Hiotakis v. Celebrity Cruises Inc.

Filing 64

ORDER GRANTING DEFENDANT CELEBRITY CRUISES INC.S MOTION TO DISMISS 13 AND COMPELLING THIS CASE TO ARBITRATION. Signed by Judge Joan A. Lenard on 5/31/2011. (dpv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 10-22954-CIV-LENARD/O’SULLIVAN
EMMANOUIL HIOTAKIS,
Plaintiff,
vs.
CELEBRITY CRUISES INC.,
Defendant.
________________________________/

ORDER GRANTING DEFENDANT CELEBRITY CRUISES INC.’S MOTION TO
DISMISS (D.E. 13) AND COMPELLING THIS CASE TO ARBITRATION
THIS CAUSE is before the Court on Defendant Celebrity Cruises Inc.’s
(“Defendant”) Motion to Dismiss (“Motion,” D.E. 13), filed on September 14, 2010.
Plaintiff Emmanouil Hiotakis (“Plaintiff”)1 filed his Response in Opposition to the Motion
(“Response,” D.E. 22) on October 22, 2010, to which Defendant replied (“Reply,” D.E. 27)
on November 8, 2010. Having reviewed the Motion, the Response, the Reply and the record,
the Court finds as follows:
I.

Factual and Procedural Background
This action involves allegedly unpaid overtime wages owed to the Defendant’s

housekeeping staff from 1992 to the present. (Complaint ¶ 19, D.E. 1-1.) Plaintiff
Emmanouil Hiotakis, the named plaintiff in this putative class of employees, worked in

1

The correct spelling of Plaintiff’s last name is “Chiotakis.” The case style is
apparently a scrivener’s error made by Plaintiff’s counsel.

Defendant’s housekeeping department in its Caribbean fleet from approximately 2002
through April 24, 2008. (Id. ¶¶ 9-11.)2 He alleges that he is owed unpaid overtime wages,
penalties and statutory damages under 46 U.S.C. § 10313, the Seaman’s Wage Act (“Wage
Act”). (Id. at Count I.)
Plaintiff originally brought suit against Defendant in the Circuit Court of the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida. Defendant removed the action to
this Court and subsequently moved to dismiss. (See generally, Notice of Removal, D.E. 1.)
In its Motion, Defendant argues that Plaintiff’s Wage Act claim must be dismissed as
it is governed by a mandatory arbitration provision. Per the Motion, Plaintiff, a Greek
citizen, signed employment agreements with Defendant which incorporated by reference the
collective bargaining agreements which governed all terms of his employment, including
Defendant’s obligation to pay him overtime wages. The collective bargaining agreements
contain mandatory arbitration provisions, providing for arbitration in either Miami or Greece,
Plaintiff’s country of citizenship. (Mot. at 3 and 7, see also Mot. Exs. 3-8.) Defendants
argue that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
21 U.S.T. 2517, 9 U.S.C. §§ 202-208 (“Convention Act”) requires that the arbitration
provision be enforced once four jurisdictional elements are met. (Mot. at 4, citing Bautista
v. Star Cruises, 396 F.3d 1289, 1294, n.7 (11th Cir. 2005).)

2

Defendant posits that Plaintiff’s employment ended in 2006. (See Mot. at 2.) For
the purposes of the Motion, Plaintiff’s date of termination is not relevant.
2

