THE LEGAL LIMITS ON UNION ORGANIZING OF CRUISE SHIP
LABOR
(Published January
1995)
When calling at U.S. ports, foreign flag vessels are typically subject to various aspects of US laws and regulations. One area of concern is the applicability of US labor laws, particularly the National Labor Relations Act ("NLRA"), the Labor Management Relations Act ("LMRA"), and the jurisdiction of the National Labor Relations Board ("NLRB"), the administrative agency charged with implementing these acts of Congress. This article surveys the restraining of union activity in the cruise industry.
The NLRA and LMRA were enacted to regulate employer and employee labor relations of entities engaged in commerce. The NLRB, an independent agency, has two principal functions: (1) to prevent and remedy unfair labor practices by employers, labor organizations, and their agents; and (2) to conduct secret balloting among employees in appropriate collective bargaining units to determine whether they desire to be represented by labor organizations. Unions give employees significant leverage to negotiate wages, hours, vacation time, sick leave, pension funds, insurance, working conditions and a host of other employment-related issues. The NLRB's jurisdiction is limited to entities engaged in "commerce," a term with particular legal significance when considering foreign ships and crew.
Foreign Flag Vessels Employing Foreign Crews Under Articles Executed in a Foreign Country Are Not Subject to NLRB Jurisdiction
The operations of a foreign company employing foreign workers does not constitute "commerce" as that term is used in the NLRA. This rule was first established in Benz v. Compania Naviera Hidalgo. S.A., 353 US 138, 77 S.Ct. 699, 1 L.Ed.2d 709 (1957) and its progeny, including McCulloch v. Soc. Nav. Marineros, 372 U.S.10 (1963); and Incres Steamship Company, Ltd. v. International Maritime Workers Union. et al., 372 US 293 (1963). Thus, disputes between foreign crew and a foreign shipowner are not subject to US federal labor laws or the jurisdiction of the NLRB. As a result, a foreign shipowner may invoke state laws to: ( 1 ) prevent picketing by US unions in support of foreign crews and seek damages caused by such activities; and (2) resist attempts by US unions to organize and represent foreign seamen in collective bargaining negotiations.
Foreign Shipowners May Sue to Enjoin US Unions From Picketing in Support of Foreign Crewmembers
In Benz, the S/S Reviera, a Liberian ship, was at berth in Portland, Oregon, for cargo and repairs when its German and British crew went on strike to protest low wages and unacceptable working conditions. (The ship's articles were opened in Germany, and the conditions were prescribed by the British Marine Board regarding hours and wages.) The Captain ordered the crew to leave the ship, but they refused. The shipowner then obtained an eviction order by instituting a state court possessory action in admiralty, forcing the crew to leave.
Meanwhile, the crew designated a US marine union as its representative, and the union began picketing. The shipowner filed a second suit in state court to enjoin the picketing as a violation of Oregon law, and sought damages caused by the picketing, i.e., expenses for delay, security, etc. The state trial court found the purpose of the picketing was "to compel the shipowner to re-employ the striking members," which caused the ship to be idle, all to the owner's damage. Benz, supra at 902. The union contended the state court had no jurisdiction to decide the dispute since the NLRA pre-empted the state court from acting. The state court rejected this argument and found the picketing was for an improper purpose and therefore violated Oregon law. Since judgment could not be entered under Oregon law against the unincorporated union, it was entered against the individual union members.
On appeal, the US Supreme Court affirmed, noting that: ( 1 ) the dispute arose on a foreign vessel; (2) the shipowner was a foreign employer with a foreign crew; and (3) the vessel was operated under a contract made in another nation. Although Congress certainly had the power to make federal law applicable to wage disputes when the ship was in US waters, the Court held that Congress did not fashion the NLRA to resolve labor disputes between foreign nationals working under terms promulgated under foreign law. The real reason for the decision, however, is buried at the end of the Court's opinion: "For us to run interference in such a delicate field of international relations, there must be a firm intention of Congress clearly expressed, especially where the "possibilities of discord are so evident and retaliative action so certain." Id. Clearly, considerations of comity and respect for the labor laws of foreign nations were the primary restraints recognized by the US Supreme Court.
