Lim v. Offshore Specialty Fabricators, Inc.

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS March 24, 2005
FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
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 AGCAOILI; 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
current 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) interlocutory appeal, Offshore

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

motions to dismiss for lack of subject matter jurisdiction and for

improper venue. See FED. R. CIV. P. 12(b)(1), (b)(3). Plaintiff
seamen are residents and citizens of the Philippines. Their

international 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 department 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 dispute

2
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
collective bargaining agreement shall submit
the claim or dispute to 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 the 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....

Lim filed this action against OSFI in the United States

District Court for the Eastern District of Louisiana, claiming

violations of the minimum wage and maximum hour (overtime)

requirements of the Fair Labor Standards Act, 29 U.S.C. § 201 et

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

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

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

similarly-situated Filipino seamen have opted in.

In its answer, and based on the Standard Terms’ arbitration

clause, OSFI claimed, inter alia, lack of subject matter

jurisdiction (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 implemented

3
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 seamen’s contracts, see 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

arbitration clause is unenforceable for three reasons. First,

arbitration has never been required in seamen’s wage litigation.

Second, the arbitration clause 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.

4
 OSFI moved for rehearing or, in the alternative, for the

district court to certify the jurisdiction and venue issues to this

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

The district court chose the latter and offered the following

controlling questions for interlocutory appeal: (1) whether the

Convention or the Supremacy Clause of the United States

Constitution, Article VI, clause 2, requires enforcement of the

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

whether there is an exception, based on Louisiana’s anti-forum

selection clause statute, LA. REV. STAT. ANN. § 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

exception in the Louisiana statute. Our court granted OSFI’s

motion to appeal.

II.

“As the text of § 1292(b) indicates, 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.” Yamaha 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 and

5
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 appeal 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 arbitration.

OSFI responds that, 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 FED. R. CIV.

P. 12(b)(1) [or] 12(b)(3) ....” Haynsworth 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)

6
(improper venue). Albany Ins. Co. v. Almacenadora Somex, S.A., 5

F.3d 907, 909 & n.3 (5th Cir. 1993). 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. Mitsui & 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 circuits are split on the issue of whether Rule

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

based on a forum selection or arbitration clause, see 5B WRIGHT &

MILLER, FEDERAL PRACTICE & PROCEDURE, § 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 for seeking

7
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 arbitrate, 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. See United States v.

Thames, 214 F.3d 608, 611 n.3 (5th Cir. 2000); see also FED. R. APP.

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

B.

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

address two issues because (1) the Convention and the Supremacy

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

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

advanced by plaintiffs, including Louisiana’s anti-forum-selection-

clause statute.

1.

The Supremacy Clause provides that laws and treaties arising

under the Constitution “shall be the supreme Law of the Land; and

the Judges in every State shall be bound thereby....” U.S. CONST.

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

8
signing a treaty and Congress adopting enabling 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 enforcement 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”. Sedco, 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 international 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 to the agreement is not an

American citizen”. Francisco, 293 F.3d at 273 (emphasis added); see

also 9 U.S.C. § 202 (listing same requirements). In Francisco, 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 legal relationship”. 293 F.3d at 273. Thus,

9
plaintiffs’ contracts are controlled by the Convention: the

contracts are in writing; they require arbitration in the

Philippines, a signatory to the Convention; they describe a

“contractual legal relationship”; and plaintiffs are not American

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

in Francisco that the 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 of this circuit can overrule a decision

previously made by another”. Legros 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

arbitrated 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.

10
 OSFI maintains the Standard Terms’ arbitration clause applies

without exception 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 domestic 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 either a
choice of forum clause or choice of law clause
in any civil or administrative action involving
an employee, shall be null and void ....

LA. REV. STAT. § 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 State to the Contrary

11
notwithstanding”. U.S. CONST. art. VI, cl. 2 (emphasis added).

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

superior federal policy.” Zschernig 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 held § 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 between franchisors

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

preempted a Louisiana statute forbidding arbitration of contracts

for public and private 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.” Sedco, 767 F.2d

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

See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001)

(FAA applies to employment contracts other than seamen’s and

transportation workers’ contracts as exempted by § 1); Francisco,

12
293 F.3d at 273 (Convention applies to seamen’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 resolution of claims

which the contracting parties agreed to resolve by arbitration”.

