United States Court of Appeals

Fifth Circuit



## FILED

August 6, 2003

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 02-31138

STEPHEN BROWN,

Plaintiff-Appellee,

VERSUS

NABORS OFFSHORE CORPORATION,

Defendant-Appellant.

Appeal from the United States District Court

For the Eastern District of Louisiana

Before KING, Chief Judge, DAVIS and BENAVIDES, Circuit Judges.

DAVIS, Circuit Judge.

Nabors Offshore Corporation (Nabors) challenges the district

court’s order, denyin g Nabors’ motion to compel arbitration and

stay Brown’s Jones Act, general maritime action pending

arbitration. The question we must address is whether Brown’s

action against his employer, Nabors, falls within the exclusion to

the Federal Arbitr ation Act (FAA) which exempts from its

application “contracts of employment of seamen, railroad employees,1 Because Brown did not raise it in the district court, we do not

consider his argument that Nabors’ mailing of the letter announcing

the adoption of the NPRP did not create an enforceable arbitration

agreement.

2 or any other class of workers engaged in foreign or interstate

commerce.” For the reasons that follow, we conclude that the

district court correctly concluded that, because Brown is a seamen,

the arbitration clause Nabors contends is included in his contract

of employment is outside the scope of the FAA.

I.

Stephen Brown was employed as a roustabout for Nabors on the

DOLPHIN-110, a jack-up rig located in the Gulf of Mexico off the

coast of Louisiana. In late April or early May of 2001 (after

Brown’s employment by Nabors had already begun), Nabors sent Brown

a letter notifying him of the adoption of the Nabors Dispute

Resolution Program (“NDRP”), which requir ed i nter alia that all

disputes between Nabors and its employees be resolved through

arbitration. Enclosed with the letter was a separate acknowledgment

form for the employee to sign con firming his notice and

understanding of the agreement. The NDRP documents, however,

provided that in the event the employee failed to return the

acknowled gment form, “[y]our continued employment after the date

you receive the enclosed documents will constitute your acceptance

of the Program.” Brown did not return the signed acknowledgment

form, and the materials were not returned as undeliverable. 1

On October 19, 2001, Brown slipped on a piece of waste3

packaging while descending a staircase on the rig and fell,

suffering injuries to his lower back. At the time of Brown’s

injury, the rig was engaged in w orkover operations on a well in

preparation for oil and gas production.

In February 2002, Brown filed suit against Nabors in federal

district court under the Jones Act and general maritime law seeking

damages predicated on negligence and unseaworthiness, along with a

claim for maintenance and cure. Nabors filed a motion to compel

arbitration and to stay or dismiss this action pending such

arbitration, arguing that Brown had agreed under the terms of the

NDRP to submit any grievances to ma ndatory, binding arbitration.

Brown opposed Nabors’ motion on the grounds that, as a “seaman,” he

was exempt from being compelled to arbitrate.

Section 1 of the Federal Arbitration Act (“FAA”) exempts from

arbitration “contracts of employment of seamen, railroad employees,

or any other class of workers engaged in foreign or interstate

commerce.” 9 U.S.C. § 1 (2000). Nabors argued that Brown fell

outside of the § 1 exemption because he was not involved in the

transportation of goods in commerce.

The district court held that, because Brown was a seamen and

a member of an enumerated class of persons exempt from the

application of the FAA, he was expressly excl uded from FAA’s

coverage. More particularly, the court concluded that, because

Brown was a seamen, he was expressly excluded from coverage without

the necessi ty of establishing that he was actually engaged in2 See Offshore v. Robison

, 266 F.2d 769 (5 th Cir. 1959), approved

in princip le by the Supreme Court in M cDermott International v.

Wilander

, 498 U.S. 337 (1991). S ee also Colomb v. Texaco

, 736 F.2d

218, 221 (5 th Cir. 1984), collecting cases holding that crew members

aboard drilling and other special purpose vessels are seamen as a

matter of law.

4 foreign or interstate commerce. Alternatively, the court concluded

that no record evidence negated that Brown’s work as a crewmember

aboard the DOLPHIN-110–-producing oil and gas for use in interstate

commerce–-was work engaged in interstate or foreign commerce.

