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Bar News - August 17, 2012


Workers’ Compensation & Personal Injury: Overseas Contractor Work Injuries Under the Defense Base Act

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Their recruiting websites have names like "Danger Zone Jobs," and they promise high pay and excitement. They warn of danger, of work in a "hostile environment" or possibly a "war zone." They use tag lines such as "A Challenging World Calls for Adventurous People," (www.fluor.com) and "Caring for Our Freedom Fighters" (www.kbr.com). Some of their names are familiar – Halliburton, KBR, Fluor Daniels – and some are less so – EOIR Technologies, Applied Energetics. They provide food service, housing, logistics, "ultrafast lasers and particle beam systems" (appliedenergetics.com/). They are the private overseas contracting industry, sending civilians from the United States, Eastern Europe, Africa, and elsewhere to work side-by-side with US military personnel all over the world. And while they have become prominent (in March, 1965, Business Week magazine declared the Viet Nam war to be a "war by contract," the issue is not new. See also "Contractor Support on the Battlefield," published by the US Army War College .) Since US involvement in Afghanistan and Iraq, they have also revived a WWII-era law meant to provide compensation for work injuries received by these civilian employees: The Defense Base Act (42 USC. § 1651 et. seq.).

As World War II wound down, the "Marshall Plan," named after US Secretary of State George Marshall, was enacted in hopes of creating modern economies across Europe.

Even before the war ended, civilian employment on overseas military bases began to rise, and it became clear that there was a need to provide a uniform system to compensate for work-related injuries occurring in many jurisdictions. The Defense Base Act, P.L. 277-208, was enacted in 1941 and applied the Longshore & Harbor Workers’ Compensation Act to overseas civilian contractor employers working on overseas US military bases. The DBA provided a uniform system for handling work injuries arising across multiple jurisdictions with unpredictable access to functioning government in the aftermath of the war.

The Longshore Act itself dates to 1927, and similarly provides a uniform system of compensation for workers injured in certain maritime-related employment. The Longshore Act provides a uniform compensation system that supports the workforce in this important and hazardous interstate economic activity. The DBA looked to the already-existing Longshore Act to provide that same consistency when the important task of fighting WWII and, later, rebuilding Europe, demanded the same.

Like all workers’ compensation systems, the DBA has simple goals: To provide medical and wage support to workers who suffer on-the-job injuries. Unlike other workers’ compensation systems, DBA claims can involve risks that are not experienced in ordinary work settings. The Longshore Act itself contains a statutory presumption in favor of coverage, which can aid injured workers in proving claims under difficult circumstances (33 USC. §920). In addition, case law has developed the "Zone of Special Danger" doctrine – in effect, if the work exposes the claimant to special danger that would not be present if it were not for the overseas assignment, then any injury arising from the novel risks of the Zone of Special Danger is work-related.

One example that demonstrates the reach of the doctrine is found in the case of a claimant who got a tattoo after work hours at an off-base tattoo parlor in Lebanon, and subsequently died from a self-administered, accidental overdose of pain medication. The claim was found to be work-related, since it was within the normal range of experience of the claimant, considering the location of the base and the tattoo parlor, and the likelihood that workers would receive tattoos there, to have gone to the tattoo parlor. Similarly, it was foreseeable that medication that would be prescription-only in the US might be available over the counter overseas, and that it could be accidentally taken in a lethal dose.

Other DBA issues have arisen around the issue of Average Weekly Wage and residual earning capacity. Overseas contracting jobs often pay well. Longshore benefits are paid at the rate of 2/3 of the difference between the average weekly wage at the time of injury and post-injury earning capacity (33 USC. § 908.) As a result, many injured overseas workers are entitled to benefits at the maximum Longshore rate (presently $1,295.20 per week). Longshore law provides that unless the injured worker is returned to the same job in which he or she was injured, the burden to show suitable alternative employment falls to the carrier, Pietrunti v. Director, OWCP, 119 F.3d 1035, 31 BRBS 84(CRT) (2d Cir. 1997).

Many injured workers cannot return to overseas work, and the employment that they do find after returning to the US often pays far less than overseas work (basic labor in laundry, foodservice, or similar jobs often pay $90,000 per year overseas). As a result, DBA insurers may face liability for ongoing partial disability benefits, even after an injured worker is back to work full-time after an overseas injury. The Longshore Act, unlike many state workers’ compensation laws, does not cap partial disability benefits — they can potentially run for the life of the injured worker, 33 USC. § 908(c)(21).

The defense industry has waged war on benefits for injured overseas workers through the familiar tool of the Labor Market Survey, but with a twist: carriers are now vigorously pushing the notion that post-injury earning capacity should be measured by labor market surveys that include the overseas job market. Courts have by and large rejected this concept; however, claimants with extensive overseas work histories who return to overseas work post-injury can expect residual earning capacity to be decided with reference to these facts, Patterson v. Omniplex World Services, BRB 02-0332 (2003). This issue is presently pending in the 5th Circuit.

The DBA is administered by the US Department of Labor Office of Workers’ Compensation Programs (OWCP), Division of Longshore and Harbor Workers’ Compensation, from 12 offices around the country. Claims start at the OWCP. If they cannot be resolved by agreement, claims are tried by Administrative Law Judges. Appeals are taken to the Benefits Review Board, and from there to federal Circuit Courts of Appeal.Claimants’ attorney fees are governed by section 28 of the Longshore Act,and Department of Labor approval is required for all fees charged to Longshore claimants. Percentage fees are expressly disallowed; hourly billing is required. The general federal law of fee-shifting statutes applies, Stanhope v. Electric Boat, BRB No. 06-0924 (2006), although a substantial body of Longshore-specific case law also exists.

The DBA is not the only law to piggyback on the LHWCA for work-related injuries. By extension, the Longshore Act also applies to workers on the Outer Continental Shelf Lands (oil rigs and related work) and to employees of Nonappropriated Fund Instrumentalities (civilian morale, welfare, and recreations workers on military bases),5 USC § 8171 (Nonappropriated Fund Instrumentalities Act); 43 USC 1331 (Outer Continental Shelf Lands Act).

Our national privatization of warfare has enormous implications. The long-term social and human costs of military veterans returning home with catastrophic injuries that would have been fatal in earlier wars has become a topic of discussion among policy makers and news media. Some of those same costs, along with the costs of numerous less-medically-critical injuries, are also being borne by civilian contractors. Setting aside the moral questions raised by the private waging of public war—and those questions are numerous—the Defense Base Act is a fascinating example of an attempt to spread the costs of one subset of obscure, unusual, often severely traumatic work injuries. This, in the end, it shares with any other workers’ compensation system. How well it will do so remains to be seen.


Doug Grauel is admitted to the bars of Maine and New Hampshire, representing injured workers in workers’ compensation, including Defense Base Act and Longshore claims. He also handles Social Security and personal injury claims. Doug practices in Concord and can be reached at dgrauel@grauellaw.com or 603-369-5010.

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