Boat Owners Think They Can Cheat Employees out of Small Amounts of Wages With Impunity
By John Merriam
(This is a true story. Names have been changed for obvious reasons.)
It irritates me that so many vessel owners think they can get away with cheating their employees on small amounts of wages. The employers assume, usually correctly, that the employees will be unable to obtain legal representation because minor sums of money are involved. How will a deckhand cheated on $1,000 of his crewshare, for example, find a lawyer to represent him on a contingent fee basis? To counter this assumption, I’ve adopted a policy of taking any meritorious maritime wage claim, regardless of amount.
I offer a case study: Tim Bratz was hired in the spring of 2021 to skipper boats operated by San Juan Whale Watching. The employer provided a trailer on Orcas Island for him to live in while working. Tim and his employer, Bert, were not a good fit and the job ended two months later. Deducted from Tim’s final paycheck was $1,300 for two months’ rent on the trailer at $650/month.
Tim called me and said that there was no prior discussion of paying rent and that he assumed that, like other jobs he’d worked, free lodging was part of the pay. I wrote a letter to San Juan Whale Watching, stating that my client claimed $1,300 was illegally deducted from his wages. I asked to hear the employer’s side of the story, and stated that if I didn’t hear back within the next two weeks litigation would commence.
Two weeks came and went with no response from San Juan Whale Watching.
I filed a lawsuit in federal court in Seattle rather than San Juan County Superior Court because I didn’t want to travel to Friday Harbor to argue motions – assuming that the ZoomCOVID procedure would soon come to an end. Also, because it was a wage claim for a seaman, I didn’t have to pre-pay the filing fee for federal court. To save the cost of process servers, I sent a Waiver of Service form to the whale watching outfit pursuant to FRCP 4(d). I included a notice that San Juan Whale Watching would be responsible for the cost of serving process if it didn’t waive service, regardless of who ultimately prevailed in the case. The deadline for waiving service of process was September 13, 2021.
I heard nothing until August 12 when I got a phone call from a Bert Bagshaw, who identified himself as the owner of San Juan Whale Watching. Bert was outraged that I’d filed a lawsuit over $1,300. “Are you a friend of Tim’s?” he asked. I said I wasn’t. Bert then went on to trash Tim, saying he drank too much, couldn’t do the job he was hired for and was overpaid by $700. “Why are you wasting my time with this lawsuit?” he added.
“Because you never responded to my letter asking for your side of the story.”
“I didn’t have time to deal with Tim’s ridiculous claims.” The conversation got acrimonious.
After we both calmed down, Bert told me that Tim had signed a lease agreement to pay rent of $650/month. “Why didn’t you tell me that in the first place,” I asked. “If he agreed in writing to pay rent, I’ll drop the lawsuit.”
Bert read me the salient portions of the lease agreement over the phone. “Now will you drop the lawsuit?”
“I will when I see it,” I said. “Send me a copy.”
Bert argued that I should accept what he read to me and drop the lawsuit right now. When I refused, I heard him tell his assistant or secretary, Katie, to send me a copy right away. The conversation ended in a civil fashion.
I assumed that Katie would send me the lease agreement that day by e-mail. But the lease agreement didn’t appear. After a few days I started to wonder if there really was a lease agreement.
The lease agreement finally arrived the morning of August 18, signed by Tim, agreeing to pay $650/month rent on the trailer. I compared Tim’s signature to the one on my fee agreement. They looked nearly identical.
I started getting mad. I sent an e-mail to Tim with the lease agreement attached, and asked him why he was wasting my time by lying to me or forgetting that he’d agreed to pay rent.
Tim called me within minutes after I sent the e-mail. “That’s my signature but I never signed a lease agreement. Bert must have transferred my signature from other papers I signed for the job.” Tim was adamant and sounded sincere. Although his claim was far-fetched, I was inclined to believe him. I’d recently concluded another case involving forgery. I had to hire a handwriting expert to prove that the boat owner in that case had transposed my client’s signature onto an employment contract, taken from a prior contract that the client had signed.
