Lucina et al v. Carnival PLC et al

Filing 32

MEMORANDUM & ORDER, For the reasons stated above. Defendants' Motion to Compel Arbitration is GRANTED. The Court retains limited jurisdiction to enforce any award resulting from the arbitration. The parties are directed to file a letter notifying the Court of the results of the arbitration and their intentto enforce any arbitral award before the Court. So Ordered by Judge Carol Bagley Amon on 3/21/2019. (fwd'd for jgm) (Lee, Tiffeny)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

CLERICS^OFFICE
X

U.S. DISTRICT COURT E.D.N.Y.

FERNANDO LUCINA,GINA PAGADUAN,

^

ARGIE ANOVA,VIDALITO GALAS,

MAR 9 ? ^fllQ

^^

^

^

JOUE GAUZON,JUN NAZARRO and

v,..

CRISTITA ONTING,each on their own

BROOKLYN OFFICE

behalf and on behalf of all other Seafarers

similarly situated,

NOT FOR PUBLICATION
MEMORANDUM & ORDER

Plaintiffs,

No. 17-CV-6849(CBA)
(LB)

-againstCARNIVAL PLC and FLEET MARITIME

SERVICES INTERNATIONAL,LTD.,
Defendants.
-X

AMON,United States District Judge:

Plaintiff Fernando Lucina and a group of similarly situated employees of Defendants

Carnival PLC and its subsidiary Fleet Maritime Services International, Ltd., who worked aboard
the Queen Mary 2 ocean liner (together, "Plaintiffs"), filed this action on November 22, 2017.
(D.E. # 1; see also D.E. # 3("Am. Compl").) The Amended Complaint alleges that Defendants
failed to pay wages due in violation ofthe Seamen's Wage Act,46 U.S.C. § 10313, and New York
Labor Law §§ 2, 190(2), 193, 196-d, and 651(5). (Am. Compl. UK 77-111.) On June 22, 2018,

Defendants filed a Motion to Compel Arbitration. (D.E. # 19-1 ("Defs.' Br.").)

This

Memorandum and Order serves as the disposition for Defendants' motion. For the reasons stated
below, that motion is GRANTED.
BACKGROUND

Plaintiffs have been employed by Defendants as stewards and stewardesses aboard the
ocean liner Queen Mary 2 since at least 2009. (Am. Compl. K 7.) Over the course of their
employment, they entered into a series of"similarly-worded Seafarer's Employment Agreements
1

with Defendant Fleet Maritime Services" for periods of eight-to-ten months at a time. (Id H 19.)
Each Plaintiff signed an identical boilerplate declaration stating that these contracts were never

explained to them, that they were not permitted to negotiate the terms, and that their principal
reason for signing the contracts was to ensure that they could provide for their families. (See, e.g.,
D.E. # 20-6 ("Decl. of Plaintiffs") at 3-4.) Defendants aver that each time they contracted with
Plaintiffs,"Plaintiffs signed two versions oftheir Employment Agreement-one of which was sent
to Defendants and a second copy which was retained by the manning agency in the Philippines."
(D.E. # 21 ("Defs.' Reply") at 4.) Plaintiffs declare that when they sign employment contracts
with Defendants, they sign "at least four copies." (See, e.g., Decl. of Plaintiffs at 3.) Defendants
have provided the Court with three different types of contracts, each allegedly signed by the
Plaintiffs before departing on each expedition. Because these contracts are central to this motion,
the Court explains in detail the material provisions ofeach contract offered by the parties.
I.

The POEA Contracts

In an attachment to Defendants' reply brief and in a supplemental filing. Defendants

provided a set of contracts (the "POEA Contracts") as an exhibit. (D.E. #21-1 ("Second Nield
Decl.") Ex. 2-A; D.E. # 24-1 ("Third Nield Decl.") Ex. 1 A.) These employment contracts were

generally signed a few months before Plaintiffs departed on expeditions on the Queen Mary 2.

