Balen v. Holland America Line Inc.

• Decision Date: 02 October 2009
• Docket Number: No. 07-36011.,07-36011.
• Citation: 583 F.3d 647
• Parties: Romeo BALEN, individually, and on behalf of all others similarly situated, Plaintiff-Appellant, v. HOLLAND AMERICA LINE INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

583 F.3d 647

Romeo BALEN, individually, and on behalf of all others similarly situated, Plaintiff-Appellant, v. HOLLAND AMERICA LINE INC., Defendant-Appellee.

No. 07-36011.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 6, 2009.

Filed October 2, 2009.

Gregory M. Miller, Carney Badley Spellman, P.S., Seattle, WA, for the plaintiff-appellant.

Stephen R. Rummage and Roger A. Leishman, Davis Wright Tremaine LLP, Seattle, WA, for the defendant-appellee.

Appeal from the United States District Court for the Western District of Washington, Ricardo S. Martinez, District Judge, Presiding. D.C. No. CV-07-00645-RSM.

Before KIM McLANE WARDLAW, RICHARD A. PAEZ, and N. RANDY SMITH, Circuit Judges.

N.R. SMITH, Circuit Judge:

Romeo Balen, individually and on behalf of those similarly situated, appeals the district court's order granting Holland America Line Inc.'s ("HAL") motion to compel arbitration. Balen contends that his claims cannot be resolved through arbitration, because (1) United States law does not permit the arbitration of claims brought under the Seamen's Wage Act, 46 U.S.C. § 10313 ("Wage Act") and (2) a valid arbitration agreement did not cover his claims against HAL. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

Claims under the Wage Act are subject to arbitration pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention"). United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, art. II, Dec. 29, 1970, 21 U.S.T. 2517 [hereinafter Convention]. Balen was subject to an arbitration agreement contained in the Collective Bargaining Agreement between his union and his employer. This arbitration agreement was valid and enforceable under the Convention.

I. BACKGROUND

The Philippine Overseas Employment Administration ("POEA"), a division of the Department of Labor and Employment of the Republic of the Philippines, closely regulates the employment of Filipino seamen by foreign corporations. Foreign employers must go through a POEA-licensed employment agency to hire workers. The POEA approves and administers standard employment contracts of the Filipino seamen. The POEA-approved contracts include the POEA's Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean Going Vessels ("Standard Terms").

Section 3 of the Standard Terms, titled "Free Passage from the Point of Hire to the Port of Embarkation" states: "[t]he seafarer shall join the vessel or be available for duty at the date and time specified by the employer. The seafarer shall travel by air or as otherwise directed at the expense of the employer."

Section 29 of the Standard Terms concerns "Dispute Settlement Procedures." It states:

In cases of claims and disputes arising from this employment, the parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If the parties are not covered by a collective bargaining agreement, the parties may at their option submit the claim or dispute to either the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If there is no provision as to the voluntary arbitrators to be appointed by the parties, the same shall be appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and Employment.

Arbitration of all claims by Filipino overseas seafarers is an integral part of the POEA's mandate to promote and monitor the overseas employment of Filipinos and safeguard their interests.

In 2004, HAL drafted a Gratuity and Beverage Service Charge Plan ("Gratuity Plan"), under which it would bill passengers for a daily gratuity charge. Under the Gratuity Plan, employees would have the right to share in the gratuities charged to passengers. HAL guaranteed a minimum gratuity amount for each person, regardless of actual payment by passengers. With the increased gratuity compensation, HAL set a lower base pay rate. This Gratuity Plan also included a provision that required participants to reimburse HAL in monthly installments for deployment costs, including travel expenses incurred by HAL, in qualifying these seafarers to work overseas. Under this plan, participants would earn more than they received previously.