I got an e-mail from Bert that afternoon stating that he’d supplied the lease agreement as agreed and asking me to dismiss the lawsuit. I e-mailed back that Tim claimed that his signature had been transposed onto the lease agreement from another document. I asked Bert to send me the original of the lease agreement and copies of all other documents Tim had signed for analysis by a handwriting expert. (I was bluffing. My handwriting expert would cost more than the amount involved.)
Bert didn’t respond to my request to have all signed documents analyzed by a handwriting expert. Instead, he called me again and offered to pay Tim $200 to drop this ridiculous claim. “Bert,” I responded, “if you want to end this now it’s going to cost you $2,550. Backing out my one-third fee of $850, and subtracting $400 for the court filing fee, that leaves $1,300 for Tim, the amount he should have been paid in the first place.”
Bert was outraged and hung up. But on August 20 I got another e-mail from him. Without addressing the forgery claim, Bert stated, “The paperwork seems all in order to me,” and that Tim had no proof that he didn’t agree to pay rent. “What makes this simple,” Bert wrote. “I am happy to meet him half way . . . and be done with this.”
“We can do this the easy way or the hard way, Bert,” I wrote back. “If you want to ‘make this simple’, do it the easy way and send me $2,550. If you want to do this the hard way, I’ll go after the $1,300, wage penalties, more attorney fees than $850, court costs, interest and punitive damages for forgery.” I heard nothing from Bert after that.
On August 27 I got an e-mail from a Tacoma lawyer named Sarah Smith, saying she represented Bert. She said that given the facts of the case “and the amount in controversy,” she was confident that “motion practice will not be required to resolve this dispute.” She went on to write that Bert’s employee, Katie, had seen Tim sign the lease agreement. Sarah threatened Rule 11 sanctions if I didn’t immediately dismiss the lawsuit with prejudice.
Before responding to Sarah’s e-mail I googled her. She was an employment lawyer in a big firm, representing employers. I guessed that her fee was $350 -$400 per hour. I wondered how much, or if, Bert was paying her. I e-mailed Sarah and reiterated what I’d told Bert. I asked again to be sent all documents signed by Tim for analysis by a handwriting expert, and also wrote: “I find it curious that the $650 monthly charge was not deducted from my client’s paychecks contemporaneously, but instead the $1,300 total was not deducted until the employment relationship came to an end. That smacks of retaliation or a quick money-grab.”
Sarah e-mailed back minutes later. “Given that your client . . . did in fact return a signed lease agreement to Katie (which she will confirm under oath), the notion that the lease agreement is forged really doesn’t seem legitimate.” I e-mailed right back. “Why not submit all the documents to a handwriting expert – ‘loser’ pays her fee – to determine who’s telling the truth.”
Sarah, minutes later: “Given the overwhelming evidence available to contradict your client’s version of events, I am not recommending that my client indulge this theory further.”
John: “Then let’s litigate. If you’re going to accept service of process, per FRCP 4(d), you need to do so by September 13.”
I heard nothing more from Sarah until September 9, when she wrote that Bert sent a check directly to Tim’s account for $1,300. “I believe that resolves any claim your client could have for wages in this case and upon receipt of these funds dismissal of your lawsuit is the next step.”
“No, this does not resolve the claim,”
I e-mailed back. “You or your client need to accept service of process by this Monday or face the expense of process servers that I will send out.”
Sarah e-mailed back the next day, Friday, September 10, stating that my client had been paid the $1,300. “What else are you trying to accomplish by pursuing litigation? The wage claim is the only one I see in your complaint.” I e-mailed back about claims for attorney fees, wage penalties, and punitive damages for forgery.
