United States Court of Appeals

Fifth Circuit



## FILED

March 24, 2005

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 03-30380

JOSELITO MADRIAGA LIM, on behalf of himself and all other current

and former employees of Offshore Specialty Fabricators , Inc.,

similarly situated; ADELITO M. AGANON; RICHARD AG C AOILI; LUIS

AGNABO; ANTONIO P. ALCANTARA; ET AL.,

Plaintiffs-Appellees,

and

MARIO M. CABANLIT, on behalf of himself and all other current and

former employees of Offshore Specialty Fabricators, Inc., similarly

situated; JIMMY GADLAW LIM, on behalf of himself and all other

curr ent and former employees of Offshore Specialty Fabricators,

Inc., similarly situated,

Plaintiffs-Intervenor Plaintiffs-Appellees,

versus

OFFSHORE SPECIALTY FABRICATORS, INC.,

Defendant-Intervenor Defendant-Appellant.

Appeal from the United States District Court

for the Eastern District of Louisiana

Before WIENER, BARKSDALE, and DENNIS, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

In this 28 U.S.C. § 1292(b) interlocu tory appeal, Offshore

Specialty Fabricators, Inc. (OSFI), chall enges the denial of its

motions to dismiss for lack of subject matter jurisdiction and for

improper venue. See F ED

. R. C IV

. P. 12(b)(1), (b)(3). Plaintiff2

seamen are residents and citizens of th e Philippines. Their

i nternational employment contracts at issue, controlled by the

Convention on the Recognition and Enforcement of Foreign Arbitral

Awards, 10 June 1958, 21 U.S.T. 2517, T.I.A.S. No. 6997, 330

U.N.T.S. 38, reprinted in 9 U .S.C.A. § 201 note (hereinafter,

Convention), require arbitration of plaintiffs’ Fair Labor

Standards Act claims, notwithstanding exceptions claimed by

plaintiffs. (One claimed exception is pursuant to a Louisiana

statute which expresses that State’s strong public policy against

forum selection clauses in employment contracts.) VACATED and

REMANDED

.

I.

OSFI, a Louisiana corporation, employed Joselito Madriaga Lim,

a Philippine resident and citizen, to work aboard the OSFI DB-1, a

foreign-flagged vessel whose home port is Port Vila, Vanuatu. The

Philippine government requires foreign employers or their agents to

employ Filipino workers through the Philippine Overseas Employment

Administration (POEA), a de partment of the Ministry of Labor and

Employment. The POEA-mandated employment contracts for seamen

incorporate the Philippine government’s Standard Terms and

Conditions Governing the Employment of Filipino Seafarers On Board

Ocean-Going Vessels (Standard Terms).

Lim’s employment contract was executed through the POEA and

subject to the Standard Terms. Those terms include dispute3

resolution procedures, which require, inter alia

, resolving

employment claims through arbitration in the Philippines. Section

29 of the Standard Terms states:

In cases of claims and disputes arising from

this employment, the parties covered by a

colle ctive bargaining agreement shall submit

the claim or dispute t o the original and

exclusive jurisdiction of the voluntary

arbitrator or panel of arbitrators. If the

parties are not covered by a collective

bargaining agreement, the parties may at their

option submit t he claim or dispute to either

the original and exclusive jurisdiction of the

National Labor Relations Commission (NLRC),

pursuant to Republic Act (RA) 8042 otherwise

known as the Migrant Workers and Overseas

Filipinos Act of 1995 or to the original and

exclusive jurisdiction of the voluntary

arbitrators or panel of arbitrators....

L im filed this action against OSFI in the United States

District Court for the Eastern District of Louis iana, claiming

violations of the minimum wage and maximum hou r (overtime)

requireme nts of the Fair Labor Standards Act, 29 U.S.C. § 201 e t

seq. (FLSA). S ee 29 U.S.C. §§ 206, 207. Lim’s first amended

complaint (b efore OSFI answered) made this an opt-in collective

action, pursuant t o 29 U.S.C. § 216(b). Approximately 100

similarly-situated Filipino seamen have opted in.

In its ans wer, and based on the Standard Terms’ arbitration

clause, OSFI claimed, inter alia

, lack of subject matter

j urisdiction (Rule 12(b)(1)) and improper venue (Rule 12(b)(3) )

.

