AEU Longshore Blog ISSUE: Questions- Extensions

This is the last (for now) of a group of posts dealing with recurring questions regarding the Longshore Act.  Following is a discussion of three issues, one for each of the Act’s three extensions.

Defense Base Act (42 U.S.C. 1651 et seq.)

I most recently discussed the Defense Base Act (DBA) on July 14, 2015.  You are encouraged to refer back to that entry, especially since it includes a discussion of the U.S. Department of Labor’s DBA waiver process.

The question that comes up with regularity is whether or not the DBA only covers U.S. citizens.   THE DBA DOES NOT ONLY COVER U.S. CITIZENS.  The DBA covers all employees, including third country nationals and host country nationals, who meet the statutory coverage requirements.

The DBA provides:

“Section 1(a) Places of employment.

Except as herein modified, the provisions of the Longshore and Harbor Workers’ Compensation Act, as amended, shall apply in respect to the injury or death of any employee engaged in any employment –

  • At any military, air, or naval base acquired after January 1, 1940, by the United States from any foreign government; or
  • Upon any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States (including the United States Naval Operating Base, Guantanamo Bay, Cuba; and the Canal Zone; or
  • Upon any public work in any Territory or possession outside the continental United States … if such employee is engaged in employment at such place under the contract of a contractor (or any subcontractor or subordinate subcontractor with respect to the contract of such contractor) with the United States; …
  • Under a contract entered into with the United States or any executive department, independent establishment, or agency thereof (including any corporate instrumentality of the United States), or any subcontract, or subordinate contract with respect to such contract, where such contract is to be performed outside the continental United States and at places not within the areas described in subparagraphs (1), (2), and (3) of this subdivision, for the purpose of engaging in public work, and every such contract shall contain provisions requiring that the contractor (and subcontractor or subordinate contractor with respect to such contract) (1) shall, before commencing performance of such contract, provide for securing to or on behalf of employees engaged in such public work under such contract the payment of compensation and other benefits under the provisions of this Act, and (2) shall maintain in full force and effect during the term of such contract, subcontract, or subordinate contract, or while employees are engaged in work performed thereunder, the said security for the payment of such compensation and benefits …;
  • Under a contract approved and financed by the United States or any executive department … where such contract is to be performed outside the continental United States, under the Mutual Security Act of 1954 …;
  • Outside the continental United States by an American employer providing welfare or similar services for the benefit of the Armed Forces pursuant to appropriate authorization by the Secretary of Defense;”

That is the entire coverage provision.  You will notice that “employees” are covered, without reference to citizenship, nationality, or resident status.

NOTE:  Under paragraph (4), the provision “for the purpose of engaging in public work” is broadly interpreted.  If you have any employees traveling outside the continental U.S. (the “continental U.S.”  includes Alaska and Hawaii for the DBA) under a U.S. government contract you should be thinking DBA.

NOTE:  DBA coverage is separate from USL&H coverage, requiring a separate endorsement.

So, this has been a long way of saying that the DBA does not only cover U.S. citizens.

Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.)

I most recently discussed the Outer Continental Shelf Lands Act (OCSLA) on February 29, 2016.  The occasion was a BRB decision interpreting the Supreme Court’s OCSLA coverage test from the case of Pacific Operators Offshore, LLP v. Valladolid, 132 S.Ct. 680 (2012).

NOTE:  In Valladolid the Supreme Court resolved a conflict among three federal Circuit Courts of Appeals and held that to be covered by OCSLA the injury does not have to occur on the outer continental shelf (OCS) of the U.S.  The Court adopted a test that requires a substantial nexus, or significant causal link between the injury and the employer’s on OCS oil and gas operations.  The Court recognized that this test is fact specific to each case.

We’ve only had a few cases so far applying this test, and we’ve just had another one, as the BRB is sorting out somewhat inconsistent results from the administrative law judges (ALJ).

In Boudreaux v. Owensby & Kritikos, Inc., 49 BRBS 83 (2015), the BRB affirmed the ALJs finding of OCSLA coverage for an employee injured in a car accident while on his way to a pick up point from which he would be transported to OCS platforms.  His job was to perform ultrasonic testing on the platforms.  The ALJ, as affirmed by the BRB, found that this employee satisfied the substantial nexus test.

The test was not whether at the time of injury the claimant was engaged in activity that met the substantial nexus test.  In this case he was not.  It was a car accident.  The test is whether his job duties significantly contribute to his employer’s on OCS operations and whether the accident occurs in the course and scope of his employment.

Baker v. Gulf Island Marine Fabricators, LLC, 49 BRBS 45 (2015), involved an injured worker who spent 100% of his time working on land building modular living quarters, some of which would eventually be installed on an offshore tension leg (oil) platform.  In this case, the BRB affirmed a coverage denial by the ALJ both under the Longshore Act (the tension leg platform was not a vessel and thus this was not shipbuilding) and under OCSLA.

The substantial nexus test was not satisfied.  The living quarters worked on by the claimant might be installed on the OCS years later, and they would be installed by other entities, not his employer.  His employer had no on OCS operations.    There was an insufficient causal connection between his duties and his employer’s on OCS operations (in this case, none).  The denial of coverage in Baker has been affirmed on appeal at the Fifth Circuit.

