Longshore Act Question Number 12

Can You Exclude Corporate Officers Under the Longshore Act?

In answer to the previous question regarding joint and several liability we saw how much trouble the corporate officers of an uninsured employer can get into under the Longshore Act. So we might as well look at another question involving corporate officers.

Question: Can an employer exclude its corporate officers from its workers’ compensation insurance coverage under the Longshore Act?

Answer: No way.

The definition of “employee” under the Longshore Act is contained in section 902(3):

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, but such term does not include a master or member of a crew of any vessel, or any person engaged by the master to load or unload or repair any small vessel under eighteen tons net.

The term “any person” includes all management and executive personnel.

Sections 902(3)(A) through 902(3)(H) contain coverage exclusions added by the 1984 amendments, but none mentions corporate officers.

The only other place in the Act where corporate officers are mentioned is section 941(f), where “officers” who willfully violate the section 941(a) safety rules and regulations can be fined.

So the answer here is the same as the answer to question number 11 concerning whether small employers can opt out of coverage. Don’t even think about it.

Coverage under the Longshore Act is without regard to the title of the employee, whether management or non-management, officer or non-officer. An employee who meets the situs and status requirements is covered.

How about this example. A corporation has one employee. He’s the president. He actually goes out everyday and does the company’s maritime business. He is injured on the job. Can he file a claim? As someone once said, “You betcha!”

Admittedly, it might get a little weird. If the employer doesn’t have Longshore Act insurance then the employee has the option to sue in tort. So he can sue himself. We can let the courts sort that out. All we have to remember is that corporate officers must be included in Longshore Act coverage.

Longshore Act Question Number 3

What Is the Difference Between State Act Comp and the Longshore and Harbor Workers’ Compensation Act?

One is state and the other is federal.

Wow! That one was easy. Next!…..What? Not buying it? OK, I’ll try again.

But first, the shortest history in the history of history.

- The Industrial Revolution in the United States during the nineteenth century led to the social consciousness of the Progressive Era,

- Which led to the passage of the first workers’ compensation law in New York State (or Wisconsin, take your pick) in 1910,

- Which led to conflict with the uniformity principles of the Admiralty and Commerce clauses of the U.S. Constitution,

- Which led to the U.S. Supreme Court’s decision in 1917 that the states could not extend their workers’ compensation laws to land based maritime workers while the workers were over the navigable waters of the United States,

- Which led to the enactment of the Longshoremen’s and Harbor Workers’ Compensation Act in 1927 extending federal workers’ compensation protection to shore based workers injured while temporarily on navigable waters,

- Which led to the 1972 amendments to the Longshore Act extending coverage landward to adjoining areas customarily used for maritime purposes,

- Which led to the 1980 U.S. Supreme Court decision that the Longshore Act did not “supplant” state laws, but rather “supplemented” state laws,

- Which led to today. We’re still trying to sort out issues of overlapping and concurrent state/federal jurisdiction in the hundreds of occupations carried on in and around navigable waters that could be either state or Longshore or both simultaneously depending on the state in which the injury occurred and the facts of the case.

So we have workers’ compensation laws in each of the 50 states and the various territories coexisting alongside the Longshore Act.

In an earlier posting (September 9, 2009) I offered my unofficial lists of states with concurrent (dual) jurisdiction and states that have “exclusive” jurisdiction. I’ll repeat the lists here.

Concurrent states – Alabama, Alaska, California, Georgia, Illinois, Indiana, Kentucky, Minnesota, New York, Missouri, Pennsylvania, Rhode Island, South Carolina, Virginia, Wisconsin, West Virginia.

Exclusive states – Florida, Hawaii, Louisiana, Maine, Maryland, Mississippi, New Jersey, Ohio, Oklahoma, Oregon, Texas, Washington.

These lists are subject to change at any time as state insurance laws change.

Note: “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 Longshore 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.

So, the Longshore Act is a workers’ compensation law for the protection of injured workers, just like the laws in the 50 states and the territories. These state laws usually cover different workers, but there is frequent overlap and uncertainty, especially in the “concurrent” states, where injured workers routinely file claims under both state act and Longshore Act and employers face redundant administrative, legal, expense, and sometimes benefit costs.