(See id) The contracts were allegedly "retained by the manning agency in the Philippines."
(Defs.' Reply at 4.) Plaintiffs deny having signed these contracts. (D.E.# 26-1 at 7.) They argue
that their signatures appear illegible and doctored. (Id at 9-11.) They also argue that the source
of these contracts—a Filipino lawyer named Herbert Tria—is untrustworthy, (D.E. #25 ("Pis.'

Supp. Br.") at 4-6), and that he cannot properly authenticate the contracts because he lacks
firsthand knowledge ofthe conditions surrounding their formation,(Id at 7-9.)

The POEA Contracts are titled "Contract of Employment." (Second Nield DecL, Ex. 2-

A.) They reflect an employment agreement between Plaintiffs, the "Agent" Singa Ship
Management Phils., Inc., and the "Principal/Shipowner" Defendant Fleet Maritime Services
International, Ltd. (Id) Each covers the duration of a single expedition on the Queen Mary 2.

(Id) Paragraph I of the contract explains the basic terms of the contract, including its duration,
the employee's position, basic monthly salary, hours of work,overtime, and more. (Id) Towards
the bottom ofthe document. Plaintiffs and "the Employer" affixed their signature. (Id) It is not
clear whether "the Employer" refers to Singa Ship Management or Fleet Meiritime Services. The
POEA Contracts also reflect that they had been "[v]erified and approved by the [Philippine

Overseas Employment Administration ('POEA')]." (Id) In addition. Paragraph 2 of the POEA
Contracts reads:"The herein terms and conditions in accordance with Governing Board Resolution
No. 09 and POEA Memorandum Circular No. 10, both Series of 2010, shall be strictly and
faithfully observed." (Id.)

POEA Memorandum Circular No. 10 is a government document released by the POEA

that promulgates a set of"Standard Terms and Conditions Governing the Overseas Employment
of Filipino Seafarers On-Board Ocean-Going Ships." (D.E. # 19-6 ("First Nield Deck") Ex. D.)
Relevant here. Memorandum Circular No. 10 contains the following provision:
Section 29. DISPUTE RESOLUTION PROCEDURES

In cases of 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 jurisdiction ofthe voluntary arbitrator or panel of arbitrators.
Ifthe parties are not covered by a collective bargaining agreement,the parties may
at their option submit their claim or dispute to either the original and exclusive
jurisdiction ofthe National Labor Relations Commission ... or to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators.

(Id.) Defendants contend that this arbitration provision governs Plaintiffs' employment contracts

and requires that this dispute be submitted to arbitration in the Philippines.
11.

The SEA Contracts

In their original submission, Defendants provided another set of contracts (the "Seafarer's
Employment Agreements" or"SEA Contracts"). (First Nield Decl., Ex. B.) These contracts were

signed by Plaintiffs and Defendants, generally a few days before an expedition on the Queen Mary
2. (Id.) The SEA Contracts contain basic terms of employment materially indistinguishable from

the POEA Contracts. (Compare First Nield Decl., Ex. B at 15 with Second Nield Decl., Ex. 2-A

at 23.) Each ofthe POEA Contracts appear to correlate to one ofthe SEA Contracts. Plaintiffs do
not contest the authenticity of their signatures on these contracts.

The principal document of the SEA Contracts is entitled "Seafarer's Employment

Agreement Part A - Individual Terms." (First Nield Decl., Ex. B.) The contracts contain basic
employment information including the employee's name and date of birth, the Defendant's

company name,the employee's rate ofpay, contracted hours, contract start date and end date. (Id)
Under this basic information is a section titled "6. Terms and Conditions." (Id.) This section

contains two provisions material to this motion. First, section 6.1 states, "Collective Bargaining

Agreement - Your Employment Agreement is governed by the POEA." (Id.) Second,section 6.2
states, "Standard Terms & Conditions of Employment- Part B of your Employment Agreement

is attached setting out all the standard terms and conditions of employment relating to your rank
and position, referenced as PART B27." (Id.) Below that, the employees and a company

representative signed the contracts. (Id.) The bottom of Part A reads,"Please continue to Part B
which sets out the standard terms and conditions applicable to your employment." (Id.)