The latest case is Anthony Grabert v. Besco Tubular and American Interstate Insurance Company and Director, Office of Workers’ Compensation Programs, U.S. Department of Labor, BRB No. 16-0140, September 22, 2016.  In this case, an ALJ denied OCSLA coverage where the circumstances were very similar to those in Boudreaux.  The claimant was injured in a car accident on his way to a crew boat that would transport him to his job on an offshore platform, where he worked as a “tong operator”, performing casing and tubing tasks.

The ALJ in the Grabert case had issued his denial prior to the BRB’s decision awarding OCSLA benefits in the Boudreaux case.  Rather than remand the case for reconsideration in light of Boudreaux, the BRB simply reversed the denial and remanded the case to the ALJ for an award of benefits.

So although the Valladolid substantial nexus test for OCSLA coverage is getting off to a somewhat inconsistent start at the ALJ level, it appears that there will be a sufficient number of cases in short order to establish a coherent pattern of interpretation.

Nonappropriated Fund Instrumentalities Act, (5 U.S.C. 8171 et seq.)

I last discussed the Nonappropriated Fund Instrumentalities Act (NAFIA) on March 13, 2014.  There’s one provision in the NAFIA that I thought I would highlight, just to cover all three extensions of the Longshore Act.

Remember how the Defense Base Act applies to all employees, whether U.S. citizens or not?  The NAFIA is a little different.

Coverage includes,

  1. “those employees of such nonappropriated fund instrumentalities as are employed within the continental United States” (including Alaska and Hawaii)
  2. “those United States citizens or permanent residents of the United States or a Territory who are employees of such nonappropriated fund instrumentalities outside the continental limits of the United States.”

For employees working outside of the continental United States who are neither citizens nor permanent resident of the United States or a Territory, “compensation shall be provided in accordance with regulations prescribed by the Secretary of the military department concerned and approved by the Secretary of Defense or regulations prescribed by the Secretary of the Treasury ….”

NOTE:  This sets up an apparent conflict with the Defense Base Act, which covers all employment on U.S. military bases outside of the continental U.S.  There is no conflict, however, since as to those non-U.S. citizens employed by NAFI’s overseas the NAFIA preempts the DBA and applies as the NAFI employees’ exclusive remedy for workplace injuries.

 

 

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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.

ISSUE: The Nonappropriated Fund Instrumentalities Act

Jack_crop 72dpiWe’ve discussed the Defense Base Act on several occasions, as well as the Outer Continental Shelf Lands Act.  These are two well known extensions of the Longshore and Harbor Workers’ Compensation Act.  There’s another extension of the Longshore Act that doesn’t get as much general attention.  It’s the Nonappropriated Fund Instrumentalities Act (NFIA), 5 U.S.C. sections 8171 et seq. (1952).

The NFIA extends Longshore Act benefits to, “… civilian employees, compensated from nonappropriated funds, of the Army and Air Force Exchange Service, Army and Air Force Motion Picture Service, Navy Ship’s Stores Ashore, Navy exchanges, Marine Corps exchanges, Coast Guard exchanges, and other instrumentalities of the United States under the jurisdiction of the Armed Forces conducted for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the Armed Forces ….” 

The employees covered by the NFIA work at base exchanges and other retail and recreational activities on U.S. military bases.  These activities are not funded by public appropriations but rather are operated from revenue generated by the activities themselves.

Coverage includes,

  1.  “those employees of such nonappropriated fund instrumentalities as are employed within the continental United States” (Alaska and Hawaii are considered to be part of the continental United States), and,
  2.  “those United States citizens or permanent residents of the United States or a Territory who are employees of such nonappropriated fund instrumentalities outside the continental limits of the United States.”

For employees working outside of the continental United States who are neither citizens nor permanent residents of the United States or a Territory, “compensation shall be provided in accordance with regulations prescribed by the Secretary of the military department concerned and approved by the Secretary of Defense or regulations prescribed by the Secretary of the Treasury ….”

The larger nonappropriated fund instrumentalities are individually self-insured for their NFIA exposure by virtue of their self-insurance authorization from the U.S. Department of Labor, which administers the NFIA.

There are some quirks to NFIA coverage. 

1)      The so-called “Zone of Special Danger” doctrine, which the courts apply in Defense Base Act cases (and in the old, now repealed District of Columbia Compensation Act extension of the Longshore Act), is not applicable to NFIA cases.

2)      There is an apparent coverage conflict with the Defense Base Act.  The Defense Base Act provides that it covers all employment on U.S. military bases overseas, and upon any lands occupied or used by the United States for military or naval purposes in any Territory or possession outside the continental United States.  There is no conflict, however, since for employees of the nonappropriated fund instrumentalities overseas, the NFIA pre-empts the DBA and applies as the nonappropriated fund instrumentalities employees’ exclusive remedy.

3)      Off duty military personnel working at a nonappropriated fund instrumentality, for example on a part time basis, are not covered by the NFIA.

4)      Nonappropriated fund instrumentalities’ employees “shall not be held and considered as employees of the United States for the purpose of any laws administered by the Civil Service Commission or the provisions of the Federal Employees’ Compensation Act ….”

5)      The United States is exempt from liability as a third party with respect to disability or death covered by the NFIA.

So that’s it.  There’s the Defense Base Act, the Outer Continental Shelf Lands Act, and the Nonappropriated Fund Instrumentalities Act.  We’re out of extensions to the Longshore Act.