A recent federal court decision analyzes the type of claims and circumstances subjecting a foreign cruise ship worker to arbitration.
Rutledge v. NCL (Bahamas) Ltd., et al involved a motion to compel arbitration under the Convention on the Reorganization and Enforcement of Foreign Arbitral Awards ("Convention"). The plaintiff, Meredith Rutledge, was employed by Defendant Norwegian Cruise Lines (Bahamas), Ltd.("NCL") as a photographer. The plaintiff brought a lawsuit against NCL, asserting claims that stem from two alleged incidents while employed by NCL: (1) a slip and fall incident; (2) the sexual harassment and sexual assault of plaintiff by her supervisor. The plaintiff alleged negligence, unseaworthiness, failure to pay maintenance and cure, failure to treat, and strict liability.
1. Whether the Convention Applies
Under the convention a court shall order arbitration unless: (1) the four jurisdictional prerequisites are not met; or (2) one of the Convention's affirmative defenses applies. The four jurisdictional prerequisites are: (1) there is an agreement to arbitrate in writing; (2) the agreement provides for arbitration in the territory of a signatory to the Convention; (3) the agreement arises out of a commercial, legal relationship; and (4) a party to the agreement is not an American citizen, or that the commercial relationship has some reasonable relation with one or more foreign states.
The issue in this case was whether there was a sufficient foreign nexus under the fourth jurisdictional requirement, and in particular whether the commercial relationship had some reasonable relation with one or more foreign states. The court found that the employment relationship between NCL and the plaintiff satisfied the fourth jurisdictional requirement because it envisages performances aboard. The cruise ship plaintiff was employed was outside the country for 80% of plaintiff's employment and sailed to six foreign ports during plaintiff's service. Therefore, the Convention applied to the dispute.
2. Whether Plaintiff's Claims Fall
Under The Arbitration Agreement
Because the court found that the Convention applied to plaintiff's claims, it next determined whether plaintiff's claims fell under the arbitration agreement between plaintiff and NCL. The arbitration agreement regarding any and all claims "relating to or in any way connected with the Seaman's shipboard employment with the Company."
The court first considered plaintiff's claims for Jones act negligence, unseaworthiness, and failure to pay maintenance and cure, and failure to treat. The court determined that these claims fell under the arbitration provision because they were "related to" or "in any way connected with" plaintiff's employment with NCL. As a result, the court granted the motion to compel arbitration regarding these claims.
The court next considered plaintiff's sexual harassment and sexual assault negligence and strict liability claims. The court determined that claims of negligence and strict liability stemming from sexual harassment and sexual assault do not sufficiently relate to Plaintiff's employment as a ship's photographer. Importantly, the claims would still exist even if plaintiff was not an NCL employee, but rather a guest on the cruise ship. As such, the claims were not an immediate foreseeable result of the performance of the parties' contractual duties or plaintiff's services as an employee, and the court denied the defendant's Motion to Compel on these claims.
3. Allocation of Arbitration Costs
The plaintiff also argued that the Motion to Compel arbitration should be denied because the arbitration agreement was silent as to who pays for the costs of arbitration. The court found that the mere fact that the arbitration agreement between plaintiff and NCL was silent as to which party should bear the cost of arbitration does not, by itself, render the agreement unenforceable as the allocation of arbitration costs is a proper subject for the arbitrator.
The law surrounding claims for personal injuries by cruise line workers, as well as cruise line passengers, are often complicated and intricate. Let the attorneys of Koch & Schmidt help navigate you through these dangerous shoals.