Balen v. Holland America Inc ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROMEO BALEN, individually, and on 
behalf of all others similarly
No. 07-36011
situated,
Plaintiff-Appellant,
 D.C. No.
CV-07-00645-RSM
v.
OPINION
HOLLAND AMERICA LINE INC.,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of Washington
Ricardo S. Martinez, District Judge, Presiding
Argued and Submitted
May 6, 2009—Seattle, Washington
Filed October 2, 2009
Before: Kim McLane Wardlaw, Richard A. Paez, and
N. Randy Smith, Circuit Judges.
Opinion by Judge N.R. Smith
14211
14214 BALEN v. HOLLAND AMERICA LINE
COUNSEL
Gregory M. Miller, Reed, Longyear, Malnati & Ahrens,
PLLC, Seattle, Washington, for the plaintiff-appellant.
Stephen R. Rummage and Roger A. Leishman, Davis Wright
Tremaine LLP, Seattle, Washington, for the defendant-
appellee.
OPINION
N.R. SMITH, Circuit Judge:
Romeo Balen, individually and on behalf of those similarly
situated, appeals the district court’s order granting Holland
BALEN v. HOLLAND AMERICA LINE 14215
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 pursu-
ant to the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (“Convention”).
United Nations Convention on the Recognition and Enforce-
ment 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 arbitra-
tion agreement was valid and enforceable under the Conven-
tion.
I. BACKGROUND
The Philippine Overseas Employment Administration
(“POEA”), a division of the Department of Labor and
Employment of the Republic of the Philippines, closely regu-
lates the employment of Filipino seamen by foreign corpora-
tions. 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
14216 BALEN v. HOLLAND AMERICA LINE
travel by air or as otherwise directed at the expense of the
employer.”
Section 29 of the Standard Terms concerns “Dispute Settle-
ment Procedures.” It states:
In cases of claims and disputes arising from this
employment, the parties covered by a collective bar-
gaining agreement shall submit the claim or dispute
to the original and exclusive jurisdiction of the vol-
untary arbitrator or panel of arbitrators. If the parties
are not covered by a collective bargaining agree-
ment, the parties may at their option submit the
claim or dispute to either the original and exclusive
jurisdiction of the National Labor Relations Com-
mission (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 pas-
sengers 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 pas-
sengers. With the increased gratuity compensation, HAL set
a lower base pay rate. This Gratuity Plan also included a pro-
vision that required participants to reimburse HAL in monthly
BALEN v. HOLLAND AMERICA LINE 14217
installments for deployment costs, including travel expenses
incurred by HAL, in qualifying these seafarers to work over-
seas. 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 Fili-
pino seamen’s union (Associated Marine Officers’ and Sea-
men’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 repre-
sented 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 pro-
vided 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 com-
pel 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
14218 BALEN v. HOLLAND AMERICA LINE
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 under-
lying 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 arbitra-
tion, because (1) the Convention does not apply to Wage Act
claims and (2) the arbitration agreement is invalid. We dis-
agree.
A. The Convention requires enforcement of arbitration
agreements.
[1] 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 (1983). “[A]ny doubts concerning the
scope of arbitrable issues should be resolved in favor of arbi-
tration . . . .” Id. at 24-25. 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
(1985). Article II(1) of the Convention also recognizes the
importance of arbitral resolution. It provides that “[e]ach Con-
tracting 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 con-
tractual or not, concerning a subject matter capable of settle-
ment by arbitration.” Convention, supra, art. II.
BALEN v. HOLLAND AMERICA LINE 14219
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 dis-
agree.
[2] 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 agree-
ments that would, in the absence of the exemption clause, be
covered by the Convention.” We held that it did not. Id. Rog-
ers 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 arbi-
tration, because U.S. Bulk Carriers, Inc. v. Arguelles, 400
U.S. 351 (1971), prohibits arbitration agreements from divest-
ing 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 arbi-
tral or judicial remedies, because Congress had not clearly
made arbitration mandatory. Arguelles, 400 U.S. at 357-58.
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.
14220 BALEN v. HOLLAND AMERICA LINE
Therefore, Arguelles does not alter our conclusion that the
exemption clause does not apply to the Convention Act.”
Rogers, 547 F.3d at 1157. Accordingly, Arguelles does not
preclude enforcement of the arbitration agreement under the
Convention.
3. 46 U.S.C. § 10317
[3] Balen contends that the arbitration agreement is void
under 46 U.S.C. § 10317. Section 10317 provides:
A master or seaman by any agreement other than one
provided for in this chapter may not forfeit the mas-
ter’s or seaman’s lien on the vessel or be deprived of
a remedy to which the master or seaman otherwise
would be entitled for the recovery of wages. A stipu-
lation in an agreement inconsistent with this chapter,
or a stipulation by which a seaman consents to aban-
don a right to wages if the vessel is lost, or to aban-
don a right the seaman may have or obtain in the
nature of salvage, is void.
