AEU Longshore Blog ISSUE: Amendments to the Act, Part III

If the Act is to be opened for Amendment, there are other key issues currently the subject of conflict in the jurisprudence that can be addressed.

  1. The definition of “adjoining” in section 3(a) can be clarified. Currently in the federal Fourth and Fifth Circuits, the word means touching or contiguous with navigable waters in order for a location to be considered a covered situs.  In every other circuit, the word means in the neighborhood or vicinity of navigable waters, and the courts apply varying versions of functional and geographic connection tests.  This can be fixed one way or the other.
  2. Currently, Defense Base Act appeals from the Benefits Review Board in some cases go to federal district courts while others go to the federal courts of appeal, depending on the law of the federal circuit. This can be fixed and made uniform.
  3. Section 33(g) can be amended to correct current Board case law to the effect that the “gross” amount of a third-party settlement rather than the “net” amount is to be used to determine whether the injured worker has met his prior written approval obligation under section 33(g)(1). The Board says use the gross amount.  It should be the “net” amount.
  4. Case law and U.S. Department of Labor proposed regulations can be corrected regarding the phrases “currently receiving” and “newly awarded” in determining what maximum weekly rate applies. The Average Weekly Wage/applicable maximum rate set at the date of injury should apply throughout the claim.
  5. Maybe an amendment can clear up the question of whether the navigable waters of the United States includes the high seas, and under what conditions, if any, and also whether navigable waters includes the territorial waters and adjoining land areas of foreign countries.
  6. Finally, here’s a real long shot. Repeal the Longshore Act’s exclusion of “a master or member or a crew of a vessel” in Section 2(3)(G) and the pertinent language in Section 3(e) regarding a credit to the Longshore employer for a Jones Act recovery.  Then also repeal the Jones Act’s liability provision granting the negligence remedy to seamen.  Presumably, this would result in seamen, including the apparently impossible to define at the margins “crewmembers” of “vessels” being covered under the Longshore Act for workplace injuries.

Seamen, and others on board vessels doing seamen’s work, would still have the general maritime law remedies of unseaworthiness and maintenance and cure.  The crewmembers formerly covered by the Jones Act would also have the Longshore Act’s Section 905(b) remedy against the vessel for vessel negligence.  They would also still have the Death on the High Seas Act remedy.  And they would also have the Longshore Act’s Section 33 remedy against negligent third parties.

What would be accomplished is that employers who don’t own or operate vessels would no longer have to contend with the “Uncertainty Zone”, the overlap between the Longshore Act and the Jones Act where liability often can go either way.  This would simplify insurance liability issues and reduce litigation.

There are many other conflicts in interpretation, such as the treatment of “per diem” in calculating the average weekly wage, the coverage issue of workers “transiently and fortuitously” over navigable waters when injured, meeting the evidentiary burden of establishing suitable alternate employment, attorney fees pre- and post-controversion, the “manifest” requirement in occupational disease cases under section 8(f), and so forth that maybe it is better not to try to resolve by legislative amendment.

This concludes my list of potential Longshore Act Amendments.

 

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

AEU Longshore Blog ISSUE: Amendments to the Act – Part 2

This is a continuation of the discussion of possible amendments to the Longshore and Harbor Workers’ Compensation Act.  In that post was a list of what I consider to be the top tier of potential amendments.  Following is what I consider to be a second tier of potential amendments.

