Local Federal Courts More Protective than State Supreme Court of Fishermen’s Right to Unearned Wages

By John Merriam

Two local federal judges ruled in separate cases that 30-day employment contracts for fishermen do not necessarily mean that, following illness or injury, unearned wages are limited to the end of the 30-day period then in effect. The state Supreme Court did so limit that entitlement. Miller v. Arctic Alaska, 133 Wn.2d 250 (1997).

From time immemorial, fishing has been conducted by the season. Fishermen sally forth to fish for a particular species of crab, salmon, etc., and expect to work until the end of the season. When hurt, they are not entitled to workers’ compensation. Instead, commercial fishermen receive maintenance and cure. Part of the maintenance and cure remedy is the entitlement to unearned wages. Unearned wages are the wages the fishermen would have earned, but for an injury or illness, for the duration of the contemplated period of employment—traditionally the season.

Starting in 1988, Congress required that contracts of employment for commercial fishermen be in writing and include the rate of compensation and term of employment. 46 U.S.C. § 10601. The statute was supposed to benefit employees but fishing companies soon started to use the new requirements to benefit themselves. By the early 1990s, some fishing companies included abbreviated periods of employment in their written contracts. Except in cases of illness or injury, however, employment was still usually based upon the season. The shorter contractual period was asserted only to minimize the obligation to pay unearned wages. One prominent local marine insurance defense practitioner was heard to refer to these types of contracts as “now you see them, now you don’t”.

This practitioner took the position that 46 U.S.C. § 10601 affects only earned wages. It has no bearing on unearned wages, which are part of maintenance and cure. Fishing is still conducted by the season, just as it always has been. The difference, after passage of 46 U.S.C. § 10601, was that some employers were using contracts of artificially short duration to lessen the entitlement of injured seaman to unearned wages. Fishing companies had effectively turned remedial legislation on its head. The practice was first challenged in a state court case. Miller v. Arctic Alaska Fisheries, supra.

Miller involved highly contentious litigation over relatively minor damages. It resulted in a jury verdict, then opinions from Division I of the Court of Appeals and state Supreme Court. The case is usually cited as a first discussion by the Supreme Court of then-recent evidence rule (ER) 904. The Miller court found several errors but ruled those errors “harmless”. 133 Wn.2d at 269. The decision was criticized on these pages. “Litigation or War of Attrition?” Trial News (February 1998). Mr. Miller contended that the Supreme Court took liberties with logic and the law to prevent a remand and second trial. Among other erroneous rulings, the Miller court enforced a limit on unearned wages to the 30-day period then in effect, during a crab season that lasted more than 30 days, based upon the term in the employment contract. 133 Wn.2d at 26768. The court ignored Miller’s argument that 46 U.S.C. § 10601 related only to earned wages, and didn’t even consider public policy surrounding the doctrine of maintenance and cure. The court refused to allow any parol or other extrinsic evidence to modify the terms of a written contract of employment. Id.

Initially, one local federal court followed the Miller holding on unearned wages, making no distinction between earned and unearned wages in the application of46 U.S.C. § 10601. Diaz v. Ocean Peace, 2001 A.M.C. 408 (W.D. Wash. 2000).

The federal Ninth Circuit has never spoken on the applicability of 46 U.S.C. § 10601 to unearned wages. Motions in two federal district court cases in Seattle were recently brought to challenge the holding in Miller, supra, Benny v. Blue North Fisheries, No. C04-0672L and Gilliss v. Seldovia Fisheries, No. C04- 503C. The fact patterns in those cases were typical. Both plaintiffs were told that they were being hired for the season, then rushed into signing contracts containing 30-day terms of employment. Neither was given a copy of the contract. After each left their respective vessels with injury, unearned wages stopped at the end of the 30-day period then in effect, while the season continued. Plaintiffs in both cases filed motions requesting that the respective federal judges correctly articulate the doctrine of unearned wages and undo some of the damage done by the Washington Supreme Court in Miller.

Judge Lasnik attempted to distinguish the Miller case but ruled that Mr. Benny could use parol evidence to modify the terms of a written employment contract, for purposes of determining the duration of his entitlement to unearned wages. He specifically allowed the use of extrinsic evidence to modify unambiguous contract terms. Benny v. Blue North, supra, Order of January 3, 2005. 2005 A.M.C.___. Judge Coughenour reached the same result without mentioning the Miller case. Gilliss v. Seldovia Fisheries, supra. Order of March 29, 2005.

Judges Lasnik and Coughenour apparently took cognizance of plaintiffs’ argument that the term of employment in written contracts was getting shorter and shorter. If the fishing companies were allowed to get away with this, it was argued, they could require that fishermen renew their written contracts weekly, or even on a daily basis, virtually eliminating the obligation for payment of unearned Wages.

The Benny case settled and, at this writing, the Gilliss case is expected to settle as well. Neither will be appealed. It is established—in federal court, and for now at least—that the term stated in contracts of employment is not necessarily the contemplated period of employment for purposes of unearned wages. The contracts of all ill and injured seamen should be scrutinized by counsel for the possibility of additional unearned wages.

In Benny v. Blue North, plaintiff was represented by John Merriam and Gordon Webb. Defendants were represented by Thomas Waller of Bauer Moynihan and Johnson. In the Gilliss case, plaintiff was represented by John Merriam. Defendants were represented by Richard Nielsen and Louis Shields of Nielsen Shields.

Eagle John Merriam is a former merchant seaman, now a sole practitioner at Fisherman’s Terminal in Seattle.