Balen argues that the arbitration agreement is void, because
it requires him to abandon his Wage Act rights. We disagree.
[4] First, this provision does not apply to foreign vessels.
Section 10301(c) specifically states that “unless otherwise
provided, this chapter does not apply to a foreign vessel.”
While other provisions of the Merchant Seamen Protection
and Relief Act specifically state when they apply to foreign
vessels, § 10317 does not. See, e.g., 46 U.S.C. § 10313(i)
(“This section applies to a seaman on a foreign vessel when
in a harbor of the United States.”). Balen argues that the legis-
lative history of the Merchant Seamen Relief and Protection
Act indicates that § 10317 applies to seamen on foreign ves-
sels when harbored in the United States. However, because
this statute is unambiguous, we need not look to legislative
history and consider these arguments. See North Dakota v.
BALEN v. HOLLAND AMERICA LINE 14221
United States, 460 U.S. 300, 312 (1983) (noting that if the
statutory language is clear and unambiguous “that language
must ordinarily be regarded as conclusive.” (citation and
internal quotation marks omitted)).
[5] Second, there is nothing in the record indicating that
Balen would forfeit or be deprived of any substantive rights
by arbitration because, as explained below, he may bring his
Wage Act claims in the arbitration proceedings. Accordingly,
we hold that § 10317 does not invalidate Balen’s arbitration
agreement.
4. Public Policy
Balen contends that the arbitration provision is null and
void because it is contrary to public policy. Balen argues that,
by ordering arbitration, the court would eliminate a significant
and protected component of his seafarer’s wages, effectively
voiding Congress’s intent to ensure proper treatment of sea-
men (a class for which Congress enacted comprehensive leg-
islation). Again, we disagree.
[6] The Convention requires that courts must enforce an
agreement to arbitrate unless the agreement is “null and void,
inoperative or incapable of being performed.” Mitsubishi
Motors, 473 U.S. at 619 n.3 (quoting 21 U.S.T. at 2519 (citing
9 U.S.C. § 203 (conferring federal jurisdiction over Conven-
tion claims))). Like the Supreme Court, id. at 631, we also
have recognized “the strong public policy favoring arbitra-
tion,” including international arbitration. Lozano v. AT&T
Wireless Servs., Inc., 504 F.3d 718, 726 (9th Cir. 2007).
Given this strong public policy, Balen must show that the
public policy regarding the proper treatment of seafarers is
stronger than the public policy favoring the arbitration. See
Rogers, 547 F.3d at 1159. Balen has failed to meet this bur-
den.
[7] First, Balen has not established what statutory remedy
or procedure he could pursue in the United States that he
14222 BALEN v. HOLLAND AMERICA LINE
could not pursue in the Philippines. There is no reason to con-
clude that Philippine arbitrators could not consider an action
arising under the Wage Act. See Lim v. Offshore Specialty
Fabricators, Inc., 404 F.3d 898, 908 (5th Cir. 2005). Balen
has failed to establish that he could not pursue any of his stat-
utory claims in an arbitration proceeding in the Philippines.
Further, to the extent that the arbitration body in the Philip-
pines does not apply the Wage Act, Balen will be free to
return to the district court in Washington and to move to set
aside the arbitration award.
The Fifth Circuit reached a similar conclusion in Lim v.
Offshore Specialty Fabricators, Inc. There, Filipino seafarers
argued that their claims under the Fair Labor Standards Act
(“FLSA”) were incapable of resolution by the National Labor
Relations Commission (“NLRC”). Id. The NLRC is the Phil-
ippine body charged with arbitrating employment claims
under Standard Term 29. Id. The Fifth Circuit stated that
“[t]here is no reason to conclude the NLRC could not con-
sider an action arising under the FLSA, if that statute applies
to plaintiffs’ claims.” Id.
Balen’s second public policy argument is similar to that
made by the Rogers plaintiffs. The Rogers plaintiffs argued
that the arbitration provision should be invalidated, because
“public policy requires that the courts remain open to seafar-
ers for the enforcement of their wage claims” because seafar-
ers are “wards of admiralty.” Rogers, 547 F.3d at 1158
(citation and internal quotation marks omitted). We rejected
this argument, stating: “This argument is insufficient to war-
rant rendering the arbitration provisions void.” Id.
Accordingly, we reject Balen’s arguments regarding public
policy.
B. Balen’s claims against HAL are subject to
mandatory arbitration.
[8] The Convention applies to “[a]n arbitration agreement
. . . arising out of a legal relationship, whether contractual or
BALEN v. HOLLAND AMERICA LINE 14223
not, which is considered as commercial.” 9 U.S.C. § 202.