OSFI moved to dismiss, claiming: the Standard Terms require

arbitration in the Philippines; and the Convention, as implemented4

at 9 U.S.C. § 201 et seq. as Chapter 2 of the Federal Arbitration

Act (FAA), requires district court enforcement of the arbitration

clause. (Both the Philippines and the United States are

signatories to the Convention.)

Plaintiffs responded that , although our court had held the

Convention applies to seam en’s contracts, s ee Francisco v. STOLT

ACHIEVEMENT MT

, 293 F.3d 270, 273 (5th Cir.), cert. denied

, 537

U.S. 1030 (2002), the decision was in error and the Convention

should not apply. In the alternative, plaintiffs asserted that the

arb itration clause is unenforceable for three reasons. First,

arbitration has never been required in seamen’s wage liti gation.

Second, the arbitration claus e is contrary to Louisiana public

policy against a forum selection clause in an employment contract.

(An arbitration clause is a subset of a forum selection clause.

See Scherk v. Alberto-Culver Co. , 417 U.S. 506, 519 (1974).) And

third, the arbitration clause is invalid under the terms of the

Convention, because plaintiffs’ FLSA claims are rooted in United

States law and can not be resolved through foreign arbitration.

The district court denied dismissal, holding the arbitration

clause violated Louisiana law, which signaled a strong public

policy against a forum selection clause in an employment contract

and rendered the clause unenforceable. Accordingly, the district

court stated it did not need to address the other two exceptions

advanced by plaintiffs.5

OSFI moved for rehearin g or, in the alternative, for the

district court to certify the jurisdiction and venue issues to this

court for interlocu tory appeal, pursuant to 28 U.S.C. § 1292(b).

The district court chose the latter and of fered the following

controlling questions for interlocutory appeal: (1) whether the

Convention or the Supremacy Clause of the United States

Constitution, A rticle VI, clause 2, requires enforcement of the

a rbitration agreement in the employment contract; (2) if so,

w hether there is an exception, based on Louisiana’s anti-foru m

selection clause statute, L A

. R EV

. S TAT

. A NN

. § 23:921(A)(2) (2004);

(3) if the Louisiana statute is not preempted, whether it applies

to the employment contract; and (4) if so, whether plaintiffs

agreed to, or ratified, the arbitration clause pursuant to the

exce ption in the Louisiana statute. Our court granted OSFI’s

motion to appeal.

II.

“As the text of § 1292(b) indicate s, appellate jurisdiction

applies to the order certified to the court of appeals, and is not

tied to the particular question[s] formulated by the district

court.” Y amaha Motor Corp. v. Calhoun , 516 U.S. 199, 205 (1996)

(emphasis in original). The above-noted questions presented in the

district court’s order assist in determining the propriety of the

ruling; but they fail to include the other two exceptions claimed

in district court by plaintiffs, which are also advanced here and6

which we address. (No authority need be cited for the rule that an

issue presented in district court, but not ruled on there, may be

raised on a ppeal in support of the ruling being challenged.)

OSFI’s method of invoking the Convention must be addressed first,

however.

A.

Plaintiffs seek relief because OSFI did not request the

district court to stay these proceedings and order arbitra tion.

OSFI responds t hat, based on the arbitration clause, it properly

moved to dismiss, under Rules 12(b)(1) (lack of subject matter

jurisdiction) and 12(b)(3) (improper venue). As noted, foreign

arbitration clauses are deemed a “subset of foreign forum selection

clauses in general”. Vimar Seguros y Reaseguros, S.A. v. M/V SKY

REEFER , 515 U.S. 528, 534 (1995). Therefore, analysis of foreign

forum selection clauses can be extended to foreign arbitration

clauses. Id.

1.

Our court has noted, but declined to address, the “enigmatic

question of whether motions to dismiss on the basis of forum

selection clauses are properly brought as motions under F ED

. R. C IV

.

P. 12(b)(1) [or] 12(b)(3) ....” H aynsworth v. The Corporation

, 121

F.3d 956, 961 (5th Cir. 1997), cert. denied

, 523 U.S. 1072 (1998).

