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The goal of most of the exhibitors at the Fort Lauderdale International Boat Show is to sell boats. From the anecdotal stories I heard during the show, this year’s was one of the most successful shows in recent memory for sales.
Assuming that is true, there are a group of owners and crew members who will soon be parting company. Not all, of course, but more than a few. While many crews will hopefully be moving up to the owner’s new and larger toy or staying with the new owner, some will be looking for new opportunities.
The most challenging aspects of boat ownership from an owner’s perspective is finding, keeping and managing great crew. For those owners selling and not moving up, as I have at various times over the past 30 years, the issue is how to compensate crew upon departure due to a sale. What is fair for all involved? While some crew will have a sale event written into their contracts, I suspect that many do not.
First and foremost, a great crew will help the owner during the sales process. Showings, surveys, sea trials, innumerable buyer and new crew questions are standard fare. Keeping a smiling, helpful countenance during this process is critical to a sale. Even while knowing the end result is the loss of their job, crew should fully and happily participate. Crew owe this to the owner. Crew can make or break a sale.
Conversely, the owner has a duty to crew to compensate them for their efforts. I also expect that a properly motivated crew will result in a higher sale price of the boat. Win/win.
I know of some owners who share a taste of the sale price with their crew to encourage their eager participation in the sale process. I also have heard of some crew who are compensated by brokers to ease the transaction. I don’t know what is the right answer, but I do believe that loyal, hard-working crew deserve to be treated like a similarly paid position out in the business world.
If a crew member is to be “laid off” as a part of the sale, it seems to me that their severance should be similar to the payments typically made in corporate America.
The payments upon departure can be based upon multiple formulas, but typically it is a payment based upon time served. This will vary from company to company and in some cases is mandated by labor agreements and laws. But basically, the longer a crew member has been employed by an owner, it would seem that a larger payment should be made.
As usual, Google has some answers:
“The severance pay offered is typically one to two weeks for every year worked but can be more. If the job loss will create an economic hardship, discuss this with your (former) employer. The general practice is to try to get four weeks of severance pay for each year worked.”
While each situation is unique, it would seem fair to me for crew to receive something in this range. A discussion might also include the extension of health insurance coverage and perhaps other benefits.
But as a tip for crew in the future, it would probably pay to discuss the eventuality of a sale of the boat up front, at the time of hiring. And like all aspects of crew/owner relations, it never hurts to put it in writing. Written agreements do not solely exist for litigation, but are a valuable tool to ensure that all parties clearly understand their duties, obligations and goals. Even if it is a simple letter of agreement, something memorializing each party’s expectations and commitments can be helpful in understanding their role in the relationship and clarifying it when questions arise.
I am not suggesting to hire a fancy, expensive attorney for this, but a written agreement may make both parties happier in the long run. And if the boat did not sell at the show, it is not too late for captains and crew to clarify what they might expect from the owner now.
Bow west and high tide only.
Peter Herm is the pen name for a veteran yacht owner who is an entrepreneur based on the East Coast of the U.S. Comments are welcome at email@example.com.