Royal Caribbean is reportedly outsourcing the majority of the employees in its call center in Springfield, Oregon (near Eugene) to Jamaica and Guatemala. Over 700 positions in the Springfield office will apparently be gone by the end of 2019. Employees say that they were forced to sign Non-Disclosure Agreements (NDA’s) prohibiting them from talking about the company’s decision. As one employee who wishes to remain anonymous recently told me, “it’s pretty sad there right now.”

Royal Caribbean has operated a call center in the town of Springfield, Oregon since 2006 in a customized office which is designed to look like a cruise ship (see article below). As of 2014, Royal Caribbean employed over 700 people and had plans to hire over 200 others there.

Several current employees in Springfield contacted me to discuss the company’s plans. They state that Royal Caribbean plans to outsource 85-90% of its jobs in Springfield to Guatemala and Jamaica. This leaves around 700 U.S. employees without jobs, and the cruise line is not offering severance pay or assistance to most of the employees. All of the employees wish to remain anonymous out of fear that the company will retaliate against them.

The only teams which, reportedly, are being offered to remain employed are “sales” and “outbound sales.” However,  long term sales agents are not being provided with leads anymore and the cruise line is already outsourcing calls to agents in Guatemala. 

One employee told me that “when guests have a issue with their booking and want to speak with a supervisor (escalating to the resolutions department), they will now speak to someone overseas. It seems like for now Royal Caribbean wants their sales agents in the USA to hook the customer  and introduce them to the product, but when they call back with an issue they will be routed overseas.” She added “good luck getting a refund . . . ” 

Several years ago, Travel Weekly reported that Royal Caribbean’s UK and Ireland managing director reassured agents about the planned outsourcing of the cruise line’s UK call center to Guatemala. He told Travel Weekly at the time that Royal Caribbean was busy training the new Guatemalan call center staff and he would soon visit the Central American center.

Royal Caribbean is obviously not the first cruise line to outsource services from the U.S. Two year ago, Carnival eliminated 200 positions from its IT departments across its brands, including Carnival Cruise Lines, Holland America Lines and Princess Cruises. Carnival received wide spread criticism when it was revealed that Carnival employees were required to train the “foreign” replacements.

Over the years, there have been several incidents involving mass lay-offs from Royal Caribbean, dating back many years ago with 500 employees losing their jobs, with the last one in 2013 involving around 100 people let go.

As I mentioned before, this appears to be an inevitable part of the “globalization” of the cruise industry. Money saved by the cruise executives in Miami, yes, but at the expense of terminating loyal U.S employees. Not to mention running the risk of demoralizing the remaining staff while offering substandard services.

Have a thought? Please join the discussion on our Facebook page.  

August 30, 2018 Update:

According to KVAL TV in Eugene, “some of the Springfield employees were used to train workers in Jamaica in April ‘only to realize now that they trained their own replacements.’ The sources have asked not to be identified for fear of repercussions at work.”

KVAL TV article “Absolutely Heartbroken;” Employee at Royal Caribbean in Springfield Speaks Out.

Royal Caribbean responds by saying that there are allegedly no layoffs currently planned but plans to “reassign some of the jobs to other areas.” The employees in Springfield will be “reduced through attrition.” A KVAL reporter reported that the cruise line would not provide a time table for the changes and “declined to say where those jobs would be located, and said officials have not decided how many jobs would be moved.”

Interested in this issue? Please read:

Cruise Law Visits Royal Caribbean in Oregon

Globalization at Work? Royal Caribbean’s U.K. Call Center Outsourced to Guatemala

Loyal to Royal” Royal Caribbean Axes 100 Jobs in Corporate Headquarters

Photo credit: Jim Walker

According to The Telegraph newspaper, NCL cruise executive Andy Stuart’s 83-year-old mother told the newspaper that Norwegian Star cruise guest Kay Longstaff, who went overboard as the cruise ship was heading back to Venice three days ago,

“. . . didn’t fall off. She jumped. This has cost Norwegian Cruise Line $600,000. This stupid woman.”

Mr. Suart’s mother told the U.K. newspaper that he was upset that Ms. Longstaff caused “massive disruption to fellow passengers while costing Norwegian Cruise Line (NCL) hundreds of thousands of pounds in compensation.”