In any event, our court has treated a motion to dismiss based on a

forum selection clause as properly brought under Rule 12(b)(3)7

(improper venue). Albany Ins. Co. v. Almacenadora Somex, S.A. , 5

F.3d 907, 909 & n.3 (5th Cir. 199 3). We have also affirmed,

without comment on procedural posture, a district court’s granting

a Rule 12(b)(3) motion to dismiss based on a forum selection

clause. M

itsui & Co. (USA), Inc. v. Mira M/V

, 111 F.3d 33, 37 (5th

Cir. 1997). And, other circuits agree that a motion to dismiss

based on an arbitration or forum selection clause is proper under

Rule 12(b)(3). See Continental Ins. Co. v. Polish S.S. Co. , 346

F.3d 281, 282 (2d Cir. 2003) (affirming Rule 12(b)(3) dismissal in

favor of foreign arbitration) ; Lipcon v. Underwriters at Lloyd’s,

London

, 148 F.3d 1285, 1290 (11th Cir. 1998), cert. denied

, 525

U.S. 1093 (1999) (motion to dismiss based on forum selection clause

in international agreement should be brought under Rule 12(b)(3));

Argueta v. Banco Mexicano, S.A. , 87 F.3d 320, 324 (9th Cir. 1996)

(Rule 12(b)(3) motion proper method to invoke forum selection

clause); Frietsch v. Refco, Inc.

, 56 F.3d 825, 830 (7th Cir. 1995)

(same).

Although circu its are split on the issue of whether Rule

1 2(b)(1) or 12(b)(3) is the proper motion for seeking dismissal

based on a forum selection o r arbitration clause, s ee 5B W RIGHT &

M ILLER

, F EDERAL P RACTICE & P ROCEDURE

, § 1352 (3d ed. 2004), neither side

has substantively briefed the merits of the question. Because our

court has accepted Rule 12(b)(3) as a proper method f or seeking8

dismissal based on a forum selection clause, we need not decide

whether a Rule 12(b)(1) motion would be appropriate.

2.

Claiming a right to trial to determine whether they are

required to arbitrat e, plaintiffs rely on 9 U.S.C. § 4 (allowing

“[a] party aggrieved by the alleged failure, neglect, or refusal of

another to arbitrate under a written agreement for arbitration” to

petition district court to direct arbitration). Plaintiffs do not

explain how this statute applies. Because the issue is not

adequately briefed, we decline to address it. S ee United States v.

Thames

, 214 F.3d 608, 611 n.3 (5th Cir. 2000); see also F ED

. R. A PP

.

P. 28(a)(9)(A).

B.

Accordingly, we turn to the order under review. We need only

address two issues because (1) the Conven tion and the Supremacy

Clause require enforcement of the arbitration clause; and (2) there

is no exception to that requirement based on any one of t he three

advanced by plaintiffs, including Louisiana’s anti-forum-selectionclause statute.

1.

The Supremacy Clause provides that laws and treaties ari sing

un der the Constitution “shall be the supreme Law of the Land; and

the Judges in every State shall be bound thereby....” U.S. C ONS T

.

art. VI, cl. 2. It goes without saying that, upon the United States9

signing a treaty and Congress adopting enabl i ng legislation, the

treaty becomes the supreme law of the land. E .g., Sedco, Inc. v.

Petroleos Mexicanos Mexican Nat. Oil Co.

, 767 F.2d 1140, 1145 (5th

Cir. 1985). It also goes without saying that whether the Supremacy

Clause and the Convention require en f orcement of the arbitration

clause is a question of law, reviewed de novo

. E .g., Witty v. Delta

Air Lines, Inc. , 366 F.3d 380, 382 (5th Cir. 2004).

In 1970, Congress enacted the Convention’s enabling

legislation, 9 U.S.C. §§ 201-208 (Convention Act). E .g. Scherk

, 417

U.S. at 520 n.15. If an international arbitration clause falls

under the Convention Act, “the Convention requires district courts

to order arbitration”. S edco , 767 F.2d at 1145; see also 9 U.S.C.

§ 201 (“The Convention

... shall be enforced in United States courts

....”).