Part B was given to the Plaintiffs before they signed Part A oftheir employment agreements

prior to each expedition. (D.E. # 20-1 ("Lucina Decl.") at 5.) Part B is titled, "Part B Improvements to Standard Terms and Conditions ofEmployment Within the POEA Dated 2010."

(First Nield Decl., Ex. C at 1.) It continues, "[t]his Part B Addendum sets out improvements to
the POEA dated October 2010 that are necessary to ensure compliance with the Maritime Labour

Convention 2006. This forms part of your Seafarers Employment Agreement. Other than detailed
below, all other Terms set out in the POEA dated October 2010 continue unchanged." (Id) The
remainder of Part B contains modifications to the terms and conditions ofPlaintiffs' employment.

(Id.) Defendants argue that the reference to the "POEA dated October 2010" and the provision in
Part A stating that "Your Employment Agreement is governed by the POEA" incorporates
Memorandum Circular No. 10 and its arbitration clause. Memorandum Circular No. 10 is dated
October 26, 2010. (First Nield Decl. Ex. D.)
III.

Memorandum Circular No. 10 Standard Terms and Conditions

In response to the direction of the Court at oral argument on December 14, 2018,

Defendants also provided Plaintiffs and the Court with copies of the POEA Standard Terms and
Conditions contained in Memorandum Circular No. 10 purportedly executed by each of the

Plaintiffs and corresponding to each of their trips. (See D.E. # 31-2—31-9; D.E. # 30.) These
documents contain the arbitration clause that Defendants seek to enforce against Plaintiffs.

Defendants also point to the following language in POEA Memorandum Circular No. 10 that

purports to show that the government ofthe Philippines mandates that every Filipino seafarer must
be presented with these terms before departing on an expedition:

5. Manning agencies shall ensure that its departing seafarers are given a copy ofthe
processed and approved employment contract, including its improvements if any.
Under no circumstances shall seafarers be allowed to leave their respective vessels

without a copy of the processed employment contract. Such contract shall be
randomly checked at the airports.

(D.E. # 32-10.) In response, Plaintiffs deny the authenticity of their signatures for many of the
same reasons they denied the authenticity ofthe signatures on the POEA contracts. (D.E. #31.)
LEGAL STANDARD

A court"may direct that arbitration be held in accordance with [an] agreement at any place
therein provided for, whether that place is within or without the United States." 9 U.S.C. § 206.
In deciding whether to compel arbitration,"the court applies a standard similar to that applicable

for a motion for summary judgment." Bensadoun v. Jobe-Riat. 316 F.3d 171,175(2d Cir. 2003).
"If there is an issue of fact as to the making of the agreement for arbitration, then a trial is

necessary." Id (citing 9 U.S.C. § 4). "Unless the parties clearly and unmistakably provide

otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not
the arbitrator." AT&T Techs.. Inc. v. Comm. Workers of Am..475 U.S. 643,649(1986).

When a party seeks to compel arbitration pursuant to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards(the "Convention") and Chapter Two of the Federal
Arbitration Act, four basic requirements must be met: "(1) there must be a written agreement;(2)
it must provide for arbitration in the territory ofa signatory ofthe convention;(3)the subject matter
must be commercial; and (4)it cannot be entirely domestic in scope." Smith/Enron Cogeneration
Ltd. Partnership. Inc. v. Smith Coeeneration Intern.. Inc.. 198 F.3d 88, 92(2d Cir. 1999). "If a

district court finds that these requirements are met, it must order arbitration unless it finds the
agreement 'null and void, inoperative or incapable of being performed.'" Cargill Intern. S.A. v.
M/T Pavel Dvbenko. 991 F.2d 1012, 1018 (2d Cir. 1993)(citing the Convention, Article 11(3)).

"[Qjuestions ofarbitrability must be addressed with a healthy regard for the federal policy favoring
arbitration." Moses H. Cone Memorial Hosp. v. Mercurv Constr. Corp.. 460 U.S. 1, 25 (1983).

