Lobo v. Celebrity Cruises, Inc., 2007 U.S. App. LEXIS 13141 (11th Cir. June 7, 2007)

Terra Bowling, J.D.

Inacio Lobo worked aboard Celebrity Cruises as a stateroom attendant. As part of his duties, Lobo was assigned to clean passenger cabins with the help of an assistant. Cruise passengers tipped Lobo for his services; however, the cruise company required Lobo to pay his assistant $1.20 per passenger per day out of the gratuities that he received. Alleging that the requirement violated the terms of his employment, as well as the Seaman’s Wage Act and a prior U.S. Supreme Court decision, U.S. Bulk Carriers, Inc. v. Arguelles,1 Lobo filed suit.

Arbitration Clause
The terms of Lobo’s employment were governed by a collective bargaining agreement, which specified that disputes arising on the vessel or in connection with the agreement must be sent to arbitration. Lobo argued that the Seaman’s Wage Act and Arguelles rendered the arbitration clause invalid.

The Seaman’s Wage Act gives seamen the right to resolve wage disputes in federal courts. In Arguelles, a seaman successfully argued that the Seaman’s Wage Act was not displaced by the Labor Management Relations Act (LMRA), which “provides a federal remedy to enforce grievance and arbitration provisions of collective-bargaining agreements.”2 Lobos claimed that the Arguelles decision permitted him to sue in federal court in lieu of arbitration.
The federal district court dismissed his claim, finding that an international treaty adopted by the U.S., the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Convention), requires states to recognize and enforce international arbitration agreements and superseded the Seaman’s Wage Act. Furthermore, the court concluded that Arguelles did not apply to Lobos’ claim, because Arguelles was heard before the Convention was implemented. The court, therefore, held that Lobo was required to resolve his claim through arbitration.

Exempt?
On appeal to the Eleventh Circuit, Lobos again contended that the Arguelles decision effectively exempted seamen’s arbitration agreements from the Convention. The Eleventh Circuit disagreed. The court noted that the Supreme Court in Arguelles did not consider the effect of the Convention, because the Convention was implemented only a few days after the briefing and oral argument. The appellate court also recognized that there is nothing in the language or the legislative history of the LMRA to indicate that it would supersede the right to sue in federal court. On the other hand, the Convention compels federal courts to direct qualifying disputes to arbitration. The court reasoned that invalidating the arbitration provision in Lobos’ terms of employment would not conform to Congress’ intent in enacting the Convention. The court affirmed the district court’s ruling, leaving Lobo to seek relief through arbitration.

Endnotes
1. 400 U.S. 351 (1971).
2. Id. at 352.