Defendant contends that all of the elements have been met in this case and therefore
dismissal of the action in favor of arbitration is required. (Id. at 8.)
Plaintiff opposes Defendant’s Motion on several grounds. First, he argues that the
collective bargaining agreements attached to Defendant’s Motion do not pertain to him,
as he is not a member of any Italian union, and the Greek collective labor agreement only
applies to the crews of Mediterranean vessels. (Resp. at 2-3.) He indicates that the Greek
Marine Work Contract from 2004 is the only operative agreement referenced by
Defendant. (Id. at 3.)
Plaintiff also argues that the Greek Marine Work Contract’s arbitration provision
is void as against public policy. (Id. at 4-5.) The provision states that Plaintiff’s
“employment contract shall be governed exclusively and solely by the Greek Laws, . . .
expressly barring the application of any foreign law or provision.” (Id. at 4-5, citing D.E.
13-2 at 8, ¶ 9.) Because such language acts as waiver of Plaintiff’s right to pursue
statutory remedies, including those under the Wage Act, and precludes opportunity for
review, Plaintiff contends that it is not enforceable as a matter of law. (Id. at 5, citing
Thomas v. Carnival Crop., 573 F.3d 1113 (11th Cir. 2009).)
Finally, Plaintiff claims that Defendant waived its right to enforce the arbitration
provision. (Id. at 5-6.) Plaintiff, along with forty additional claimants, commenced the
arbitration process with the International Centre for Dispute Resolution (“ICDR”) in
March 2010. (Id. at 7.) However, Defendant allegedly refused to pay for the costs of
arbitration for the forty one claimants, as required by the 2008 Collective Bargaining
3

Agreement, and after some delay, all of the claims were withdrawn from the ICDR on or
around July 21, 2010. (Id. at 9.) Plaintiff subsequently commenced this suit in state
court. (Id.) In October 2010, Plaintiff received notice from the ICDR that the arbitration
process had been reinstated for the claimants, at the direction of Defendant’s counsel.
(Id. at 9.) Plaintiff argues that this chain of events illustrates Defendant’s waiver of the
arbitration provision, the resulting prejudice to Plaintiff and bad faith on the part of
Defendant.
In its Reply, Defendant addresses each of Plaintiff’s contentions. First, Defendant
argues that its employees were required to sign sign-on employee agreements (“SOEA”)
prior to beginning a tour of employment with Defendant. (Reply at 1-2.) Each SOEA,
including those that Plaintiff admittedly signed, incorporated the Italian collective
bargaining agreements which contained the mandatory arbitration provisions. Although
Defendant cannot locate Plaintiff’s signed SOEAs, they claim that Plaintiff undoubtedly
signed his, and that they incorporate the collective bargaining agreements which govern
the present dispute. Furthermore, Defendant points out that from 2002 through 2004,
Defendant’s Greek employees signed Marine Work Contracts that incorporated the terms
of the Greek collective bargaining agreements. (Id. at 6.)3
As to Plaintiff’s second argument, Defendant contends that he has not met his

3

Defendant’s Reply also raises the argument that Plaintiff’s claims for overtime
wages from 2002 through 2004 would be time barred if he is correct in his assertion that only his
Marine Work Contract for 2004 is the only operative agreement. This argument was not raised
in the initial Motion and shall not be considered at this stage.
4

burden under Thomas to show that the arbitration provision is void as against public
policy. Specifically, Plaintiff has failed to show that (1) Greek law will not recognize his
U.S. statutory Wage Act claim, (2) that the choice of forum clause combined with the
choice of law clause operates as a prospective waiver of his Wage Act claim, (3) that
Greek law will not be as favorable to Plaintiff as United States law, and (4) that there will
be no opportunity for review of the disposition of his Wage Act claim. (Id. at 8, citing
Thomas, 573 F.3d at 1122-23).
Finally, Defendant dismisses Plaintiff’s claims of waiver, arguing that Plaintiff has
misconstrued the waiver analysis. (Id. at 8.) Defendant notes that when waiver is
asserted in the context of the Convention Act, “the analysis focuses upon whether a party
pursued litigation instead of arbitration.” (Id. (citations omitted).) Here, Defendant never
pursued litigation, therefore waiver cannot be established.
II.

