Cruz v. Chesapeake Shipping Inc.

Related Cases

ALITO, Circuit Judge,

dissenting.

The majority affirms the decision of the district court holding that the plaintiffs in this case, foreign seamen on American-flag ships engaged in trade between foreign ports, were not covered by the minimum wage provision of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 206. The district court concluded: first, that American law did not apply under choice-of-law principles taken primarily from cases involving the Jones Act, 46 U.S.C. § 688; second, that neither the seamen nor the enterprises that employed them were engaged in “commerce” within the meaning of the FLSA because their activities lacked sufficient connection with the United States; and third, that the seamen were excluded from coverage by the “foreign workplace exemption,” 29 U.S.C. § 213(f), which applies to employees who labor “in a workplace within a foreign country.” Because Congress, in my view, clearly intended for the FLSA’s minimum wage provision to apply to all seamen on all American-flag ships, I respectfully dissent.

I: CHOICE OF LAW

A. In determining whether the FLSA’s minimum wage provision governs the present case, we must first examine Congress’s intent. When Congress dictates a choice of law by statute, courts must of course comply. See, e.g., Lauritzen v. Larsen, 345 U.S. 571, 579 n. 7, 73 S.Ct. 921, 926 n. 7, 97 L.Ed. 1254 (1953); Restatement (2nd) Conflict of Laws § 6(1) (1971).

Analysis of Congress’s intent in enacting the relevant provisions of the FLSA must, in turn, begin with the statutory language. If statutory language is unambiguous, it must be followed absent exceptional circumstances. Demarest v. Manspeaker, — U.S. -, -, 111 S.Ct. 599, 602, 112 L.Ed.2d 608 (1991); Russello v. United States, 464 U.S. 16, 20, 104 S.Ct. 296, 299, 78 L.Ed.2d 17 (1983).1

B. The statutory language relevant to the choice-of-law issue appears in 29 U.S.C. § 206(a), which provides in pertinent part as follows:

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:
(4) if such employee is employed as a seaman on an American vessel, not less than [a specified amount.]

This language does not definitively reveal whether Congress intended to specify *236a choice-of-law rule. On the one hand, the language of Section 206(a)(4) may plausibly be construed as a statutory directive to apply American law (the FLSA minimum wage provision), thus precluding application of nonstatutory choice-of-law principles. In other words, the language of Section 206(a)(4) may in effect be read as follows: “[e]very employer shall pay to each of his employees,” in a commerce-related job the FLSA minimum wage “if such employee is employed as a seaman on an American vessel.”

On the other hand, the language of Section 206(a)(4) may also be reasonably interpreted as leaving open the choice-of-law question, thus necessitating the application of nonstatutory choice-of-law principles. Under this interpretation, Section 206(a)(4) would merely specify the minimum wage rate for seamen on American vessels in those instances in which the choice of American law is appropriate. In other words, the language of Section 206(a)(4) may in effect be construed as follows: “[ejvery employer shall pay to each of his employees,” in a commerce-related job, minimum wages at certain rates, and “if such employee is employed as a seaman on an American vessel,” the rate must be “not less than [a specified amount].” Because I believe that the language of Section 206(a)(4) does not foreclose either of these interpretations, examination of the relevant legislative history is proper.

C. Unlike the statutory language, the legislative history of the FLSA makes clear that Congress intended for the minimum wage requirement to apply to all seamen on all American vessels. The evolution of the minimum wage provision, 29 U.S.C. § 206(a), is particularly instructive. Before 1961, Section 13(a) of the FLSA, 29 U.S.C. § 213(a) (1958 ed), excluded all seamen from the coverage of the minimum wage provision.2 In 1961, the exclusion was narrowed to seamen on foreign vessels.3 At the same time, the minimum wage provision, 29 U.S.C. § 206(b) (1958 ed.), was also amended to read in pertinent part as follows (Pub.L. 87-30, sec. 5(b), 75 Stat. 65 (1961)):

Every employer shall pay to each of his employees who in any workweek ... (ii) is brought within the purview of this section by the amendments made to section 13(a) of this Act by the Fair Labor Standards Amendments of 1961, wages at [specified rates].

This language made clear that the minimum wage requirement was meant to apply to all seamen on all American vessels. All such seamen were “brought within the purview of [the minimum wage provision] by the [1961] amendments to section 13(a) of the [FLSA],” and therefore employers were required to pay the FLSA minimum wage to all such seamen.

The current version of the minimum wage requirement, 29 U.S.C. § 206(a), which is susceptible to the two interpretations discussed above, dates from the Fair Labor Standards Amendments of 1966, Pub.L. 89-601, 80 Stat. 830, sec. 301. As the relevant House and Senate Reports stated, however, this amendment was not intended “to make any substantive change, but rather merely rearrange[d] the order of the provisions of the ... act.” H.R.Rep. No. 1366, 89th Cong., 2d Sess., at 43 (1966); S.Rep. No. 1487, 89th Cong., 2d Sess. [1966 U.S.Code Cong. & Admin.News 3002, 3034]. Thus, the evolution of the minimum wage provision plainly shows that this provision was meant to apply to all seamen on American ships.

