ing at a construction project for the Army in South Vietnam. Such an employee would be covered by this act? Mr. TINSLEY. That is correct. That is the type of employee who would be covered. Senator YARBOROUGH. And it could be in various parts of the world where alien employees are covered by the act. Would the Secretary, under that discretion, fit the standards to the various standards of living in various parts of the world? Mr. TINSLEY. Under the Federal Employees Compensation Act, this is exactly what we do. Senator YARBOROUGH. In other words, as precedence for this, you have established procedures and experience in this type of administration. Mr. TINSLEY. Yes, sir. Senator YARBOROUGH. That is what the Federal Employees Compensation Act of 1966 provides, a similar discretion? Mr. TINSLEY. A similar discretion. Mrs. PETERSON. This provision is particularly important in the extension of the Longshore Act to the Defense Base Act. Senator YARBOROUGH. Are there any questions by minority counsel? Minority Senators could not be here, but Mr. Mittelman, minority counsel, advised they have a number of questions. They desire to submit them to the Department of Labor in writing. They have not finished the list of questions, but will have them ready for the hearings next week. Although other witnesses will be testifying, they will be transmitted promptly to your Department so that the Department of Labor will have the opportunity to answer those in writing. Mrs. PETERSON. We will be very happy to do this. Senator YARBOROUGH. The order issued earlier for holding the record open until January 15 will remain, of course. Mrs. PETERSON. We are interested that the record be as complete as possible to make wise decisions in this matter. Senator YARBOROUGH. To an injured worker, the most important. thing in the whole world is this act. All other things added together are not as important to him as this act. Still, we have to take these in sequence. The Federal Employees Compensation Act Amendments of 1966 applied, I presume, to over 2 million people, 2,900,000 civilian employees of the Government. Of course, the Age Discrimination Act. applies to about 40 million people and this act to about 1 million workers. To the injured worker under the Longshoremen's Act, it is the most important thing in the world, and his rights under this bill the most important thing in the world. All of the sequential provisions in this bill should probably be considered. Are there any questions by counsel? Senator Morse? Senator MORSE. Due to my being called from the committee room, Mrs. Peterson, there was a portion of your statement that I did not hear you present. At the time I left, I thought you were well underway to making a prima facie case. I shall read your statement and withhold any questions I may have. Senator YARBOROUGH. If there are no further questions, thank you, Mrs. Peterson. With the able attorneys and Deputy Administrators you have described, there will be questions for them submitted to you. Of course, we want this fully understood, fully explained, and everyone to understand what we are voting on before the bill comes up for markup next year before the subcommittee, then the full committee, and then the Congress. I regard this as very important legislation. In my law practice of over 20 years, I have handled workmen's compensation cases under the State laws of my State of Texas. I was trial judge for 5 years and tried workmen's compensation cases, but never any longshoremen and harbor worker cases. I didn't live on the gulf coast. This act applies to a large number of ports in our State, Houston, Galveston, Brownsville, Corpus Christi-all are deepwater ports, with ships from all over the world coming there. We have quite a volume of shipping, particularly with liquid products such as petroleum and petroleum products. Two or three years ago they had the figure that 10 percent of the gasoline in the United States was refined in the Beaumont-Port Arthur-Orange triangle. It is a vast tonnage of liquid products which are not noted as much as dry products that you unload. Of course, most of the grain goes out from Houston and Galveston. There is cotton from Cornus Christi, Houston, Galveston, and Brownsville. Millions of bales of cotton are brought from Mexico and shipped from the Brownsville port. It is brought in under bond. It is not considered as imported or exported into the United States, but it is handled by the longshoremen and is a great volume of business. So I know this act through others, through the years, in my own State, who I practiced law with. We have our Texas Workmen's Compensation Act and having some familiarity with that, I know how very important this legislation is. As I hear your explanation, and having practiced law, provision after provision will have differences of opinion. So we have our work cut out for us. I feel greatly encouraged that the ranking majority member of this Subcommittee on Labor beat out this bill on the anvil of experience, and the most knowledgeable labor lawyer in the Congress at this time, and