465 U.S. at 10 (emphasis added). The Louisiana anti-forum-

selection-clause statute conflicts directly with the Convention’s

mandate to enforce arbitration clauses. Applying a straightforward

preemption analysis, the Convention, as the “supreme Law of the

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

as plaintiffs claim, it satisfies an exception 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, unjustness, overreaching, or

fraud. Bremen, 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”. Id. at 15 (emphasis

added). The Convention mirrors this policy concern by allowing a

court charged with enforcing an arbitral award to refuse enforcement

13
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 jurisdiction”. BLACK’S LAW DICTIONARY (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 raised claims under a federal

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

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

electing to bring their 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 January 2003)(order denying motions to dismiss)

(emphasis added).

On the other hand, it is quite understandable that the

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

national, rather than local. Cf. Convention, art. V, § 2 (a)

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

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

(giving federal courts jurisdiction over cases to which the

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

14
the Convention envisions the applicable forum to be the signatory

country, not individual states within it. See Convention, art. XI,

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

government are the same as those of a signatory that is a unitary

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

reasonableness of a choice of forum clause in an international

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

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

cert. denied, 525 U.S. 1141 (1999); Lipcon, 148 F.3d at 1298-99;

Dahiya v. Talmidge Int’l, Ltd., 371 F.3d 207, 220 (5th Cir. 2004)

(DeMoss, J., dissenting).

Because plaintiffs brought 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 Louisiana, as discussed infra,

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, LA.

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

15
STAVANGER PRINCE, 802 So. 2d 598 (La. 2002). OSFI relies on the

dissent in Dahiya to support its response that Louisiana public

policy against a choice of forum clause (arbitration clause) in

employment contracts does not outweigh the federal policy 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”. Bremen, 407 U.S. at 17. “[T]here

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

to invalidate an arbitration agreement bears the burden of

establishing its invalidity”. Carter v. Countrywide Credit Indus.,

Inc., 362 F.3d 294, 297 (5th Cir. 2004) (citing Gilmer 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 1999, prohibits choice of

forum or choice of law clauses in all employment contracts.

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

of a statute concerning restraints on business; the Louisiana

Supreme Court has held generally that the statute demonstrates

“strong Louisiana public policy concerning forum selection clauses”.

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

and judicial decision evince a policy against enforcement of

arbitration clauses in employment contracts.

16
 (b)

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

federal public policy favoring domestic and international

arbitration agreements has been declared by both statute and

judicial 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, 500 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 enforce the parties’
[arbitration] agreement, even assuming that a
contrary result would be forthcoming 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

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

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

17
 In addition, in weighing 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

statute seeks to protect Louisiana citizen-employees from being

subjected to litigation in a foreign forum, under laws with which

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

Representative Jackson, Official Minutes of Louisiana Senate

Committee on Labor and Industrial Relations, Hearing on Senate Bill

915 (22 April 1999). Plaintiffs are Philippine residents and

citizens. Their employment contracts do not require them to bring

claims in a foreign forum, but instead require 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 Convention to seamen’s employment contracts in

particular, the overall balance of public 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.

18
Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351, 357 (1971), which

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

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

arbitration provisions of collective bargaining 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). Id. For the following reasons, Arguelles is

distinguishable.

First, the claims in Arguelles addressed seamen’s judicial

remedies for denial of contractual wages. Id. at 354. Plaintiffs

do not claim they were not paid according to their contract;

instead, they make claims under the FLSA for extra-contractual

wages. Also at issue in Arguelles was the duty to follow the

collective bargaining grievance procedure under the LMRA, a statute

and procedure absent here. Finally, while the Arguelles court

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

Court did not declare seamen’s wages conclusively exempt from

arbitration in all situations. Id. 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 arbitration of their FLSA claims because they are not

subject to arbitration. OSFI reserves the question of whether the

19
FLSA applies to plaintiffs’ claims, but contends that, in any event,

they are subject to arbitration.

Article II of the Convention states: “Each Contracting State

shall recognize an agreement in writing under which the parties

undertake to submit to arbitration ... concerning a subject matter

capable of settlement 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 finds that the said

agreement is ... incapable of being performed”. Convention, art.

II, §§ 1, 3 (emphasis added). Article V states: “Recognition 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: (a) the 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

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

issue are statutory. Carter, 362 F.3d at 297. In Gilmer, the

Supreme Court held federal statutory claims are subject to

arbitration unless the party resisting arbitration can show

“Congress intended to 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 arbitration

20
and the [statute’s] underlying purposes.” Id. The FLSA does not

preclude arbitration by its terms or legislative history. Carter,

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 foreign 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 of 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.)

( e m p h a s i s a d d e d ) , a v a i l a b l e a t

http://www.poea.gov.ph/html/ra8042.html. There is no reason to

conclude the NLRC could not consider an action arising under the

FLSA, if that statute applies to plaintiffs’ claims.

21
 III.

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

this matter is REMANDED to district court for further proceedings

consistent with this opinion.

VACATED and REMANDED

22