ISSUE: Port Authorities

Are employees of port authorities covered under the Longshore and Harbor Workers’ Compensation Act?  This is a question that comes up regularly, but infrequently enough to seem novel.  Of course, and as usual with these coverage questions, there is no simple, unconditional answer.

It is important to note that, unlike typical coverage issues under the Longshore Act, the answer here does not depend on the status and situs of the employee.  Rather it depends on the status of the employer under section 903(b) of the Act.  If the port authority is a subdivision of a state then its employees are excluded regardless of the location and nature of their job duties.  Of course, if the port authority is not a subdivision of a state, then the usual situs and status analyses apply to coverage.

Section 903(b) (33 U.S.C. 903(b)) states, “No compensation shall be payable in respect of the disability or death of an officer or employee of the United States, or any agency thereof, or of any State or foreign government, or any subdivision thereof.”

Once again, the question then becomes whether the particular port authority in question is a subdivision of a state government.  If so, then its employees are excluded from Longshore Act coverage regardless of the nature or location of their job duties.

The initial inquiry is factual.  Does the port authority provide or perform certain governmental functions?  Since it’s not a simple issue, many courts use a multi-part test in an attempt to sort out the facts.  And, admittedly, multi-part tests sometimes tend to complicate rather than simplify an inquiry; especially one with as many parts as this one.

One version of the test was cited and used in a recent federal Ninth Circuit Court of Appeals case (Gale Wheaton v Golden Gate Bridge, Highway & Transportation District, et al).  As the court stated,

“Factors that may be considered under the Hawkins County test in determining whether the entity’s actual operations and characteristics support the conclusion that it is a subdivision of a state include:

(a)    whether the entity was created by state law;

(b)   whether the entity was granted all the powers necessary to exercise its functions;

(c)    whether the entity has the power of eminent domain;

(d)   whether the entity has the power to assess or collect taxes;

(e)    the entity’s status under state law;

(f)     whether the entity is exempt from federal taxation;

(g)    whether the entity’s operations are subject to public hearing and its records open to the public;

(h)    whether the officials administering the entity are responsible to the public or public officials;

(i)      whether social security benefits for the entity’s employees are provided through voluntary rather than mandatory coverage;

(j)     whether the entity’s officers receive nominal compensation; and

(k)   whether the entity has the power of subpoena.”

The answers to these questions do not have to be unanimous one way or the other.  Taken together, they provide an analytical framework for determining if the port authority or other entity is governmental.

I usually prefer the less complex “I know it when I see it” type of test.  At any rate, most of the port authorities I’ve come across seem to have sufficient governmental attributes to qualify as subdivisions under section 903(b).  But you should use the eleven point test set out above whenever a question arises with regard to Longshore Act coverage for a port authority.

One thing to watch out for:  if a private contractor goes to work on a governmental port authority contract, is it possible that an employee of the port authority, normally excluded under section 903(b), could come under Longshore Act coverage as an “employee” of the private contractor by virtue of the application of the borrowed employee doctrine?  I would say yes.  Of course, this would be an exposure problem for the private contractor and not for the port authority.

As usual, resolve any doubt in favor of getting coverage.

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