Over the years, I have written many dozens of articles about people going overboard from cruise ships.  One of the first things that readers think when a passenger (or cruise employee) goes overboard is that “you can’t fall from a cruise ship.”

Most of the time, the person who goes over the rails of a cruise ship is not rescued.  In fact, less than 15% of people who go into the sea are rescued. They die at sea. But that doesn’t stop cynics from attacking the dead cruisers as being “stupid.”  Considering that 319 people have gone overboard in the last two decades according to cruise expert Professor Ross Klein, this means that well over 250 families have grieved or are grieving the loss of a family member lost at sea from a cruise ship.

The cruise industry does not bother to keep statistics of the number of people who go overboard, or the reasons why they do, choosing instead to label their disappearances to be the “result of an intentional or reckless act,” as pointed out by NPR in a recent article.

The “intentional or reckless act” is a talking point from the cruise industry’s trade organization, the Cruise Line International Organization (“CLIA”). CLIA, of course, claims that cruising is “one of the safest forms of travel” and claims that it is impossible to go overboard unless cruise guests act recklessly.

Over-intoxication is the leading cause of passengers going overboard from cruise ships, by far. Pushing alcohol during cruises is a fundamental part of the cruise business. Bar and tavern owners know that customers often act recklessly when they are over-served alcohol. Things are no different on the high seas.

Just last week, a jury in Miami heard testimony about Samantha Broberg,  a guest on the Carnival Liberty. In 2016, Carnival served her 19 drinks over the course of the day and evening, rendering her well past the point of obvious intoxication. She staggered out of the cruise ship bar after 1:30 A.M., sat on a railing in a drunken stupor, and fell into the dark waters of the Gulf of Mexico.

The cruise ship did not have an automatic man overboard system installed, as required by the 2010 Cruise Vessel Security and Safety Act which President Obama signed into law and became effective in 2012.

Such a system would have instantly signaled the bridge that a person went over the railing, captured the person’s image and tracked the person in the water, even at night, via combination of motion-detection, infrared and radar technology.  Carnival eventually resorted to reviewing CCTV images after-the-fact once the woman’s friends reported her missing around 11:00 A.M. the next morning and searching the ship even though the woman went into the water several hundreds of nautical miles earlier. Carnival eventually contacted the United States Coast Guard around 5:00 P.M the following day while it continued heading back to its home port in Galveston.

Ms. Bromberg’s body was never found.

Ms. Bromberg left behind a loving husband and four children.  But that didn’t stop the cruise cynics from calling her drunk and stupid.”

Like Carnival, NCL doesn’t seem to have installed an automatic man overboard system on the Norwegian Star.  So when Ms. Longstaff went over the rails late at night, perhaps just like Ms. Broberg did two-and-one-half years earlier, the ship’s bridge was not automatically and immediately notified. The ship continued sailing until her friends notified the ship that they could not find her.

After turning around to search for her many hours later, the NCL cruise ship eventually abandoned the search and returned to Venice, arriving around 3:00 P.M. rather than the scheduled 8:00 A.M. The cruise ship was full of upset passengers who were agitated that they had missed their flights home and had to look for a hotel.

As explained in articles by Quartz and NPR, this is the second time in two months that NCL abandoned a search for an overboard guest or cruise employee and returned to the ship’s home port due to pressure from  angry passengers and in order to re-rack the ships with new guests for the next cruise.  The same thing happened with the Norwegian Getaway last month when the Getaway decided to head back to Miami after a short search for a crew member who had jumped overboard, leaving the Coast Guard during the middle of the search. (The crew member was eventually rescued the next day by a passing Carnival cruise ship,)

It’s bitterly ironic that NCL cruise CEO Stuart, or his mom, would complain about Ms. Longstaff’s going overboard when its was NCL which probably over-served her alcohol in the first place, and didn’t equip its cruise ship with an automatic man overboard system even though it knows that other intoxicated guests have disappeared overboard during cruises.  It was also NCL which abandoned its search for her as she treaded water for over 10 hours in the Adriatic Sea.

