Balen v. Holland America Line Inc.
Filed October 2, 2009
Cite as 07-36011

CBA valid pursuant to convention

Romeo Balen (Balen) was a Filipino seaman employed by America Line Inc.’s (HAL) as a beverage attendant. Balen’s employment was regulated by the Philippine Overseas Employment Administration which was tasked to approve and regulate employment of Filipino seamen.

In order to hire Filipino seamen, foreign employers must go through a POEA licensed employment agency. A POEA approved contract included a standard terms and conditions on dispute settlement. The contract provided that all claims and disputes must be submitted to a voluntary arbitrator or to the National Labors Relations Commision if the party was not covered by a collective bargaining agreement (CBA).

During Balen’s employment, HAL drafted a Gratuity and Beverage Service Charge Plan (Gratuity Plan). Under this plan, employees have the right to share in the gratuities charged to passengers. It also required participants to reimburse HAL in monthly installments deployment costs including travel expenses.

When Balen failed to reimburse the travel expenses in the amount of $2,119, he was discharged. Consequently, Balen filed a suit with U.S. District Court for the Western District of Washington. HAL moved to dismiss Balen’s complaint and to compel arbitration.

The district court granted HAL’s motion on the grounds that:

1. Balen’s claims were covered by the CBA; and
2. The claims were subject to arbitration.

Balen appealed contending that arbitration agreement was invalid.

The United States Court of Appeals for Ninth Circuit disagreed with Balen’s contentions. The court ruled that claims under the Seamen’s Wage Act are subject to arbitration pursuant to the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Hence, the district court properly granted HAL’s motion to compel arbitration. Balen’s claims were subject to an arbitration agreement contained in the CBA agreed upon between Balen’s union and HAL. Therefore, the agreement was valid and enforceable under the convention.