Standard of Review
Federal law strongly favors agreements to arbitrate, especially in international

commercial transactions. See Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15; Del
Orbe v. Royal Carribean Cruises, LTD., 549 F. Supp. 2d 1365, 1368 (S.D. Fla. 2008)
(Gold, J.). In deciding a motion to compel under the Convention Act, the district court
conducts a “very limited inquiry.” Bautista, 396 F.3d at 1294. Four jurisdictional
prerequisites must be met prior to compelling arbitration:
(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
5

Convention; (3) the agreement arises out of a legal relationship, whether
contractual or not, which is considered commercial; and (4) a party to the
agreement is not an American citizen, or that the commercial relationship has
some reasonable relation with one or more foreign states.
Id. at 1294, n.7. If the four prerequisites are satisfied, the court must compel arbitration
unless one the Convention Act’s affirmative defenses applies. Vacaru v. Royal Carribean
Cruises, LTD., 2008 WL 649178, at *4 (S.D. Fla. Feb. 1, 2008) (Ungaro, J.). One such
affirmative defense that may preclude arbitration is when “[t]he recognition or
enforcement of the award would be contrary to the public policy of that country.”
Thomas, 573 F.3d at 1120 (quoting Article V(2)(b) of the Convention); see also Bautista,
396 F.3d at 1302.
III.

Discussion
A.

Jurisdictional Prerequisites

The Court begins its analysis with the four jurisdictional prerequisites necessary to
compel arbitration. Although Plaintiff does not write in such express language, the Court
interprets his initial protestations regarding the applicability of the collective bargaining
agreements to mean that he disputes the first prerequisite: the existence of an agreement
in writing within the meaning of the Convention.4

4

Regarding the second, third and fourth jurisdictional prerequisites, the parties do
not dispute that the potentially applicable collective bargaining agreement provides for
arbitration in the territory of a signatory of the Convention (here, the United States or Greece),
that the agreement arises out of a legal, commercial relationship, that Plaintiff is not an
American citizen, or that the parties’ commercial relationship has some reasonable relation with
one or more foreign states.
6

1.

The Agreements Constitute a Valid Agreement in Writing

The Convention Act’s definition of an “agreement in writing” includes “an arbitral
clause in a contract or an arbitral agreement, signed by the parties or contained in an
exchange of letters or telegrams.” Polychronakis v. Celebrity Cruises, Inc., 2008 WL
5191104, at *4 (S.D. Fla. Dec. 10, 2008) (King, J.); see Bautista, 396 F.3d at 1300. It is
well-settled that the agreement to arbitrate can exist where the arbitration clause in a
collective bargaining agreement has been incorporated by reference into the main contract
between the employer and employee. See Bautista, 396 F.3d at 1300; Polychronakis,
2008 WL 5191104, at *4.
In Polychronakis, a case involving a different Greek seaman working for
Defendant, Judge King found that the first jurisdictional requirement of an agreement in
writing had been satisfied. 2008 WL 5191104, at **4-5. There, the plaintiff executed
SOEAs prior to his terms of employment with Defendant from 2004 through 2007; each
SOEA incorporated by reference the terms of an Italian union’s collective bargaining
agreement. Id. at *3. That the plaintiff was never a member of an Italian union was
“irrelevant to the question of whether [plaintiff was] subject to the incorporated collective
bargaining agreement.” Id. (also finding that the third jurisdictional prerequisite was
satisfied). Furthermore, Judge King concluded that Bautista rejected the plaintiff’s other
arguments, specifically that the language of the SOEAs was too vague, failing to name a
specific union or a specific collective bargaining agreement, and that the collective
bargaining agreement was never presented to him. Id. at *4. In Bautista, the Eleventh
7

