Container Repair Facilities and Longshore Coverage

Two recent U.S. Court of Appeals decisions analyze the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) coverage requirements with regards to shipping container repair facilities. 

 

Under the LHWCA situs requirement, the place where an injury occurs must 1) have a geographic nexus with maritime activity; and 2) a functional nexus with maritime activity.  For the status requirement, a worker must be a maritime employee. 

 

In Ramos v. Director (OWCP-O:11-0130 August 10, 2012), the 11th Circuit upheld the Benefit Review Board’s (the “BRB”) determination that a container repair and storage facility did not meet the geographic nexus prong of the situs requirement.  There, the facility was 3.2 miles away from the closest port.  The Ramos court noted LHWCA-covered workplaces do not necessarily have to adjoin navigable waters.  Still, the court considered the 3.2-mile distance from a port, the business considerations for the facility’s location, and the fact that surrounding businesses had no maritime connection.  Therefore, the court agreed the facility did not have geographic nexus to maritime activity.

 

In New Orleans Depot Services, Inc. v. Director (11-60057 July 25, 2012), the 5th Circuit upheld the BRB’s holding that a container repair facility met the functional nexus requirement.  While the employer conceded geographic nexus because the facility was near navigable waters, the court took an expansive view in finding functional nexus.  It reasoned the containers were used for marine transportation and were, thus, a part of the ship loading process.  A strongly worded dissent asserted this connection was too attenuated.

 

The court similarly held the employee in question met the status requirement.  The court opined that container repair is an essential function of the ship loading and unloading process.  Therefore, the claimant, who serviced marine shipping containers, was a covered employee under the LHWCA. 

 

In analyzing these cases together, it would appear the LHWCA does not cover employees working at a container repair facility located sufficiently far away from a port or terminal. However, container repair employees at facilities adjoining navigable waters may meet the status requirement and the facilities themselves may meet the functional prong of the situs requirement.

 

by Tim Boykin.

A security guard may be covered under the Longshore Act if his work is integral to shipbuilding.

The 1984 Amendments to the Longshore and Harbor Workers’ Compensation Act made it clear that employees who exclusively perform “office clerical, secretarial, security, or data processing work” are not covered by the Act so long as they are covered by the applicable state workers’ compensation act.  33 U.S.C. §902(3)(A).

In a recent case, Gelinas v. Electric Boat Corp., 45 BRBS 69 (2011), the Benefits Review Board appears to have taken steps toward limiting this exclusion, at least as it applies to security guards.

In Gelinas, the claimant was employed as a security guard at his employer’s submarine fabrication facility.  He was required to hold an EMT certification and while he was typically assigned to work at the entrance of the facility, he would perform security rounds through the facility on the weekends.  He was also required to respond to medical incidents at the facility.

The ALJ had determined that the EMT duties of the claimant were not maritime in nature and that none of the duties were integral to shipbuilding and denied coverage.  The Board reversed the ALJ’s holding that the claimant did not have status as a maritime employee under the Act, finding that the ALJ had not adequately detail the rationale behind his decision and specify the evidence on which he relied.  The case was remanded back to the ALJ for further determination as to whether the claimant’s work was integral to the shipbuilding process. 

The takeaway for Longshore employers and carriers is that it isn't safe to assume that security guards will always fall outside of the Act's status requirement.  The job duties of the security officer must be carefully scrutinized to determine whether they may be integral to shipbuilding.

Attitude Matters

Do you have a claim, or two, on your desk where the claimant just seems determined not to get better? I do not mean to offend any injured workers, nor am I lumping all injured workers into any pigeon hole or stereotype, but if you are feeling frustrated or overwhelmed by the sheer number of cases on your desk, take a look at this video. May it remind you that each file on your desk represents a person - and you are in a position to help change the course of that person's life.

Attitude matters. Even if you've been injured, even in you are in pain, it does not have to chart the course for the rest of your life. Perhaps this should be mandatory viewing by any one filing a workers' compensation claim . . .