And as far as NCL having to allegedly pay for their guests’ airfare and hotel accommodations in Venice? Hogwash.  NCL has a well deserved penny-pinching reputation for never paying for missed ports or cruises gone wrong though its own negligence. It has never reimbursed its guests’ airfare or hotel accommodations caused by a delayed return to port following a passenger lost at sea. It’s preposterous to believe that NCL allegedly paid anything to the guests who they dumped in Venice at the end of the ill-fated cruise, much less $600,000 as claimed by Mr. Stuart’s mom in the Telegraph.

Most of the passengers who have contacted me about this case complain that NCL refuses to reimburse them for their airfare changes and hotel expenses due to the the Star’s late return to Venice.

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

Here are just a couple of automatic man overboard systems available to the cruise industry (there are several others):

MARSS Mobtronic

Pure Tech

Photo credit:  Croatian Coast Guard, Harbour Master’s Office, Rijeka via ABC News.

 

Today, Royal Caribbean Cruises announced that it is acquiring a 66.7% stake in Silversea Cruises for $1,000,000,000 (billion) and assuming around $500,000,000 (million) in debt.

As a privately held cruise brand, Silversea operates nine ships with two newbuilds, Silver Moon and Silver Dawn, which are under construction for delivery in 2020 and 2021, with an option for a sister ship.

RCL states that it plans to finance the purchase through debt. Silversea’s executive chairman, Manfredi Lefebvre d’Ovidio, will qualify for an estimated contingent payment of of 472,000 RCL shares, based on reaching certain 2019-2020 performance marks, which are currently worth a little over $50,000,000 based on the current price of RCL shares.

Seatrade Cruise explains that Silversea was the “brainchild of Antonio Lefebvre d’Ovidio, a noted Italian jurist and law professor who wanted to create a new class of spacious ships with highly Royal Caribbean - Silversea Cruise Dealpersonalized service. In 1988, he purchased the majority of Sitmar Cruises, merging it with P&O’s Princess Cruises a year later. In 1994, he launched Silversea Cruises with two purpose-built ships. His son Manfredi, who had been involved in the family’s businesses from an early age, managed ship operations. He took control of the company and became chairman in 2001.”

Silversea Cruises has tarnished its reputation in the last few years, having faced the embarrassment of crew members being ordered to hide carts of food and galley equipment in crew member quarters on the Silver Shadow in 2013. CNN aired a special report of the CDC flunking the Silver Shadow when inspectors caught Silversea in the act.  The Silver Shadow flunked another CDC inspection in 2015.

The Silver Wind also flunked a USPH sanitation inspection last month.

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Photo Credit; Royal Caribbean/Silversea via Travel Weekly,

Norwegian Cruise Line Holdings Ltd. (NCLH) reports that its CEO Frank Del Rio’s total compensation for 2017 was $10.5 million.  

Cruise executive Del Rio received compensation valued at $2.9 million in 2016, down from almost $32 million in 2015. According to Seatrade Cruise News, Mr. Del Rio received compensation valued at $31.9 million in 2015, including nearly $17.8 million in stock options and $10.3 million in stock awards. His cash income was about $4 million including a salary of over $1.8 million, and a bonus of $1.9 NCL CEO Frank Del Riomillion. Other compensation of $140,651 included a cash automobile allowance, tax preparation service and a country club membership.

HCLH’s first quarter returns for this year include revenues of $1,293.4 million, and a 13.1% increase in passenger ticket revenues to $889.87 million. 

In an article in Skift today titled Norwegian Cruise CEO Sees No Signs of Recession, Del Rio disputed  the standard worry among cruise industry investors these days "that a recession might loom as the global fleet is growing, potentially leading to costly new ships with a public too cash-strapped to sail on them." 

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

Interested in this issue? We suggest reading:

NCL CEO Del Rio on the Norwegian Breakaway Bomb Cyclone Fiasco: "Weather Can Be Unpredictable . . . (It’s) All Good." 

NCL Imposes Keelhauling to Motivate Crew Members.

Photo credit: Frank Del Rio – Mark Elias/Bloomberg via Getty Images and Storify.

Royal Caribbean Chairman Richard Fain remains the highest paid executive in the cruise industry. 

Mr. Fain is the highest paid cruise executive for the second year in a row. Mr. Fain was paid $13,343,413 last year (2017), an increase of nearly three million dollars, from $10,405,684 in 2016. 

