TO: IRAP FROM: Christine Clarke Re: Defense Base Act Date: 3/3/08

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1 TO: IRAP FROM: Christine Clarke Re: Defense Base Act Date: 3/3/08 I. Introduction...2 II. Employees Covered...2 A. Definition of working under a Government Contract...2 B. Defining government base and lands occupied or used by the U.S. military...2 III. Employees Not Covered...3 IV. Employers Must Purchase Insurance or Self-Insure...3 A. Penalty for Failure to Insure...3 V. Posting Notice...3 VI. Scope of Coverage...4 A. Course of Employment and Zone of Special Danger...4 B. Transportation to and From Work...4 VII. Showing Compensability...5 A. Presumption of Compensability and a Prima Facie Case...5 B. Rebutting a Presumption of Compensability...5 C. Weighing Evidence Once Presumption is Successfully Rebutted...5 D. Burdens of Proof...5 VIII. Bars to Recovery and Time Limits...5 A. Intoxication or Willful Misconduct...6 B. Failure to Timely Give Notice...6 i. Exceptions to the Notice Provision...6 ii. Presumption that Sufficient Notice Was Given...7 C. Failure to Timely File Claim/Appeal...7 IX. Procedure...7 X. Filing Claim...8 XI. Relevant Offices/Levels of Authority/Standards of Review...8 A. Deputy Commissioner...8 B. Administrative Law Judge...9 C. Benefits Review Board...9 D. Federal District Court...9 E. Court of Appeals...9 XII. Fees...9 XIII. Benefits...10 A. Medical Costs...10 B. Temporary Total Disability...10 C. Temporary Partial Disability...10 D. Permanent Total Disability...11 E. Permanent Partial Disability...11 F. Death...11 G. Aliens and Commutation...11 XIV. Waivers...11

2 I. Introduction The Defense Base Act (DBA) 42 USC 1651 is an extension of the Longshore and Harbor Worker s Compensation Act (LHWCA) 33 USC The act is to be construed liberally in favor of injured employees. Carter 40 BRBS 660 citing Voris v. Eikel, 346 U.S. 328, 333 (1953). Compensation is payable irrespective of fault. 33 USC 904(b). II. Employees Covered The DBA extends coverage to anyone either employed under a contract or subcontract to perform work for the United States Government overseas engaged in public works, 42 USC 1651(a)(3) and (4) or providing welfare to US soldiers, 42 USC 1651(a)(6); anyone employed to work on a US military, naval, or air force base overseas, 42 USC 1651(a)(1); or anyone employed on any lands occupied or used by U.S. military or naval for military purposes, 42 USC 1651(a) (2). The act explicitly extends to aliens and nonnationals, though nonnationals are required to accept settlements, if offered by the insurance carrier or ordered by the compensation board, comprised of one half of the present value of future expected payments. 42 USC 1652(b). A. Definition of working under a Government Contract The Benefits Review Board (BRB) defines an employee as working under a government contract for the purposes of the DBA if that employee is employed in one of the following conditions: (a) employee acted in furtherance of a Government contract. Z.S. v. Science Application International, Corp., 41 BRBA 216 (ALJ) 2007 citing Airey v. Birdair Div. Of Bird and Sons, 12 BRBS 405 (1980). (b) employee was involved in the performance of a Government contract, Z.S. 41 BRBA 216 citing Rosenthal v. Statistica, 31 BRBS 215 (1998). (c) employee was doing work which was related to the employer s contract with the United States. Z.S. 41 BRBA 216 citing Casey v. Chapman College-Pace Program, 23 BRBS 7 (1989). B. Defining government base and lands occupied or used by the U.S. military

3 For purposes of the DBA, the Green Zone in Iraq does not qualify as either a U.S. military base or a land occupied or used by the U.S. government for military purposes. Z.S. 41 BRBA 216. III. Employees Not Covered The DBA does not extend coverage to any employees who are covered by the Federal Employees Compensation Act (i.e. Federal worker s compensation); employees engaged in agriculture, domestic service, or any employment that is casual and not in the usual course of the trade, business, or profession of the employer; or masters or crew of a vessel. 42 USC The act does not apply to prisoners of war or those protected by the Geneva Convetion. 42 USC 1651(f). It also does not apply to officers of the United States government, any state government, or any foreign government. 33 USC 903(a). IV. Employers Must Purchase Insurance or Self-Insure The LHWCA requires that employers procure insurance from a third party or are certified as self-insured by the Department of Labor (DOL) to cover injury or death as covered under the act. 33 USC 932. The DOD is now required to put notice of this in all overseas defense contracts. Memo of December 8, 2003 from Office of Under Secretary of Defense. retrieved February 24, The Department of Labor also attempts to ensure compliance by withholding certain forms, such as Notice to Employees (of coverage) until employer has been verified as having third party insurance or being legitimately self insured. Defense Base Act Frequently Asked Questions retrieved February 24, A. Penalty for Failure to Insure Failure to secure payment through appropriate insurance is guilty of a misdemeanor which is punishable by up to 1 year in prison and/or up to $10,000 in fines. The President, Secretary, and Treasurer of the corporation is liable for the punishments and any compensation that is deemed appropriate under the act. 33 USC 938(a). Prime contractors are liable for the failure of subcontracts to secure compensation. 33 USC 904. V. Posting Notice Employers are required to post notice forms that are given out exclusively by the DOL upon insurance authorization and are not available to the general public. The

