Update from the Benefits Review Board (May 2014)

Update from the Benefits Review Board (May 2014)

By Karen Koenig, Associate General Counsel, Longshore Benefits Review Board, United States Department of Labor Washington, D.C.

BRB News

On April 30, 2014, Chairman and Chief Administrative Appeals Judge Nancy S. Dolder retired after 29 years of service with the Department of Labor. Judge Betty Jean Hall, a former chairman and chief judge, has been named Acting Chairman and Chief Administrative Appeals Judge. We anticipate the naming of a fifth Board member before too long.

On the budget front, the BRB was shut down during the October 1-16, 2013, budget impasse. During this time, the Clerk of the Board worked intermittently to open mail, and a panel of judges was made available to address one motion for a stay of payments. It is not anticipated that there will be any employee furloughs for the remainder of this fiscal year.

BRB Statistical Update

The Board began Fiscal Year 2014 in October 2013 with 132 pending Longshore/DBA appeals (Longshore and Harbor Workers' Compensation Act, 33 U.S.C.S. § 901 et seq., and Defense Base Act, 42 U.S.C.S. § 1651 et seq.). During the last fiscal year, which ended September 30, 2013, the Board received 199 appeals in cases under the Longshore and Defense Base Acts, 30 more than the year before. 197 decisions were issued, 8 fewer than the year before; 23 orders on reconsideration also were issued. In Fiscal Year 2013, we received decisions from appellate courts in 32 of the Board’s Longshore/DBA decisions, and the Board’s decisions were affirmed in 75 percent of them. Last year, an average of 11 months elapsed between the date an appeal was filed with the Board and the date a decision on the merits was issued.

As of April 30, 2014, the Board has approximately 111 pending Longshore appeals, including 13 appeals under the DBA. This fiscal year, the Board has received 85 new Longshore/DBA appeals and issued 110 dispositions. Thus far, the Board has received 16 decisions from appellate courts and the Board’s decision was affirmed in 15 of these cases (94%).

The Board Issues First Decisions on Amended Section 2(3)(F)

In 1984, Section 2(3)(F), 33 U.S.C.S. § 902(3)(F), was added to the Act; it stated that “individuals employed to build, repair, or dismantle any recreational vessel under sixty-five feet in length” is excluded from the Act’s coverage if the individual is subject to coverage under a state workers’ compensation law. See Powers v. Sea Ray Boats, 31 BRBS 206 (1998). In 1984, as amended in 1996, the following was added as Section 3(d), 33 U.S.C.S. § 903(d):

(1) No compensation shall be payable to an employee employed at a facility of an employer if, as certified by the Secretary, the facility is engaged in the business of building, repairing, or dismantling exclusively small vessels (as defined in paragraph (3) of this subsection), unless the injury occurs while upon the navigable waters of the United States or while upon any adjoining pier, wharf, dock, facility over land for launching vessels, or facility over land for hauling, lifting, or drydocking vessels.

(2) Notwithstanding paragraph (1), compensation shall be payable to an employee —

(A) who is employed at a facility which is used in the business of building, repairing, or dismantling small vessels if such facility receives Federal maritime subsidies; or

(B) if the employee is not subject to coverage under a State workers' compensation law.

(3) For purposes of this subsection, a small vessel means —

(A) a commercial barge which is under 900 lightship displacement tons; or

(B) a commercial tugboat, towboat, crew boat, supply boat, fishing vessel, or other work vessel which is under 1,600 tons gross as measured under section 14502 of title 46, United States Code, or an alternate tonnage measured under section 14302 of that title as prescribed by the Secretary under section 14104 of that title.

Thus, special rules apply to both the “status” and “situs” inquiries when small vessels are involved. See Koepp v. Trinity Industries, Inc., 46 BRBS 7 (2012) (Board affirmed administrative law judge’s finding that the location where the claimant was injured was exempt from coverage pursuant Section 3(d)(1) based on a “Certificate of Exemption From Coverage” issued by the DOL).

Congress amended Section 2(3)(F) in 2009. The amended section excludes from coverage:

individuals employed to build any recreational vessel under sixty-five feet in length, or individuals employed to repair any recreational vessel, or to dismantle any part of a recreational vessel in connection with the repair of such vessel …

if [the individual is] subject to coverage under a state workers’ compensation law.

Thus, there is no longer a length of vessel requirement for those employed to repair recreational vessels. This amendment became effective on February 17, 2009, and applies based on the nature of the claimant’s work, not on the nature of the work at the employer’s facility. DeJesus v. Viking Yacht Co., Inc., 47 BRBS 51, 53 n.8 (2014). It does not apply to those awarded benefits for an injury occurring before February 17, 2009, even if the individual would now be excluded. 20 C.F.R. § 701.505. Regulations implementing the amended section were promulgated after a notice and comment period. See 76 Fed. Reg. 82117 (Dec. 30, 2011); https://federalregister.gov/a/2011-32880. The regulations are set out at 20 C.F.R. §§ 701.501-505, and collectively are entitled “Special Rules for the Recreational Vessel Exclusion from the Definition of ‘Employee.’” In addition, there are FAQs and coverage examples on the website of the Office of Workers’ Compensation Programs. See http://www.dol.gov/owcp/dlhwc/lsnewregfaqs.htm.