Circuit stated:
Plaintiffs . . . offer no authority indicating that the Convention or the
Convention Act impose upon the party seeking arbitration the burden of
demonstrating notice or knowledgeable consent. . . . We find it especially
appropriate to abide by the general principal that one who has executed a
written contract and is ignorant of its contents cannot set up that ignorance to
avoid the obligation absent fraud and misrepresentation.
396 F.3d at 1301 (quoting Vulcan Painters v. MCI Constructors, 41 F.3d 1457, 1461
(11th Cir. 1995)). Neither the plaintiff in Polychronakis nor the plaintiffs in Bautista
disputed signing the contracts which incorporated the terms of the collective bargaining
agreements.
Here, Plaintiff raises similar arguments: he has never been a member of an Italian
Union, he did not receive the referenced collective bargaining agreement and was not
aware of its terms, and the language of the unsigned SOEA provided by Defendant is
vague as to the terms “Collective Bargaining Agreement” and “Union.” Plaintiff also
notes that Defendant fails to attach signed, executed SOEAs from 2004 through the end
of Plaintiff’s employment to its Motion, the SOEA is for employment with another cruise
line operator, and the Greek collective labor agreements (“Greek CLA”), governing
employment from 2002 through 2004, only applied to “Crews of Mediterranean
Passenger Ships.”
Beginning with Plaintiff’s original arguments first, the Court finds them
unpersuasive. The 2002, 2003 and 2004 Greek CLAs clearly state, “[t]his Collective
Agreement applies to the following: . . . . Passenger Tourist Ships performing cruises

8

inside and outside the Mediterranean Sea.” (Mot. Ex. 5, 2004 Greek CLA at Art. 1.1(a),
D.E. 13-5; see also Mot. Ex. 3, 2002 Greek CLA, Art. 1.1(a), D.E. 13-3; Mot. Ex. 4,
2003 Greek CLA at Art. 1.1(a), D.E. 13-4.) Thus, incorporated by the 2004 Marine Work
Contract, which Plaintiff concedes is binding upon him (Resp. at 3), the terms of the 2004
Greek CLA clearly govern Plaintiff’s entitlement to wages. The same would be true for
the 2002 and 2003 Greek CLAs.5
Plaintiff’s contention that the SOEA is for Defendant’s affiliated company, RCCL,
is also without merit. The SOEA clearly lists “Celebrity Cruise Line” in its header. (See
Ex. B to Rombach Decl., 13-2 at 9.) The use of the defined term “Company” throughout
the SOEA as distinct from the specifically referenced “Royal Caribbean Cruises Ltd.” in
the “Remark” section further indicates to the Court that the SOEA pertains to an entity
other than RCCL.
Regarding the lack of signed SOEAs and Marine Work Contracts for all years of
Plaintiff’s employment except 2004, Defendant presents the affidavit of Jay Rombach, its
associate vice president of human resources, which explains that from 2002 through 2004,
all Greek nationals who worked for Defendant signed a Marine Work Contract as a
precondition of their employment. (Rombach Decl. ¶ 3, D.E. 13-2.) These Marine Work
Contracts incorporated by reference the Greek CLAs. (Id.; see also Mot. Ex. 3, 2002
5

The Court also notes that the sample, unsigned Marine Work Contract covers
“announced cruises in the CARIBBEAN/SOUTH/CENTRAL AMERICA seas for 2004” and the
Company (Defendant) may transfer Plaintiff “to another passenger ship, managed and operated
by the Company, during the [period of employment], to work under the same terms and
conditions.” (Ex. A to Rombach Decl., 13-2 at 7.)
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Greek CLA; Mot. Ex. 4, 2003 Greek CLA; Mot. Ex. 5, 2004 Greek CLA.) From 2004
through 2006, Greek crewmembers were required to sign SOEAs as a precondition of
employment. (Rombach Decl. ¶ 4.) The SOEAs incorporate by reference a collective
bargaining agreement between Defendant and the Italian union, Federazione Italianan
Trasporti. (Id.; see also Mot. Ex. 6, 2005 Collective Agreement, D.E. 13-7; Mot. Ex. 7,
2006 Collective Agreement, D.E. 13-8.) Rombach stresses that no person would be
“permitted to sign on [Defendant’s] cruise ship at the beginning of his or her scheduled
contract period unless he or she first signed the [Marine Work Contract/SOEA].”
(Rombach Decl. ¶¶ 3, 4.)
Plaintiff does not deny that he worked aboard Defendant’s ships under a contract,
such as the Marine Work Contract or SOEA, which governed the terms of his
employment. He refers to the existence of Defendant’s contractual obligation to pay him
overtime wages as arising “according to contract or collective bargaining agreement.”
(Compl. ¶¶ 13, 14, 15.)