Royal Caribbean enjoyed a record earnings year in 2017.

The Miami-based cruise line just reported strong first quarterly returns for 2018 – net income of RCCL Chairman Richard Fain$218,700.000 (million), revenues of $2,027,000,000 (billion) and passenger ticket revenues of $1,425,000,000 (billion). 

Financial records also reveal that Mr. Fain sold 20,000 shares of RCL stock two weeks ago. In a transaction dated Friday, April 13th, he sold 17,500 shares of stock at an average price of $114.84, and 2,500 shares at an average price of $115.40 for a total transaction of nearly  $2,300,000.00. Following the sale, SEC records reflect that the chief executive officer now own 882,537 shares of the company’s stock, valued at over approximately $100,000,000. 

Royal Caribbean is the leader of the "over-sized" cruise ship club (think Oasis of the Seas, Allure of the Seas, Harmony of the Seas) with its newest billion-dollar Oasis-class ship (and largest cruise ship in the world) Symphony of the Seas which was delivered from the shipyard last month.

But can the cruise business support the many huge ships coming on line? Skift just published Royal Caribbean Ups Forecast But Wall Street Worries About Too Many Ships.

Have a comment? Please leave one below or join the discussion on our Facebook page. 

Interested in this issue? We suggest reading Fearless Fain, Royal Caribbean’s CEO.

Photo Credit: Carmen Molino YouTube – "Symphony of the Seas delivery. Richard Fain talks to the audience."

AIDAperlaPassengers aboard the Norwegian Sun are still complaining about the massive renovation projects that ruined their two week cruise from Miami through the Panama Canal to Los Angeles several weeks ago.

We wrote about the problem almost three weeks ago in an article titled NCL’s Panama Canal Fiasco Cruise. The Miami Herald just reported on the continued fallout from the large scale project yesterday in They booked a two-week Norwegian cruise. Instead, they got a ‘nightmare at sea.’

For a cruise where customers paid for what should have been a relaxing and care-free vacation at sea, NCL scheduled the sanding and application of noxious smelling chemicals and compounds throughout the open decks of the ship. Ship employees and contractors involved in the work were wearing respirators due to the dust but the passengers were left to inhale dust generated by the work.

The project obviously should have taken place in a dry-dock. The heavy construction caused NCL to shut down numerous bars, deck spaces and restaurants. The work also risked the health and personal AIDAperlasafety of the guests. Photos from the Facebook page, Panama Canal Sun, show paint particles and metal shards covering the decks. Doors leading to muster stations on the ship were blocked which seems dangerous, especially considering the buckets of flammable chemicals stored all over the decks. Many passengers complained of burning, itching and runny eyes and difficulty breathing due to the strong fumes and/or particles.

But cruise industry supporters told the Miami Herald that a cruise ship undergoing construction projects outside of a dry dock is not uncommon (although the level of construction on the Norwegian Sun was quite unusual).

Over the years we have been contacted by dozens of cruise passengers who have complained that grinding of exterior decks, painting of portions of the ship exteriors and other noisy and smelly projects ruined their vacations. Take a moment and read our article HAL’s Upgraded Cabin From Hell. Watch the video here.

I have always been amazed that a travel/vacation company of any type would subject their customers to such an inconvenience, much less a health hazard like what happened on the Norwegian Sun.

But cruise lines don’t make money unless they are sailing their ships. The industry’s enormous tax-free profits come from shipboard activities like sales from the casinos, shore excursions, gift shops, AIDAperlaspecialty restaurants and the tremendous amount of booze sold during cruises. Several thousand  passengers each paying many thousands of dollars in cruise fares and many hundreds of dollars in onboard purchases is simply too much loot for greedy cruise executives to walk away from.

We typically don’t get involved in such disputes. But writing about such bait-and-switch tactics seems to be an insight in the nickel-and-dime mentalities of many cruise lines.

I was recently contacted by a German couple who is cruising with their young child on the AIDAperla, which I understand to be the newest and most modern cruise ship of AIDA Cruises. AIDA did not bother to tell them that some of the pools were closed due to renovations/repairs taking place during the cruise. Passengers witnessed grinding and sanding which required workers to use masks or respirators (top left) during the project. Paint and chemicals were stored on the deck next to passengers sitting around the emplty pool (middle right).  Experiencing such inconveniences would seem to be the last thing that any guest should expect from a new ship (launched just last year).

