First, let’s start with the “Last Employer Rule”. This is a judge created rule that the courts use to mitigate the difficulties and delays inherent in trying to apportion liability among several employers for disability due to cumulative exposure in occupational disease cases. The last employer to have exposed the worker to “injurious stimuli” prior to the date of injury is held liable for the entire resulting disability (the date of injury in occupational disease cases is the date of manifestation).
The Last Employer Rule is based on the assumption that it is equitable because all employers will be the last responsible employer a fair, proportional number of times, so aside from simplifying litigation, the rationale is that the rule is not unfair.
This may be a dubious proposition in general; in specific instances it can be quite inequitable, but the courts have adopted it.
It can certainly be inequitable as it is applied in Longshore Act cases. As the Last Maritime Employer Rule, it assigns liability to the last responsible employer under the Longshore Act notwithstanding subsequent and intervening injurious exposure in non-covered employment. An extreme example is the claimant who worked for Newport News Shipbuilding and Dry Dock Company for six months during the 1950s where he was exposed to asbestos and then worked for over thirty years for NASA where he was also exposed to asbestos. His widow collected survivor’s benefits from Newport News under the Longshore Act.
The Last Employer Rule used in occupational disease cases has a counterpart in cases involving multiple party cumulative traumatic injuries. It is known as the Aggravation Rule.
As a general proposition, the determination of the responsible employer in cumulative trauma claims turns on the distinction between whether the claimant’s disability is the result of the “natural progression” of a work related injury or an “aggravation” of that injury.
NOTE: “Natural Progression” means that the disability would have occurred and been the same without the occurrence of a subsequent injury.
If the disability results from the natural progression of an initial injury, then the employer at the time of that initial injury is the Responsible Employer for the entire disability. But if the conditions of employment with a subsequent employer aggravated, accelerated, or combined with the earlier injury, then the employer at the time of the second injury is liable for the entire resulting disability.
Of course there are inequitable applications. In a well known Ninth Circuit case, the claimant continued to work after he was scheduled for bilateral knee surgery. He worked a total of one shift for a stevedore employer, and the court found that this one shift caused a minor but permanent increase in the claimant’s disability; in other words, an aggravation. The stevedore on that last day of work was found to be the responsible employer for the entire disability even though the claimant had worked only one day with that employer over the previous 20 years. The court held that the one day of work was sufficient to aggravate the knee conditions that the last employer inherited from the previous employers.
As noted above, in a traumatic injury case, the pertinent issue is whether an employee’s disability is the result of the natural progression of his injury with earlier employers, or whether the condition was aggravated by an injury with a later employer.
The Last Employer Rule and the Aggravation Rule raise many questions.
- Does the last responsible employer in occupational disease cases get a credit against its liability under section 903(e) of the Longshore Act for settlements reached by the claimant with previous maritime employers for the same injurious exposure? The answer is “No”. Section 903(e) only provides a credit for payments made under “other” workers’ compensation laws or the Jones Act.
- In the case of two hearing loss exposures with two different employers confirmed by two separate audiograms, is the last maritime employer responsible for the entire hearing loss? Under certain circumstances, the answer is “No”. These constitute two separate injuries payable by separate employers. They are not merged under the Aggravation Rule.
- If the claimant executes a lump sum settlement under section 8(i) of the Longhshore Act with the last responsible employer does this end the claimant’s entitlement and let the previous employer(s) off the hook? The answer is “Not necessarily”. Where the settlement with the last responsible employer for whatever reason (in the court’s judgment) does not fully compensate a good faith claimant for his entire disability, the claimant may look to previous employers for full compensation. (Yes, this is an example of inconsistent application of the Rule by the courts.)
- In the case of successive traumatic aggravating injuries, can the last responsible maritime employer take a credit for previous scheduled award payments made by previous employers? The answer is “Yes”. In this situation, the Benefits Review Board, affirmed by the federal Courts of Appeal, has created an extra-statutory credit in order to avoid double recoveries. The credit is for the dollar amount of the prior payments and only applies to scheduled awards in cumulative trauma cases.
- An increase in pain or the manifestation of symptoms due to employment is an “injury” for application of the Aggravation Rule, regardless of any change in the underlying condition. It also triggers the section 20(a) presumption.
- The relative contribution of the pre-existing condition and the aggravating injury are not weighed. The employer at the time of the aggravating injury is responsible for the entire disability.
- In traumatic injury cases a claim must be filed within 1 year of the time that the claimant is aware, or should have been aware, of the relationship between the injury and his employment. When additional employers are added as defendants after a claim has been filed, the time limitation does not begin to run against any subsequently added employers until the initial employer against which the claimant timely filed his claim is found not to be liable. The only timeliness issue in these cases involves the claim against the first employer named.
There is obviously much to be said on both sides of the Aggravation Rule, but it is a fact of life in Longshore Act cases. This has been only a very brief summary of how it works.
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 and Financial Management, and the 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.