Plaintiff’s Complaint, Response and Affidavit in support imply

that Plaintiff did sign an employment contract with Defendant, and some collective
bargaining agreement governs his Wage Act claim. However, both Plaintiff and
Defendant fail to attach signed, executed contracts of employment, leaving the Court in
the unenviable position of determining what contracts Plaintiff actually signed. The
Court shall do so, mindful of the “healthy regard for the federal policy favoring
arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24
(1983); Dockeray v. Carnival Corp., 724 F. Supp. 2d 1216, 1226 (S.D. Fla. 2010)
10

(Altonaga, J.)
Faced with absence of signed Marine Work Contracts and SOEAs, the Court relies
on the affidavit of Jay Rombach in order to find that, pursuant to Defendant’s custom and
regulations, Plaintiff would have been required to sign the Marine Work Contracts and
SOEAs each time he began a term of employment on one of Defendant’s cruise ships.
See FED. R. EVID. 406 (“Evidence of the habit of a person or of the routine practice of an
organization, whether corroborated or not and regardless of the presence of eyewitness, is
relevant to prove that the conduct of the person or organization on a particular occasion
was in conformity with the habit or routine practice.”); see also Zola v. Merrill Lynch,
Pierce, Fenner & Smith Inc., 1984 WL 94, at *1 (S.D.N.Y. May 28, 1985) (finding an
agreement in writing despite the absence of a signed document, where defendant
submitted an affidavit stating that under its practices and procedures, plaintiff would have
had to sign an agreement before he could open and maintain an account with defendant);
Johnson v. Charles Schwab & Co., Inc., 2010 U.S. Dist. LEXIS 16771, at *5 (S.D. Fla.
Jan. 26, 2010) (Vitunac, M.J.) (the plaintiff could not dispute that he had executed an
agreement containing arbitration provision because the NASD and NYSE required such
an agreement to be executed prior to registration with them). Thus the Court is satisfied
that pursuant to Defendant’s practice and procedures, Plaintiff signed the applicable
Marine Work Contracts and SOEAs prior to each of his terms of employment.
The Court next reviews the Marine Work Contract and the SOEA, finding that
both incorporate by reference the Greek CLA and collective bargaining agreement with
11

the Italian union, respectively. (See Exs. A and B to Rombach Decl.) That the terms
“Greek Collective Agreement” and “Collective Bargaining Agreement” are not defined
within Marine Work Contract and SOEA does not affect their incorporation and
application here.
First, Plaintiff has presented no evidence that the Marine Work Contract and
SOEA could have referred to more than one collective bargaining agreement, or any other
collective bargaining agreement. Plaintiff instead hangs his hat on the notion that
Defendant has failed to locate and attach signed, executed copies of his employment
contracts. However, Plaintiff fails to cite any authority in support of his argument that
Defendant’s failure to attach signed copies of the employment contracts should preclude
enforcement of the arbitration provision.
Second, the SOEA expressly states that the signing employee acknowledges
receipt of a copy of the applicable collective bargaining agreement. Plaintiff avers that he
did not receive a copy of the collective bargaining agreement. (Chiotakis Aff. ¶ 9, D.E.
22-1) However, several recent cases in this District have found that the first jurisdictional
prerequisite is met where the crewmember signs an employment agreement that
incorporates by reference a collective bargaining agreement containing an arbitration
clause and that by signing the employment agreement, the crewmember acknowledges
receipt of the collective bargaining agreement. Hodgson v. Royal Caribbean Cruises,
Ltd., 706 F. Supp. 2d 1248, 1254 (S.D. Fla. 2009) (Altonaga, J.); Polychronakis, 2008
WL 5191104, at *4-5; Allen v. Royal Caribbean Cruises, Ltd., 2008 WL 5095412, at *4-5
12