The Convention applies to in t ernational arbitration clauses

when “(1) there is an agreement in writing to arbitrate the dispute,

(2) the agreement provides for arbitration in the territory of a

Convention signatory, (3) the agreement arises out of a commercial

legal relationship, and (4) a party t o the agreement is not an

American citizen ”. F rancisco

, 293 F.3d at 273 (emphasis added); see

also 9 U.S.C. § 202 (listing same requirements). In F rancisco

, our

court considered a Filipino seaman’s employment contract identical

to the one at issue and clarified that such contracts “arise[] out

of a commercial l egal relationship”. 293 F.3d at 273. Thus,10

plaintiffs’ contracts are cont rolled by the Convention: the

contracts are in writing; they require arb itration in the

Philip pines, a signatory to the Convention; they describe a

“contractual legal relations hip”; and plaintiffs are not American

citizens. (Plaintiffs seek reconsideration of our court’s holding

in Francisco that t he Convention applies to seamen’s employment

contracts. Barring a change of law, “[i]t has long been a rule of

this court that no panel o f this circuit can overrule a decision

previously made by another”. L egros v. Panther Servs. Group, Inc.

,

863 F.2d 345, 349 (5th Cir. 1988).)

Because the United States is a signatory to the Convention, and

Congress enacted enabling legislation, the Convention is applicable

as federal law in this case. Further, unless there is an exception,

as discussed below, the Convention requires the arbitration clause

in plaintiffs’ employment contracts be honored.

2.

Accordingly, we turn to whether there is an exception to the

Convention’s mandate that the employment claims in question be

arbitrate d according to the Standard Terms. Of course, whether a

forum selection or arbitration clause is enforceable is a question

of law reviewed de novo

. E .g., Mitsui

, 111 F.3d at 35. Likewise,

questions of preemption are reviewed de novo

. E .g.

, Witty, 366 F.3d

at 382.11

OSFI maintains the Standard Terms’ arbitration clause applies

without exc eption to plaintiffs’ claims. Plaintiffs dispute that

on three bases. They maintain: (1) the clause is unreasonable, and

therefore invalid, under the test announced in M/S Bremen v. Zapata

Off-Shore Co.

, 407 U.S. 1, 15 (1972) (forum selection clause valid

unless contravenes strong public policy), because the Louisiana

statute evinces a strong public policy against arbitration clauses

in employment contracts; (2) the arbitration clause is invalid

because arbitration is not warranted in seamen’s wage litigation;

and (3) their FLSA claims are not arbitrable, so the Convention, by

its own terms, does not apply.

a.

Unlike the Convention, Louisiana law prohibits employers’ use

of choice of forum and choice of law clauses in employment

contracts:

The provisions of every employment contract or

agreement, or provisions thereof, by which any

foreign or dom e stic employer or any other

person or entity includes a choice of forum

clause or choice of law clause in an employee’s

contract of employment or collective bargaining

agreement, or attempts to enforce ei t her a

choice of forum clause or choice of law clause

in any civil or administrative action involving

an employee, shall be null and void ....

L A

. R EV

. S TAT

. § 23:921(A)(2). Again, the Supremacy Clause declares

that federal law “shall be the supreme Law of the Land [,]

... any

Thing in the Constitution or Laws of any Stat e to the Contrary12

notwithstanding”. U.S. C ONST

. art. VI, cl. 2 (emphas i s added).

“Where [state] laws co nflict with a treaty, they must bow to the

superior federal policy .” Z schernig v. Miller

, 389 U.S . 429, 441

(1968) (emphasis added).

i.

OSFI maintains the Convention preempts Louisiana law. It

analogizes that preemption question to those presented in Southland

Corp. v. Keating

, 465 U.S. 1 (1984), and OPE International, L.P. v.

Chet Morrison Contractors, Inc. , 258 F.3d 443 (5th Cir. 2001).

Southland hel d § 2 of the FAA, which declares arbitration

clauses in American contracts “shall be valid, irrevocable, and

enforceable”, preempted a California statute forbidding arbitration

of disputes arising from interstate contracts b etween franchisors

and franchisees. 465 U.S. at 10. O PE International held the FAA

preempt ed a Louisiana statute forbidding arbitration of contracts

for public and pri vate works when one party was located, and the

work was done, in Louisiana. 258 F.3d at 447.

OSFI relies properly on Southland and OPE

. “In substance, the

Convention replicates the Federal Arbitration Act.” S edco

, 767 F.2d

at 1146. Both statutes apply to employment contracts in general.