DISCUSSION

Defendants move to compel arbitration in the Philippines on the basis that it is required by
the arbitration clause contained in POEA Memorandum Circular No. 10, as incorporated by the

POEA Contracts and the SEA Contracts and as signed directly by the Plaintiffs. Plaintiffs oppose

Defendants' motion on three grounds. First, they argue that there is no written arbitration

agreement between the parties. (D.E.# 20 ("Pis.' Opp'n") at 2-18.) Second, they argue that the
arbitration provision operates as an unenforceable prospective waiver of Plaintiffs' claims under
the Seamen's Wage Act. (Id. at 18-25.) Finally, they argue that the arbitration provision is null
and void because it is unconscionable, having been secured under conditions of duress. (Id at 2527.) Each of Plaintiffs' contentions are discussed in turn.
I.

Existence of a Written Arbitration Agreement

Plaintiffs contend that there is no written arbitration agreement between them and
Defendants because their signed employment contracts do not contain an express arbitration

provision and no arbitration provisions are incorporated into the contracts by reference. (Pis.'
Opp'n at 2-10.) Plaintiffs do not dispute that they signed Part A ofthe SEA Contracts. (Id) But
they do dispute whether they signed the POEA Contracts and Memorandum Circular No. 10, as
well whether those contracts are properly authenticated and whether Carnival—a non-signatory—

can enforce their provisions. Defendants do not claim that Part A of the POEA Contracts or the
SEA Contracts contain an arbitration clause on their face. Instead, they argue that the arbitration

provision ofPOEA Memorandum Circular No. 10 is incorporated in these contracts by reference.
(Defs.' Br at 6-8; Defs.' Reply at 3-4.)

A. The POEA Contracts

The POEA Contracts are identical to contracts signed by the plaintiffs in Pagaduan v.
Carnival Corp.. 709 F. App'x 713(2d Cir. 2017). In Pagaduan. the Second Circuit held that "[t]he

Contract of Employment [(the POEA Contract)] incorporates the Standard Terms and Conditions
[of Memorandum Circular No. 10] and its arbitration provision by reference as a matter of law,
foreclosing any material factual dispute." Id at 716. Based on Pagaduan. if the POEA Contracts

are valid and enforceable, Plaintiffs' contracts ofemployment incorporate Memorandum Circular
No. lO's arbitration clause by reference.

Plaintiffs challenge the enforceability ofthe POEA Contracts on three grounds. First, they

argue that they did not sign those contracts. (Pis.' Supp. Br. at 3-6.) Second,they argue that those
contracts were not properly authenticated because the lawyer through whom they were introduced
lacked firsthand knowledge of their execution. Third, Plaintiffs contend that Carnival cannot
enforce the POEA Contracts because it is not a signatory to those contracts. For the reasons stated
below,the Court finds that none ofthese arguments preclude enforcement ofthe POEA Contracts.

Regarding the first argument. Plaintiffs have submitted an affidavit averring, that "each of
us plaintiffs in this case categorically denies having signed any of these one-paged POEA
employment contracts." (D.E. #26-1, at 7.) They note that those contracts are "difficult to read,
if not completely illegible," contain "white-out," and have "almost illegible signatures." (Id at 811.) The Plaintiffs' affidavit is insufficient to defeat Defendants' motion to compel arbitration
because "[s]omething more than a bald assertion of forgery is required to create an issue of fact

contesting the authenticity of a signature." Banco Popular North America v. Victorv Taxi
Management.Inc..806 N.E.2d 488,490(N.Y.2004). Here,Plaintiffs have provided nothing more.