The congressional reports issued at the time of the 1961 amendments fortify this conclusion. The Senate Report stated (S.Rep. No. 145, 87th Cong., 1st Sess. [1961 U.S.Code Cong. & Admin.News at 1628] *237(emphasis added)): “The committee bill covers for minimum wage but not for overtime seamen on American-flag vessels.” Subsequently, the Report added (id. at 1851-52) (emphasis added):

The present act in section 13(a)(14) provides an exemption from its minimum wage and overtime provisions for all seamen. Under the bill all seamen will continue to be exempt from the overtime provisions. However, seamen on vessels documented or numbered under the laws of the United States will be covered by the minimum wage requirements.

Identical language appeared in the House Report. H.R.Rep. No. 75, 87th Cong., 1st Sess. 13-14 (1961). See also id. at 5, 36. Similarly, the Conference Report (Conf.Rep. No. 327, 87th Cong. 1st Sess. [1961 U.S.Code Cong. & Admin.News 1706, 1710] (emphasis added)) stated: “The Senate Amendment and the conference substitute (Secs. 13(a)(14) and 13(b)(6)) change the complete exemption contained in the present law for all seamen to provide minimum wage coverage for seamen on American vessels.”

In sum, the legislative history manifests an unambiguous congressional intent to provide minimum wage protection for all seamen on American vessels. This congressional intent would be thwarted if the FLSA’s coverage of seamen on American vessels depended, as the district court held, on a weighing of the eight factors relevant to the choice of law in Jones Act cases.4

II: COMMERCE

A. The FLSA minimum wage provision applies to employees who are “engaged in commerce” or “employed in an enterprise engaged in commerce.” 29 U.S.C. § 206(a)(4). Under the FLSA, “commerce” is defined as “trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof.” 29 U.S.C. § 203(b). A “State” is defined as “any State of the United States or the District of Columbia or any Territory or possession of the United States.” 29 U.S.C. § 203(c).

The meaning of the FLSA “commerce” requirement, 29 U.S.C. § 206(a)(4), is ambiguous as applied to American vessels engaged in trade between or among foreign ports. On the one hand, the term “commerce” in 29 U.S.C. 206(a) may be interpreted not to include trade between or among foreign ports. Such trade is not, in the most literal sense, trade “among the several States or between any State and any place outside thereof.” 29 U.S.C. § 203(b).

On the other hand, I am not convinced that a somewhat less literal interpretation may be rejected without closer scrutiny. In defining “commerce” to include trade between any State, Territory, or possession and any foreign place, Congress seems to have intended in essence to define “commerce” to include trade between the United States (which consists of all the States, Territories, and possessions) and any for*238eign place. Vessels flying the American flag have long been regarded “as part of the territory of [the] nation.” Patterson v. Eudora, 190 U.S. 169, 176, 23 S.Ct. 821, 823, 47 L.Ed. 1002 (1903); see also Lauritzen v. Larsen, 345 U.S. 571, 585, 73 S.Ct. 921, 929, 97 L.Ed. 1254 (1953); Ross v. McIntyre, 140 U.S. 453, 477, 11 S.Ct. 897, 904, 35 L.Ed. 581 (1891); Restatement of the Foreign Relations Law of the United States § 501 (1987). (Indeed, the vessels involved in the present case were permitted to fly the American flag precisely for the purpose of invoking this principle and thereby deterring potential attacks). Thus, the transfer of goods between an American-flag vessel and a foreign place may reasonably be regarded as trade between the United States and a foreign place and thus as “commerce” under the FLSA.

Because the statutory language relating to “commerce” may reasonably be construed in either of the ways noted above, examination of the legislative history is justified.

B. The legislative history clearly shows that Congress assumed the “commerce” requirement would pose no obstacle for seamen on American vessels. Once again, the language Congress adopted in the 1961 FLSA amendments ending the exclusion of seamen on American vessels is critical. As previously noted, the minimum wage provision was amended in 1961 to read in pertinent part as follows (Pub.L. 87-30, sec. 5(b), 75 Stat. 65 (1961)):

Every employer shall pay to each of his employees who in any workweek ... (ii) is brought within the purview of this section by the amendments made to section 13(a) of this Act by the Fair Labor Standards Amendments of 1961, wages at [specified rates].

Under this statutory language in the 1961 amendment, seamen on American vessels did not have to satisfy any commerce requirement whatsoever. Every employer was required to pay the FLSA minimum wage to every employee brought within the coverage of the minimum wage provision by the amendments to section 13(a), and all seamen on American vessels fell within that category.