But the Carnival-owned cruise line brushed off the couple’s complaints, offering just an onboard credit of 30 euros for the adults and a 15 euro credit for the child – after the German couple paid over 1,200 euros for the cruise which left Hamburg.

I suppose that this inconvenience is a far cry from the outrageous conduct of NCL in the Norwegian Sun fiasco, which eventually resulted in a “full cruise refund” after the passengers organized themselves and their complaints went viral.   But it all seems reflective of the we-take-our-guests for granted if not outright contemptuous attitude of many cruise managers and executives toward their passengers.

Have you encountered a similar inconvenience or aggravation during a cruise that you paid for your family? How did the cruise line respond?  Join the conversation on out Facebook page.

Photo and video credit: Anonymous

https://youtube.com/watch?v=hWHkAfV9u1E%3Frel%3D0

Royal Caribbean announced its fourth quarter financial results with CEO Richard Fain stating that the cruise company received revenues of $2,000,000,000 with net profits of $288,040,000. Royal Caribbean’s fourth-quarter profits and revenues reportedly exceeded Wall Street estimates,

Mr. Fain told CNBC that the company met its lofty three-year goals of “double earnings” and a “double-digit” return on invested capital. In response the Royal Caribbean executive stated yesterday that Royal Caribbean employees will each receive a bonuses in the amount of 5% of their annual salary.

Investor Place reports that the cruise line will be distributing the bonus to its 66,000 employees. This Roya; Caribean CEO Richard Fainwill include shore-side and shipboard employees. This bonuses will be in the form of “equity grants” which will vest over three years. RCL reports that total spending on the bonuses will be $80 million.

Crew members state that their annual minimum guaranteed salaries range from $500 to $600 a month for a pot-washer to around $800 to $1,300 for a waiter, cabin attendant or bar tender. These Royal Caribbean ship  employees typically work contracts of around 6 to 8 months straight which turns out to working approximately 9 months a year. So a 5% bonus turns out to be around $225 to $270 for a pot-washer to around $350 to $550 for waiters, cabin attendants and bartenders, to be paid over the course of three years.

Meanwhile, CEO Fain reportedly sold 20,000 shares of Royal Caribbean Cruises stock in a transaction on January 16th. The stock was sold at an average price of $128.10, for a total transaction of $2,562,000.00. Following the sale, the chief executive officer now directly owns 807,741 shares of the company’s stock, valued at $103,471,622.10, according to SEC records. Ms. Fain indirectly owns another 216,206 shares which, at a price of $128.10 each, have a value of $27,695,988.60. Mr. Fain’s’ direct and indirect holdings of RCL stock are valued at $131,167,610.70, at the price of $128.10 a share.

RCL shares are now worth around $132 a share, up approximately $4 more a share since last week, so Mr. Fain’s RCL total RCL shares are now worth around $4,000,000 more than they were at the time of the sale last week.

The point is, that although it’s to be commended in theory that crew members will be rewarded for their hard work with bonuses, the amounts to be paid to the crew in question are rather minuscule, especially because they are to be paid over the course of the next three years rather than in a single check now. The bulk of the $80 million to be paid in bonuses will primarily go to the higher paid shore-side workers. So be sure to tip the crew members with cash when you cruise.

Have a thought? Please leave one below or join the discussion on our Facebook page.

Photo credit: CNBC

Shortly after the new year, Royal Caribbean will again increase the automatic gratuities which it charges its passengers. Royal Caribbean will hike the automatic gratuities which it adds onto its guests’ accounts (by more than 7%) to $14.50 per person, per day. Passengers who stay in suites will pay even more, $17.50 per person, per day.

USA Today explains that a family of four will now pay more than $400 in automatic gratuities on a 7 night cruise which is one of the highest gratuities in the cruise business. 

The increase is the third in three years at the line. In early 2015, the Royal Caribbean’s gratuity fee Royal Caribbean Automatic Gratutieswas $12.

Like rival cruise lines, Royal Caribbean has been drastically increasing its automatic gratuities. USA Today says that Royal Caribbean’s gratuity charge has now jumped by nearly 21% since May 2015 (more than five times the rate of inflation). 