Although the appended copies of the POEA Contracts are not perfectly clear, all signs point to

8

their authenticity. The contested signatures on the POEA Contracts look very similar to (but not
photocopied from) the signatures on the SEA Contracts which Plaintiffs concede are their
signatures. (Compare e.g.. First Nield Decl. Ex. B, at 5, with Third Nield Deck, at 27.) Further,

the signatures for each individual Plaintiff appear to vary from contract to contract within the

POEA Contracts, suggesting that they were not copied and pasted. (Compare e.g.. Third Nield
Deck, at 27 with id. at 28.) In addition, these contracts were stamped with the approval of the

Philippine Overseas Employment Agency, a government agency tasked with protecting the rights
of Filipino seafarers. The declarations of three individuals versed in Filipino law state that
Plaintiffs would have been required by the government of the Philippines to execute copies ofthe
POEA Contract before embarking on any overseas expeditions. (D.E.# 27-2 at 3, 27-3 at 4, 27-

4 at 2.') This involvement of the government of the Philippines provides further reason not to
doubt the authenticity of Plaintiffs' signatures.

Second, Plaintiffs argue that the POEA Contracts cannot be considered because they were

not properly authenticated. (Pis.' Supp. Br. at 6-12.) Specifically, they argue that the individual
through whom the contracts were originally offered lacked personal knowledge oftheir formation,

as is required to properly authenticate a document under Federal Rule of Evidence 901. Without
commenting on the merits of this contention, the Court notes that any potential infirmities have
been remedied by Defendants' December 7, 2018 submission. In that filing, Rene Riel, president

of Singa Ship Management Philippines, Inc., swore that "his company ... has issued the attached
POEA-approved employment contracts" and that "[t]hese documents are true and correct copies
of documents, retained in the Philippines in the ordinary course of business." (Third Nield Deck,

' Plaintiffs moved, in a December 10, 2018 letter, to strike these affidavits and others attached to Defendants'

"Supplemental Reply in Support of Motion to Compel Arbitration and/or Dismiss,"(D.E. # 27). (D.E. # 28.) The
Court declines to strike these filings because they respond to material questions raised in Plaintiffs' November 9,2018
Affidavit/Declaration. (D.E.# 26.)

Ex. 3 at 3.) This is sufficient to establish the POEA Contracts' authenticity.

Elsevier B.V. v.

UnitedHealth Group. Inc.. 784 F. Supp. 2d 286, 291-92(S.D.N.Y. 2011)(noting that documents
which "conform[ed]to the same format as other... agreements ... used in the ordinary course of
business" satisfied Rule 901).

Finally, Plaintiffs argue that Carnival, as non-signatories to the POEA Contracts, cannot

enforce them. (Pis.' Supp. Br. 13-17.) The Second Circuit in Paeaduan. however, concluded that

"agency principles dictate that Carnival is a party capable of enforcing an arbitration agreement
made by its agents." 709 F. App'x at 717. Plaintiffs attempt to distinguish Paeaduan by arguing
that the Defendants have failed to establish a connection between the signatories of the POEA

Contracts (either Singa Ship Management or Fleet Maritime Services) and Carnival. However,
Defendants established the necessary connection in Rene Riel's affidavit, which avers that Singa

Ship Management is an agent of Fleet Maritime, which in turn is a subsidiary of Carnival. (Third
Nield Decl., Ex. 3 at 4.) The Court therefore concludes, consistent with Paeaduan. that Carnival
can enforce the POEA Contracts.

Because Carnival can enforce the POEA Contracts against Plaintiffs, the holding of

Paeaduan requires the Court to conclude that POEA Memorandum Circular No. lO's arbitration

clause is incorporated into their employment contracts.^
B. The SEA Contracts

Even if the dispute about the authenticity of the POEA Contracts could not be resolved at
this stage of the litigation, the Court nonetheless concludes that Memorandum Circular No. lO's

arbitration clause is incorporated by reference into the SEA Contracts. Specifically, Part B is

^ For the same reasons, the Court disagrees with Plaintiffs' arguments,(D.E.# 30), regarding the authenticity oftheir
signatures on the Standard Terms and Conditions contained in Memorandum Circular No. 10, supplied to the Court
subsequent to oral argument. (See D.E.# 31-2-31-9.) However,because Plaintiffs have not fully briefed their position
on these documents, the Court declines to rest its decision on the direct acceptance ofthese Terms and Conditions.
10

incorporated by reference into Part A of the SEA Contracts and Memorandum Circular No. 10 is

incorporated by reference into Part B. Plaintiffs do not dispute that they signed Part A.^
"A contract may incorporate another document by reference by describing it in such clear
and unambiguous terms that its identity can be ascertained beyond reasonable doubt." Paeaduan.

