By Larry DeMarcay, from the December 2010 edition of MarineNews
Historically in our industry, there has been a clear dichotomy between companies whose employees are seamen that are covered by the Jones Act and those that are longshoremen and covered by the Longshore and Harbor Workers’ Compensation Act (LHWCA). The difference was very simple, Jones Act employers and their seamen were responsible for vessel-based duties and operations. Longshore employers hired longshoremen that were land-based although they performed a portion of their duties aboard vessels. However, as with many of the issues that are germane to the industry, the determination as to whether your employees are longshoremen or seamen has, due to changes in the industry, become more difficult to make.
Although the determination of the status of your employees may not be important to the day-to-day operation of the company, it is critically important that you know how your employees are classified so that you can plan accordingly by knowing the duty owed to the people working on your vessels, procuring proper insurance and managing your employees’ medical and wage issues after an incident. For example, a Jones Act employer would rely upon its maritime employer liability insurance policy to provide coverage for injuries to a Jones Act seaman. Whereas, a longshore employer would rely on its Longshore and Harbor Workers’ Compensation Act insurance policy to provide medical care and lost wages to its employee.
If an employer incorrectly designates its longshore employees as seamen and does not purchase a LHWCA policy, the company could be left without coverage for an employee’s injury. Conversely, if a longshore employer incorrectly believes that its employees are seamen and purchases a maritime employers’ liability policy, but not a LHWCA policy, it could also be left bare and without insurance coverage for an employee’s injury. In addition to seaman status determining which insurance policy provides coverage for an incident, seaman status also invokes different standards of care applicable to both the employer and vessel owner.
It is important to first understand the difference between a seaman and a longshoreman. An employee is determined to be a seaman under the Jones Act if he or she is permanently assigned to and a member of the crew of a vessel or a fleet of vessels. Seaman status extends to employees while on shore, if the employee was, at the time, an employee of the vessel and engaged within the course and scope of his employment at the time of the incident.
Under the Jones Act, a seaman who suffers an injury has three potential remedies against his or her employer. All three of these claims are usually insured by a maritime employers’ liability policy. These claims include (1) a claim for maintenance and cure that is not based upon a claim for negligence, (2) a cause of action for the unseaworthiness of the vessel and (3) a cause of action for negligence. As maintenance and cure are not fault-based and provide workers’ compensation style benefits, a seaman’s claim against the employer for unseaworthiness and negligence places the seaman at an advantage against his or her employer by being able to bring both a fault-based claim against its employer and a claim for wage and medical benefits, which is traditionally prohibited in other employment settings.
On the other hand, under the Longshore and Harbor Workers’ Compensation Act, shore-based employees are entitled to benefits for injuries that may have been suffered either on land or the water. The test to determine whether an employee is covered by the Longshore Act focuses on both the “situs of the accident” and the status of the worker involved. The situs requirement is satisfied when an employee’s work is upon the navigable waters of the United States including any adjoining pier, wharf, dry dock, terminal, building, marine railway, or other area customarily used by an employer in loading, unloading, repairing or building a vessel. The status requirement is satisfied by showing that an employee is engaged in maritime employment including longshoring operations, harbor work, ship repairs, ship building, etc. This status determination is centered upon the maritime function of the employee.
It is important to remember that a longshore claim against an employer is not based upon proving negligence or the unseaworthiness of the vessel and benefits will be paid regardless of any negligence attributable to the employer or the employee.
The courts have realized that there is an overlap between potential Jones Act and Longshore Act claims. There is a “zone of uncertainty” inevitably connecting the Jones Act and the Longshore Act. As such, employees may file concurrent or successive claims under the Jones Act and the Longshore Act. If a worker is denied Longshore Act benefits because it is determined that he is a seaman, he then will be able to file a claim under the Jones Act. Conversely, if an employee files a Jones Act claim against his employer and it is determined that he is a longshoreman, he will then be allowed to pursue a longshore claim. Employees that fall into this gray zone can pursue either potential remedy. From our experience, as damages under the Jones Act are usually higher than those paid under the Longshore Act, employees tend to file Jones Act claims and later pursue Longshore Act claims if the Jones Act claim is unsuccessful.
In addition to the importance of seaman status in determining which insurance policy applies in the event of an injury, employee status also determines the applicable standards of care that apply to employers and vessel owners. Vessel owners owe different duties to Jones Act employees and longshoremen. Vessel owners/Jones Act employers owe Jones Act seaman a duty to provide a seaworthy vessel and are responsible for any injuries caused by the negligence of either the employer or its employees. Under the Jones Act, negligence is determined under a featherweight standard and is easier to prove than a normal land-based negligence action.
On the other hand, a vessel owner that has longshore employees working aboard its vessel owes an entirely different standard of care. As these longshoremen are covered by their employer’s longshore policy (that is not negligence based) the courts have created a higher burden for longshoremen that bring claims against vessel owners. A vessel owner owes three narrow duties to a longshoreman working aboard their vessels: (1) a duty to turn over the vessel in a reasonable condition and warn the longshoreman of any known dangers, (2) a duty to exercise care in the areas of the ship that are under the active control of the vessel, and (3) a duty to intervene if it becomes aware of a dangerous condition.
The traditional lines of which company’s employees are considered members of the crew and those that are traditionally longshoremen have been further clouded by the use of employee leasing companies and the outsourcing of jobs that were traditionally performed by vessel crew. For example, in a supply boat scenario, the vessel owner used to staff its vessels with employees that performed both the vessel’s navigational and operational tasks. These positions included deckhands and/or riggers that were responsible for the loading and off-loading of the vessel. As these employees were vessel-based employees of the ship owner that were permanently assigned to the vessel and performing their duties aboard the vessel, they had always been considered Jones Act seamen. However, many of these positions have been outsourced to third-party companies who provide employees to vessel owners. These third-party hands then perform the tasks previously assigned to the vessel-based crews. However, to achieve seaman status, the employee must be permanently assigned to a vessel or a fleet of vessels. We have seen situations where these third-party hands are permanently assigned to work for one company or aboard a fleet of vessels and are clearly considered seamen. However, we have also seen situations where these third-party employees may work for a short period of time aboard a vessel and then, when that shift is over, be sent to work aboard a vessel owned by another employer. As such, there is no permanence associated with the assignment to a vessel or fleet of vessels. Under this scenario, these employees may be considered longshoremen.
If your company purchases both maritime employer liability and longshore coverage, you will be adequately covered in the event of an incident to an employee regardless of the determination of seaman status. However, if your company has purchased only longshore coverage (assuming your employees are longshoremen) or just a maritime employer liability policy (assuming your employees are seamen) it is important to take a close look at the tasks performed by your employees to make sure that you are acquiring the proper coverage. As many injuries that occur in the offshore setting can be serious, it is important to make sure that your company does not face any additional exposure due to the incorrect determination of the status of its employees.