Courts generally address four factors to determine whether to
enforce an arbitration agreement under the Convention. See,
e.g., Bautista v. Star Cruises, 396 F.3d 1289, 1294-95 (11th
Cir. 2005); Standard Bent Glass Corp. v. Glassrobots Oy, 333
F.3d 440, 449 n.13 (3d Cir. 2003). “These four require that (1)
there is an agreement in writing within the meaning of the
Convention; (2) the agreement provides for arbitration in the
territory of a signatory of the Convention; (3) the agreement
arises out of a legal relationship, whether contractual or not,
which is considered commercial; and (4) a party to the agree-
ment is not an American citizen, or that the commercial rela-
tionship has some reasonable relation with one or more
foreign states.” Bautista, 396 F.3d at 1294 n.7 (citation omit-
ted).
[9] The agreement in the record provides for arbitration in
the Philippines. The Philippines acceded to the Convention in
1967. The record clearly establishes that the parties’ agree-
ment arises out of a legal relationship that is commercial. See
Rogers, 547 F.3d at 1155 (finding that employment contracts
of seafarers arise out of legal relationships which are consid-
ered commercial). There is also no dispute that Balen is not
a United States citizen. Balen contends only there is no agree-
ment in writing to arbitrate the dispute, because (1) HAL is
not a party to the CBA and (2) the CBA was never approved
by the POEA. We disagree. There was a valid, written agree-
ment between the parties to arbitrate any dispute.1
1
We note that, even absent a valid CBA, Section 29 of the Standard
Terms requires the parties to arbitrate but gives seafarers and their
employers a choice of forums: they can arbitrate either before the NLRC
or a voluntary panel. Section 29 gives seafarers and their employers a
choice of forums: they can arbitrate either before the NLRC or a voluntary
panel. Specifically, it states: “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), . . . or to the original and exclusive
jurisdiction of the voluntary arbitrator[s].”
14224 BALEN v. HOLLAND AMERICA LINE
1. HAL is party to the CBA.
Balen contends that the district court’s finding that HAL
was a party to the CBA was clearly erroneous. We disagree.
Review under the clearly erroneous standard is signifi-
cantly deferential, requiring a “definite and firm conviction
that a mistake has been committed.” Easley v. Cromartie, 532
U.S. 234, 242 (2001) (internal quotation marks omitted); Len-
tini v. Cal. Ctr. for the Arts, Escondido, 370 F.3d 837, 843
(9th Cir. 2004). If the district court’s account of the evidence
is plausible in light of the entire record, the court of appeals
may not reverse, even if it would have weighed the evidence
differently. See Husain v. Olympic Airways, 316 F.3d 829,
835 (9th Cir. 2002), aff’d, 540 U.S. 644 (2004).
[10] Nothing in the record indicates that the district court’s
finding was clearly erroneous. The CBA itself indicates that
HAL is a party. The cover page states: “COLLECTIVE BAR-
GAINING AGREEMENT BETWEEN AMOSUP ASSOCI-
ATED MARINE OFFICERS’ AND SEAMEN’S UNION OF
THE PHILIPPINES AND HOLLAND AMERICA LINE
INC. REPRESENTED BY UNITED PHILIPPINE LINES,
INC.” Balen contends, however, that HAL is not a party to the
CBA, because UPL signed the CBA on HAL’s behalf.
Balen’s argument is without merit, however, because a corpo-
ration must use employment agencies licensed by the POEA
to employ Filipino Seamen. Accordingly, HAL had no choice
but to engage an agency like UPL to represent it. Because
ordinary contract and agency principles apply to arbitration
agreements, see Letizia v. Prudential Bache Sec., Inc., 802
F.2d 1185, 1187-88 (9th Cir. 1986), that UPL signed the CBA
on HAL’s behalf renders HAL a party to the agreement. The
district court did not clearly err when it found that HAL was
a party to the CBA.
BALEN v. HOLLAND AMERICA LINE 14225
2. The CBA is valid.
Balen contends that, even if HAL were a party to the CBA,
the CBA is invalid, because the POEA did not approve the
agreement. We disagree.
[11] Section 29 of the Standard Terms provides that, for
any “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 juris-
diction of the voluntary arbitrator or panel of arbitrators.”
Nothing in the Standard Terms or the record limits the appli-
cation of this provision to only those agreements approved by
the POEA. Furthermore, Balen concedes that the POEA does
not, as a matter of practice, approve CBAs. Certainly, it
would seem odd for the POEA to (1) provide a Standard Term
that envisioned CBAs, (2) require their approval, and yet (3)
never approve them. There is no contention that the POEA
rejected the CBA, and the POEA’s lack of approval cannot
invalidate the CBA.
Because (1) the HAL is a party to the CBA and (2) the
CBA contains an provision for arbitration, the CBA is
enforceable against Balen under the Convention.
III. CONCLUSION
[12] The district court properly granted HAL’s motion to
compel arbitration. Balen’s claims under the Seamen’s Wage
Act are subject to arbitration pursuant to the Convention. The
arbitration agreement was also valid and enforceable under
the Convention. We therefore affirm.
AFFIRMED.