Because the Gratuity Plan modified the existing collective bargaining agreement ("CBA") between HAL and the Filipino seamen's union (Associated Marine Officers' and Seamen's Union of the Philippines ("AMOSUP")), HAL, acting through its agent, United Philippine Lines, Inc. ("UPL"), a POEA-licensed employment agency, entered into negotiations regarding its Gratuity Plan with AMOSUP. AMOSUP represented Balen and other Filipino seafarers. Under Philippine law, AMOSUP could enter into such agreements without POEA's approval if the benefits were greater than those provided in the Standard Terms. The CBA was approved by AMOSUP, and AMOSUP also submitted the CBA to the POEA, who marked it with a "received" stamp and the attached payscale with an "approved" stamp.

Balen was employed by HAL from September 2005 through March 2006 as a beverage attendant. Before he left the Philippines in September 2005, Balen signed a document acknowledging the terms of the Gratuity Plan. Balen could not, however, fully afford to pay the $2,119 travel expenses in the time frame demanded by HAL. Balen was therefore discharged in March 2006.

On April 27, 2007, Balen filed suit in U.S. District Court for the Western District of Washington, claiming that HAL (1) breached its contract when it required him to pay travel expenses and (2) violated the Wage Act. HAL moved to compel arbitration and dismiss Balen's complaint pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure. The district court granted the motion, finding that Balen's Wage Act claims were subject to arbitration under the Convention. The district court also found that (1) the CBA covered Balen's claims against HAL and (2) Section 29 of the Standard Terms made his claims subject to arbitration.

II. DISCUSSION

We review de novo the district court's decision to grant or deny a motion to compel arbitration. Bushley v. Credit Suisse First Boston, 360 F.3d 1149, 1152 (9th Cir.2004). The underlying factual findings are reviewed for clear error. See Ticknor v. Choice Hotels Int'l, Inc., 265 F.3d 931, 936 (9th Cir.2001). Balen contends the district court erred in compelling arbitration, because (1) the Convention does not apply to Wage Act claims and (2) the arbitration agreement is invalid. We disagree.

A. The Convention requires enforcement of arbitration agreements.

It is well-settled that "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). "[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration...." Id. at 24-25, 103 S.Ct. 927. The Supreme Court has consistently recognized "the emphatic federal policy in favor of arbitral dispute resolution," a policy that "applies with special force in the field of international commerce." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). Article II(1) of the Convention also recognizes the importance of arbitral resolution. It provides that "[e]ach Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration." Convention, supra, art. II.

1. The Federal Arbitration Act's Exemption Clause

Balen contends that the district court erred in granting HAL's motion to compel arbitration, because the Federal Arbitration Act (FAA) exempts foreign arbitration agreements that would otherwise be covered by the Convention. We disagree.

Like the Convention, 9 U.S.C. § 202, the FAA applies to maritime contracts in commerce. Unlike the Convention, the FAA includes a provision exempting "contracts of employment of seamen" from domestic arbitration. 9 U.S.C. §§ 1, 2. However, in Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148, 1154 (9th Cir.2008), we addressed whether the FAA's exemption clause "applies to arbitration agreements that would, in the absence of the exemption clause, be covered by the Convention." We held that it did not. Id. Rogers is controlling on this issue, and we are bound to follow it. See, e.g., Miller v. Gammie, 335 F.3d 889, 899 (9th Cir.2003) (en banc).

2. 46 U.S.C. § 10313

Balen contends the district court erred in compelling arbitration, because U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 91 S.Ct. 409, 27 L.Ed.2d 456 (1971), prohibits arbitration agreements from divesting courts of jurisdiction over seafarer wage disputes under 46 U.S.C. § 10313. He argues that § 10313 provides that the courts are available to seamen to enforce the rights guaranteed by this section. In Arguelles, the Supreme Court concluded that individual seamen could choose between pursuing arbitral or judicial remedies, because Congress had not clearly made arbitration mandatory. Arguelles, 400 U.S. at 357-58, 91 S.Ct. 409. Again, Rogers precludes this argument. After reviewing Arguelles and the provisions under 46 U.S.C. § 10313, we held in Rogers that the Convention "specifically and expressly compels federal courts to enforce arbitration agreements. Therefore, Arguelles does not alter our...