ISSUE: Recurring Question

Some questions come up over and over again.  One such question involves foreign workers and/or foreign employers in the United States.  Does the Longshore Act cover foreign workers?  Does the Longshore Act apply to foreign companies?  The answers are yes.

If we look at the definitions and coverage provisions in the Act we do not find anything that pertains to nationality or citizenship, with one minor exception.

Section 2(3) (33 U.S.C. 902(3)) defines “employee” as, “any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker …”. 

Section 2(4) defines “employer” as, “an employer any of whose employees are employed in maritime employment, in whole or in part, upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, or building a vessel)”.

Section 3 is the Coverage provision.  Section 3(a) states, “… compensation shall be payable under this Act in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel).”

Section 3(b) states that, “No compensation shall be payable in respect of the disability or death of an officer or employee of the United States, or any agency therof, or of any State or foreign government, or any subdivision thereof.”

So that’s it.  Section 2(3) is the “status” provision, and Section 3(a) is the “situs” provision.  Together they provide the tests for coverage for employees under the Longshore Act.  A maritime employer is any employer who employs a worker who meets the “status” and “situs” tests.

With the exception of employees of a foreign government, there is no nationality or citizenship component to Longshore Act coverage.

If a domestic U.S. company hires foreign workers to work in the U.S., either permanently or temporarily, these workers are covered by the Longshore Act if they meet the status and situs tests.

If a foreign company sends foreign workers to work in theUnited States, either permanently or temporarily, these workers are covered by the Longshore Act if they meet the status and situs tests.

All employees, working in maritime employment on covered sites as specified in Section 3(a), and not specifically excluded somewhere else in the Act, are covered.  Nationality or citizenship is not part of the coverage analysis.  It all comes down to status and situs, period.

Now bear in mind that we’ve been discussing the coverage issue of foreign workers working in the U.S. The coverage issue presented by U.S. citizens working overseas or on the high seas is an entirely separate question.  We discussed this back on August 21, 2009, and we will have the opportunity to pick up the issue again when the Ninth Circuit issues its decision in the pending appeal of Joseph Tracy v. Keller Foundation, Inc./Case Foundation Co. and ACE USA/ESIS v. Global Offshore Int’l, Inc., Liberty Mutual Insurance Co., and Director, Office of Workers’ Compensation Programs (Ninth Circuit Nos. 11-71703, 11-71800)(Yes, that is a long caption with a lot of parties).  This case involves aU.S. citizen performing maritime work in Singapore and Indonesia.  One issue is, “Does the Longshore Act cover an American citizen injured on foreign territorial waters in the course of his maritime employment?”

Finally, congratulations to David Widener, who has been selected for the position of Longshore District Director in the U.S. Department of Labor’s Houston district office.  Dave, formerly with The American Equity Risk Services (AERS),ALMA’s claims unit, and most recently with the Department of Labor as a Claims Examiner in the DOL’s Houston office, is an excellent choice.

ISSUE: Coverage – Status

Review

Section 902(3) of the Longshore Act is the “STATUS” coverage provision.  It states, “The term ‘employee’ means any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, and any harbor worker including a ship repairman, shipbuilder, and ship breaker ….”

Section 903(a) is the “SITUS” coverage provision.  It states, “… compensation shall be payable under this Act in respect of disability or death of an employee, but only if the disability or death results from an injury occurring upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel).”

So, to be covered by the Longshore Act an injury must occur upon the navigable waters of the United States, including dry docks, or on a landward area covered by the situs provisions of section 903(a) if the work is maritime in nature under the status provision of section 902(3).  Both the “status” and the “situs” tests must be met.

One point to keep in mind is that not every worker on a covered situs is covered by the Longshore Act.  The “status” test must also be met.  At any given time, there are many, many workers engaged in numerous occupations employed at shipyards, port areas, and “other adjoining areas” that meet the “situs” test.  How can we tell if these workers also meet the “status” test for Longshore Act coverage?

The U.S. Department of Labor’s Benefits Review Board recently published a helpful decision in the case of a nurse employed by a large shipyard (Lucille Galinas v. Electric Boat Corporation, BRB No. 10-0422, 11/23/2010).  The employee met the situs requirement because she worked at the shipyard.  Her duties consisted of treating injured employees in the employer’s medical clinic, responding to ambulance calls in the shipyard, performing physical examinations, audiograms, and EKGs, stocking RADCON (radiological control) supplies, and participating in RADCON training drills.  Is she covered by the Longshore Act?

The test is whether the employee’s duties are “integral” (essential) to the employer’s shipbuilding process.  Would the employee’s failure to perform these duties impede the employer’s shipbuilding activities?  Of course, evaluating the degree of the impediment is where the difficulty comes in.  In the range from mildly inconvenient to grinding to a halt there is lots of room for a thin line to meander.