In this appeal, Nabors argues that although Brown is a seamen

for purposes of the Jones Act, he does not fall within the scope of

the FAA exemption because he was not engaged in the transportation

of goods in foreign or interstate commerce.

II.

Nabors does not–-indeed it could not–-challenge that Brown is

considered a seamen and member of the crew of the DOLPHIN-110 for

purposes of t he Jones Act. 2 Nabors argues that it is not enough

for Brown to show that he is a seamen; to trigger the e xemption,

Brown must also show that he was engaged in interstate or foreign

commerce.

In other words, Nabors would have us read the statutory

language–-“engaged in . . . commerce” as limiting all three named

groups–seamen, railroad employees and “any other class of workers.”

Specifically, he argues that the “engaged in . . .commerce” would

limit the exe mption to those seamen directly involved in the

transportation of goods in foreign or interstate commerce. Because3 87 F.3d 745 (5 th Cir. 1996)

4 71. F.3 592 (6 th Cir. 1995).

5 Brown was a roustabout or general laborer on a jack up drilling or

workover rig, Nabors contends that he cannot qualify as a worker

engaged in transportation of goods in foreign or interstate

commerce.

Brown argues, on the other hand, that the § 1 exemption

applies to all seamen, all railroad employees and further that the

exemption applies to all other transportation workers engaged in

c ommerce whose jobs are sufficiently similar to those in the

enumerated classes, seamen and railroad workers.

We have not before specifically addressed the precise question

presented to us. In R ojas v. TK Communications, Inc.

, 3 we

considered wh ether a disc jockey who sought recovery against her

employer for sexual harassment fell within the “engaged in foreign

commerce” exemption to the FAA. In rejecting Rojas’ argument that

she fell within the exemption, we followed a Sixth Circuit opinion

Asplundh Tree Expert Co. v. Bates

, 4 and state d that “the

exclusionary clause of § 1 in the Arbitration Act should be

narrowly construed to a pply to employment contracts of seamen,

railroad workers, and any other class of workers actually engaged

in the movement of goods in interstate commerce in the same way

that seamen and railroad workers are.” I d

. at 748. Although this

language is dicta

, our analysis supports Brown’s argument that the5 532 U.S. 105 (2001).

6

limiting phrase “engaged in foreign or interstate commerce” only

applies to “any other class of workers” and not to t he specific

categories of workers enumerated, seamen and railroad employees.

Nabors argues that the Supreme Court decision in Circuit City

Stores, Inc. v. Ada ms

, 5 supports its interpretation of the

exemption. In C ircuit City Stores

, the Court considered whether an

employee of Circuit City, a national retailer of consumer

electronics, fell within the § 1 exemption. The employee argued

that the words “contract of employment of

. . . any other class of

workers engaged in

. . . commerce” included all contracts of

employment so long as they involved commerce within the reach of

Congress under the Commerce Clause. I d

. at 114. The court rejected

this argument and reasoned that “.

. . the words any other class of

workers engaged in

. . . commerce” constitute a residual phrase

following, in the same sentence, explicit reference to “seamen” and

“railroad employees.” I d

. Construing the residual phrase to

exclude all employment contracts fails to give independent effect

to the statute’s enumeration of the specific categories of workers

which precedes it; there would be no need for Congress to use the

phrases “seamen” and “railroad employees” if those same classes of

workers were subsumed within the meaning of the “engaged in

commerce residual clause.” I d

. The court then explained that § 1

called for the application of the maxim ejusdem generis and that7

“[u]nder this rule of construction, the residual clause should be

read to give effect to the term ‘seamen’ and ‘railroad employees’

and should itself be controlled and defined by reference to the

enumerated categories of workers which are recited just before it;

the interpretation of the clause presse d by respondent fails to”

produce these results. Id . at 114-115.

We are satisfied that the Supreme Court’s reading of this

exemption is fully consistent with our reasoning in Rojas

. The

Supreme Court referred to seamen and railroad employees as

“enumerated categories of workers” and held that the residual class

of workers--“any other cl ass of workers engaged in commerce”--

should be limited by reference to the enumerated workers. C ircuit

City Stores

, 532 U.S. at 114-115. Contrary to Nabors’ argument,

the Court gave no signal that it would limit the meaning of the

enumerated workers by the limitation placed on the residual class

of workers, those “engaged in . . . commerce.”

