LONGSHOREMEN'S AND HARBOR WORKERS'

AMENDMENTS

TUESDAY, JANUARY 30, 1968

U.S. SENATE,

SUBCOMMITTEE ON LABOR OF THE

COMMITTEE ON LABOR AND PUBLIC WELFARE,

Portland, Oreg.

The subcommittee met at 9:30 a.m., pursuant to recess, in the Auditorium of the Department of Interior Building, Senator Ralph Yarborough (chairman of the subcommittee) presiding.

Members present: Senators Yarborough and Morse.

Committee staff members present: Robert O. Harris, counsel; Eugene Mittelman, minority counsel; and Peter C. Benedict, minority labor counsel.

Senator YARBOROUGH. The Senate Subcommittee on Labor will come to order and the hearing is resumed on S. 2485.

The witnesses this morning are Mr. Francis J. Murnane and Mr. Julius Stern of the International Longshoremen's and Warehousemen's Union.

Mr. Murnane, I believe you are elected to be the first witness. Go right ahead and present your testimony in your own way.

STATEMENT OF FRANCIS J. MURNANE, REPRESENTING INTERNATIONAL LONGSHOREMEN'S & WAREHOUSEMEN'S UNION, SAN FRANCISCO, CALIF.

Mr. Chairman, I am Francis J. Murnane, and with my colleague, Julius Stern, of San Francisco, I represent the International Longshoremen's and Warehousemen's Union, which embraces membership in Oregon, Washington, California, Alaska, and Hawaii.

I would like to say, Senator Yarborough and Senator Morse, before I get into my prepared statement that as President of the Portland Longshoremen's Union I am glad that this distinguished committee has come to the Kingdom of Roses. I would like to point out that it isn't often that nature bestows such a beautiful ermine robe to welcome visitors, but she did for you gentlemen. You will notice that, knowing of your eminent departure, the ermine robe is being removed cheerfully and with considerable dampness.

Senator YARBOROUGH. Thank you. I thought it was going to freeze the witnesses in so they would have to testify before they could flee the committee's presence.

Mr. MURNANE. I also want to thank you personally, Senator Yarborough, for the way you lauded the achievements of Senator Morse when this hearing opened in Washington, D.C., and also here in Port

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land, because I am one of those who feel that Senator Morse, in his record of achievements and arbitration cases, in progressive legislation, and many humanitarian endeavors, has set an example that is certainly beneficial to all Americans. I am one of hundreds of thousands of Oregonians who are determined that this pleasant view of you and Senator Morse will continue through the years, that you will be working together. I can assure you that all of us are indebted to Senator Morse for the way he has distinguished this State, and I personally thank you for pointing that out in the record of this

case.

Senator YARBOROUGH. I am glad to hear you say that, Mr. Murnane. Of course, I speak not as an Oregonian but as one who represents another State. I concur with what you say in what he has done for the whole American people and as a Member of the U.S. Senate and for the United States through his membership there. He is one of the most distinguished Senators of all times.

Mr. MURNANE. I would like to also explain, gentlemen, that I am a working longshoreman although I am president of the Portland Longshoremen's Union. Tomorrow, when these hearings will have concluded, I will be back on the job at the point of production, so that the things discussed here and in Washington, D.Ĉ., are a matter of personal concern to me and to those with whom I work.

Mr. Chairman and distinguished members of the Senate subcommittee, considering needed improvements to the Longshoremen's and Harbor Workers' Compensation Act by means of Senate bill 2485: It is a privilege to appear before this honorable body representing the International Longshoremen's and Warehousemen's Union embracing members in the States of Oregon, Washington, California, Alaska, and Hawaii, to urge the adoption of much needed improvements and a substantial increase in benefits.

This acts, which was adopted in 1927, has been amended seven times in order to meet changing conditions and to provide greater protection to disabled employees and their families. The maritime industry, as you gentlemen know, is among the most hazardous in the United States. These inherent dangers persist despite extensive safety programs fostered by our union and the Pacific Maritime Association and the outstanding cooperation extended by the Bureau of Labor Standards of the U.S. Department of Labor.