4 notice is supposed to contain the name and address of the employer representative to whom notice of injury is given and the name insurance carrier. 33 USC 934. There does not appear to be a requirement that the notice be posted in foreign languages or explain the DBA or claiming procedures. Failure to post the name of the person that employees are supposed to contact in case of injury is sufficient reason to excuse a late filing by claimant. 20 C.F.R VI. Scope of Coverage Unlike the War Hazards Compensation Act, the DBA does not propose to cover all accidents that happen 24/7 while employed. Rather, the act attempts to cover only those injuries that arise out of the course of employment. However, courts, and therefore also ALJs and the BRB, have taken a more liberal approach. A. Course of Employment and Zone of Special Danger The LHWCA covers injuries that arise out of the course of employment or out of a zone of special danger created by obligations or conditions of employment. O Leary v. Brown-Pacific-Maxon 340 U.S. 604, (1951) extended to DBA in O Keefe v. Smith, Hinchman & Grylls Associates, Inc. 380 U.S. 359, and Kelly v. Washington Group International, Inc. 39 BRBS 104 (ALJ) The zone of special danger standard has been construed to include all employment overseas that falls within the DBA. See Harrris v. England Air Force Base, 23 BRBS 175, 159, So long as the injury arises out of this zone of special danger, a causal connection exists between the injury and the employment. Ilaszczat v. Kalamata Services, BRB No (June 19, 2002), cited in V.S. v. USA Environmental, Inc., 41 BRBS 839 (ALJ) It has been held that employment in the environment in Iraq constitutes a zone of special danger for the purposes of entitlement to disability benefits. Id. See also S.K. v. Service Employers International, Inc. 41 BRBS 293 (ALJ) 2006, C.C. v. Service Employers International 40 BRBS 631 (ALJ) B. Transportation to and From Work The DBA explicitly notes that employees are covered for injuries arising during transportation to or from work when the employer pays for the cost of transportation. 42 USC 1651(a).

5 VII. Showing Compensability A. Presumption of Compensability and a Prima Facie Case An employee is given a presumption of compensability, including a presumption that the claim comes within the provision of the law. 33 USC 920 (a). To establish a prima facie case of a compensable injury supporting a claim of compensation a claimant must show that he/she has been injured and that either an accident occurred in the course of employment or that conditions existed at work which could have caused the injury. E.S. v. Service Employers International, Inc. 40 BRBS 1003 (ALJ) 2006 citing Kelaita v. Triple A machine Shop, 13 BRBS 326 (1981) aff d sub nom. Kelaita v. Director, OWCP, 799 F.2d 1308 (9 th Cir. 1986). B. Rebutting a Presumption of Compensability Presumption of compensability can be rebutted with a showing of substantial evidence to the contrary. Id. See also Carter v. Brown & Root/Halliburton 40 BRBS 660 (ALJ) Such substantial evidence must be backed up by facts and not mere speculation in order to overcome presumption of compensability. E.S. 40 BRBS C. Weighing Evidence Once Presumption is Successfully Rebutted If presumption is successfully rebutted, the evidence for both parties is weighed in its entirety. See Carter 40 BRBS 660 and E.S. 40 BRBS D. Burdens of Proof When the presumption of compensability has been rebutted and if evidence is evenly weighed, the burden of proof falls upon the claimant. E.S. 40 BRBS 1003 citing Director, OWCP v. Greenwhich Collieries, 512 U.S The burden of proving that claimant is disabled and cannot find alternative employment falls upon the employer (see below). E.S. 40 BRBS VIII. Bars to Recovery and Time Limits There are very few absolute bars to recovery, aside from actual intentional infliction of harm on oneself or others, with explicit intent to injure and to cause all future consequences. Even failure to abide time limits for appeal does not bar appeal, but rather raises the standard to one of clear error as opposed to the usual procedure of reviewing most things de novo.

