Priyanto v. M/S Amsterdam

Plaintiffs were on-board housekeeping staff on foreign-flagged cruiseships. After a discussing the fact that Plaintiffs were likely not “seaman” within the meaning of the FLSA and therefore not “seaman” exempt, the Court granted Defendants Motion for Summary Judgment, holding that the FLSA does not apply to Plaintiffs’ work aboard foreign-flagged ships at sea, stating, “[e]ven if the Plaintiffs are not excluded from the protection of the FLSA based on what kind of work they do, they may be excluded based on where they do it.”

There is a general presumption against the extraterritorial application of federal statutes, and the FLSA is no exception. In the instant case, this presumption is strengthened by “the well-established rule of international law that the law of the flag state ordinarily governs the internal affairs of a ship.” McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 20, 83 S.Ct. 671, 9 L.Ed.2d 547 (1963). While general statutes apply to foreign-flag vessels located in United States territory, “absent a clear statement of congressional intent, general statutes may not apply to foreign-flag vessels insofar as they regulate matters that involve only the internal order and discipline of the vessel, rather than the peace of the port.” Spector v. Norwegian Cruise Line Ltd., 545 U.S. 119, 130, 125 S.Ct. 2169, 162 L.Ed.2d 97 (2005).

The Supreme Court has consistently held employment relations on a ship to be such “internal affairs.” See Spector, 545 U.S. at 130-31 (discussing “internal affairs” doctrine); E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991) (holding that, in absence of clear statement, Title VII (subsequently amended) did not apply to American citizen employees on ships at sea); McCulloch, 372 U.S. 10, 83 S.Ct. 671, 9 L.Ed.2d 547 (holding labor relations to be “internal affairs” and thus National Labor Relations Act does not apply to employees on foreign ship at sea); Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 77 S.Ct. 699, 1 L.Ed.2d 709 (1957) (holding “internal affairs” limitation bars application of Labor Management Relations Act to ship at sea). In accordance with this case law, employment relations between foreign citizens and their employers on foreign-flagged ships lie within a ship’s “internal affairs.” Therefore, the FLSA could only apply to Plaintiffs if there were a “clear statement of congressional intent” suggesting as much.

Such a clear statement is lacking. Indeed, the text of the FLSA suggests that it does not apply to Plaintiffs insofar as the work they performed was outside the United States. The statute contains a specific provision barring its application to:

any employee whose services during the workweek are performed in a workplace within a foreign country or within territory under the jurisdiction of the United States other than the following: a State of the United States; the District of Columbia; PuertoRico; the Virgin Islands; outer Continental Shelf lands defined in the Outer Continental Shelf Lands Act (ch. 345, 67 Stat. 462) [43 U.S.C. § 1331 et seq.]; American Samoa; Guam; Wake Island; Eniwetok Atoll; Kwajalein Atoll; and Johnston Island

29 U.S.C. § 213(f). As the Third Circuit has noted, the services of maritime workers are generally “not rendered within the United States or one of the enumerated territories” under this provision. Cruz v. Chesapeake Shipping Inc., 932 F.2d 218, 226 (3d Cir.1991). The court there noted the “exclusion of ships flying foreign flags was presumably to avoid interference in the delicate field of international relations by imposing domestic labor law on foreign ships employing foreign nationals at foreign wages.” 932 F.2d at 231.

It was undisputed that Plaintiffs worked solely on foreign-flagged ships, and their work was performed at sea. Therefore, the Court held that the FLSA could not be applied to them without interfering with the internal afffairs of a foreign-flagged ship. In light of the lack of a clear statement of Congressional intent to do so, the Court found the overtime provision of the FLSA did not apply to Plaintiffs, and thus Plaintiffs could not recover unpaid overtime wages under the Seaman’s Wage Act.