The proposed bill, S. 2485, would increase the present maximum amount from $70 per week to $105 per week. Based on the average wages of west coast longshoremen for the years 1966 and 1967, this figure is much lower than it should be. All available data (provided by the Pacific Maritime Association) indicates that earnings now approximate $10,000 a year. We, therefore, respectfully recommend that the sum of $121 per week, formerly the maximum under the Federal Employees Compensation Act, be substituted.

The importance of adequate compensation has been recognized by the American College of Surgeons and the American Medical Association. The surgeons stated that provision must be made for "adequate compensation to secure family security during the entire period of disability and rehabilitation." The AMA stated: "Workmen's compensation is not a relief program. It is the proper intent of the program that a disabled employee and his family should not suffer a serious

reduction in normal living standards during the rehabilitation period. This requires that the benefit level be maintained at an adequate percentage of usual wages, and include reasonable expenses incurred by the employee in the course of the rehabilitation process."

What a contrast between the statements of trained medical men and skilled surgeons with the statement of a witness who previously testified in Washington. This man displayed a callous lack of concern for injured workers when he seriously suggested that benefits be increased from $70 per week to $74 per week.

Although I understand from later conversation that this gentleman meant this would apply only to his particular area of the country. I wonder if employers and others who resist the needed improvements in the act could support their families, make house payments, send children to school, drive an automobile, and provide food, all on $75 per week, or even $70 per week. I would like to point out that the recently published City Worker's Family Budget as of 1966 calls for $176 weekly income as a moderate standard of living for a family' of four. Eighty percent of this is for goods and services. Under the present maximum, a family of four, headed by a disabled worker would have to eke out an existence on little more than one-third, namely, 40 percent of this amount. It is truly saddening to hear the plea of an employer's representative that our members, geared to a decent American standard of living, and who work to make America a great Nation, should take such a reduction. This in spite of the fact that the underlying principle in most workmen's compensation laws concedes that the great majority shall receive indemnity benefits in amount equal to at least two-thirds of the actual wage loss during the period of total disability.

Why shouldn't a worker be paid for his pain and suffering? Of course, by this I mean his injury. Why should a worker be subjected to a campaign to have special legislation enacted against him? Compensation benefits should be upgraded; not downgraded. It would be helpful if the worker could sue his employer when such employer is clearly negligent. One hears the complaint that the injured worker sues the shipowner and then the shipowner gets indemnity under the act against the direct employer, because it is really the direct employer's fault. It would be helpful if an injured worker could obtain full indemnity when he gets hurt because of the fault of others. For example, if a Congressman is struck by a drunken driver and lands in the hospital for 6 months, loses a leg, and has phantom pains for the rest of his life, he has a right to be paid for such suffering by direct suit against the offender. In England, an injured worker can sue his employer where such employer is negligent. I have little patience with those who endeavor to smear the U.S. Supreme Court because it has been liberal in extending the rights of workers to obtain full indemnity for injuries.

It is recognized that an employer who has a breach of contract suit against a firm expects to be paid full damages either by settlement or through a lawsuit. The laws of the land properly safeguard such procedures. We, as consumers, if we are injured because of negligent manufacture, can sue the manufacturer and recover fully for our loss Such procedures are fundamental and reminds one, when hearing shotgun blasts against the courts, administrative agencies, and capable

attorneys who successfully represent injured workers, "it all depends on whose ox is being gored."

It appears to me that whenever workers plead for an increase in compensation and allied benefits in order to keep pace with cost-ofliving increases employers and their spokesmen are in the forefront striving to prevent just recompense. I have observed, too, that invariably such arguments are directed not only against the workers but also against the honesty and dedication of those who administer such laws.

When I view the magnitude of the efforts being expended to prevent the passage of S. 2485, I cannot refrain from recalling the speech made before a business group by Mr. Charles Luckman when he was president of Lever Bros.:

Why is it that during the past 20 years American business has become identified in the public mind as opposed to everything that spells greater security, wellbeing, or peace of mind for the little guy? We got the reputation we have because, by and large, we earned it. How? Well, we declared war on collective bargaining. We actually opposed increased taxes for education. We fought health and safety measures. The record proves that we battled child-labor legislation. We yipped and yowled against the minimum-wage laws. We struggled against unemployment insurance. We decried social security, and currently we are kicking the hell out of legislative proposals to provide universal sickness and accident insurance *** Where on the record is there is a single example to show that big business ever initiated a leigslative program of benefits for workers? It is not clear that they have always waited until they were asked or forced to do something?