  1. The occupational exclusions in section 902(3) covering clerical, secretarial, security, and data processing work should be simplified and clarified. Rather than require that the listed occupations be performed “exclusively” in an “office”, the requirement should be that the employee be performing these duties as a “primary” responsibility for the employer at the time of the injury.
  2. Previous proposals have included an amendment that effectively ends section 908(f)’s second injury provision. For example, an amendment can state that no new order granting section 908(f) relief can be issued except for cases of modification in existing 8(f) cases.
  3. Various sections of the Act can be amended to create a right for the employer to seek restitution in instances of fraud and overpayment of benefits. This would overturn existing case law.
  4. In the case of concurrent benefits for separate injuries, an amendment can overturn existing case law and limit combined weekly benefits to two-thirds of the average weekly wage at the time of the latest injury.
  5. An amendment can be brought back to codify the one-year pending appeal limit on appeals to the Benefits Review Board (BRB). The amendment can read, “If the Board fails to resolve an appeal during the one year period following the date on which the appeal was filed, the decision that was the basis of the appeal is automatically affirmed and such affirmation shall be considered a final order by the Board.”
  6. Section 8(j) should be amended to reverse the current interpretation of the phrase a “disabled employee”. The present language reads, “The employer may inform a disabled employee of his obligation to report to the employer not less than semiannually any earnings from employment or self-employment, on such forms as the Secretary shall specify in regulations”.  The term “disabled employee” can be replaced simply by “an employee”.
  7. The Section 916 anti-assignment provision can be amended and clarified as to when benefits may be subject to withholding, garnishment, or assignment. In the past, the following additional language has been suggested: “Benefits due or payable under this Act shall be subject to withholding and any other legal process in the same form and manner, and in the same extent, as withholding and other legal processes apply under section 206 of the Employment Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. 1056).”
  8. The definition of wages in section 902(13) can be clarified. An amendment can provide that “wages” does not include incentives or one-time payments, severance pay, settlement of employment claims, a bonus that is not guaranteed, container royalties, stock, or stock options.
  9. Previous proposed amendments have attempted to simplify the confused, multi-part judicial tests and litigation surrounding the issue of the common law doctrine of borrowed employee. Language can be introduced for section 904(d) that provides that in the situation where an employee who is working for another employer at the direction of the employee’s primary employer, all employers of the employee at the time of the injury shall be treated as a single employer for purposes of liability under the Act.
  10. An amendment may be advisable to codify existing case law regarding employer’s legitimate personnel actions. The definition of “injury” in section 902(2) can be amended to provide that, “Physical or mental conditions caused in part or in whole by an employer’s personnel actions shall not be considered an injury or disease compensable under this Act. Physical or mental conditions caused in part or in whole by an employer’s personnel action may only be compensable under applicable State or Federal employment laws other than workers’ compensation laws.”  This would codify existing case law.
  11. Previous proposals have sought to help the Office of Administrative Law Judges (OALJ) and BRB interpret the Section 20 presumptions and the difference between the evidentiary burdens of production and persuasion by expressly stating the correct procedure. Proposed language: “A presumption shall not be considered evidence once rebutted. Once a presumption has been rebutted, the burden of production of evidence and burden of persuasion shall be governed by section 556(d) of Title 5, United States Code” (the Administrative Procedures Act).
  12. Other potential amendments to section 20 provide substantive changes to existing case law as well as new rules of evidence. Proposed language is as follows: “The injury, its occupational cause, and any resulting manifestations of disability must be proven to a reasonable degree of medical certainty, based on objective relevant medical findings…” and “…notwithstanding section 4(c) or section 8(c)(13)(B), the employment exposure or accident shall be the major contributing cause of any injury.” Also, “…pain or other subjective complaints alone, in the absence of objective relevant medical findings, is not compensable.”
  13. Previous proposed amendments have included a proposal to change the weekly compensation rate from “66 2/3 percent of the average weekly wage” to “75 percent of the spendable earnings”. A proposed definition of “spendable earnings” was, “The spendable earnings of an employee shall be the average weekly wage … reduced by subtracting the Federal, State, and local taxes that would have been withheld based on standard deductions and on the domicile of the employee at the time of the injury, and reduced by subtracting the tax that would have been withheld under section 3101 of the Internal Revenue Code of 1986.”
  14. Previous proposals have also included an amendment to section 944 to change the formula for the Special Fund assessment. The formula and calculation factors for self-insured employers remain the same, while for insurance carriers the current paid indemnity loss factor is replaced by a premium surcharge rate calculated by the U.S. Department of Labor based on premium data that it would collect. The proposal allows insurance carriers to change the assessment from a percent of paid losses to a premium surcharge.
  15. Previous proposals have included a change to section 921(c) to clarify the issue of judicial deference. The following language was proposed: “A litigating position of the Secretary shall not be entitled to any deference, unless such position has been expressly adopted by the Secretary as a rule made on the record after opportunity for an agency hearing pursuant to section 556 and 557 of Title 5, United State Code.”
  16. Finally, past proposals have included language addressing interpretation and statutory intent along the lines of, “…in a claim brought under this Act, the facts are not to be given a broad liberal construction in favor of the employee or of the employer…” This change seeks to eliminate the ubiquitous references in formal orders and court decisions to the remedial purposes of the Act and the need for a liberal interpretation in favor of the claimant. The U.S. Supreme Court has, in fact, held that the Administrative Procedures Act, which governs adjudications under the Longshore Act, does not permit doubts to be automatically resolved in the injured worker’s favor.

This has been merely a summary of most of what I consider to be the most significant changes previously proposed for amendment to the Longshore Act.  Presumably, these would form the basis for possible Longshore Act Amendments of 2018.

This series will conclude in the next post with my own suggestions for possible amendments, not previously proposed.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

AEU Longshore Blog ISSUE: Amendments to the Act – Part One

It’s been 100 years since the U.S. Supreme Court’s decision in Southern Pacific RR Co. v. Jensen, (244 U.S. 205 (1917)), established the “Jensen” line, limiting the coverage of states’ workers’ compensation laws to the landward side of the water’s edge and creating a gap in workers’ compensation coverage for employees working over the navigable waters of the U.S.  The decision ultimately led to the passage of the Longshore and Harbor Workers’ Compensation Act in 1927.

