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Case law: Sanchez v. Smart Fabricators of Texas LLC, 5th U.S. Circuit Court of Appeals, No. 19-20506
News & Insights 31 May 2021
Key words: Jones Act
Test for Jones Act seaman status
In a unanimous decision in Sanchez v. Smart Fabricators of Texas, L.L.C., No. 19-20506 (5th Cir. May 11, 2021) (en banc - case heard before all the judges of a court), the US Court of Appeals for the Fifth Circuit affirmed the district Court decision holding that a welder assigned to a jack-up rig was not a seaman within the meaning of the Jones Act.
Courts generally employ the Supreme Court’s two-pronged test to determine whether an individual qualifies as a seaman under the Jones Act. Courts will look at whether:
- an employee’s duties contribute to the function of the vessel or the accomplishment of its mission; and,
- the employee’s connection to a vessel in navigation is substantial in terms of duration and nature. The durational aspect is satisfied if an individual spends at least 30 percent of his or her time in the service of a vessel in navigation. Determining whether an individual’s connection to a vessel is substantial in nature can be a more complex task.
The claimant, Gilbert Sanchez, was employed by Smart Fabricators as a welder and was directed by his employer to work on two discrete short-term transient repair jobs on two jacked-up rigs. During the course of his work, Sanchez was injured and subsequently filed a suit against Smart Fabricators under the Jones Act. The District Court found that Sanchez was not a seaman as he failed to establish that his connection with vessels was substantial nature.
On appeal, the Fifth Circuit panel reversed the District Court’s finding and concluded that, based on precedent, the primary consideration to determine if a worker qualified as a seaman was whether the worker was subject to the "perils of the sea." However, the panel urged that the Fifth Circuit take the case en banc to reconsider the circuit precedent.
In considering the seaman status question, the en banc Fifth Circuit held that the plaintiff’s work assignment on the vessels was substantial in duration but not in nature and he therefore could not avail himself of the Jones Act, relegating the plaintiff to the scheme available under the Longshore and Harbor Workers’ Compensation Act (LHWCA). The Court devised the following additional inquiries to determine whether a land-based worker who serves a vessel should be considered a Jones Act seaman:
- Does the worker owe his allegiance to the vessel, rather than simply to a shoreside employer?
- Is the work sea-based or does it involve seagoing activity?
- (a) Is the worker’s assignment to a vessel limited to performance of a discrete task after which the worker’s connection to the vessel ends, or (b) does the worker’s assignment include sailing with the vessel from port to port or location to location?
The Court’s ruling in Sanchez has a potentially widespread impact on the offshore oil and gas industry. Industry participants should re-examine whether their employees meet the newly stated seaman status test when considering contractual indemnities, insurance coverage, project development and risk management.
- Link to judgment can be found here
Link to commentary by Holland & Knight can be found here