Labor & Employment Law Daily Father of Royal Caribbean worker who died from COVID-19 must arbitrate claims against cruise line (1)
Monday, November 2, 2020

Father of Royal Caribbean worker who died from COVID-19 must arbitrate claims against cruise line

By Kathleen Kapusta, J.D.

The father claimed that Royal Caribbean failed to implement social distancing requirements and encouraged crewmembers to “attend parties, shows, events, and activities.”

The father of a Royal Caribbean employee who died from COVID-19 allegedly as a result of the cruise ship’s negligence and failure to timely implement social distancing requirements must arbitrate his claims against the cruise line for, among other things, wrongful death and failure to provide prompt, proper, and adequate medical care for his son. Granting the company’s motion to compel, a federal court in Florida found that the complaint’s allegations did not clearly show the employee had been terminated at the time he contracted COVID-19, which undermined the plaintiff’s claim the arbitration agreement was inapplicable (Isanto v. Royal Caribbean Cruises, Ltd., October 23, 2020, Bloom, B.).

No restrictions. As personal representative of his son’s estate, the plaintiff claimed in his complaint against Royal Caribbean that although his son’s employment contract or collective bargaining agreement had a projected end date of March 21, 2020, he was terminated somewhere around March 13. On March 14, the complaint alleged, passengers aboard the ship were disembarked due to COVID-19, while the employee and other crewmembers were allowed to roam about the vessel without any restrictions for the next two weeks.

Death and lawsuit. The employee, however, began to suffer from flu-like symptoms sometime around March 23 and a week later, he was taken off the ship and transferred to a hospital where he passed away the following month. According to the complaint, Royal Caribbean did not implement any social distancing requirement aboard the ship until March 29, after the employee became ill. Alleging that he contracted the virus “as a result of Defendant’s negligence and/or gross negligence and/or intentional conduct,” the plaintiff asserted claims for Jones Act wrongful death; unseaworthiness; failure to provide prompt, proper and adequate medical care; and failure to provide maintenance and cure.

The Convention. Royal Caribbean then moved to compel arbitration under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards pursuant to the arbitration provision in the employee’s “Sign-On Employment Agreement,” which provided that all grievances must be resolved by arbitration under Bahamian law, the law of the ship’s Flag State. Implemented by Chapter 2 of the Federal Arbitration Act, the Convention requires courts of signatory nations, such as the United States, to give effect to private arbitration agreements and enforce arbitral awards made in signatory nations, the court observed.

Time detail report. The plaintiff argued, however, that under the “well pled facts,” there was no valid, binding arbitration clause because Royal Caribbean terminated the employee on March 13 before the projected end of the employment relationship, and thus the employment agreement’s arbitration clause did not apply. But according to Royal Caribbean, its punch-in and punch-out time detail report showed the employee continued to work until March 23, and there was no indication he had been terminated at any time before his medical sign-off on March 30.

Despite the plaintiff’s contrary contention, the court found the complaint did not clearly allege that the arbitration clause was inapplicable. While it did allege the employee was terminated on March 13, it also alleged he contracted COVID-19 “while working” aboard the ship and that “at all times material” he was a crewmember who “worked” for Royal Caribbean and contracted COVID-19 “while working” on the ship. Thus, said the court, the complaint “does not uniformly set forth allegations that bar the potential application of the arbitration agreement.”

And while Royal Caribbean argued the allegation the employee’s employment was terminated was “wholly unfounded” and advanced solely “to avoid the mandatory arbitration provision of the Employment Agreement,” the court refused to consider the time detail report. Not only was it not part of the complaint, the plaintiff had not contested the authenticity of the employment agreement but instead contested the time detail report, which Royal Caribbean had attached to its motion to compel.

Agreement to arbitrate arbitrability. Turning to whether the parties agreed to arbitrate, the court noted that even if it overlooked the pleading issues and construed the allegations so that the employee’s job was terminated on March 13, “the matter would still be subject to arbitration.” Pointing to the broad language of the employment agreement—which stated that “The arbitrator, not any federal, state or local court or agency shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this agreement is void or voidable and as to choice of law,”—the court found that gateway issues of arbitrability, including the applicability and enforceability of the arbitration agreement, were for the arbitrator to decide.

Further, the court noted, “other courts have determined that disputes under similar broadly-worded arbitration agreements are subject to arbitration even though the plaintiffs, like Plaintiff here, argued that the employment agreement had terminated and thus the arbitration clauses did not apply.” Moreover, said the court, rather than addressing the employment agreement’s delegation clause, the plaintiff focused on the allegation the employee was terminated on March 13, and thus the employment agreement did not apply. But this allegation, said the court, was not dispositive of whether the action was subject to arbitration.

And as it had already pointed out, the complaint’s allegations did not clearly show the employee was terminated at the time he contracted COVID-19, “which alone displaces Plaintiff’s unadorned allegation that the arbitration provision is inapplicable because the employment contract had ‘expired’ when Decedent’s employment was terminated.” Accordingly, the court found Royal Caribbean carried it initial burden to show an agreement to arbitrate was subject to the Convention.

Affirmative defenses. Turning to the applicability of the Convention’s limited defenses, the court noted that at the arbitration-enforcement state, the only defenses are that the arbitration agreement is “null and void, inoperative, or incapable of being performed.” The plaintiff, however, argued that the arbitration agreement was inapplicable because the employee had been terminated before the projected employment end date expired, the employment agreement did not survive termination, and the court, not the arbitrator, must decide whether the arbitration agreement applied. But as it had already explained, the court again pointed out that these “defenses” did not bar arbitration here.

Jurisdictional claim. As to the plaintiff’s assertion it lacked jurisdiction, the court noted that contrary to his claim that removal was improper because Jones Act claims cannot be removed as a matter of law, Eleventh Circuit precedent establishes that a seaman’s Jones Act claim covered by an arbitration clause falling under the Convention may be removed to federal court. So too was the plaintiff’s assertion that the Jones Act controlled over the Convention inconsistent with Eleventh Circuit case law that expressly approves of removing Jones Act claims under the Convention.

Null and void. Also rejected was the plaintiff’s assertion that the arbitration agreement was void and unenforceable under the Eleventh Circuit’s 2009 decision in Thomas v. Carnival. However, that decision was not the binding law of the circuit, Lindo v. NCL (Bahamas), Ltd., was. And while the plaintiff also argued that the agreement was null and void because it did not provide him with any meaningful relief, that “is not a valid defense at this stage and is, thus, premature.” Accordingly, the court ordered that the lawsuit be submitted to binding arbitration in accordance with the arbitration clause in the employment agreement.

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