Amount of Benefits to be Determined by the Date of Injury, Not the Date an Award is Issued, per the US Supreme Court

On March 20, 2012, the U.S. Supreme Court announced its decision in Roberts v. Sea-Land Services. This case involves the Longshore and Harbor Workers’ Compensation Act (LHWCA), which provides compensation in cases of disability but caps benefits at twice the national average weekly wage for the fiscal year in which the injured worker is “newly awarded compensation.”  The question here was whether the determination as to when the worker is “newly awarded compensation” is affected by the issuance of a compensation order on the worker’s behalf.

After his employer discontinued voluntary workers compensation payments in 2005 for an injury the claimant received in 2002, claimant filed a claim. The ALJ awarded benefits at the 2002 statutory maximum rate under the LHWCA. Claimant disagreed, arguing his benefits should be based on the statutory maximum compensation rate in effect on the date the award was issued, not the date of his injury. The BRB and the Court of Appeals for the Ninth Circuit affirmed the ALJ's decision. 

In an opinion delivered by Justice Sotomayor, the Court affirmed the ALJ and held by a vote of 8-1 that “an employee is ‘newly awarded compensation’ when he first becomes disabled and thereby becomes statutorily entitled to benefits, no matter whether, or when, a compensation order issues on his behalf.”

The Supreme Court conducted a thorough analysis of statutory construction, utilized dictionary definitions of key terms and considered congressional intent. In the end, however, the Supreme Court affirmed due to the potential negative repercussions of basing the compensation amount on the order date. For example, the alternative would make it more difficult for an employer to calculate benefit costs; result in granting disparate awards to similarly situated employees; reward employees who initiate unnecessary administrative proceedings in order to secure higher rates, and frustrate the LHWCA’s purpose in compensating employees for the wages the employee was receiving at the time of injury.

This decision unifies the Circuit Courts, and lays down the law for ALL injured workers. It eliminates on of the incentives for injured workers being voluntarily paid benefits to seek unnecessary adjudication in order to secure a compensation award, thereby allowing employers and carriers to avoid unnecessary litigation costs. 

If you have a claimant who is entitled to the statutory maximum compensation rate, and you have questions about the impact of this new decision, or want to ensure that you do not 'overpay' the injured worker, please contact us.   

HB 153 is now Chapter 654 of the Virginia Code

On April 6, 2012, Governor McDonald signed HB 153, which excludes a person who suffers an injury on or after July 1, 2012 from coverage under the Virginia Workers' Compensation Act if there is jurisdiction under either the Longshore and Harbor Workers' Compensation Act or the Merchant Marine Act of 1920. The full text of the new law can be found here, and is located in Va. Code. Ann. §65.2-101 as an ammendement to the definition of what is NOT considered an "employee" for purposes of entitlement to benefits under the Virginia Workers' Compensation Act.  

Concurrent Jurisdiction is a Thing of the Past in Virginia

Virginia has always been a “concurrent” jurisdiction state. "Concurrent” in this context simply means that in some states there are some injuries that are covered by both the state’s workers’ compensation law and by the federal Longshore & Harbor Workers' Compensation Act. A state that is listed as “exclusive” on the other hand has amended its workers’ compensation law with language to the effect that if you are covered by a federal workers’ compensation law then you are not covered by that state’s law.

Virginia, historically a "concurrent" state, will finally follow the likes of Florida, Hawaii, Texas, and Lousiana - other states with significant maritime industries - in making the move to the "exclusive" jurisdiction column come July 1, 2012. In part because it is the right thing to do, and also because of the lobbying efforts of many of the local maritime employers and attorneys, including Vandeventer Black's own F. Nash Bilisoly, the legislature in Virginia has just passed a bill - HB 153 - that will abolish concurrent jurisdiction in Virginia. Injured maritime workers in Virignia will no longer be able to proceed simultaenously under both the federal and state laws, but will be under the exclusive jursidiciton of the LHWCA.  

