December 21, 2017 Practice Points

Third Circuit Reverses Rule Permitting Piecemeal Review of Seafarer’s CBAs

Tips from the Joyce decision, for labor attorneys and attorneys for shipping employers alike.

By Raz Barnea

More than a quarter century ago, the Third Circuit Court of Appeals decided Barnes v. Andover co., L.P., 900 F.2d 630 (3d Cir. 1990). This decision held that common law seaman’s remedies permitted courts to conduct piecemeal review and modification of “maintenance,” even when specific provisions for “maintenance” were covered by collective bargaining agreements (CBAs).

Barnes cut against decisions from the First, Sixth, and Ninth Circuits, all of which had ruled that so long as collective bargaining agreements were fair and real negotiations had produced the final rates of maintenance, cure, and unearned wages, then admiralty courts were obligated to uphold the terms of those agreements. By 2017, the Third Circuit stood alone on this issue. But on December 4, 2017, the Third Circuit published the en banc decision for Joyce v. Maersk Line, Ltd., No 16-3553 (3d Cir. Dec. 14, 2017). With Joyce, the Third Circuit joined the rest of the Federal Judiciary and limited its authority to modify mariners’ collective bargaining agreements.

The Facts of Joyce

The improbably named James Joyce was a member of the Seafarers International Union. Prior to shipping out as a bosun with the MAERSK OHIO for a three month voyage, he signed “Articles of Agreement,” which had incorporated by reference a collective bargaining agreement negotiated between Seafarers International and Maersk. The CBA governed the terms of all unionized seafarers on Maersk Lines.

Somewhere between Newark, New Jersey, and Western Europe, Joyce fell ill. Kidney stones required his repatriation to the United States before the completion of the voyage.

The CBA between Maersk and Seafarers International provided that if a seafarer was medically discharged before conclusion of the contract, the seafarer would be entitled to unearned wages for the remaining period of the contract. Overtime wages were not included in the definition of unearned wages.

Joyce filed a putative class action in the U.S. District Court of the District of New Jersey to recover overtime wages as part of the traditional mariner’s remedy of unearned wages. His claim appealed to Barnes and argued that by withholding overtime wages, the CBA violated general maritime law. The district court disagreed, distinguishing Barnes by holding that its scope was limited to maintenance, a different remedy of the “Seaman’s Trifecta” of maintenance, cure, and unearned wages. Joyce appealed.

The Third Circuit Overturns Barnes

Faced with Joyce’s appeal, the Third Circuit Court of Appeals revisited, and then expressly overruled Barnes. The court agreed with Joyce that overtime wages could be argued as part of the “unearned wages” a seaman could reasonably expect and sue to recover under the general maritime law. However, the court acknowledged that Barnes rested on the paternalism that allowed admiralty courts to impute a “peculiarity” to seafarer’s lives and consider mariners to be “generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence.” Barnes at 631, (quoting Harden v. Gordon, 11 F. Cas. 480, 483 (C.C.D. Me. 1823) (No. 6,047)). The Third Circuit overruled Barnes with the recognition that that times have changed and seafarers are in less need of courts to aggressively intervene on their behalf. The Court observed that with the rise of federal labor regulations, organized labor, and other extrajudicial means of looking after the interests of seafarers, the need for judicial intervention is much reduced. With the acknowledgment that the need for judicial intervention is slighter now than in the past, the Third Circuit relinquished its right to freely rewrite piecemeal provisions of collective bargaining agreements so long as the agreements as a whole are reasonable.

But the Third Circuit’s decision should not be seen as giving either shipping companies, or seafarer’s unions a free hand to negotiate for (or negotiate away) anything or everything. Although Barnes is no longer good law in the Third Circuit, the common law rights of seafarers to recover maintenance, cure, and unearned wages has not been abrogated, nor can it be. Although the Third Circuit adhered to a CBA while also acknowledging that the CBA likely trimmed the quantum of recoverable unearned wages under the common law, the court did not signal that it would reflexively adhere to the terms of every CBA. Instead, the court found that this particular CBA was enforceable.

To maintain the ability to review future CBAs, the court expressly adopted two seafarer’s protections afforded by other circuits. First, if a court were faced with persuasive facts suggesting that the process of negotiation of a CBA was fatally flawed, or that the final CBA was unfair as a whole, then that hypothetical court could modify or discard the agreement. Second, the court reiterated that while modern CBAs can (and do) establish the contours of seafarer’s benefits, and these ultimate benefits might reduce the total sum that might otherwise be recoverable under the general maritime law, no enforceable CBA can entirely abrogate any of the three traditional seafarer’s remedies.

Implications for Attorneys

The Third Circuit’s decision in Joyce brings uniformity to the Federal Admiralty Judiciary as far as the modifiability of collective bargaining agreements are concerned. The implications for admiralty lawyers practicing in the Third Circuit follow this decision. Because Third Circuit courts will no longer engage in ad hoc piecemeal review and modification of the terms of a CBA, the terms of a CBA become more important. Labor lawyers working on behalf of seafarers are advised to diligently ensure that the final CBA provides suitable remedies for injured seafarers. Attorneys working on behalf of shipping employers should both audit the terms of the CBA to ensure it contains provisions for maintenance, cure, and unearned wages; and document the process by which CBA’s are negotiated to protect against future challenges alleging that the process was defective.

Raz Barnea is an associate with Cozen O'Connor in Seattle, Washington.

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