Cruise lines suggest that the extra gratuities go to the hard working crew members, but that’s hardly true. Crew members used to receive substantially more when passengers used to directly hand them money as tips. Cabin attendants and waiters have stated that the auto gratuities go to the cruise lines which take a cut and distribute some of the money to non-tip earning crew members. 

The Swiss TravelNews site rightly contends that "the passengers indirectly pay a massive wage component of these employees."

Royal Caribbean says that passengers can lower or remove the automatic gratuities by by visiting the Guest Services desk. Expect this to happen, as many passengers don’t like to pay gratuities when the service is average or to pay what the cruise lines should already be paying in wages. The same thing happened when Carnival hiked its auto gratuities. Carnival Hikes Pre-Paid Gratuities But Will Passengers Secretly Remove Tips?

We reported on a prior automatic gratuity increase in 2015 in Loyal to Royal? Expect to Pay Higher Gratuities! (And the Money’s Not for the Crew). Not coincidentally, CEO Richard Fain has RCL stock now worth over $110,000,000. 

Matt Hochberg’s Royal Caribbean Blog as the first to announce the gratuity increase. 

Have a thought? Please leave a comment below or join the discussion on our Facebook page. 

Former Norwegian Cruise Line ("NCL") CEO Colin Veitch’s trial against his successor, Kevin  Sheehan, and their old cruise line, NCL, for defamation and breach of contract has been underway in the Miami-Dade County courthouse, here in Miami, Florida this past week.

Veitch worked at the helm of NCL from 2000 to 2008. According to Travel Weekly, Veitch was the architect of "Freestyle Cruising" and undertook an ambitious fleet renewal program, purchasing nine new cruise ships. By some accounts, but  not all, Veitch was an innovative cruise executive who was successful in beginning the transformation of under-performing old cruise ships into a larger and far more profitable fleet. 

Veitch turned the revitalized cruise line over to Sheehan in 2008. Things turned sour between the two NCL Colin Veitchrich cruise executives after a travel periodical, Travel Weekly, wrote a glowing article in December of 2014 about Veitch and his success at NCL. Sheehan then sent an email to Travel Weekly mocking the article and criticizing Veitch. The Miami Herald reported at the time, quoting the lawsuit allegations, that Sheehan sent a “vindictive, false and defamatory” email to Travel Weekly which eventually published. A few days later, Travel Weekly retracted the complimentary article about Veitch.

Veitch then sued Sheehan and NCL alleging defamation, as well as breach of contract, claiming that his former cruise line and its new CEO allegedly cheated him out of revenue sharing. 

The overblown 187-page lawsuit which you can review here is, in my opinion, a rather fascinating insight into the hurt-feelings and out-of-control personalities of two multi-millionaire former NCL cruise executives.

The lawsuit which Veitch filed against Sheehan included allegations which have been characterized by the Skift travel publication as "incendiary" accusations that Mr. Sheehan engaged in “a long pattern of personal and professional misconduct and recklessness, stunning in its scope and hubris, corrosive and detrimental in its impact on the company, and deeply undermining of the workplace culture . . . ” 

In response, Mr. Sheehan and NCL asked the court to strike what they characterized as "immaterial, impertinent and scandalous" allegations. 

The bitter personal allegations between these two former cruise executives arise from a nasty dispute between two very wealthy former cruise executives.  When Mr. Veitch resigned from NCL’s parent company, Star Cruises, he reportedly received $10,000,000 as part of a severance package. He also settled a $300,000,000 lawsuit which he filed against Sir Richard Branson and the Virgin Group after he alleged that the British billionaire and his company stole his ideas for a new cruise project. The precise amount of money that Veitch pocketed is confidential. 

Kevin SheehanSheehan also received a severance package from NCL in 2015 after it terminated his employment, totaling $13,400,000.

The many articles written by trade publications and major newspapers in Miami. like the Miami Herald and the Miami New Times, have covered the Veitch-Sheehan squabbles at length, but they are ignoring the biter irony of the litigation. Veitch was the NCL CEO in 2003 when a decrepit, poorly maintained steam boiler on NCL’s 40+ year-old SS Norway exploded at the port of Miami. The explosion killed eight crew members and seriously burned another nineteen NCL crew members.