You can read more about this legisltation here, and be sure to contact us for specific information about how this significant piece of legislation will impact claims handling in Virginia. Also, stay tuned to his blog where I will continue to provide updates on the legislation with specifics about what the bill says and what the new laws will look like in the coming weeks.  

Child and Spousal Support Withholding Orders

Courts and administrative agencies may order the deduction of money from an employee’s income for payment of child or spousal support.  Income is defined as any periodic form of payment, and includes wages, salaries, commissions, bonuses, disability benefits, retirement or pension payments, interest from principle, and workers’ compensation benefits. 

Virginia employers must honor an income withholding order or notice for child or spousal support from all states and U.S. territories.  Employers must deduct the specified amount during each pay period and send it to the appropriate State Disbursement Unit (SDU). The SDU then forwards the payment to the custodial parent or spouse.

When an injured employee is receiving workers’ compensation benefits pursuant to the Virginia Workers’ Compensation Act (VWCA), the insurance carrier stands in the shoes of the employer for purposes of honoring withholding orders. The insurance carrier may, and in some cases, must garnish benefits if the employer has a valid withholding order for child or spousal support. Benefits paid pursuant to the Longshore and Harbor Workers’ Compensation Act, however, are not subject to garnishment.

The withholding order provides how much to garnish from income; however, pursuant to Virginia law, not more than 55% of the workers’ weekly benefits may be withheld.  When a workers’ compensation claim is settled, if there is an existing child or spousal support order, withholding can be made for any amount of arrearage up to 55% of the settlement proceeds.    

Therefore, it is very important to remember to advise your workers’ compensation insurance carrier, or the attorney retained to represent your interests in defense of a workers’ compensation claim, of any withholding orders or notices for an injured worker who is receiving or seeking to receive workers compensation benefits.  The insurance company is then able to withhold the appropriate amount from benefit checks and send it to the SDU for payment to the custodial parent or spouse.

Yes, That's My Employee But Someone Else Caused His Injury - Make Them Pay

When an employee suffers an injury that arises out of and in the course of his or her employment, the Virginia Workers’ Compensation Act limits his or her remedies for work-related injuries to a workers’ compensation claim against the employer.  Thus, workers’ compensation is referred to as the “exclusive remedy” available to an injured worker.  In many cases, this works to the advantage of the employee, as he or she will receive benefits for lost wages and medical care, even if the worker causes his or her own injury. It also benefits the employer by limiting the recovery to the benefits permitted by statute.

However, there are circumstances where a personal injury action remains possible; for example, where the employee is injured while on the premises of another business, by the actions of a person who is not a co-employee, or by defective or unreasonably dangerous equipment or machinery.  Under these circumstances, the injured worker may be able to bring a personal injury action against the responsible party - a "third" party.  

The construction industry is a common breeding ground for third party claims.  It is not unusual for workers from multiple contractors and subcontractors to be simultaneously working at the same construction site, and as a result, construction injuries are often caused by the negligence of a third party. Motor vehicle accidents almost always provide grounds for the filing of a third party suit.  

The value of a viable third party lawsuit lies in the recovery rights available to the workers’ compensation insurance carrier, or the employer if self-insured.  If, for example, workers’ compensation benefits are paid to an injured worker who subsequently succeeds in recovering monetary compensation from a third party lawsuit, the employer or insurance company is entitled to recover all or a portion of the workers’ compensation benefits paid out.  However, it can sometimes be tricky to determine if an injury was caused by a third party, as the Virginia Workers’ Compensation Act has created rather complicated rules regarding what constitutes an “employer” and what workers are deemed “co-employees.”  It is therefore beneficial to work with an attorney to determine whether or not workers’ compensation is the “exclusive remedy” for injuries which may have been fully or partially caused by a third party.