(S.D. Fla. Sept. 30, 2008) (Ungaro, J.); Vacaru, 2008 WL 649178, at *4 (S.D. Fla. Feb. 1,
2008). Having found that Defendant’s practice and procedures required Plaintiff to sign
the SOEAs, the Court further finds that Plaintiff’s acknowledgment of receipt on the
SOEA of the collective bargaining agreement outweighs his self-serving averment that he
never received it.
Finally, the Court declines to give any weight to Plaintiff’s averment that it was
Defendant’s practice “not to provide or show any collective bargaining agreement to any
crewmembers,”as Plaintiff provides no foundation for knowledge of Defendant’s
professional customs and practices.
To the extent the Plaintiff raises similar arguments to those made in Polychronakis,
the Court adopts Judge King’s well-reasoned analysis and application of Bautista in
finding that (1) Plaintiff’s non-membership in the Italian union did not preclude the
SOEA from incorporating by reference that union’s collective bargaining agreement, (2)
the incorporation by reference of the collective bargaining agreements by the Marine
Work Contract and SOEA satisfies the Convention Act’s agreement in writing
requirement, and (3) pursuant to Bautista, the party seeking arbitration does not need to
demonstrate notice or knowledgeable consent of the arbitration provision. 2008 WL
5191104, at *4; see also Bautista, 396 F.3d at 1301.6

6

Should the Court take into consideration Plaintiff’s initial attempt at arbitration
with the ICDR in March 2010, Plaintiff’s argument that he was not bound by, much less aware
of, the arbitration provision would be further weakened.
13

The Court thus finds that under Bautista, its progeny (including Polychronakis)
and pursuant to FED. R. EVID. 406, Defendant has made an initial showing, via the
Declaration of Jay Rombach and attached exhibits, of the existence of a written
agreement to arbitrate that is sufficient to invoke the provision of section 2 of the
Convention Act. See Zola, 1985 WL 94, at *2 (finding same under section 4 of the
Federal Arbitration Act).
Accordingly, the Court finds that the jurisdictional prerequisites of the Convention
Act have been met.
B.

None of the Convention’s Affirmative Defenses Are Applicable

Having found that the jurisdictional prerequisites have been met, the Court must
compel arbitration unless one of the Convention’s affirmative defenses applies.
1.

The Arbitration Provision is Not Void as Against Public Policy

One such defense is found in Article V of the Convention, providing that the
“[r]ecognition and enforcement of an arbitral award may also be refused if the competent
authority in the country where recognition and enforcement is sought finds that . . . the
recognition or enforcement of the award would be contrary to the public policy of that
country.”
Plaintiff argues that because the Marine Work Contract requires the application of
Greek law to settle all disputes, the public policy defense applies and voids the arbitration
provision pursuant to Thomas. The seaman plaintiff in Thomas brought an action against
his employer alleging Jones Act negligence, unseaworthiness, failure to provide
14

