To Be A Seaman or Not To Be A Seaman: That IS the Question: Winning the Battle on Wages but Losing the War on Status?
Adams v. All Coast, L.L.C. , 2021 U.S. App. LEXIS 29559 *, 2021 WL 4470027 (5th Cir., Sept. 30, 2021).
The Fifth Circuit denied the petition for rehearing en banc filed by All Coast, L.L.C. to review the panel’s opinion of February 11, 2021[1] in which the court[2] reversed the trial court’s dismissal of the claimant’s collective action[3] for overtime pay under the Fair Labor Standards Act.[4] The initial opinion was withdrawn and replaced adding only the dissent of Judge Jones joined by Judge Elrod to the denial of the rehearing en banc.[5] Fifteen judges of the court voted to deny rehearing en banc (Chief Judge Owen, Judges Smith, Stewart, Dennis, Southwick, Haynes, Graves, Higginson, Costa, Willett, Ho, Duncan, Engelhardt, Oldham, and Wilson).[6] In doing so, court reversed the summary judgment in favor of the defendant and remanded the matter for further proceedings. It should be noted that the court does not render judgment for the employees that they are not exempt under the FLSA and leaves to the jury the question of whether the seaman’s exemption applies. Yet, the court says their work while operating cranes is not seaman’s work. “Whether the plaintiffs qualify for the exemption otherwise will be decided on remand.”[7] The employer bears the burden of proof.[8]
The plaintiffs asserted that though classified as “seamen” on liftboats owned by All Coast, the work they performed was no different than oil and gas work done on shore.[9] The employees maintained that 80% of the time they operated cranes (or prepared food for non-seamen) while the liftboats were jacked-up and did not serve the operation of the vessels “as a means of transportation.”[10] All Coast classified the employees as seamen and thus exempt from the overtime provisions of the FLSA[11] pursuant to 29 U.S.C. § 213(b)(6).
The Fifth Circuit relied on its precedent of Coffin v. Blessey Marine Servs., Inc.[12] and the regulations of the Department of Labor, namely 29 CFR §783.31 entitled: “Criteria for employment ‘as a seaman’” which requires that to be exempt as a seaman several criteria must be established. First, the employee must be the master “or subject to the authority, direction, and control of the master aboard a vessel”[13] and second, the employee must render service “primarily as an aid in the operation of such vessel as a means of transportation, provided he performs no substantial amount of work of a different character.”[14] In addition, the court cited 29 CFR §783.32 which disassociates the loading and unloading of cargo at the beginning and end of a voyage from the navigation of the vessel and §783.34 which excludes employees on floating equipment who perform construction, dredging, digging and processing of sand and gravel as seamen. “By the regulation's plain language, when the crew assists with loading or unloading, or with ‘essentially industrial’ tasks, that portion of their time is not seaman's work.”[15]
Using standard interpretative methods including dictionary definitions leads also to the conclusion that these employees were not seamen when operating equipment though still under the authority and control of the master of the vessel but only when performing nautical duties.[16]. The liftboats served as platforms for the cranes to support industrial operations on platforms.[17] Crane operation does not aid in the navigation of the vessel.[18] Thus, these employees did not qualify as seamen for the exemption.[19] Whether they otherwise qualify for the exemption is for trial.
The majority then turned to address the status of the cooks which, on vessels, cook for seamen. If the other employees are not seamen, then neither are the cooks.[20] Again turning to the regulations of the Department of Labor,[21] if the cooks perform 20% of differing work, that is, more than 20% of the work week for non-crew members or non-seamen, then they are not seamen and are not exempt under the FLSA.[22] Thus, summary judgment for All Coast was reversed. But, judgment was not rendered for the employees.[23]
Judge Edith Jones dissented and criticized the court in failing for the second time in two months to heed the precedent of the U.S. Supreme Court that exemptions in the FLSA should be given a fair and not narrow reading.[24] In this case the employees are licensed by the Coast Guard “as mates, deckhands, ordinary seamen, and able-bodied seamen.”[25] A liftboat, such as the one on which the plaintiffs served, is defined in the Coast Guard regulations as an "offshore supply vessel with moveable legs capable of raising its hull above the surface of the sea"[26] even when jacked up.[27] Further, when the vessel is jacked up the employees are responsible for other work such as engine room work, splicing rope, cleaning the deck and other “quintessential seaman’s work.”[28] 29 CFR §783.32 recognizes that seamen do not lose their status as such when loading and unloading cargo at the beginning and end of the voyage.[29] Looking at the operations and work as a whole, the employees qualify as seamen as the operations of the cranes on the vessels serve the function, purpose and mission of the liftboats.[30] Judge Jones also cautioned that the expansive holding of the court will have repercussions throughout the offshore industry.[31]
What are the potential “unintended consequences” of the decision? Can employees such as those who brought the action now qualify as seaman under the Jones Act? The U.S. Supreme Court in Stewart v. Dutra Constr. Co. eschewed adding a temporal element to Jones Act coverage: “A ship and its crew do not move in and out of Jones Act coverage depending on whether the ship is at anchor, docked for loading or unloading, or berthed for minor repairs, in the same way that ships taken permanently out of the water as a practical matter do not remain vessels merely because of the remote possibility that they may one day sail again.”[32] It is doubtful the Fifth Circuit will accept a proposition that these employees float in and out of status. The court could conclude that they remain seaman for purposes of the Jones Act but not the FLSA. This would preserve their right to sue the employer under the Jones Act, as well as the right to recover maintenance and cure and the unseaworthiness remedy.