The Board has twice addressed the amended exclusion within the last year. In Czikowsky v. Ocean Performance, Inc., 47 BRBS 35 (2013), the claimant, a repairman, filed a claim for hearing loss benefits against his employer, which sold recreational vessels, as well as repaired and stored such vessels. The claimant’s physician stated that claimant’s hearing loss, as documented in April and August 2009 audiograms, was due to “many years” of exposure to noise at work. The administrative law judge applied the amended version of Section 2(3)(F), as the vessels which claimant repaired had recreational purposes.

On claimant’s appeal, the Board held that the amended version of Section 2(3)(F) does not apply. Section 701.504(a)(3) of the regulations states that,

If the individual claims compensation for hearing loss, the date of injury is the date the individual was exposed to harmful workplace noise or other stimulus that is capable of causing hearing loss.

20 C.F.R. § 701.504(a)(3). If the “date of injury” is before February 17, 2009, the former version of Section 2(3)(F) applies; if it is on or after February 17, 2009, the amended version applies. 20 C.F.R. § 701.504(b), (c). Thus, the Board rejected the supposition of the parties and the administrative law judge that the date of the audiogram identifying claimant’s hearing loss is the relevant date for determining which version of Section 2(3)(F) is applicable. Moreover, the Board observed that the date of exposure does not necessarily mean the date of last exposure. 47 BRBS at 36. Commentary in the Federal Register accompanying the promulgation of the new regulations recognizes that hearing loss occurs over a period of time and states: “[i]f some or all exposures occurred prior to February 17, 2009, the amendment would simply not apply with respect to a disability resulting from those exposures.” 76 Fed. Reg. 82124; see also examples in the chart at http://www.dol.gov/owcp/dlhwc/lsnewregfaqs.htm. As the claimant had exposure to noise prior to February 17, 2009, the Board held that the prior version of Section 2(3)(F) applied. The Board remanded the case for the administrative law judge to address whether the claimant was covered under that provision; the Board affirmed the finding that claimant was subject to coverage under state law as he had settled a claim under Connecticut law. 47 BRBS at 37-38.

In DeJesus v. Viking Yacht Co., Inc., 47 BRBS 51 (2014), the Board reversed the administrative law judge’s award of benefits under the Act to a ship repairman, holding that his repair work on yachts used on display in boat shows and to take potential customers on sea trials constituted repair of “any recreational vessel” within the meaning of amended Section 2(3)(F). The Board held that both parts of the definition at 20 C.F.R. § 701.501(a), (b), must be applied to ascertain whether a vessel is “recreational,” rejecting the Director’s interpretation that downplayed paragraph (b); the Director contended the administrative law judge properly found the vessels were used for the business purpose of generating sales and therefore were not “recreational.”

The Board’s holding is based on the plain language of the regulation. 47 BRBS at 54. Subsection 701.501(a)(1) states: “Recreational vessel means a vessel—(1) Being manufactured or operated primarily for pleasure;. . . .” Although “pleasure” is not defined in the regulations, the Board held that the vessels in question were reasonably said to be operated “primarily for pleasure” of the potential customers pursuant to this subsection. The regulation also specifically states, “In applying the definition in paragraph (a) of this section, the following rules apply:

(b)(1) A vessel being manufactured or built, or being repaired under warranty by its manufacturer or builder, is a recreational vessel if the vessel appears intended, based on its design and construction, to be for ultimate recreational uses. The manufacturer or builder bears the burden of establishing that a vessel is recreational under this standard.

(2) A vessel being repaired, dismantled for repair, or dismantled at the end of its life is not a recreational vessel if the vessel had been operating, around the time of its repair or dismantling, in one or more of the following categories on more than an infrequent basis—

(A) “Passenger vessel” as defined by 46 U.S.C.S. § 2101(22);

(B) “Small passenger vessel” as defined by 46 U.S.C.S. § 2101(35);

(C) “Uninspected passenger vessel” as defined by 46 U.S.C.S. § 2101(42);

(D) Vessel routinely engaged in “commercial service” as defined by 46 U.S.C.S. § 2101(5); or

(E) Vessel that routinely carries “passengers for hire” as defined by 46 U.S.C.S. § 2101(21a).

20 C.F.R. § 701.501(b) (emphasis in original). In DeJesus, subsection (b)(2) was applicable because the vessels on which claimant worked were under repair, but not by the builder or under warranty. The Board held that the only way an apparently recreational vessel becomes “non-recreational” is if its use falls within one of the categories enumerated in subsection (b)(2). This holding comports with the rules of statutory construction, as well as with the Department’s explanation of the recreational vessel exception. 47 BRBS at 55 (quoting 76 Fed. Reg. 82120-82121).

The Board then addressed whether the vessels in question were involved in “commercial service” as defined by 20 C.F.R. § 701.501(b)(2)(D), and thus 46 U.S.C.S. § 2101(5), as none of the other categories was potentially applicable (because they all require at least one paying customer). The Board held that the vessels were not used in “commercial service” because they were not used to transport goods or people from one place to another; customers riding on the promotional vessels were returned to their starting point. 47 BRBS at 56. The vessels therefore retained their “recreational” nature. As claimant repaired only recreational vessels, and as he was covered by a state workers’ compensation law, the Board held the claimant excluded from coverage pursuant to amended Section 2(3)(F). Id.

© Copyright 2014 U.S. Dept. of Labor. All rights reserved. Reprinted by permission.

Publisher's Note: This article will appear in a forthcoming issue of Benefits Review Board Service Longshore Reporter (LexisNexis).