The 9th Circuit Court of Appeals had ruled that cruise lines and the unions who negotiate labor contracts on behalf of the “seamen” who work on cruise ships can agree that all disputes go to arbitration, and that employment contracts that include arbitration clauses are enforceable.
In a recent case, sailors argued that federal laws (some dating back to the late 1700s) protecting seamen from their captains prohibited the use of arbitration agreements. They asked the court to let them sue under California .
Recent case: Michael Rogers, a citizen of Trinidad and Tobago, and Hulya Kar, a citizen of Turkey, worked on cruise ships operated by Royal Caribbean Cruises. Rogers worked as a cabin boy and stateroom attendant. Kar worked as an assistant waiter.
Both employees signed written employment agreements setting their wages significantly lower than required under California labor laws. The agreements also included a provision requiring arbitration of all disputes under a collective-bargaining agreement between Royal Caribbean and the Norwegian Seafarers’ Union.
The men tried to sue the cruise line under California labor laws, but the 9th Circuit Court of Appeals rejected their claims and said they were bound by the employment agreement they had signed. (Rogers v. Royal Caribbean Cruise Line, No. 07-55071, 9th Cir., 2008)
Final note: Always have counsel review any arbitration and employment agreements you prepare to make sure they comply with relevant state and federal laws.
- Close supervision could result in constructive discharge claim
- Operate in several states? Beware arbitration pacts referencing states other than California
- 2009 is 'year of employee benefits'; more in the pipeline for 2010
- Small biz retirement plans: Which is best?
- Use new EEOC guidance to review severance agreements