Further langu age in the opinion supports the view that

employment contracts of the enumerated workers–-seamen and railroad

workers–-are, without limitation, exempt from the applica tion of

FAA:

We see no paradox in the Congressional decision to exempt

the workers over whom the co mmerce power was most

apparent. To the contrary, it is a permissible inference

that the employment contracts of the class of workers in

§ 1 were exclude d from the FAA precisely because of

Congress’s undoubted authority to govern the employment

relationships at iss u e by the enactment of statutes

specific to them. [Discussing existing statutes and6 Because our dispo sition of this case does not require it, we

do not consider Brown’s argument that his activity to develop oil

and gas for interstate commerce supports a conclusion that he was

engaged in commerce. We also do not consider the argument that the

rig and its crew are engaged in commerce by moving the rig and its

equipment and supplies from location to location in the Gulf of

Mexico. S ee Manuel v. P.A.W. drilling & Well Service, In c. , 135

F.3d 344 (5 th Cir. 1998).

8 statutes in the pipeline relating to seamen and railroad

workers.] It is reasonable to assume that Congress

excluded “seamen” and “railroad employees” from the FAA

for the simple reason that it did not wish to unsettle

established or developing statutory dispute resolution

schemes covering specific workers. Id . at 120-121.

We conclude, therefore, tha t Circuit City supports Brown’s

view that, as a seamen, § 1 excludes his employment contract from

the appli cation of the FAA, even if he was not “engaged in . . .

commerce.” 6

Finally, Nabors argues that the term “seamen” has no universal

meaning under all statutes and that the differing purposes of the

FAA and the Jones Act require that different meanings be attached

to this term. In support of their argument, they rely primarily on

Dole v. Petroleum Treaters, Inc.

, 876 F.2d 518 (5 th Cir. 1989). The

question presented in Dole was whether seamen were entitled to be

paid time and a half for overtime under the Fair Labor Standards

Act, 29 U.S.C. § 201, et seq . Under 29 U.S.C. § 213(b)(6) of the

Fair Labor Standards Act, any employee “employed as a seamen” is

exempt from the overtime requirements of the Act.

The panel con cluded that “seaman” under the Fair Labor

Standards Act had a different meaning than under the Jones Act.7 S ee also Buckley v. Nabors Drilling U.S.A., Inc.

, 190 F.

Supp.2d 958 (S.D. Tex. 2002); Pittman v. Nabors Drilling U .S.A.,

Inc. , No. 02-1719 (E.D. La. filed May 6, 2003).

9 Id . at 524. Because the employees at issue in Dole were employed

to service and maintain oil wells, the court concluded that the

exemption did not apply. Id

.

We conclude, however, that D ole is not helpful in analyzing

today’s case primarily for two reasons. First, the panel in Dole

accepted the inte rpretation of the seamen exemption set forth by

the Secretary of Labor in its regulations:

An employee will ordinarily be regarded as “employed as

a seamen” if he performs

. . . service which is rendered

primarily as an aid in the operation of [a] vessel as a

means of transportation, provided he performs no

substantial amount of work of a different character. Id

. at 521, citing 29 C.F.R. § 783.31.

Second, the panel relied heavily on the legislative history of the

Fair Labor Standards Act. I d

. at 522-523. Based on this

legislative history, the court concluded that the Jones Act and the

Fair Labor Standards Act have different purposes and each statute’s

protection was to be construed as broadly as possible. I d

. at 522.

Nothing comparable to the legislative hist ory and administrative

rules this court relied on in Do le to narrow the definition of

seamen under the Fair Labor Standards Act are present in this

case. 7

Conclusion

.

For the reasons discussed above, the district court correctly

concluded that the arbitration clause relied upon by Nabors is10

excluded from the application of the FAA. We, therefore, affirm

the district court’s judgment and remand this case to the district

court for further proceedings.

AFFIRMED AND REMANDED.