Fifth Circuit Compels Arbitration in Jones Act Seaman Case

A seaman sustained injuries while working on an offshore supply vessel. Following the incident, the seaman and his employer entered into an Advance Wage and Benefits Agreement that provided supplemental financial assistance in exchange for the seaman’s agreement to arbitrate any related claims. The seaman later filed a lawsuit against his employer in federal district court, seeking a declaratory judgment to render the agreement null and void on the grounds of fraud and economic duress. The district court denied the employer’s motion to compel arbitration without prejudice and the employer appealed. 

In May, the United States Court of Appeals for Fifth Circuit vacated the district court's order and remanded the case to compel arbitration. The court ruled that substantive federal arbitration law required the threshold validity challenges to be resolved by an arbitrator instead of a court.

The Fifth Circuit’s decision underscores that a well-drafted arbitration agreement with a clear delegation clause can shift key disputes out of court at the outset. Vessel owners and operators should expect courts to enforce delegation clauses when a seaman challenges an agreement broadly rather than targeting the clause itself. At the same time, companies should pair strong contract language with careful practices when presenting post-injury agreements.

Please contact Michael Held or any member of the Phelps Admiralty team with questions about these agreements and whether they may be appropriate for your business.