Brown v. Nabors Offshore Corp.

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS August 6, 2003

For the Fifth Circuit Charles R. Fulbruge III
Clerk

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, denying 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 Arbitration Act (FAA) which exempts from its

application “contracts of employment of seamen, railroad employees,
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 required inter 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 confirming his notice and

understanding of the agreement. The NDRP documents, however,

provided that in the event the employee failed to return the

acknowledgment 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 waste

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.

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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 workover 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 mandatory, 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 excluded from FAA’s

coverage. More particularly, the court concluded that, because

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

the necessity of establishing that he was actually engaged in

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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 the Jones Act.2 Nabors argues that it is not enough

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

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 exemption to those seamen directly involved in the

transportation of goods in foreign or interstate commerce. Because

2
See Offshore v. Robison, 266 F.2d 769 (5th Cir. 1959), approved
in principle by the Supreme Court in McDermott International v.
Wilander, 498 U.S. 337 (1991). See also Colomb v. Texaco, 736 F.2d
218, 221 (5th Cir. 1984), collecting cases holding that crew members
aboard drilling and other special purpose vessels are seamen as a
matter of law.

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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

commerce 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 Rojas v. TK Communications, Inc.,3 we

considered whether 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 stated that “the

exclusionary clause of § 1 in the Arbitration Act should be

narrowly construed to apply 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.” Id. at 748. Although this

language is dicta, our analysis supports Brown’s argument that the

3
87 F.3d 745 (5th Cir. 1996)
4
71. F.3 592 (6th Cir. 1995).

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limiting phrase “engaged in foreign or interstate commerce” only

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

categories of workers enumerated, seamen and railroad employees.

Nabors argues that the Supreme Court decision in Circuit City

Stores, Inc. v. Adams,5 supports its interpretation of the

exemption. In Circuit 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. Id. 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.” Id. 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.” Id. The court then explained that § 1

called for the application of the maxim ejusdem generis and that

5
532 U.S. 105 (2001).

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“[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 pressed 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 class of workers engaged in commerce”--

should be limited by reference to the enumerated workers. Circuit

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 language in the opinion supports the view that

employment contracts of the enumerated workers–-seamen and railroad

workers–-are, without limitation, exempt from the application of

FAA:

We see no paradox in the Congressional decision to exempt
the workers over whom the commerce power was most
apparent. To the contrary, it is a permissible inference
that the employment contracts of the class of workers in
§ 1 were excluded from the FAA precisely because of
Congress’s undoubted authority to govern the employment
relationships at issue by the enactment of statutes
specific to them. [Discussing existing statutes and

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 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, that Circuit City supports Brown’s

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

the application 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 (5th 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 concluded that “seaman” under the Fair Labor

Standards Act had a different meaning than under the Jones Act.

6
Because our disposition 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. See Manuel v. P.A.W. drilling & Well Service, Inc., 135
F.3d 344 (5th Cir. 1998).

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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 Dole is not helpful in analyzing

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

accepted the interpretation 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. Id. 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. Id. at 522.

Nothing comparable to the legislative history and administrative

rules this court relied on in Dole 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 is

7
See 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).

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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.

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