The Longshore Act was significantly amended in 1972 and 1984.  Since 1984 there have been several unsuccessful attempts to add amendments (and, of course, one success, amending the recreational vessel exclusion in 2009).

Previous unsuccessful amendments, in my opinion, can be grouped into two categories.

First, listed here in Part One, are significant changes that should be made in the interest of equity and to match broad changes that have been enacted in many state workers’ compensation laws.

Second, to be listed in Part Two, are changes that would be welcomed by the insurance carrier/maritime employer/self-insured employer community rationalized as restoring balance in the administration of the Act.

Part One – Significant changes

The intoxication defense in section 903(c) should be amended to strike the requirement for a successful defense that the injury must be occasioned “solely” by the intoxication of the employee.  Simply remove the word “solely”.  A corresponding change would have to be made in section 920(c) that creates a rebuttable presumption in favor of the injured worker.

The last maritime employer doctrine should be addressed.  The Act can be amended to reflect liability for intervening, post maritime employment.  Suggested language proposed in the past has been along the lines of, “Intervening Employment – If the last employment exposure that contributed to an injury or death was the result of employment that was not covered under this Act, no benefits shall be payable under this Act for the injury or death.”

The problem of concurrent Longshore Act and state act jurisdiction in many states should be addressed.  Section 905(a) can be amended to reflect that state workers’ compensation laws are expressly preempted by the Longshore Act.  Procedures can be provided in section 905 for the maritime employer to enforce this preemption of state laws.

The free choice of physician provision in section 907 should be addressed.  Previous proposals have reflected changes in many state laws that provide that insurance carriers may designate participating networks of health care panels that would be the obligatory choice for medical services and supplies for injured workers.

With regard to hearing loss several changes should be considered.  A combination of the aggravation rule and the last maritime employer rule has maritime employers frequently paying for hearing loss that they did not cause.  One change would involve language to remove the effects of lifestyle and aging from awards for hearing loss.  For example, the employer would not be liable for any part of an employee’s hearing loss caused by presbycusis, non-occupational causes, and documented pre-employment hearing loss.  The employer should only be liable for the percent of hearing loss for which it is responsible.  Pre-employment and post-employment should also be accounted for in a more equitable manner than in the current jurisprudence.

The time limits for notice of injury and filing a claim in sections 912 and 913 should be amended to reflect outside time limits.  The employer should be protected against claims filed years after an alleged workplace injury or exposure.

Past draft amendments have included a proposed change to section 921(b)(3) dealing with the payment of benefits in disputed cases.  Current language reads, “The payment of the amounts required by an award shall NOT be stayed pending final decision in any such proceeding unless ordered by the Board.  No stay shall be issued unless irreparable injury would otherwise ensue to the employer or carrier” (emphasis added, and a stay is virtually never issued).  Proposed new language would read something along the lines of, “Disputed amounts required by an award shall be stayed”.

An attempt should be made to improve the methodology for calculating the injured worker’s Average Weekly Wage.  Current methods under section 910(a) inflate the compensation rate calculation by a judicially created presumption that a worker who works 75% of the year preceding his injury is credited with a full year.  Also, section 10(c), the very broad and discretionary calculation provision, has resulted in workers receiving credit for part-time jobs, short overseas assignments that inflate weekly wages by a factor of three times or more and assorted other methods of inflating an injured worker’s wage earning “capacity” at the time of the injury.

The 20% penalty provision in section 14(f) should be amended.  An amendment should provide that payment under an award is due within 10 business days after receipt by the employer or carrier of a priority delivery or communication containing the award.

Finally, the issue of reduction or offset against disability payments based on receipt of retirement income from Social Security or retirement benefits furnished by the employer should be considered.

These are what I consider to be the most important, significant changes to be considered in amending the Longshore Act.

In Part Two, we’ll review further changes that would be welcomed by insurance carriers, maritime employers, and self-insured employers alike.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

 

AEU Longshore Blog ISSUE: Annual Increase & Attorney Fees

ANNUAL INCREASE

By Industry Notice No. 162, dated September 12, 2017, The U.S. Department of Labor, which administers the Longshore Act, has announced the new National Average Weekly Wage (NAWW) effective October 1, 2017, and consequently the new maximum and minimum rates for weekly benefits derived from the NAWW under Section 910(f) of the Longshore Act.

The new NAWW effective for the period October 1, 2017, through September 30, 2018, is $735.89.  This represents a 2.46% increase over the October 1, 2016, NAWW.  All beneficiaries receiving permanent total disability or related death benefits as of September 30, 2017, receive a 2.46% increase in their weekly rate.