See Circuit City Stores, Inc. v. Adams

, 532 U.S. 105, 1 09 (2001)

(FAA applies to employment contracts o t her than seamen’s and

transportation workers’ contracts as exempted by § 1); F rancisco

,13

293 F.3d at 273 (Convention applies to s eamen’s employment

contracts).

Southland

noted that, in the FAA, Congress “declared a

national policy favoring arbitration and withdrew the power of the

states to require a judicial forum for the resolut ion of claims

which the co n tracting parties agreed to resolve by arbitration”.

465 U.S. at 10 (emphasis added) . The Louisiana anti-forumselection-c l ause statute conflicts directly with the Convention’s

mandate to enforce arbitration clauses. Applying a straightforward

preemption an alysis, the Convention, as the “supreme Law of the

Land”, preempts the directly conflicting Louisiana statute, unless,

as plaintiffs claim, it satisfies an exceptio n to the Convention.

ii.

According to plaintiffs, the arbitration clause should not be

enforced because it is contrary to strong Louisiana public policy.

The Supreme Court has held forum selection clauses in international

contracts are “prima facie valid” and should be upheld absent a

clear showing of unreasonableness, unjustn e ss, overreaching, or

fraud. B remen

, 407 U.S. at 10, 15. Bremen held a choice of forum

clause may be unreasonable when “enforcement would contravene a

strong public policy of the forum in which suit is brought

, whether

declared by statute or by judicial decision”. I d. at 15 (emphasis

adde d). The Convention mirrors this policy concern by allowing a

court charged with enforcing an arbitral award to refuse enforcement14

if “[t]he recognition or enforcement of the award would be contrary

to the public policy of that country ”. Convention, art. V, § 2(b)

(emphasis added).

Forum is broadly defined as “[a] court or other judicial body;

a place of juri s diction”. B LACK ’ S L AW D ICTIONARY (8th ed. 2004). In

performing the instant Bremen reasonableness analysis, an underlying

issue is which forum

– the United States or Louisiana

– is relevant

for purposes of the test. As they did in district court, plaintiffs

assume Louisiana is the relevant forum. The district court agreed,

noting that, although plaintiffs raise d claims under a federal

statute (FLSA) in federal cour t, they could have brought them in

state court. It ruled: “The fortuity (for defendant) of plaintiffs

electing to bring the ir claims in federal court should not exempt

defendant from Louisiana laws intended to apply to employers in this

state ”. Lim v. Offshore Specialty Fabricators, Inc.

, No. 02-2126

(E.D. La. 28 Janua r y 2003)(order denying motions to dismiss)

(emphasis added).

On the other hand, i t is quite understandable that the

Convention and its enabling act imply that the forum at issue is

national, rather than local. C f. Conventi on, art. V, § 2 (a)

(allowing a country to refuse enforcement of an arbitral award if

the award violates the country’s public polic y); 9 U.S.C. § 205

(giving federal courts jurisdiction over cases to which the

Convention applies, regardless of amount in controversy). Likewise,15

the Convention envisions the applic a ble forum to be the signatory

country, not individual states within it. S ee Convention, art. XI,

§ (a) (clarifying that the obligations of a signatory with a federal

government are the same as those o f a signatory that is a unitary

state). Further, for obvious reasons, when analyzing the

reasonableness of a choice of forum clau s e in an international

contract, courts do not ignore federal law and policy. S ee Afram

Carriers, Inc. v. Moeykens , 145 F.3d 298, 302-03 (5th Cir. 1998),

cert. denied

, 525 U.S . 1141 (1999); L ipcon

, 148 F.3d at 1298-99;

Dahiya v. Talmidge Int’l, Ltd.

, 371 F.3d 207, 2 20 (5th Cir. 2004)

(DeMoss, J., dissenting).

Because plaintiffs broug ht FLSA claims in federal court, and

the contested clause mandates arbitration in a foreign country (as

opposed to a State), the relevant forum is arguably the United

States, a signatory to the Convention. On this record, including

plaintiffs’ not being residents of Louisi ana, as discussed i nfra

,

we need not decide whether the United States is the relevant forum.

Accordingly, we will consider both United States and Louisiana

public policy in our Bremen reasonableness analysis.

