U.S. Appeals Court holds that in a Jones Act case a "settlement agreement not to sail or work" is valid

December 2000

A chief steward aboard the M/V SEA-LAND EXPEDITION experienced an onset of low back pain, which he alleged occurred after moving a heavy box of meat. The seaman brought a claim under the Jones Act for total disability from work at sea. Sea-Land paid all maintenance and all medical expenses, including costs for surgery. The seaman’s physician diagnosed the seaman as being permanently not fit for duty. He found that the seaman had reached maximum medical cure and assigned a permanent disability of 56% of the total body.

Sea-Land eventually settled the seaman’s claims for $364,500.00 in exchange for a release and a "settlement agreement not to sail or work." In the agreement, the seaman agreed not to work, sail and/or navigate, and/or seek to sail, navigate or work in any capacity, including shore side aboard vessels owned, managed and/or operated by Sea-Land Service, Inc., and/or any of its affiliates and/or subsidiaries, in the future.

After the settlement, the seaman ended up being dispatched by his union to a Sea-Land vessel where, about three weeks after he returned to work, he reported re-injuring his back. Sea-Land commenced a declaratory judgment action in federal court seeking a judgment declaring that the agreement was enforceable and that it precluded the seaman from pursuing any action seeking to recover damages on account of the second injury. The district court found that the seaman was bound by the terms of the agreement

The only issue pursued at the appellate level was whether the agreement not to sail or work violated the provision of the Jones Act which states "any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void. . . ."

On appeal, the Eleventh Circuit (Sea-Land Service, Inc. v. Sellan, F.3d - 11th Cir., October 26, 2000)explained that the United States Supreme Court has previously held that a release does not violate the Jones Act where it is "not a device to exempt from liability but as a means of compromising a claimed liability."

The Eleventh Circuit noted that "Sea-Land compromised the claim of permanent total disability to prevent a re-injury to the seaman." The agreement was designed "to make sure that a totally disabled seaman would not work for Sea-Land as a seaman under the Jones Act." The court held that such an agreement was not a violation of a federal statute designed to protect seaman from overreaching employers when employees attempt to obtain or maintain employment.

While the holding in this case seems to benefit Jones Act employers by limiting liability of seamen who have previously been injured and have settled their claims, the holding is very narrow and may not apply to a seaman if he sought employment with a different employer. Additionally, any release must involve an express settlement of claims for specific injuries.

 With thanks to Charles McCammon of Rawle & Henderson LLP, Philadelphia, for preparing this article