Have employers hijacked federal protections for seafarers enacted by Congress by using mandatory arbitration clauses in their employment contracts for those who work aboard U.S. based vessels? On March 23, 2015, CCL filed an amicus curiae brief on behalf of the American Association for Justice asking the Supreme Court to halt this erosion of federal statutory rights by accepting Pysarenko v. Carnival Corp., Docket No.14-12378, for review.
Vitalii Pysarenko, a citizen of Ukraine (now a permanent resident of the U.S.), was employed by Carnival Cruise Lines, headquartered in Miami. He was injured while moving heavy equipment aboard the Carnival Dream in Port Canaveral, Fla. Pysarenko brought suit under the Jones Act and the Seamen’s Wage Act. Carnival moved to compel arbitration, alleging that the manadory arbitration provision in Pysarenko’s employment contract was enforceable under Chapter 2 of the Federal Arbitration Act, which implements the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, including those between U.S citizens and citizens of foreign countries. The district court granted Carnival’s motion to compel arbitration in Monaco while applying Panamanian law as provided in the employment contract. The Eleventh Circuit affirmed.
AAJ’s amicus brief supporting Pysarenko’s Petition for Certiorari, prepared by CCL Senior Counsel Jeffrey R. White, emphasized the Court’s historic role in protecting the rights of seafarers, long deemed “wards of the admiralty.” That role remains essential with respect to the cruise industry, which makes use of “flags of convenience” to evade safety regulations. AAJ also pointed out to the Court that the enforcement of mandatory arbitration agreements under Chapter 2 of the FAA also extends to U.S. citizen seamen who hire onto foreign vessels and to U.S. seamen working aboard U.S. vessels, where the employment contract has some connection with a foreign nation.
Enforcement of the arbitration provision under Chapter 2 of the FAA raises three important issues that should be resolved by the Supreme Court. First, enforcement violates § 1 of the FAA, which states that “nothing herein contained shall apply to contracts of employment of seamen.” Second, enforcement violates the Federal Employers Liability Act, 45 U.S.C. § 55, which is incorporated into the Jones Act and states that any contract “the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void.” Third, enforcement violates the Court’s precedents stating that federal statutory rights may be the subject of arbitration only where the party may vindicate his federal rights in the arbitral forum. In this case, because the laws of Panama offer no rights to seafarers comparable to the Jones Act and Seamen’s Wage Act, the mandatory arbitration provision operates as a prohibited prospective waiver of federal statutory rights.