On the other hand, language in the majority opinion and analogies in it to the same type of oil and gas operations on land and offshore platforms should give one pause to assume the court will preserve these remedies. If these employees are not seamen, then why would employees on Mobile Offshore Drilling Units still be considered seamen when they are performing drilling operations? A MODU like All Coast’s liftboats is “temporarily attached” to the subsoil and seabed; AND the work toolpushers, drillers, floormen perform on a MODU is the same as toolpushers, drillers, floormen on land based drilling rigs. The U.S. Supreme Court has stated as far back as Rodrigue v. Aetna Casualty & Surety Co.[33] that operations on the Outer Continental Shelf have no “connection with the ordinary stuff of admiralty than do accidents on piers.”[34] Admittedly, the facility in Rodrigue was a fixed, stationary platform. Nonetheless, the majority emphasizes several times in Adams that the vessels were in jacked up position 80% of the time and often 100% of the time based on the deposition testimony of the claimants and supported the industrial operations on platforms.[35]
This raises the question: Have these workers won the battle on wages but lost the war on status? Judge Joy Clement is the author of the Adams opinion and was also the author of the opinion in Barker v. Hercules Offshore, Inc.[36] Though ostensibly the issue in Barker was whether the action could be removed to federal court based on federal question jurisdiction, she emphasized that the casing work on a jack-up drilling rig was not traditional maritime activity.[37] The Fifth Circuit will not likely reverse decades of maritime law and reverse its position that jack-up barges and MODUs are vessels engaged in maritime commerce and that employees on them are seamen. But if those employed on jack-ups are not seamen for purposes of the FLSA because the work performed while jacked-up is industrial in nature, it may be a stretch to grant them seaman’s status under the Jones Act.
A copy of the opinion may be found following this url:
https://www.ca5.uscourts.gov/opinions/pub/19/19-30907-CV1.pdf
AAC
[1] 988 F.3d 203 (5th Cir. 2021)
[2] The initial panel consisted of Judges Smith, Clement and Oldham.
[3] All employees of All Coast similarly situated including cooks on the liftboats, 988 F.3d at 205
[4] 9 U.S.C. §§ 201 et seq.
[5] The initial opinion is restated in the denial for rehearing en banc. Only the dissent to granting rehearing en banc of Judge Jones is added. 2021 U.S. App. LEXIS 29559 at *2
[6] 2021 U.S. App. LEXIS 29559 *1
[7] Id. at *24
[8] Id. at *8
[9] 988 F.3d at 205
[10] Id.
[11] 2021 U.S. App. LEXIS 29559 at *5
[12] 771 F.3d 276 (5th Cir. 2014)
[13] 29 CFR §783.31
[14] 2021 U.S. App. LEXIS 29559 at *8. The litigants did not dispute that the first prong was met. The dispute is over the second element of the criterial.
[15] 2021 U.S. App. LEXIS 29559 at *9
[16] Id. at *17-*18
[17] Id. at *21
[18] Id. at *23
[19] Id. at *24
[20] Id. at *25
[21] 29 CFR §783.37 which states: “’such differing work is 'substantial' if it occupies more than 20 percent of the time worked by the employee during the workweek."
[22] 2021 U.S. App. LEXIS 29559 at *26. Query: Based on this reasoning then would cooks, croupiers, stewards, entertainers, etc. other than the navigational crew on a passenger cruise vessel now lose seaman’s status? We thank David Carrigee of Baldwin, Haspel, Burke and Mayer for raising this question. The difference there may well be that passenger cruise vessels are never “temporarily attached” to the seabed like a liftboat or MODU.
[23] As stated in Judge Jones’s dissent: “That this case will go to a jury for ultimate [*37] resolution of the exemption offers some comfort, perhaps, to All Coast….” 2021 U.S. App. LEXIS 29559 at *36-37
[24] Id. at *28
[25] Id. at *29
[26] Id. citing 46 C.F.R. § 90.10-20
[27] 2021 U.S. App. LEXIS 29559 at *29
[28] Id. at *29-30
[29] Id. at *33
[30] Id. at *35
[31] Id. at *28-29
[32] 543 U.S. 481, 494 (2004)
[33] 395 U.S. 352 (1969)
[34] Id. at 360
[35] 2021 U.S. App. LEXIS 29559 at *9 *12, *18, *29
[36] 713 F.3d 208 (5th Cir. 2013) The panel in Barker consisted of Judges Higginbotham, Clement, and Haynes. Judge Clement addressed choice of law in that case but was not joined in her exegesis on that point. 713 F.3d at 214 (“For the reasons explained below, the panel chooses not to decide this issue because the result is the same regardless of which law is applied.”)
[37] Id. at 218