709 F. App'x at 715 (citing Progressive Cas. Ins. Co. v. C.A. Reaseeuradora Nacional De
Venezuela. 991 F.2d 42, 47 (2d Cir. 1993)). "Maritime contracts frequently incorporate by

reference other documents and industry terms and conditions." Id.(citing Son Shipping Co. v. De
Fosse & Tanghe. 199 F2d 687,688(2d Cir. 1952)).
Here a short chain connects the SEA Contracts to Memorandum Circular No. 10. Part A

ofthe SEA Contracts states "Part B of your Employment Agreement is attached setting out all the

standard terms and conditions of employment relating to your rank and position." (Nield Deck,
Ex. B.) That clause incorporates Part B into the SEA Contracts. Part B is titled "Improvements
to Standard Terms and Conditions of Employment Within the POEA Dated 2010."(IdJ Part B

also states that the "POEA dated 2010" was promulgated in October. (Id) POEA Memorandum
Circular No. 10 is dated October 26,2010 and is titled "Standard Terms and Conditions Governing

the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships." (Id)

Any Filipino seafarer would understand the reference to "the POEA dated October 2010"
to refer to the terms and conditions set forth in Memorandum Circular No. 10. Memorandum

Circular No. 10 was promulgated in October 2010 and concerns the terms and conditions of
Filipino seafarers' employment aboard ocean-going vessels. The SEA contracts concern the exact

^ Plaintiffs do argue that they never signed Part B oftheir employment agreements and are therefore not bound by any
of Part B's provisions. (See Pis.' Opp'n at 4.) However,"[ijncorporation by reference produces a single agreement
out of the incorporated documents and the contract itself." Lamb v. Emhart Corp.. 47 F.3d 551, 558(2d Cir. 1995).
As such,"Carnival does not need to prove that [Plaintiffs] signed both the Contract ofEmployment and the documents

incorporated by reference into that contract at the same time." Pasaduan, 709 F. App'x at 717. In any event, the
Court notes that Part B does not even contain a signature line. (See D.E.# 19-5.)
11

same subject—the employment of Plaintiffs aboard ocean-going vessels. The reference to the

"POEA dated October 2010" comes in that part of the SEA Contract explicating changes to the
"Standard Terms and Conditions ofEmployment"—once again,the exact subject ofMemorandum
Circular No. 10. Because the SEA Contracts identify Memorandum Circular No. 10 in "clear and

unambiguous terms," Memorandum Circular No. lO's arbitration clause is incorporated by
reference into the SEA Contracts.

Plaintiffs argue that the "POEA dated October 2010" could refer to any number of
documents, ranging from contracts to regulations to implementing guidelines promulgated by the
POEA. (Pis.' Br. at 7.) But Plaintiffs have not pointed to any other POEA-promulgated documents
that would confuse a reader of the SEA Contracts. The Court has identified other documents

promulgated by the POEA, but none of them render the SEA Contracts' reference to the "POEA
dated October 2010" ambiguous. For example, no Filipino seafarer would take the phrase to be a
reference to Memorandum Circular No. 8(dated October 6, 2010), which is entitled "Guidelines

on the Selection and Deployment of Filipino Au Pairs to Denmark." S^ POEA Memorandum
Circular No. 8, Philippine Overseas Employment Administration (October 6, 2010),

http://www.poea.gov.Dh/memorandumcirculars/2010/8.pdf.(last visited March 20,2019).^^
In sum, the SEA Contracts' reference to the "POEA dated October 2010" must be read in
the context of the contract as a whole. Savers v. Rochester Telephone Corp. Supplemental

Management Pension Plan. 7 F.3d 1091, 1095(2d Cir. 1993). It is contained in a document titled

"Seafarer's Employment Agreement." The "POEA dated October 2010" therefore must concem

employment and seafaring. The "POEA dated October 2010" reference is also located on a page