The National Transportation Safety Board ("NTBS") concluded that the deadly boiler explosion was caused by NCL’s "improper operation, maintenance and inspection" of the old cruise ship’s steam chamber. The old boiler had "extensive fatigue cracking" and deteriorated materials that weakened the metal and caused it to rupture under pressure. The NTSB reported that NCL was aware of the dangerous condition but failed to take action to fix the problem. 

CEO Veitch tried to deflect blame but NCL was forced to plead guilty to a criminal charge of gross negligence regarding the explosion. The Norway was subsequently sold for scrap.

When the families of the eight dead crew members who were scalded to death filed suit in Miami to obtain compensation for the loss of their fathers and husbands, Veitch’s lawyers argued that the crew members were not entitled to file suit before a judge and jury in Miami. Instead, NCL argued, because the crew members were Filipinos, their loved ones had to pursue the extremely limited death benefits pursuant to the arbitration process in the Philippines. 

Kicking "foreign" (i.e., non-U.S.) crew members out of the American legal system was unprecedented.  Foreign crew members injured or killed due to the negligence of U.S. based shipping companies have long been permitted to have their cases resolved through jury trials under the Jones Act here in the U.S. In addition to the Jones Act, crew members have also been entitled to obtain medical treatment and daily living expenses when they are injured aboard U.S. based cruise ships Norway Boiler Explosionunder the "maintenance and cure" doctrine, one of the oldest legal American legal doctrines dating back to the early 1800’s. 

But NCL, which faced substantial liability and damages for the deaths of eight crew members and nearly twenty other ship employees burned in the explosion, sought to dismiss the cases, arguing that their only remedy was the limited benefits under the Filipino law. NCL argued that Miami was not the proper location to resolve the dispute even though it is based in Miami and the deaths occurred at the port of Miami.  In Batista v. Star Cruises, our federal court agreed with NCL and sent the cases to Manila, where Filipino law limited the widows to just $50,000 and the children to just $7,500 for the loss of their dead husbands/fathers.

Like "freestlye cruising," NCL’s unprecedented legal posturing has also been copied by NCL’s competitors Carnival, Royal Caribbean and all other cruise lines, which quickly inserted one-sided arbitration clauses into their crew member employment agreements to escape or limit their liability when things go wrong on the high seas. 

Except for Disney Cruises, all other cruise lines prohibit injured crew members from having their cases heard by juries in the U.S. legal system. Filipino seafarers are especially susceptible to being screwed by the Miami-based cruise lines, thanks to NCL’s efforts which started under Veitch’s tenure. 

During the trial last week at the Miami-Dade courthouse, where NCL crew members are barred from filing suit, Veitch’s lawyer reportedly asked the jury to consider awarding $95,000,000 in damages, according to Court View Network (CVN). That may be a proper amount to finally compensate the families of the eight Filipino crew members who were burned to death on the SS Norway back in 2003, but it seems to be an awful lot for a healthy, millionaire former cruise executive with hurt feelings. 

Have a comment? Please leave one below or join the discussion on our Facebook page.

December 11, 2017 UpdateAs reported by the Miami Business Review today, Norwegian Cruise Line Defeats $90M Lawsuit From Former CEO.

Photo credits:

Colin Veitch: Associated Press via the Honolulu Star-Bulletin

Kevin Sheehan: REUTERS/Brendan McDermid.

SS Norway: News7 Miami via CBS News video.

Richard Fain Royal Caribbean Royal Caribbean top executive Richard Fain reportedly sold 20,000 shares of Royal Caribbean (RCL) stock this week for a total amount of approximately $2,500,000.

In a transaction this past Monday, November 13th, he sold his shares at an an average price of $123.76, for a total value of $2,475,200.00. CEO Fain officer reportedly now owns 895,416 shares of his cruise company’s stock, valued at around $110,816,684.16. 

In August 2017, Mr. Fain sold over $24,000,000 of Royal Caribbean stock. 

Have a thought? Please leave a comment below or join the discussion on our Facebook page.

Interested in this issue? Read Cruise Executive Richard Fain Hits the Jackpot Again.

Photo Credit: Royal Caribbean Press Center