6 A. Intoxication or Willful Misconduct A claimant is completely bared from recovery if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another. 33 USC 903(c). This has been construed to mean that only actions in which claimant intended harm to him/herself and actions whose resulting harm was foreseeable to claimant. E.S. 40 BRBS However, the act provides for a presumption that the injury was not occasioned solely by the intoxication of the employee and that the injury was not occasioned by the willful intention of the employee to injure or kill himself or another. Only substantial evidence to the contrary can overcome this presumption. 33 USC 920. (See above: presumption of compensability). B. Failure to Timely Give Notice A claimant is required to give notice to the employer and the deputy director of the compensation district in which the employee was injured (for workers injured in Iraq, this means the LHWC office in New York City) within 30 days of the injury or within 30 days after the employee has become aware of the injury. For injuries such as occupational hazards where disability or death is not an immediate result of the injury (e.g. PTSD) the claimant has one year to give notice. i. Exceptions to the Notice Provision A claimant is not barred for failure to give timely notice where: (a) the employer or agent (probably includes subcontractors, no cases found yet to the contrary) had knowledge of the injury or death (b) the deputy commissioner of the relevant compensation office finds that the employer or insurance carrier has not been prejudiced by the failure to give notice (c) the deputy commissioner excuses the failure to give notice because notice was given to someone at the relevant company (just not the right person), or for some satisfactory reason such notice could not be given (d) the employer or insurance carrier did not raise an objection to the failure at the first hearing of the claim 33 USC 912 (d). Failure to post the name of the person that employees are supposed to contact in case of injury is sufficient reason to excuse a late filing by claimant. 20 C.F.R

7 ii. Presumption that Sufficient Notice Was Given LHWCA provides for a presumption that sufficient notice of the claim was given, which can be overcome only with substantial evidence to the contrary. 33 USC 920(b). C. Failure to Timely File Claim/Appeal A claim must be filed within one year of the injury or within one year of the time the claimant is aware or by exercise of reasonable diligence should have been aware of the relationship between the injury or death and the employment. 33 USC 913(a). For situations in which the injury does not immediately result in death or disability, the claimant has 2 years from the time claimant knew or should have known that the injury was related to the employment. 33 USC 913(b)(2). Claims must be filed after the first seven days of disability following an injury or at any time after death. 33 USC 919(a). That is, you cannot file a claim until after at least seven days have passed after the initial disabling injury. Appeals or motions to modify existing decisions must be filed within one year after the last payment of benefits or rejection of claim. Modifications can be applied retroactively only in cases where payment is to be increased. 33 USC 922. Settlements cannot be modified. 33 USC 922. IX. Procedure Initial notice is made to the deputy commissioner of the claims office with jurisdiction over the area where the injury happened, in the case of injuries sustained in Iraq, the LHWC office in New York City.Department of Labor website retrieved February 23, The initial claim is filed with the deputy commissioner who is tasked with trying to get both parties to settle any disputes informally or, in the absence of dispute, issue awards. If informal agreement is impossible, the deputy commissioner must refer the case to an Administrative Law Judge (ALJ) for a hearing. The ALJ decision can be appealed to the Benefits Review Board (BRB). That decision is then appealable to the US District Court for the District where the applicable compensation office is located, in this case the Southern District of New York. The District Court decision can be

8 appealed to the US Court of Appeals, in this case the US Court of Appeals for the Second Circuit. All hearings are open to the public. 33 USC 923(b). X. Filing Claim New claims for Iraq and Afghanistan should be filed at: New York Longshore District Office Post Office Box Varick Street Room 740 New York, NY p: (646) f: (646) XI. Relevant Offices/Levels of Authority/Standards of Review The various fora for review are listed below in order of review: that is, from the office that initially receives the claim to the highest level of review. While the Supreme Court is generally the highest level of review, it has declined to grant cert in any cases thus far arising out of Iraq. A. Deputy Commissioner Within ten days of the filing the deputy commissioner is required to notify the employer that the claim has been filed. 33 USC 919(b). The deputy commissioner is supposed to provide technical assistance to claimants. He/She also helps parties resolve their disputes by way of mutual agreement or compromise without formal litigation. The deputy commissioner conducts informal conferences to this end. Department of Labor Defense Base Act Frequently Asked Questions retrieved February 23, The deputy commissioner can approve settlements and issue compensation awards in undisputed claims. Department of Labor Defense Base Act Frequently Asked Questions retrieved February 23, Within 20 days of notifying the employer, the deputy commissioner must either make a decision or refer the case, upon request of either party to an ALJ. 33 USC 919(d).