The weekly rates for temporary total disability and permanent partial disability are subject to the maximum rate that is applicable on the date of injury.  These benefits are not increased annually.

The new NAWW provides the new maximum and minimum weekly rates.   Effective October 1, 2017, the maximum weekly rate under the Longshore Act is 200% of the NAWW, or $1,471.78.  The new minimum weekly rate is 50% of the NAWW, so it is $367.94.

Note on calculating the weekly compensation rate:  The weekly rate for permanent total disability and temporary total disability and for permanent partial disability based on the schedule in Section 908(c) is two-thirds of the worker’s Average Weekly Wage (AWW).  The weekly rate for permanent partial disability based on a loss of wage-earning capacity is two-thirds of the difference between the AWW and the post-injury wage-earning capacity.  The weekly rate for a widow is fifty percent of the AWW.  The AWW is established as of the date of the injury.

The minimum weekly rate does not apply in Defense Base Act cases.

ATTORNEY FEES

Section 28(a) of the Longshore Act states, “If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner on the ground that there is no liability for compensation within the provisions of this chapter and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of his claim … “ then the employer may be liable for the claimant’s attorney’s fee.

In the case of Steven Lincoln v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor; Ceres Marine Terminals, Inc., decided March12, 2014, the federal Fourth Circuit Court of Appeals affirmed a Benefits Review Board’s (Board) decision denying an employer paid attorney fee.

In the Lincoln case, based on a 4/11/11 audiogram the claimant filed a claim for hearing loss on 5/24/11, which the employer controverted on 5/26/11.  The employer received written notice of the claim from the Department of Labor (DOL) on 6/14/11, and on 7/7/11 the employer voluntarily paid $1,256.84 in compensation, which was the equivalent of one week’s compensation at the maximum weekly rate and was paid within the 30 day time limit of Section 28(a). The employer acknowledged that there was workplace noise-induced hearing loss, but that additional information was needed before it could determine the correct compensation payment.

The Board held that the term “any compensation” in Section 28(a) is unambiguous and plainly encompasses an employer’s partial payment.  The Fourth Circuit affirmed that the payment of one week’s compensation was directly tied to the alleged injury and was not merely an attempt to avoid fee shifting.  Thus, under the terms of Section 28(a), the employer was not liable for the claimant’s attorney’s fee.

The Lincoln case did not mention medical benefits (whether they constitute “compensation”) in relation to the phrase “any compensation”.   Now we have a case that deals with medical benefits and Section 28(a).

The case is Arthur B. Taylor v. SSA Cooper, L.L.C. and Homeport Insurance Company and Director, Office of Workers’ Compensation, U.S. Department of Labor, Benefits Review Board No. 16-0174, issued June 30, 2017.

In the Taylor case, the employer paid medical benefits within the Section 28(a) thirty-day time limit but did not pay weekly disability compensation.

The employer argued that it satisfied the Section 28(a) requirement of “any compensation” by the payment of medical benefits and should not be liable for the claimant’s attorney’s fee.

The issue, thus, was whether the employer’s payment of medical benefits within the thirty day period constitutes payment of “any compensation” such that the employer cannot be held liable for an attorney’s fee, even though the claimant was successful in obtaining disability benefits after using the services of an attorney.

The Administrative Law Judge (ALJ) denied an employer paid attorney’s fee, finding that the phrase “any compensation” includes medical benefits, and in this case, the employer paid medical benefits and thus did not decline to “pay any compensation” within thirty days.

The Board reversed the ALJ’s decision.

The Board held that the term “compensation” in Section 28(a) should be read as “disability and/or medical benefits”.  The Board stated, “Its (compensation) precise meaning in the phrase “declines to pay any compensation” depends on what benefits are claimed and what benefits the employer paid or declined to pay in each case.  Whether a claimant files a claim for both disability and medical benefits or for only one or the other type of benefit, fee liability under Section 28(a) depends on whether there is success in obtaining the claimed but denied benefit”.

Essentially, if any type of claimed benefit is denied with no payment within 30 days of receipt of the claim from the DOL and legal services are necessary to obtain the denied benefit, the claimant will be entitled to an employer-paid attorney fee.

Doug Matthews, a New Orleans-based attorney at King Krebs & Jurgens who specializes in longshore cases, raised several questions related to this case.

For instance, if there are issues with regard to medical bills in the first 30 days after receipt of the claim from the DOL, is a direct analogy with the Lincoln case suggested?  Should the employer tender some amount “directly tied to the alleged injury” against potential medical liability to protect itself under Section 28(a)?

It’s not unusual for a decision to resolve the issues between the immediate parties, but in a broad sense, it seems to raise more questions than it answers. We’ll wait for future cases for clarification.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.