Sarah: “I’m not aware of any provision of Washington law that would allow you to recover attorney fees or costs, wage penalties or any punitive damages in this situation.” “This is a seaman’s wage claim brought under the maritime law,” I patiently explained in a return e-mail. “Your client did not offer to pay the $1,300 at issue until (Tim) was forced to hire a lawyer and file a lawsuit. That is bad faith. Even if my client is not entitled to wage penalties and attorney fees under RCW Chapters 49.48 and 49.52, he is under the general maritime law. And then, when confronted with wage theft, your client forged my client’s signature to avoid payment. What don’t you understand?”
Sarah then asked for the statutes that supported my claims.
I e-mailed back that the maritime common law was shaped primarily through stare decisis, by court decisions, and that punitive damages were generally available for deliberate wrongdoing. I added: “My current, non-negotiable demand includes a 1/3 contingent fee. If this matter goes forward, I will be seeking instead reasonable hourly fees. I need not explain to you the difference, but I will point out that recent federal court decisions here and elsewhere have awarded me fees at $450/hour. Do you want to do this the easy way or the hard way?” By this time it was September 11, the 20th anniversary of the Al-Qaeda attacks on the U.S.
On September 13 Sarah offered to pay $500, in addition to the $1,300 already paid to Tim by direct deposit into his bank account. She wrote that she wouldn’t cover the $400 filing fee (it’s actually $402 in federal court) because, “Your complaint and PACER confirm that no filing fee has been paid in this case pursuant to 28 USC 1916.”
I e-mailed back: “$1,800 will not resolve this claim. Pay the $2550, pronto, or file an Answer to the complaint. Regarding the court filing fee, you need to read the statute before citing it. 28 USC 1916 allows a seaman to avoid “pre-paying” the filing fee. My practice is to pay the filing fee after receiving it from vessel owners. Do you really think I’m trying to beat you out of $400 when I could hold you up for many times that?” (Note: Most of my colleagues in the plaintiffs’ maritime bar never pay the filing fee in seamen’s cases. Even though the federal Western District of Washington does not enforce the plain meaning of 28 USC 1916, I pay the filing fee at the end of cases because it’s the right thing to do.)
Sarah responded that Tim “has received more than he is entitled, and it is disappointing that you would prolong this matter over a few hundred dollars in attorney’s fees.”
I wrote back: “Please explain to me why (Tim) should accept a net recovery (after paying my fee) of less than the $1,300 he is due?”
Sarah reverted back to offering $500 in addition to the $1,300 paid directly to Tim behind my back, alleging that, “Three different individuals recall talking with or overhearing conversations with (Tm) about the lodging option and his decision to occupy the trailer he rented.” Without mentioning the written rental agreement, she continued, “He was obligated to pay rent for that unit at the agreed-upon price of $650 per month.”
By this time it was after 5:00 on September 13, but the e-mail exchange continued. I wrote to Sarah: “If you’re not willing to submit the signatures for analysis, please file an Answer the Complaint.”
Sarah: “I am not inclined to rely on an expert you hire to do an analysis of a signature that there is no evidence (other than your client’s subjective memory) to suggest a forgery. This document was not forged. My client does not want to spend more time and money on this situation, your client has received all of the wages he is due, and my client has authorized me to offer to pay your ‘full contingent fee’ of $850. If that is acceptable I will update the settlement agreement tonight and it can be signed around.”
I emailed back: “And the $400 filing fee? If your client won’t agree to a handwriting analysis, how about dueling polygraph testing by a mutually-agreeable examiner? Again, ‘loser’ pays.”
Sarah didn’t respond to my challenge to have both of our clients tested by a lie detector machine. Instead she asked if I could avoid paying the $400 filing fee. “Surely, Sarah,” I responded, “you are not suggesting that I break with my standard practice in order to give your client a discount after he cheated my client out of $1,300?”
Sarah: “For a difference of $400, my client is not going to hire an expert or even a lay person to analyze a signature.”
The case settled that evening for a total of $2,550. Tim got to keep all of the $1,300 direct deposit and I paid the $402 filing fee.
Eagle John Merriam is a former merchant seaman, now a sole practitioner at Seattle’s Fishermen’s Terminal who restricts his practice to representing claimants for maritime wages and injury.