Fortunately for the American workers the record of Congress is much better than that of the business interests described by the iconoclastic Mr. Luckman. As a representative of the international union, and as president of the Portland Longshoremen's Union, it is my intention to report to the members that this subcommittee is sincerely interested in their welfare and are aware that constructive revisions are needed in the Longshoremen's and Harbor Workers Act. At the hearings in Washington I heard a witness bewail about the activities of attorneys who won difficult compensation cases before administrative hearings and before the courts of the land. It all sounded like sour grapes to me. Is it possible that injured workers are led by divine providence to the more capable, more dedicated attorneys who brilliantly thwart the best efforts to trample on the rights of the injured? Or is it more likely that the cause of such injured workers is so main fest that the courts resolutely set things right?

Let us consider the matter of attorneys and their fees. The matter of fees in third-party cases could be resolved very easily by limiting such fees to 25 percent of recovery on a net basis; by this, I mean after all costs are paid and after the employer and insurance company have been fully reimbursed for compensation and medical benefits. In short, follow the pattern of the Federal Torts Act. This would prevent the few—and I am certain that there are only a few-who might take advantage of injured workers.

In this area, we have two large insurance carriers, Fireman's Fund, which handled all the employers' business with the exception of two companies. The larger of the two, W. J. Jones & Son, is insured by the National Auto and Casualty Co., the other is the Portland Stevedoring Co., a self-insurer up to a limited amount of money, the balance being covered by Lloyds of London.

The Portland Stevedoring Co. and Fireman's Fund is represented by the law firm of Gray, Fredrickson & Heath, who handle all claims involving compensation cases affecting our members. Mr. Dennis J. Lindsay's office handled the compensation cases for W. J. Jones Co., the largest of the waterfront employers in Oregon. I cannot help wondering what the company lawyers are paid. I am sure that the attorney who handles our claims would be glad to exchange fees with

them.

It is indisputable that our members have to fight in the courts to obtain what is rightfully theirs. Schneider's Third Edition on Workmen's Compensation deals brilliantly with this question. If the compensation benefits were as high as the situation warrants, none of us would have to go to the courts.

Section 28(a) is a step in the right direction. Despite some indicated unwillingness to ascribe impartiality to deputy commissioners, such an official is more likely to deal honestly and fairly with the injured worker than the employers and the insurance carriers. Facts are stubborn things; and it is a stubborn fact that the carriers and employers are in business to make profits. Cutting down on a claim is the key to a profitable enterprise; never mind the misery and hardship that such callousness may cause. It is an exercise in glibness to impugn the honest administration of the act through the deputy commissioners. To provide proof is something else entirely.

A speaker was highly critical of the deputy commissioners who administer this act. All I can tell you concerns our personal experiences of relationships in the administration of the act with Commissioner J. J. O'Leary of the 13th Naval District. He has, and is, administering the act honestly and fairly. I suspect that such attacks are inspired because of the paucity of substantiating evidence; too often the temptation arises to pillory an individual.

My colleague, Julius Stern, welfare director of ILWU Local 10 in San Francisco for many years, one of the founders of the union, and a man who has become a recognized expert on compensation cases, can attest to the impartiality, honesty, and dedication of such men who serve in his home State.

The proposal to repeal subsection (m) of section 14 is a just and long-overdue proposal. This eliminates an artificial barrier. This provision not only worked to the advantage of the employer on unscheduled disability but also scheduled disability.

Section 5 proposes to extend serious disfigurement to areas of the body other than the head and face so that it will include the normally exposed areas of the body. I remember a witness making much of a slight scar on his face and questioned the good faith of the commissioners in administering this portion of the act. He failed to mention that under the existing provisions of the law, if a man has all his teeth knocked out in an accident, it is not considered a facial disfigurement. It might be well to broaden the proposals so that an allowance is made for such loss of teeth.

Section 9 of the proposed amendments would increase the death benefits, yet they still seem rather inadequate to support a mother and her children. Such mothers frequently must obtain a job to supplement her income, resulting in children being denied a stable homelife and the assurance that "mother will always be there." It is my hope