I think the most knowledgeable labor lawyer in the history of the Congress. Like most of us, he didn't have to learn the law after he got here. He knew it when he came here. I have made this statement often: That there wasn't one lawyer out of 100 in the United States who was competent to represent either an employer or a labor union in a labor dispute. I don't mean competent. in basic intelligence, but he wasn't trained. This is a very specialized field of law. There isn't one lawyer in 100 who knows enough about labor law, if you get into a labor dispute, in a dispute over wages and working conditions. I think it is less than 1 percent of the lawyers of the country who are informed enough to represent their respective clients, be it labor or management. So we are very fortunate in having a man here who has administered labor law in the executive department for years, in World War II, and a dean of a law school before he came to the Congress, to bring his great knowledge of labor law to this hearing. Senator MORSE. Mr. Chairman, I would like to make a request of Mrs. Peterson and the Department. Let me say, irrespective of what you say, that this is the only way we can learn, carrying out our duties as Senators in connection with a matter as complicated as this bill. I am sure, because I have talked to some of them, that the employers, when they present their case, in chief, next week, will stress their concern about so-called third-party suits. I would like to have counsel for the Department prepare a memorandum for insertion into the record dealing with this subject matter after the Department has had an opportunity to hear both the employers and the unions, with the understanding from the chairman, of course, that the parties would be allowed to file a surrebuttal. I think we need to be sure that we make a record dealing with this contested area, which represents a great concern on the part of the employers, in respect to third-party suits. So after the employers and the unions complete their case in chief, I would like to have the Department file a memorandum on the subject matter. it. Scannng the statement you made this morning, you did not go into Mrs. PETERSON. I did not go into it. Senator MORSE. I do not think this record would be complete from the administration standpoint without a statement of the administration's position. Also, Mr. Chairman, I would suggest that the Department of Labor-not that I don't have complete confidence in its legal counselshould also touch base with the Department of Justice in respect. to the memorandum that it files with us so that both sides will know, at least, what the opinion of the legal branch of the Department of Justice is in regard to their particular subject matter. Mrs. PETERSON. Yes, we will be very pleased to do this. I am aware of the complication of third-party suits with respect to longshore employment. I was not really sure that this subject should be handled with longshore compensation problems. I think your request for comments is very wise. We will be very pleased to do this. I think also we should cooperate and coordinate with the Department of Justice. I will see that this is done. (The memorandum requested follows:) Hon. RALPH YARBOROUGH, ASSISTANT SECRETARY OF LABOR, Chairman, Labor Subcommittee, Senate Committee on Labor and Public Welfare. Washington, D.C. Dear Mr. CHAIRMAN: During my testimony on S. 2485 on November 15, 1967. Senator Morse asked the Department of Labor to prepare a memorandum for insertion in the Record dealing with the subject matter of third party suits under the Longshoremen's and Harbor Workers' Compensation Act. I am attaching such a memorandum covering a full explanation of the history, background, and court decisions as well as prior and present positions of the Department of Labor concerning legislatioin having the effect of eliminating these suits. Supplementing this memorandum, I wish to comment briefly upon these suits and the position of the Department that they should not be restricted by proposed legislation. Before the enactment of the Longshoremen's and Harbor Workers' Compensation Act, the longshoreman had a right of action for negligence, in the given case, not only against the stevedoring company under the Jones Act, but also, under admiralty law, against the shipowner. After the Longshoremen's and Harbor Workers' Compensation Act was enacted in 1927, any liability of the stevedoring company under the Jones Act ceased, but the liability of the shipowner to the longshoreman for negligence continued. At the same time, the stevedoring company, employing the longshoreman, is liable to the shipowner whenever his, the stevedoring company's negligence is responsible for the injury to the longshoreman, resulting in the above-described liability of the shipowner to the longshoreman. However, in order to prevent. in these cases, an unfair recovery by the longshoreman from the stevedoring company and unfair payments by the stevedoring company, the Longshoremen's and Harbor Workers' Compensation Act also provides that where