'' The Court may take judicial notice of official foreign government-promulgated documents. See Fed. R. Evid.
201(b)(2)("The court may judicially notice a fact that is not subject to reasonable dispute because it can accurately

and readily be determined from sources whose accuracy cannot reasonably be questioned."); see also In re Vitamin C
Antitrust Litigation. 837 F.3d 175, 194 n.13(2d Cir. 2016)(judicially noting diplomatic communication).
12

titled "Improvements to the Standard Terms and Conditions of Employment." Memorandum
Circular No. 10 is a set of standard terms and conditions of employment. Without identifying
another POEA document promulgated in October 2010 concerning the terms and conditions of
employment for Filipino seafarers, Plaintiffs fail to establish that the SEA Contracts' reference to
the "POEA dated October 2010" is ambiguous. The Court therefore concludes that the reference
to the "POEA dated October 2010" incorporates Memorandum Circular No. 10 and its arbitration
clause into the SEA Contracts.
* * *

For the foregoing reasons, the Court concludes that the arbitration clause contained in
POEA Memorandum Circular No. 10 is incorporated into Plaintiffs' contracts of employment

through both the SEA Contracts and the POEA Contracts.
II.

Article 11(3) of the Convention

Plaintiffs argue that the arbitration clause cannot be enforced because it is "null and void"
under Article 11(3) of the Convention on the Recognition and Enforcement of Foreign Arbitral
Awards. (Pis.' Opp'n at 18-27.) "The limited scope of the Convention's null and void clause
must be interpreted to encompass only those situations—such as fraud, mistake, duress, and
waiver—^that can be applied neutrally on an international scale." Apple & Eve. LLC v. Yantai
North Andre Juice Co.. Ltd.. 610 F. Supp. 2d 226,228(E.D.N.Y. 2009)(internal quotation marks
omittedk see also Meadows Indem. Co. Ltd. v. Baccala & Shoops Ins. Services. Ins.. 760 F. Supp.

1036, 1043 (E.D.N.Y. 1991).
A. Prospective Waiver

First, Plaintiffs argue that the arbitration clause is null and void because it operates as a

prospective waiver oftheir statutory right to damages under the Seaman's Wage Act. (Pis.' Opp'n

13

at 18-25.) Plaintiffs' Filipino-law expert avers that Filipino arbitral tribunals never apply foreign
law and that if Plaintiffs are forced to arbitrate in the Philippines, they will have no opportunity to
recover under U.S. statutory law. (D.E. # 20-2 ("Gorecho Decl.").) Relying on Thomas v.
Carnival Corp.. 573 F.3d 1113 (11th Cir. 2009), Plaintiffs argue that this "prospective waiver" is
a violation of public policy under Article V ofthe Convention.

Plaintiffs misconstrue Article V. Article V's "public policy" defense applies to the
recognition of arbitral awards, not to the enforceabilitv of arbitration clauses. Article V(2)

provides that "[rjecognition and enforcement of an arbitral award may [] be refused" if
"recognition or enforcement ofthe award would be contrary to the public policy of that country."
Convention, Article V(2); see also Lindo v. NCL(Bahamas! Ltd.. 652 F.3d 1257,1280(11th Cir.

2011)("Article V applies only at the arbitral award-enforcement stage and not at the arbitrationenforcement stage at issue here."). To the extent Plaintiffs attempt to rely on Article V, their

protests are premature. The prospective waiver defense applies only where "there [is] no

subsequent opportunity for review" and where the Court is "persuaded that 'the choice-of-forum
and choice-of-law clauses operated in tandem as a prospective waiver of a party's right to pursue

statutory remedies.'" Vimar Seguras v Reaseguros v. MA^ Skv Reefer. 515 U.S. 528, 540(1995)
(quoting Mitsubishi Motors Corp. v. Soler Chrvsler-Plvmouth. Inc.. 473 U.S. 614, 638 (1985)).
But where, as here, the Court can "retain[]jurisdiction over the case and 'will have the opportunity
at the award-enforcement stage to ensure that the legitimate interest in the enforcement ofthe ...

laws [will] be[] addressed,"' there is not cause to invalidate an arbitration clause. Id (citing
Mitsubishi Motors Corp.. 473 U.S. at 638).