maintenance and cure, and failure to provide wages under the Wage Act. 573 F.3d at
1114. The Eleventh Circuit found only a portion of the Wage Act claim was subject to a
written arbitration provision. Id. at 1119. Finding Panamanian law did not provide a
reasonable equivalent to plaintiff’s rights under the Wage Act and there was no assurance
of an opportunity for review of plaintiff’s only claim, the Thomas Court held that the
arbitration and choice of law provisions acted in tandem to strip the plaintiff of his
statutorily-created rights. Id. at 1123. Thus, the Thomas court found the arbitration
provision null and void as contrary to public policy with regard to the plaintiff’s Wage
Act claim and reversed the district court’s decision to compel arbitration. Id. at 1124.
Here, the Court finds the Convention’s “public policy” affirmative defense does
not apply so as to void the arbitration provisions contained in the Greek CLAs and Italian
union collective bargaining agreements. As an initial matter, Plaintiff has not explained
how Greek law fails to provide him with a reasonable equivalent to his statutory Wage
Act claim or submitted any evidence in support. See, e.g., Williams v. NCL (Bahamas)
Ltd., 2011 U.S. Dist. LEXIS 37952, at *10 (S.D. Fla. Mar. 31, 2011) (in support of his
argument that Bahamian law would strip him of his Jones Act and common law claims,
plaintiff submitted the affidavits of two Bahamian attorneys). Instead, Plaintiff merely
cites to Thomas and Vimar Seguros y Reaseguros v. M/V Sky Reefer, 515 U.S. 528
(1995), a Supreme Court case affirming the order to compel arbitration in Japan under the
Carriage of Goods by Sea act.
The Court agrees with Defendant; simply uttering the name Thomas and itemizing

15

the Eleventh Circuit’s findings in that case will not satisfy the inquiry of whether the
arbitration provision in the instant case is void as against public policy. Plaintiff must
provide more than conclusory assertions that the forum selection clause7 and choice of
law provision combine to operate as a prospective waiver of Plaintiff’s right to pursue his
Wage Act claim (or similar relief) and that no meaningful review of the arbitral award
will be available. See Thomas, 573 F.3d at 1124. Plaintiff’s failure to make any showing
regarding Greek law, including the recognition or foreign statutory causes of action such
as the Wage Act and the remedies available to seamen seeking overtime wages, and the
opportunity for review of arbitral awards, preclude this Court from making the finding
that the public policy affirmative defense voids the arbitration provisions.8
Accordingly, none of the Convention’s affirmative defenses apply to the
arbitration provisions at issue.
2.

No Waiver of the Arbitration Provision

An agreement to arbitrate may be waived just like any other. Burton-Dixie Corp.
v. Timothy McCarthy Constr. Co., 436 F.2d 405, 407 (5th Cir. 1971). Waiver is
recognized as a defense to the enforcement of the Convention. See, e.g., Bautista, 396
F.3d at 1302.

7

As highlighted by Defendant in its Motion, arbitration proceedings may be conducted
in Miami or Greece.
8

The Court has been unable to find relevant case law involving enforcement of
arbitration provisions, requiring application of Greek law, as to U.S. Wage Act claims.
16

In determining whether a party has waived its right to arbitrate, the Eleventh
Circuit applies a two-part test, first deciding if “under the totality of the circumstances,
the party has acted inconsistently with the arbitration right,” and, second, whether that
party “has in some way prejudiced the other party.” Ivax Corp. v. B. Braun of Am., 286
F.3d 1309, 1315-16 (internal quotation omitted). “However, ‘[b]ecause federal law
favors arbitration, any party arguing waiver of arbitration bears a heavy burden of
proof.’” Stone v. E.F. Hutton & Co., 898 F.2d 1542, 1543 (11th Cir. 1990) (quoting Belke
v. Merrill Lynch, Pierce, Fenner & Smith, 693 F.2d 1023, 1025 (11th Cir. 1982),
overruled on other grounds by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985)).
Substantial participation in litigation is enough to satisfy the first prong of waiver.
Citibank, N.A. v. Stok & Assocs., P.A., 387 Fed. Appx. 921, 924 (11th Cir.
2010); Morewitz v. W. of Eng. Ship Owners Mut. Prot. & Indem. Ass'n, 62 F.3d 1356,
1366 (11th Cir. 1995). Here, Defendant’s participation in this suit from July 27, 2010,
when Plaintiff filed his Complaint in state court, through September 14, 2010, the date of
the instant Motion to Dismiss, cannot be deemed substantial participation in litigation.
Defendant removed the case to this Court at earliest opportunity and moved to dismiss
shortly thereafter. At the time of this Motion’s filing, no other litigation activity had
occurred, nor had discovery commenced. Cf. Gemb Lending, Inc. v. RV Sales of
Broward, Inc., 2010 U.S. Dist. LEXIS 47649, at **8-9 (S.D. Fla. May 14, 2010) (Cohn,
J.) (substantial participation in litigation found where defendant waited three months,

