Balen v. Holland America Inc

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.