Under the ruling in Benz, a foreign shipowner can simply fire foreign crewmembers for attempting unionization onboard the ship (if they are not unionized already), as long as the attempt to unionize is prohibited by the ship's articles, the law of the flag, or the terms of any collective bargaining arrangement between the foreign shipowner and its foreign crew. If the disruptive crewmembers refuse to leave the ship, they can likely be evicted by a suit in admiralty in a US court, or an action for possession of the ship. Also, even if a collective bargaining unit is assembled by the crew, there is no requirement under US law that the shipowner bargain with them. A union has no effective means under US Law to force a foreign shipowner to bargain collectively.
Foreign Vessels Can Oppose Efforts by US Unions or Even the NLRB to Influence Labor Relations
A union may petition the NLRB to order elections to determine whether the union should be permitted to represent the crew. Essentially, the US union may even attempt to bed itself in a foreign ship's fo'c'sle without an invitation.
The rationale of the Benz decision was echoed again in McCulloch, which further restricted federal interference with labor relations on foreign flag vessels. In McCulloch, the NLRB ordered elections aboard foreign flag ships to determine whether the National Maritime Union (NMU) should represent the crew. The ships in question were owned by a foreign corporation, Empressa, which was wholly-owned by a US corporation, United Fruit. United Fruit chartered the ships from its subsidiary. The crewmembers were Honduran, and belonged to a Honduran union. The ships were of Honduran registry, and Honduran law required that only Honduran unions could represent seamen employed on board.
The US Supreme Court seized the opportunity to rule that the NLRB 's jurisdiction did not extend to maritime operations of foreign flag ships employing alien seamen. The Court rejected the contention that it should look to the frequency of the ship's US port calls to determine whether the vessel was "in commerce." The court concluded such a test-was not feasible and expressed concern that any mechanical contacts test would "inevitably lead to embarrassment in foreign affairs." The fact that Empressa, the shipowner, was wholly-owned by a US corporation was immaterial. Citing the international law principle that "the law of the flag ordinarily governs internal affairs of ships"; and quoting Chief Justice Marshall that "an act of Congress ought never to be construed to violate the law of nations, if any other possible construction remains," the Supreme Court concluded the NLRB's order of election was made without jurisdiction and therefore no elections could be compelled.
In Incres Steamship Company, Ltd. v. International Maritime Workers Union and Shannon J. Wall! et al., 372 IJ.S. 293 (1963), the Supreme Court reiterated that the NLRB has no jurisdiction over disputes involving alien seamen on foreign flag ships. Based on this principle, the Court affirmed a state court's exercise of jurisdiction to enjoin an American union from picketing an Italian-owned, Liberian flag vessel employing alien seamen. The fact that the ship called regularly at US ports was deemed immaterial. Stated another way, a foreign shipowner could seek redress by injunction, and even sue for damages under state law whenever faced with picketing by US unions attempting to organize its foreign crew.
Shipowners May Enjoin US Union Picketing Designed to Force Higher Operating Costs on Foreign Ships
Wages throughout the maritime industry are not uniform, and US mariners are among the best paid seamen in the world. Many commentators believe the substantial loss of US shipping interests in the 60's and 70's was caused by escalating operating costs, including seamen wages. Rightly or wrongly, US maritime labor unions typically blamed foreign shipowners for this decline. During this time, the admitted purpose of union picketing of foreign flag ships was to increase operating costs, thereby leveling the playing field between US and non-U.S. shipowners.
In Windward Shipping (London) Limited, et al. v. American Radio Ass'n., 1974 A.M.C. 1 (Sct 1974), an American union picketed foreign flag vessels in order to force payment of higher wages to foreign crews. The marine unions, alarmed by the decline in the number of jobs available to them, picketed foreign ships solely to emphasize the discrepancy between foreign wages and the wages of US mariners. The shipowner filed suit in state court to enjoin the picketing and sought damages on the theory that the unions were seeking to induce the owners and crews to break pro-existing contracts. The unions responded that the state court's jurisdiction was pre-empted by the NLRB, a view that was actually adopted by the trial court. However, reversing the lower court's decision, the US Supreme Court held the union's picketing did not give rise to a dispute "affecting commerce" and therefore, the picketing was not subject to the NLRB's jurisdiction.
In sum, there is little doubt that when picketing is directed toward foreign seamen working aboard a foreign ship, a foreign shipowner may obtain an injunction to prevent such picketing, and recover all compensatory damages permitted by the law of the state where the picketing occurs. In these circumstances, the NLRB has no jurisdiction over such disputes and the protesting seamen or longshoremen are not protected by federal labor laws. Nor can the unions compel the NLRB to order elections aboard foreign flag vessels employing foreign crews.