17

during which time discovery had commenced and the parties actively litigated the case,
before asserting its right to arbitration).
Under the totality of the circumstances prong, the Court also takes into
consideration Defendant’s behavior prior to the filing of Plaintiff’s Complaint. Plaintiff
alleges that Defendant’s dilatory tactics from May through July 2010, namely, failing to
pay the filing fee to ICDR for all of the Greek seamen’s claims submitted to arbitration, is
evidence of behavior inconsistent with the intent to arbitrate. (See generally, Resp. at 515.) Plaintiff minimizes the fact that Defendant was required, by the 2008 collective
bargaining agreement, to pay the filing fee for each of the forty one claimants’ arbitration
proceedings, an expensive undertaking at $4,350.00 per claim. (Id. at 7-8.) The record
reveals that from May through July, Defendant negotiated with the American Arbitration
Association (“AAA”), the parent entity of the ICDR, to pay a discounted rate for all
arbitrations. On or around July 9, 2010, the parties reached an agreement: Defendant
would pay to the AAA $58,000.00 in filing fees for the remaining twenty nine arbitrations
(including Plaintiff’s). (Reply at 12.) Shortly after, Defendant claims it began the
process of paying the filing fees. However, on July 20, Plaintiff sent an e-mail to the
AAA notifying it of the withdrawal of all claims due to Defendant’s non-payment and
declaring that Defendant had waived its right to arbitrate these remaining claims.
“Mere delay is insufficient to support a defense of waiver.” Hale v. Dep’t of
Revenue, 973 So. 2d 518, 522-23 (Fla. 1st DCA 2008) (citation omitted). Here,
Defendant’s delay in paying the filing fees appears to have been caused by its

18

negotiations with AAA over a discounted fee. Plaintiff’s attempted showing of
Defendant’s delay and bad faith falls far below the its heavy burden to establish the
defense of waiver. See Air Products and Chemicals, Inc. v. Louisiana Land and
Exploration Co., 867 F.2d 1376, 1379 (11th Cir. 1989) (applying Florida law and
affirming the district court’s finding that mere delay did not constitute waiver).
Moreover, Defendant’s failure to meet Plaintiff’s deadline for payment of filing fees and
Plaintiff’s subsequent withdrawal from arbitration and unilateral declaration of waiver is
not persuasive to the Court’s waiver analysis.9
Having found that Plaintiff has not satisfied the first prong of the test for the
waiver defense, the Court need not continue to the prejudice prong.
IV.

Conclusion
Consistent with the foregoing, it is ORDERED AND ADJUDGED that:
1.

Defendant’s Motion to Dismiss (D.E. 13), filed on September 14, 2010, is
GRANTED. Plaintiff is directed to proceed to arbitrate his overtime wage
dispute as per his employment contract.

2.

All pending motions are DENIED as moot.

3.

This Case is now CLOSED.

9

The experiences of Plaintiff’s counsel with Defendant in prior ICDR arbitrations
is not relevant to either prong of the waiver analysis. Having read Ms. Watford’s Affidavit (D.E.
22-3), the Court is concerned about ICDR’s inability to move the parties’ arbitration along as
well as the ex parte communications between the ICDR case manager and the Defendant’s
counsel. However, these complaints are outside the Court’s province and are irrelevant to the
instant Motion.
19

DONE AND ORDERED in Chambers at Miami, Florida, this 31st day of May,
2011.

_________________________________
JOAN A. LENARD
UNITED STATES DISTRICT JUDGE

20