed an arbitrator to determine if the seaman’s claim was arbitral. 

That Court considered the seaman’s employment contract, which stated in relevant part that “... If this agreement to arbitrate is determined to be exempt from enforcement under the Federal Arbitration Act, the laws of the State of New York shall be applied in determining the validity and enforceability of this agreement…”  From there, the Court concluded that New York State law favors arbitration and leaves the decision of arbitrability of disputes to the arbitrator, so granted the motion to dismiss and compel arbitration.  

Constitutional Considerations  

In the United States, maritime disputes are governed generally by what is referred to as ‘general maritime law,’ which represents the cumulative doctrinal, precedent-established, and legislative admiralty laws that exist on a federal level. Where there is no applicable federal law, general maritime supplants with relevant state law, depending on the state law applicable to the dispute. Sometimes the state whose law will supplant any gaps in federal maritime law is determined by the jurisdiction of the matter, and sometimes by a choice of law clause in a contract, as in Trejo. 

However, what represents a gap in federal law is not as clear as one may assume. In Trejo, the Court characterized its decision as a dispute over the arbitrability of a seaman’s Jones Act claim, not a dispute over whether U.S. federal law even allows seamen’s claims to be arbitrated. Instead of viewing the FAA ‘exemption’ as a statement that seamen’s employment contract disputes cannot be arbitrated, they viewed it as an expression of procedure –that the FAA may not be used to enforce an arbitration agreement, but that perhaps a state’s law may allow enforcement. Thus, the Trejo Court never considered whether other federal maritime laws exist that would prohibit arbitrating a seaman’s Jones Act claim. 

If the FAA’s exemption language were interpreted as a ban on the arbitrability of contracts of employment for seamen, instead of a mere ban on the enforcement of those agreements where they contained arbitration provisions, this would apply over any choice of state law due to the Constitution’s Supremacy Clause.  

The United States Supreme Court has recently considered the FAA exemption as it applies to the general class of transportation workers, regardless of particular job title. See Bissonnette et al. v. LePage Bakeries Park St., LLC et al. 144 S. Ct. 905 (2024). Though the Court there was not considering whether any other state’s laws would allow arbitration of a transportation worker’s claim, the underlying facts were the same – a transportation worker alleged their claim was not arbitrable because their employment agreement arbitration clause was exempt from the FAA. The underlying district and appeals courts both compelled arbitration on the notion that the plaintiff-employee was in the bakery industry, not the transportation industry. The Supreme Court disagreed and held that the pedantry of job titles determining FAA exemption was purposefully obtuse – the entire class of ‘transportation workers’ were exempt from FAA enforcement. The opinion addressed arguments that their view of ‘transportation workers’ as a class would be too sweeping and wide, and effectively mean that far too many employees nationwide would be entitled to litigious resolution over arbitration. No arguments were presented that a state’s law might allow for arbitration of a transportation worker’s employment-related claims, presumably because the FAA’s exemption is meant to represent that under federal law certain kinds of workers cannot be forced to arbitrate, not that federal law merely lacks the procedural enforcement mechanism to make them do so.  

Even if the Trejo Court’s reading of the FAA exemption were accurate, the Court’s next consideration should have been whether other federal law exists that may prevent arbitration of a seaman’s claims, instead of whether state law was needed to determine the enforceability of the arbitration provision. 28 U.S. § 1333(1) states that “The district courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.” (emphasis added). This has been interpreted by courts to mean that seamen-suitors are allowed to pursue their claims in state courts because state courts provide a remedy/right they are entitled to – a jury.¹ If seamen are entitled to a jury, it stands to reason that they cannot be compelled to arbitrate against their will.²  

Conclusion 

US maritime law axiomatically favors uniformity. Additionally, for better and worse, US seamen are still viewed as ‘wards of the court’. To the extent that the Trejo interpretation of the FAA exemption will result in a slew of non-uniform decisions regarding arbitrability of seamen’s employment-related claims via the non-essential supplanting of federal law with various states’ laws on what classes of workers and claims may be subject to arbitration, this will result in a net-negative to the body of maritime law in the United States. While some employers may temporarily benefit from a particular district’s procedural interpretation of the FAA’s exemption, it is likely that other courts may take a more plenary view of the purpose of the FAA’s wording. 

 

 

¹ Note that a case being filed under admiralty jurisdiction is otherwise (a) exclusively federal, and (b) without a jury. 

² This analysis does not apply to post-incident arbitration agreements where seamen willingly forego their right to jury in exchange for something (usually advanced wages).