9 No one can be required to appear before the deputy commissioner as a witness outside of his state of residence unless his transportation costs and fee for one day s attendance are provided for. 33 USC 924. B. Administrative Law Judge Administrative Law Judge (ALJ) has relatively broad discretion in determining the credibility of the claimant and is not bound to accept the opinion of any experts. See E.S. 40 BRBS 1003 and Carter 40 BRBS 660 citing Atlantic Marine, Inc. & Hartford Accident and Indem. Co. v. Bruce, 661 F.2d 898, 900 (5 th Circ.) C. Benefits Review Board The BRB is authorized to hear appeals from the ALJ decision. 33 USC 921(b)(3). The BRB can remand cases to the ALJ. 33 USC 921(b)(4). The BRB findings of fact are conclusive if supported by substantial evidence in the record considered as a whole. 33 USC 921(b)(3). The BRB is not bound by common law or statutory rules of evidence or by technical or formal rules of procedure, except as provided by the LHWCA. 33 USC 923(a). D. Federal District Court The BRB decision can be appealed to the United States district court in which injury occurred. While the LHWCA states that appeals are to be held by the United States circuit court 33 USC 921(c), the DBA 42 USC 1653(b) has been construed as requiring appeal to be first held at the US District Court for the district in which the relevant compensation office is located. ITT Base Services v. Hickson 155 F.3d 1272, 1275, E. Court of Appeals District Court decisions can be appealed to the Court of Appeals for the relevant circuit. H B Zachry Cojpany v. Quinones 206 F.3d 474 (2000). XII. Fees Travel fees are compensated for if the deputy commissioner requires a witness from far away to appear. 33 USC 924. Expert witness fees are the same as for courts of

10 the United States 33 USC 925 but must be approved beforehand by the hearing officer. Attorney fees can be charged to the employer upon successful grant of an award to the claimant. 33 USC 928. If attorney fees are awarded, expert witness fees, travel fees for witnesses and medical evaluation fees will also be charged to the employer 33 USC 928(d). Penalties for attorneys who accept fees without approval from whichever forum is hearing the case will be fined up to $1,000 and/or imprisoned for up to 1 year. 33 USC 928(e). XIII. Benefits A. Medical Costs Patients are encouraged to get permission from their employer to see a physician of their choice, but even if they cannot due to emergency etc., the employer is bound to pay for all reasonable physician costs, prior to, during, and after adjudication. See Department of Labor website: B. Temporary Total Disability Successful claimants who are shown to be temporarily totally disabled are entitled to 2/3 of their pre-injury salary for the duration of the injury, known as the average weekly wage. See Department of Labor website: The average weekly wage can be calculated three possible ways: (a) by looking at your salary for the year prior to injury if you were employed the same or similar job in which you were injured for that entire year; (b) by looking at the salaries of people in the same class as you if they were employed in the same or similar job for the year prior to injury (note: non-us citizens are not in the same employment class as US citizens, hence a Filipino construction worker in Iraq is not entitled to 2/3 of the salary of a US construction worker in Iraq.) (c) by somehow mixing the salaries of the job you were injured at and the jobs that were available to you prior to that job (this generally means averaging the salary of the job you had prior to Iraq and the job you had after Iraq). This is subject to the maximum weekly benefit as set by the Department of Labor, which is currently $1,160. C. Temporary Partial Disability

11 Successful claimants who are shown to be partially disabled are entitled to 2/3 of the difference between their pre-injury salary and post-injury salary. See Department of Labor website: D. Permanent Total Disability Successful claimants are entitled to 2/3 of the average weekly wage, calculated as described above. Benefits are available for life. See Department of Labor website: E. Permanent Partial Disability Successful claimants are entitled to either 2/3 the difference between pre-injury and postinjury wages or permanent disability for a defined number of weeks as is defined by the Department of Labor Schedule of Benefits. Benefits are available for life. See Department of Labor website: F. Death A deceased worker s wife is entitled to burial benefits of up to $3,000 as well as 1/2 the average weekly wage of the worker, calculated as described above. Benefits are payable for life. See Department of Labor website: G. Aliens and Commutation Medical benefits are not commutable. All other benefits can be commuted for non-us citizens as calculated at 1/2 of the present value of future expected benefits. See Department of Labor website: XIV. Waivers The Department of Labor gives DBA waivers to certain companies upon request, but only does so if the local country where people are employed offers comparable worker s compensation schemes to those workers. See Department of Labor website This means that waivers given for companies working in Iraq are of questionable legality.

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