The “commerce” test currently included in 29 U.S.C. § 206(a) resulted from the 1966 technical amendment noted earlier; but as previously discussed, that technical amendment was not intended to effect any substantive changes. See dissenting at 236. Thus, the legislative history reveals that Congress never contemplated that seamen on American vessels would be denied minimum wage coverage based on a “commerce” requirement.

In light of Congress’s clear intent in enacting the 1961 and 1965 FLSA amendments, I am persuaded that “commerce” under the FLSA should be construed to include trade, commerce, transportation, transmission, or communication between an American vessel and any place outside thereof. This interpretation is consistent with the statutory language and effectuates Congress’s unmistakable intent.

Ill: FOREIGN WORKPLACE EXEMPTION

A. The “foreign workplace exemption,” 29 U.S.C. § 213(f), excludes from FLSA coverage those employees “whose services during the workweek are performed in a workplace within a foreign country.” This language may reasonably be construed not to apply to seamen employed on American ships, since an American Vessel may be regarded as part of the United States. Interpreting this language to apply to seamen on American vessels is more dubious. Conceivably Congress might have regarded an American ship as “a workplace within a foreign country” while the vessel was docked in a foreign port or sailing in foreign territorial waters. But this interpretation would apparently mean that seamen on American vessels would lose and regain FLSA coverage as their ships passed between the high seas and foreign waters.

In any event, the legislative history already explored leaves no doubt that the foreign workplace exemption was not intended to apply to seamen on American ships. As previously shown, the congressional committee reports issued in connection with the 1961 FLSA amendments dis*239closed that Congress intended to provide minimum wage coverage for all seamen on American vessels. See dissenting at 236. Moreover, these reports specifically noted that fully half of the seamen on American vessels were employed on deep-sea vessels. S.Rep. No. 145, supra, [1961 U.S.Code Cong. & Admin.News at 1652]; H.R.Rep. No. 75, supra, at 14. Congress surely realized that many such vessels spent considerable periods of time in foreign ports and territorial waters. Yet Congress expressly indicated that it intended to provide minimum wage coverage for seamen on American deep-sea vessels and gave no indication that it wished to limit that coverage to time not spent in foreign ports or waters. Thus, I am convinced that an American vessel should not be regarded as a “workplace within a foreign country” under 29 U.S.C. 213(f).

In conclusion, I believe that the FLSA minimum wage provision applies to all seamen on all American ships. I would therefore reverse the decision of the district court.

. In EEOC v. Arabian American Oil Co., — U.S. -, -, 111 S.Ct. 1227, 1229, 113 L.Ed.2d 274 (1991) (citation omitted), the Supreme Court invoked the canon of statutory construction that legislation is presumed not to apply “beyond places over which the United States has sovereignty or has some measure of legislative control” unless a contrary intent appears. Because the United States has sovereignty over American-flag vessels (see dissenting at 237-38), this canon of construction does not apply here.

. 29 U.S.C. § 213(a) (1958 ed.) provided:

The provisions of sections 206 [minimum wage] and 207 [overtime] of [this] title shall not apply with respect to ... (14) any employee employed as a seaman ...

. Section 13(a) was amended to read as follows:

The provisions of sections 6 [29 U.S.C. § 206] and 7 [29 U.S.C. § 207] shall not apply with respect to—
(4) any employee employed as a seaman on a vessel other than an American vessel.

Pub.L. 87-30, sec. 9, 75 Stat. 65 (1961).

. These factors, which were set out in Lauritzen v. Larsen, 345 U.S. at 583-93, 73 S.Ct. at 928-34, are: the place of act, the allegiance or domicile of the seaman, the allegiance or domicile of the shipowner, the place of the employment contract, the accessibility of a foreign forum, the law of the forum, and the shipowner’s base of operations.

If the application of the FLSA’s minimum wage provision depended on a case-by-case weighing of these eight factors, the obligations of shipowners and the rights of seamen under the FLSA would often be uncertain. While shipowners and seamen may not need to be able to predict with great accuracy whether American law will govern if a seaman is hurt and sues for personal injuries under the Jones Act, shipowners and seamen must be able to predict with some degree of certainty whether the FLSA minimum wage must be paid. The Lauritzen test, however, makes such predi-cations nearly as difficult as possible. Not only does this test require a weighing and balancing of no fewer than eight factors, but some of the individual factors tend to produce shifting results totally unsuited for determining coverage of a minimum wage provision. For example, since "the place of the act" is one of the factors, a seaman might slip into and out of the coverage of the FLSA as he sailed from one destination to another. And since "the law of the forum” is another factor, a seaman’s entitlement to the FLSA minimum wage might depend upon the court in which he brought suit. As the legislative history shows, Congress did not intend such results.