Should I trust my boss?

I work as a chef aboard large motor yachts, mostly in the Caribbean. I have a job lined up for three months aboard an American flagged yacht, but I am a little concerned about the owner’s track record when it comes to paying crewmembers on time and withholding tips. Can I do anything to prevent this from happening? What can I do if he fails to pay me when I leave the boat? 

A: Our reader has a number of legal options to protect her earnings as a professional crewmember aboard a yacht, but if the owner’s reputation is a significant concern for her she may want to reconsider taking the job at all. The fact that she is worried about her legal rights at a point that she has not yet spent one day aboard the boat is not a good sign. One of the most fundamental rules of litigation provides that it is usually better to avoid a lawsuit than to win one.  

With that warning in mind, let’s take a look at her legal rights.

First, she can demand certain assurances and protections in her employment contract, but this may not be practical since many boat owners will simply look for another crewmember who will not make any contractual demands. So let’s look at her legal rights after she is employed.

The good news is that admiralty law has historically been extremely protective of the rights of merchant seamen. In a U.S. Supreme Court case decided in 1823, the court observed that seamen are “generally poor and friendless, and acquire habits of gross indulgence, carelessness, and improvidence.” That observation may sound funny today, but this was serious business 200 years ago. Merchant seamen were considered “Wards of the Admiralty,” and the law held that liens for unpaid crew wages were “sacred liens entitled to protection as long as a plank of the ship remains.”

Modern commercial mariners enjoy many of the same protections under the law today that their predecessors enjoyed 200 years ago. A maritime lien for unpaid crew wages is still a very high priority lien.  In a case where a vessel is seized to satisfy unpaid claims, crew wages will be paid before all other maritime liens, including a mortgage or a personal injury or salvage lien. After the boat is sold and crew wages are paid, all of the other creditors will fight over the remaining scraps.

So the crew is generally taken care of in a “meltdown” scenario where a long list of creditors go after a boat. But this may not help our reader. She is concerned about the rights of one person who may have trouble getting paid on time. She would have a senior maritime lien for those wages, but as we have explained many times in this column, having a lien and enforcing a lien are two very different things. 

Enforcing a lien against a documented vessel means filing a lawsuit in federal court and having the boat “arrested” and taken into custody by U.S. Marshals. A very powerful, but very expensive proceeding. The costs associated with the arrest of a vessel to enforce a maritime lien against a small yacht  may easily exceed $40,000, and some percentage of those costs will not be recoverable through the sale of the boat. So this is a great procedure if someone else initiates and pays for the vessel arrest, but it’s simply not practical for an individual crewmember who is simply trying to get paid.

One alternative for any person with a small claim against a vessel is to sue the owner in small claims court. The fact that a claim for crew wages is a maritime claim does not mean that a vessel arrest is the only source of recovery. A lawsuit in small claims court is not as dramatic as a vessel arrest but it is often the fastest and cheapest way to pursue a small amount of money. 

Another alternative for a person with a relatively small claim against a vessel is to record a Notice of Claim of Lien against the vessel with the US Coast Guard.  As we have acknowledged numerous times in this column, the recording of a Notice of Claim of Lien has no real legal effect. Instead, this procedure does exactly what the name implies. It is a Notice that somebody Claims to have a Lien against a boat.

Recording a Notice of Claim of Lien will not lead to the immediate recovery of a claimant’s money and it will not interfere with the owner’s operation of the boat or the owner’s rights of ownership.  The recorded notice will, however, remain as mark against the title until the claimant files a subsequent document called a “Satisfaction of Claim of Lien.”  While it technically has no legal effect, a Notice of Claim of Lien will interfere with the owner’s ability to sell the boat. No lender will loan money on a boat with an existing claim against it, and the boat cannot be removed from US documentation until the claim is satisfied.  So this tactic will often bring a boat owner to the table in a case where he may otherwise have ignored a claimant.

Like most of the subjects we discuss in this column, no two claims for unpaid claims against a vessel are alike and, as such, an experienced maritime attorney should be consulted for more detailed information on the options for enforcement of a specific claim.