Amendments to the Act, Part I

Amendments to the Act, Part I
It’s been 100 years since the U.S. Supreme Court’s decision in Southern Pacific RR Co. v. Jensen, (244 U.S. 205 (1917)), established the “Jensen” line, limiting the coverage of states’ workers’ compensation laws to the landward side of the water’s edge and creating a gap in workers’ compensation coverage for employees working over the navigable waters of the U.S.  The decision ultimately led to the passage of the Longshore and Harbor Workers’ Compensation Act in 1927.

The Longshore Act was significantly amended in 1972 and 1984.  Since 1984 there have been several unsuccessful attempts to add amendments (and, of course, one success, amending the recreational vessel exclusion in 2009).

Previous unsuccessful amendments, in my opinion, can be grouped into two categories.

First, listed here in Part One, are significant changes that should be made in the interest of equity and to match broad changes that have been enacted in many state workers’ compensation laws.

Second, to be listed in Part Two, are changes that would be welcomed by the insurance carrier/maritime employer/self-insured employer community rationalized as restoring balance in the administration of the Act.

Part One – Significant changes
The intoxication defense in section 903(c) should be amended to strike the requirement for a successful defense that the injury must be occasioned “solely” by the intoxication of the employee.  Simply remove the word “solely”.  A corresponding change would have to be made in section 920(c) that creates a rebuttable presumption in favor of the injured worker.

The last maritime employer doctrine should be addressed.  The Act can be amended to reflect liability for intervening, post maritime employment.  Suggested language proposed in the past has been along the lines of, “Intervening Employment – If the last employment exposure that contributed to an injury or death was the result of employment that was not covered under this Act, no benefits shall be payable under this Act for the injury or death.”

The problem of concurrent Longshore Act and state act jurisdiction in many states should be addressed.  Section 905(a) can be amended to reflect that state workers’ compensation laws are expressly preempted by the Longshore Act.  Procedures can be provided in section 905 for the maritime employer to enforce this preemption of state laws.

The free choice of physician provision in section 907 should be addressed.  Previous proposals have reflected changes in many state laws that provide that insurance carriers may designate participating networks of health care panels that would be the obligatory choice for medical services and supplies for injured workers.

With regard to hearing loss several changes should be considered.  A combination of the aggravation rule and the last maritime employer rule has maritime employers frequently paying for hearing loss that they did not cause.  One change would involve language to remove the effects of lifestyle and aging from awards for hearing loss.  For example, the employer would not be liable for any part of an employee’s hearing loss caused by presbycusis, non-occupational causes, and documented pre-employment hearing loss.  The employer should only be liable for the percent of hearing loss for which it is responsible.  Pre-employment and post-employment should also be accounted for in a more equitable manner than in the current jurisprudence.

The time limits for notice of injury and filing a claim in sections 912 and 913 should be amended to reflect outside time limits.  The employer should be protected against claims filed years after an alleged workplace injury or exposure.

Past draft amendments have included a proposed change to section 921(b)(3) dealing with the payment of benefits in disputed cases.  Current language reads, “The payment of the amounts required by an award shall NOT be stayed pending final decision in any such proceeding unless ordered by the Board.  No stay shall be issued unless irreparable injury would otherwise ensue to the employer or carrier” (emphasis added, and a stay is virtually never issued).  Proposed new language would read something along the lines of, “Disputed amounts required by an award shall be stayed”.

An attempt should be made to improve the methodology for calculating the injured worker’s Average Weekly Wage.  Current methods under section 910(a) inflate the compensation rate calculation by a judicially created presumption that a worker who works 75% of the year preceding his injury is credited with a full year.  Also, section 10(c), the very broad and discretionary calculation provision, has resulted in workers receiving credit for part-time jobs, short overseas assignments that inflate weekly wages by a factor of three times or more and assorted other methods of inflating an injured worker’s wage earning “capacity” at the time of the injury.

The 20% penalty provision in section 14(f) should be amended.  An amendment should provide that payment under an award is due within 10 business days after receipt by the employer or carrier of a priority delivery or communication containing the award.

Finally, the issue of reduction or offset against disability payments based on receipt of retirement income from Social Security or retirement benefits furnished by the employer should be considered.

These are what I consider to be the most important, significant changes to be considered in amending the Longshore Act.

In Part Two, we’ll review further changes that would be welcomed by insurance carriers, maritime employers, and self-insured employers alike.


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 AEU's Longshore Insider.
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