(a)

Plaintiffs contend the arbitration clause is unenforceable in

the light of Louisiana’s strong public policy against choice of

forum clauses, as evidenced both by the above-quoted statute, L A

.

R EV

. S TAT . § 23:921(A)(2), and by judicial decision, Sawicki v. K/S16

STAVANGER PRINCE

, 802 So. 2d 598 (La. 2002). OSFI relies on the

dissent in Dahiya to support its response th at Louisiana public

policy against a choice of fo rum clause (arbitration clause) in

employment contracts does not outweigh the federal pol i cy of

enforcing international arbitration clauses.

For obvious reasons, a party opposing, on public policy

grounds, enforcement of an international arbitration clause must

meet a “heavy burden of proof”. B remen

, 407 U.S. at 17. “[T]here

is a strong presumption in favor of arbitration and a party seeking

to invalidate an arbitration agr eement bears the burden of

establishing its invalidity”. C arter v. Countrywide Credit Indus.,

Inc. , 362 F.3d 294, 297 (5th Cir. 2004) (citing G ilmer v.

Interstate/Johnson Lane Corp. , 500 U.S. 20, 26 (1991)).

The above-quoted § 23:921(A)(2) of the Louisiana Labor and

Worker’s Compensation Code, enacted in 1 9 99, prohibits choice of

forum or choice of law clauses in a ll employment contracts.

Sawicki

, 802 So. 2d at 603. Section 23:921(A)(2) is a subsection

of a statute concerning restraints on busine ss; the Louisiana

Supreme Court has held generally that the statut e demonstrates

“strong Louisiana public policy concerning forum selection clauses”.

Id

. at 603. Accordingly, as plaintiffs note, both Louisiana statute

and judicial decision evince a polic y against enforcement of

arbitration clauses in employment contracts.17 (b)

As has been done for the contrary Louisiana public policy, the

federal public policy favoring dom e stic and international

arbitration agreements has been declar e d by both statute and

judi cial decision. Repeatedly, Congress has endorsed arbitration

clauses, first through passage of the FAA, and then through adoption

of the Convention and implementation of the Convention Act.

Likewise, federal courts have supported this strong policy in favor

of arbitration. “[Q]uestions of arbitrability must be addressed

with a healthy regard for the federal policy favoring arbitration.”

Gilmer

, 5 0 0 U.S. at 26. In the context of the Convention, the

Supreme Court held:

[C]oncerns of international comity, respect for

the capacities of foreign and transnational

tribunals, and sensitivity to the need of the

international commercial system for

predictability in the resolution of disputes

require that we e nforce the parties’

[ arbitration] agreement, e ven assuming that a

contrary result would be forthcomin g in a

domestic context

.

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.

, 473 U.S.

614, 629 (1985) (emphasis added); see also Scherk

, 417 U.S. at 520

n.15. More specifically, federal courts have endorsed federal

arbitration policy by applying the Convention to seamen’s employment

contra cts. See Francisco

, 293 F.3d at 274; Bautista v. Star

Cruises , 396 F.3d 1289, 1300 (11th Cir. 2005).18

In addition, in weig hing these competing policy concerns, it

must be noted that plaintiffs’ employment contracts do not present

the inequities the Louisiana statute was crafted to prevent

. That

statu te seeks to protect Louisiana citizen-employees from being

subjected to lit igation in a foreign forum, under laws with which

they are not familiar and before a foreign body. S ee Testimony of

Representative Jackson, Official Minutes of Louisiana Senate

Committee on Labor and Industrial Relations, Hearing on Senate Bill

915 (22 April 1999). P l aintiffs are Philippine residents and

citizens. Their employment contracts do not require them to bring

claims in a foreign forum, but instead r equire OSFI to submit to

arbitration in plaintiffs’ home country, before plaintiffs’

countrymen.

In sum, on this record, given the strong federal policy in

favor of international arbitration agreements in general, and the

application of the Conve ntion to seamen’s employment contracts in

particular, the overall balance of p u blic policy concerns favors

enforcing the arbitration agreements. Plaintiffs do not meet the

“high burden of proof” necessary to show public policy renders the

arbitration clause unreasonable.

b.