Here are some differences:

- The Longshore Act usually costs more to insure (see Question Number 7);

- The Longshore Act was enacted by the U.S. Congress as opposed to the state legislatures;

- The Longshore Act is administered by the U.S. Department of Labor and not by state agencies;

- The Longshore Act is generally more liberally administered and pays higher benefits than the state acts;

- The Longshore Act covers “maritime” employees (and there’s a library of case law trying to decide what that means) as opposed to “local” workers covered by state law; and,

- The most important difference for employers is that state workers’ compensation laws and the Longshore Act are separate exposures. And because of the overlapping jurisdictions and coverage uncertainties an employer must be careful and make sure that he has the correct coverage.

Top Ten Longshore Questions

As I’ve said, over the years the same Longshore questions have been coming up again and again, and now with AEUs Longshore BLOG there’s a source where these questions can be answered. So here’s my list of the “Top Ten” recurring Longshore questions:

16. Does the Longshore Act apply only to U.S. citizens?

15. Does the Longshore Act apply overseas?

14. What are the “navigable waters of the United States”?

13. What is a subdivision of a state government?

12. Can you exclude corporate officers under the Longshore Act?

11. Can small employers opt out of the Longshore Act?

10. How do you measure the 10 day rule for paying Formal Awards under §914(f)?

9. Does the Longshore Act apply in Guam? In Puerto Rico? In the Virgin Islands? In

the Commonwealth of the Northern Marianas?

8. What does “joint and several” liability mean? And what does “several not joint”

liability mean? And why is this very important?

7. Why is Longshore Act insurance so expensive?

6. Is the Longshore Act fair to employers?

5. What’s the difference between the Longshore Act and the Jones Act?

4. What is a vessel? What is a crewmember?

3. What is the difference between state act comp and the Longshore Act?

2. Where can I buy Longshore Act insurance?

1. Do I need Longshore Act insurance?

The answers to these, and any other questions introduced by BLOG visitors, will be offered in upcoming postings. In the meantime, if there’s a particular question you are interested in please leave a comment with your question.

The §902(3)(A) Exclusions Are Narrow

The first sentence in James Joyce’s novel Ulysses reads, “Stately, plump Buck Mulligan came from the stairhead , bearing a bowl of lather on which a mirror and a razor lay crossed.”

The literary critics immediately began arguing about whether “stately” refers to Buck Mulligan’s physical appearance or the manner in which he walked down the stairs.

Here’s another example of ambiguous modifiers:

Section 902(3)(A) of the Longshore and Harbor Workers’ Compensation Act states that, “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, but such term does not include –

(A) Individuals employed exclusively to perform office clerical, secretarial, security, or data processing work.”

The lawyers immediately began arguing about whether “exclusively” modifies the four job classifications of clerical, secretarial, security, and data processing.

The Department of Labor’s Benefits Review Board has found that the term “exclusively” does indeed modify all four classifications of work listed in the §902(3)(A) coverage exclusion (Dobey v. Johnson Controls, 33 BRBS 63 (1999)).

But the arguing continued. Does the term “office” also modify all four classifications of work?

The Benefits Review Board has previously made it clear that “office” modifies clerical and data processing work.

And in a recent case, in affirming an ALJs Decision and Order, the Board found that the term “office” also modifies the “security” work classification (K.L. v. Blue Marine Security, LLC and Louisiana Workers’ Compensation Corporation, BRB No. 08-0789, Issued 04/16/2009).

In K.L., the Board considered coverage in the case of a security guard working on a vessel on the Mississippi River. Citing the Congressional Record in support of the narrow application of the §902(3)(A) exclusions, and the fact that the worker faced the hazards of the sea since his work was performed aboard a vessel on navigable waters, the Board found that the exclusion did not apply, and the security guard was covered under the Longshore Act by virtue of Director, OWCP v. Perini North River Associates, 459 U.S. 297 (1983) (an injury on actual navigable waters provides coverage if the claimant is not excluded by a statutory exclusion).

The Board stated that the exclusion does not apply because the claimant was not exclusively performing “office” security work. This is a very narrow reading of the “security guard” exclusion.