In any event, even if Plaintiffs' challenge was appropriately before the Court, they have
failed to show that the choice-of-law and choice-of-forum provisions in this case "operate[] in

14

tandem as a prospective waiver of a party's right to pursue statutory damages." Mitsubishi, 473
U.S. at 637 n.l9. Plaintiffs have offered only a declaration of a Filipino lawyer who states that,

"there has been no labor arbiter decision involving Filipino seafarers that [he] know[s] of that

applies the laws of another country, much less the U.S. Seaman's Wage Act." (Gorecho Decl. at
12.) Defendants have pointed to at least one Philippine Supreme Court case suggesting that

Philippine conflict-of-law principles sometimes permit the application of foreign law by POEA
arbitrators. (Defs.' Reply at 7.) Several other circuits have held that choice-of-law and choice-offorum provisions only serve to invalidate an arbitral award where "the remedies available in the
chosen forum are so inadequate that enforcement would be fundamentally unfair." Lindo. 652

F.3d at 1283(quoting Lipcon v. Underwriters at Llovd's. London. 148 F.3d 1285,1297(11th Cir.

1998)); see also Asienacion v. Rickmers Genoa Schiffahrtsgesellschaft mbH & Cie KG.783 F.3d
1010,1017(5th Cir. 2015). Here,Plaintiffs have not adequately established that a POEA arbitrator

would not apply U.S. law, nor that application of Filipino law would be "fundamentally unfair."
In short. Plaintiffs cannot bring their "prospective waiver" defense at the motion to compel

arbitration stage and, even if they could, they have not adequately substantiated that defense.
B. Duress

Plaintiffs also argue that the arbitration clause is null and void because it was negotiated
under duress. (Pis.' Opp'n at 25-27.) They claim that the contracts were never explained to them,

that they were not permitted to negotiate the terms, and that they signed the contracts only to
provide for their families. (See, e.g.. Decl. of Plaintiffs at 3—4.) Duress can provide grounds to
refuse enforcement ofan arbitration clause under Article II. Apple & Eve.610 F. Supp. 2d at 228.

The Restatement (Second) of Contracts § 175 describes duress as follows: "If a party's

manifestation of assent is induced by an improper threat by the other party that leaves the victim

15

no reasonable alternative, the contract is voidable by the victim." Plaintiffs have not identified

any "improper threats" levied by Defendants. To the extent they characterize inclusion of an
arbitration clause as a threat, the Court disagrees, given the federal policy favoring arbitration.
Moses H. Cone.. 460 U.S. at 25; see also Restatement (Second) of Contracts § 176 (explaining

when a threat is improper). Nor have Plaintiffs shown that there was "no reasonable alternative"
to signing the contract. They have offered no evidence that they had to "succumb to the demands
ofthe wrongdoer or else suffer financial ruin." Wang v. New York Transit. Inc.. No. 91-CV-8695
(SAS), 1996 WL 583389, at *5(S.D.N.Y. Oct. 10, 1996)rdting Sheehan v. Atlanta IntM Ins. Co..
812 F.2d 465,469(9th Cir. 1987)).
* * *

Because Plaintiffs have failed to establish that the arbitration clause in POEA

Memorandum Circular No. 10 was "null and void" under the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, Article II, the Court concludes that the clause is
enforceable against Plaintiffs.
CONCLUSION

For the reasons stated above. Defendants' Motion to Compel Arbitration is GRANTED.

The Court retains limited jurisdiction to enforce any award resulting from the arbitration. The
parties are directed to file a letter notifying the Court ofthe results ofthe arbitration and their intent
to enforce any arbitral award before the Court.
SO ORDERED.

Dated: March 2(.2019
Brooklyn, New York

s/Carol Bagley Amon

Carol Bagley Afnon
United States District Judf

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