For the second claimed exception, plaintiffs maintain

“[a]rbitration has never been required in seamen’s wage litigation”

and clauses requiring such arbitration are invalid. They cite U .S.19

Bulk Carriers, Inc. v. Arguelles

, 400 U.S. 351, 357 (1971), which

applied § 301 of the Labor Man agement Relations Act, 29 U.S.C. §

185 (LMRA) (providing federal remedy to enforce grievance and

arbitration provisions of collective bargainin g agreements).

Arguelles held § 301 did not deprive seamen of their right to assert

in federal court wage claims arising under 46 U.S.C. § 596 (now 46

U.S.C. § 10313) (controlling seamen’s individual wage claims against

employer). I d. For the following reasons, A rguelles is

distinguishable.

First, the claims in Arguelles addr essed seamen’s judicial

remedies for denial of contractual wages. I d. at 354. Plaintiffs

do not claim they were not pa id according to their contract;

instead, they ma ke claims under the FLSA for extra-contractual

wages. Also at issue in A rguelles was the duty to follow the

collective bargaining grievance procedure under the LMRA, a statute

and procedure absent here. Finally, while the A rguelles court

refused to hold § 301 of the LMRA replaced access to courts, the

Court did not declare seamen’s wages conclus ively exempt from

arbitratio n in all situations. I d. at 356 (seamen may, if they

choose, “use the processes of grievance and arbitration”).

c.

Plaintiffs’ final claimed exception is that the Convention does

not compel arb itration of their FLSA claims because they are not

subject to arbitration. OSFI reserves the question of whether the20

FLSA applies to plaintiffs’ claims, but contends that, in any event,

they are subject to arbitration.

Article II of the Convention states: “Each Contracti ng State

s hall recognize an agreement in writing under which the parties

undertake to submit to arbitration

... concerning a subject matter

capable of se ttlement by arbitration ” ; and “[t]he court of a

Contracting State

... shall, at the request of one of the parties,

refer the parties to arbitration, unless it f inds that the said

agreement is

... incapable of being performe d ”. Convention, art.

II, §§ 1, 3 (emphasi s added). Article V states: “Recognition and

enforcement of an arbitral award m ay also be refused if the

competent authority in the country where recognition and enforcement

is sought finds that: (a) t he subject matter of the difference is

not capable of settlement by arbitration under the law of that

country ”. Convention, art. V, § 2 (emphasis added).

As noted, “individuals seeking to avoid the enforcement of an

arbitrati on agreement face a high bar”, even when the claims at

issue are statutory. C arter

, 3 6 2 F.3d at 297. In G ilmer

, the

Supreme Court held federal statutory claims are subject to

arbitration unless the party resisting arbitration can show

“Congress intended t o preclude a waiver of a judicial forum” for

resolution of the claims. 500 U.S. at 26. “If such an intention

exists, it will be discoverable in the text of the [statute], its

legislative history, or an ‘inherent conflict’ between arbitration21

and the [statute’s] underlying purpose s.” Id. The FLSA does not

preclude arbitration by its terms or legislative history. C arter

,

362 F.3d at 297. Therefore, plaintiffs must demonstrate an

“inherent conflict” between arbitration and the purposes underlying

the FLSA. Gilmer , 500 U.S. at 26.

Instead of addressing “inherent conflict” directly, plaintiffs

maintain arbitration “serves no purpose” because their FLSA claims

are “rooted in United States law [and] are incapable of resolution

by f oreign arbitration”. Without deciding whether plaintiffs’

claims are subject to the FLSA, see Haynsworth

, 121 F.3d at 966, we

note that the NLRC, the Philippine body charged with arbitrating

employment claims under Standard Terms § 29, is statutorily

empowered to have “original and exclusive jurisdiction to hear and

decide

... the claims arising out o f an employer-employee

relationship or by virtue of any law or contract involving Filipino

workers for overseas deployment including claims for actual, moral,

exemplary and other forms of damages”. Migrant Workers and Overseas

Filipino Act of 1995, Republic Act 8042, § 10 (2004) (Phil.)

(emphasis added), available at

http://www.poea.gov.ph/html/ra80 4 2.html. There is no reason to

conclude the NLRC could not cons ider an action arising under the

FLSA, if that statute applies to plaintiffs’ claims.22 III.

For the foregoing reasons, the dismissal-denial is VACATED and

this matter is REMANDED to district court for fu r ther proceedings

consistent with this opinion.

VACATED and REMANDED