Abandoning its long-held position on a maritime worker compensation issue, the U.S. Court of Appeals for the Third Circuit has ruled that judges may not alter terms of a seafarer’s labor contract without evidence that negotiations were unfair.
In a precedential, en banc decision issued Monday, the court upheld a ruling from the U.S. District Court for the District of New Jersey in an overtime dispute involving a crew member on a container ship who became ill after setting sail form the Port of Newark. Monday’s ruling brings the Third Circuit in line with several other federal appeals courts but overrules the court’s 1990 decision in Barnes v. Andover Co. L.P.
When the Third Circuit issued the Barnes ruling, the decision was a departure from the rulings of the First, Sixth and Ninth circuits in similar cases. Those courts did not find federal labor laws pre-empted maritime maintenance law, but saw the policy behind labor laws as “sufficiently weighty and clear to prevent courts from modifying a bargained-for rate of maintenance in a union contract.”
Monday’s ruling concerned James Joyce, who signed a contract to work on the Maersk Ohio for a three-month period in 2012. Not long after setting sail, Joyce became ill and was diagnosed with kidney stones. After an examination in a hospital in Spain, he was sent back to the United States.
Joyce was a member of Seafarers International Union, and his contract with shipping company Maersk referenced his union’s collective bargaining agreement with the company. His contract provided that a seafarer who is medically discharged before completing his contract is entitled to base pay for the rest of the contract term, but not overtime pay for hours he would have worked if not for his illness. In 2013 Joyce filed suit in the District of New Jersey, claiming that the contract’s provisions on unearned wages violated general maritime law.
Joyce cited Barnes, which held that when a seaman becomes ill or is injured during a voyage, the ship’s owner is obligated to provide him food, lodging and treatment until the ship returns to shore.
U.S. District Judge Esther Salas disagreed and rejected Joyce’s claim for unearned overtime pay. In Salas’ June 2016 ruling, she rejected Joyce’s claim that the labor contract improperly limited unearned wages to base pay.
Joyce appealed. In July 2017 the court concluded, sua sponte, that the initial hearing in the case should be argued en banc because it was controlled by a prior decision of the court that was under reconsideration. In the Barnes decision of 1990, the court said a ship owner’s common-law obligation to provide for crew members overrides a labor contract that provided insufficient compensation for living expenses.
Third Circuit Judge Kent Jordan, writing for the court in Joyce v. Maersk Line Ltd., said the Barnes ruling found no basis for labor contracts to override common-law protections for seafarers. But, he wrote, the nation’s labor policy is built on the premise that employees can bargain most effectively for improvements in wages, hours and working conditions by pooling their economic strength and acting through freely chosen labor organizations.
The court said that labor policies that undergird federal labor law, and the nature of the collective bargaining process, require adherence to the terms of a collective bargaining agreement, including rates established for maintenance and unearned wages.
The appeals court said the need for judicial intervention to protect seamen had been substantially lessened, and “thus the common-law basis for requiring courts to disregard the freely negotiated agreements of private parties and to refuse to enforce the terms of the collective bargaining agreement also carries substantially less force.”
John Walsh of Freehill Hogan & Mahar in New York, who represented Maersk, said the circumstances giving rise to the present case were very common. “I’m happy the Third Circuit aligned itself with the other circuits,” he said.
Dennis O’Bryan of O’Bryan Baun Karamanian in Birmingham, Michigan, who represented Joyce, did not return a call about the case.