In considering this case, the Board cited several examples from the case law.  There was the courtesy van driver who transported workers and visitors around a marine terminal.  He failed the integral test for status.  Then there was the cook at a mess hall on a wharf.  He also failed the integral test.  Then there were the janitors who cleaned restrooms, offices, and the cafeteria in a shipyard.  These workers also failed the integral test.  Finally, there were the workers’ compensation claims adjustors, who also failed to meet the “integral” test for status.

Not mentioned by the Board in its discussion were the cases of the maintenance workers who did not clean peripheral areas such as offices and restrooms, but who cleaned and maintained shipbuilding equipment or shipyard production areas, such as the workers who changed shipyard air conditioning filters or picked up trash around the shipyard production facilities.  These workers satisfied the integral test, since the failure to perform these duties would directly and proximately cause impediments in the shipbuilding activities in the form of work stoppages or interruptions in the shipbuilding process.

You can see that the test is not exactly stark.  Somewhere in the duties of these workers their work either crosses the “integral” line or it doesn’t.  Their work is useful to the employer on one side of the line, or essential to the employer on the other.

So, does the shipyard’s occupational health nurse satisfy the status test for coverage? 

No.  Not on the facts in this case.

Oil Spill Dilemmas

Insurance carriers and brokers are puzzling through the coverage dilemmas presented by the Deepwater Horizon cleanup efforts.

Are the shore side cleanup workers covered by state workers’ compensation laws or by the federal Longshore and Harbor Workers’ Compensation Act?

Naturally I have an opinion.

I think that these workers meet the “situs” requirement for Longshore Act coverage.  They are working in an area that adjoins navigable water.  Typically, they are moving sand around and loading contaminated sand on to trucks for removal.  The Third Circuit in Nelson v. American Dredging Company, 143 F.3d 789 (1998) decided that sand can be cargo and dredging/grading can be loading/unloading.

I think that they meet the “status” requirement by virtue of an appropriately liberal definition of the term “harbor worker”.  The work seems sufficiently maritime to me.

There is some relevant precedent.  In Fontenot v. Industrial Clean-up, Inc., 92 LHC 971 (1992) a worker employed in oil spill clean up was considered to be engaged in “clearly a maritime activity conducted in a maritime environment”.

There is room for interpretation.  But, as usual, in view of the penalties to the employer for needing but not having Longshore Act insurance coverage, my advice is to resolve any doubt in favor of obtaining coverage.

The same might be said for the workers who are out on vessels laying containment booms and doing the wide variety of jobs necessary to deal with the disaster.  They may have a strong case for Jones Act seaman status, or they may be essentially land based maritime workers who are spending some of their working hours on board vessels, or they may be covered by the Outer Continental Shelf Lands Act based on their location.  Much can be said on all sides.

But, with regard to the shore side clean up workers, my opinion is that they are covered by the Longshore Act.  As always, resolve all doubts conservatively by buying coverage. 

Longshore Act Question Number 2 – Where Can I Buy Longshore Act Insurance?

This is an important question, because there are serious consequences in the law if the maritime employer fails to meet the insurance requirement in section 932 of the Longshore and Harbor Workers’ Compensation Act.   Fortunately, there’s a straightforward, uncomplicated answer.

Question:  Where can I buy the coverage?

Answer:  The American Equity Underwriters, Inc. (AEU), RSA Battle House Tower, 11 North Water Street, 32^nd Floor, Mobile, AL  36602.  AEU manages a large group self-insured trust fund, the American Longshore Mutual Association (ALMA).

And, before I forget to mention it, there are also at present 348 insurance carriers authorized to write Longshore Act coverage by the U.S. Department of Labor.

Once again, it’s important to make sure that your carrier is authorized by DOL under section 932 of the Longshore Act.  We’ve previously discussed corporate officer joint and several liability, election of remedies available to the injured worker if the employer is uninsured, and possible criminal prosecution for the uninsured employer.  And if your insurance carrier is unauthorized, then you are an uninsured employer.

So, the first step is to be sure that you are dealing with an organization that is licensed by DOL.

Then, make sure that insurance coverage is in the proper form.  Your Longshore coverage will either be in the form of the regulatory required (20 C.F.R. Ch. 703) or otherwise DOL approved Longshore Act endorsement affixed to a standard state act workers’ compensation policy, or a DOL approved stand alone Longshore Act policy.  If your form of policy or endorsement does not conform to the regulatory language, or has not been approved by DOL, then you have raised an unnecessary question about your coverage.

Be sure that your insurance agent is aware of these considerations or have him call me if there are any doubts whatever. It’s very important.

Shameless self promotion alert:  In my opinion, The American Equity Underwriters, Inc., offers the best claims and loss control services in the maritime insurance market.