such recoveries occur under actions brought within the prescribed time limit, then compensation under that Act ceases until the amount of compensation which would have been paid equals the amount of the recovery by the longshoreman against the ship owner. While there are other ramifications of third party suits, the above explanation summarizes their general operation and effect, which are to enable the injured longshoreman to recover, under admiralty law, such amounts as may be due on account of the negligence of the stevedoring company, over and above the compensation payments required under the Longshoremen's and Harbor Workers' Compensation Act. While in some instances the stevedoring company is found to be liable to the shipowner for the damages recovered by a longshoreman against such owner, the Department, as you know, has consistenly taken the position that the recovery from the latter is a fair and equitable payment to the longshoreman. Accordingly, we have opposed bills which, in general, make the remedies under the Longshoremen's and Harbor Workers' Compensation Act exclusive, not only as to the stevedoring company, as it is at present, but also as to the shipowner. I am also enclosing other material requested at the hearing. Yours very truly, Enclosures. ESTHER PETERSON, MEMORANDUM FROM DEPARTMENT OF LABOR ON THIRD PARTY SUITS UNDER THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT PURPOSE OF MEMORANDUM This memorandum is submitted in response to a request from Senator Morse to Assistant Secretary of Labor Esther Peterson at the hearings November 16, 1967, on amendments to the Longshoremen's and Harbor Workers' Compensation Act Proposed by S. 2485.1 At further hearings on November 29, 1967, a representative of a number of maritime associations recommended an amendment to section 5 of the Act "Exclusiveness of Liability." In addition to analyzing the case law relating to third party actions under the Longshore Act, the memorandum includes a brief discussion of Legislative proposals to eliminate third party liability actions made in 1926 at the time the Act was first considered and in subsequent years. None of these proposals was acted upon. PROPOSED AMENDMENT OF REPRESENTATIVE OF MARITIME ASSOCIATION "SEC. 5. The liability prescribed in section 4 of this title of an employer or ressel upon which or in connection with which injury occurs, shall be exclusive and in place of any and all other liability of such employer or vessel to the employee, his legal representative, husband or wife, parents, children, dependents, next-of-kin, and anyone otherwise entitled to recover damages from any such employer or vessel at law or in admiralty on account of such injury, death or disa 1 S. 2485 includes no provision relating to third-party suits. bility, except that if the employer or vessel fails to secure payment of the compensation as provided by this chapter, etc." [amending words underscored] The effect of the proposed amendment, with conforming amendments also recommended and attached, would be to bar third-party suits by an employee covered by the Longshore Act except those completely unconnected with the vessel or not attributable to a shipowner or stevedore contractor or officer or member of a crew. EARLY CASES ON THIRD-PARTY LIABILITY Prior to the adoption of the Longshoremen's Act in 1927, the Supreme Court of the United States held in International Stevedoring Co. v. Haverty, 272 U.S. 50 (1926), that a longshoreman who was injured in loading or unloading cargo was a seaman within the meaning of the Jones Act of June 5, 1920, (46 U.S.C. 688). Accordingly, the Court concluded that such a person might sue his employer for negligence under that Act. In the year following the court's decision, this right of a longshore seaman to sue his employer under the Jones Act was removed by the enactment of the Longshoremen's and Harbor Workers' Compensation Act. See Swanson v. Marra Bros., 328 U.S. 1 (1946). In lieu of his former Jones Act right, the longshoreman-employee was given compensation benefits which were not dependent upon any act of negligence or fault on the part of the employer. With respect to any injury to the longshoreman which might have been occasioned by the act of a third party, the longshoreman's right of action against such tortfeasor remained unaffected by the compensation legislation. Included in this third party right was the right of the injured man, or his survivors, to sue the shipowner for unseaworthiness in the same way as an ordinary member-of-a-crew seaman might do. Seas Shipping Co. v. Sieracki, 328 U.S. 85 (1946). This conclusion was predicated upon the theory that a longshoreman, or stevedore, was entitled to the same traditional protection accorded all seamen-a protection which a shipowner could not contract away by having its work performed by some stevedoring company. Subsequently, this right was extended so as to apply not only to persons performing traditional or orthodox seaman's work of loading or unloading a vessel, but also to the work of a carpenter engaged in repairing the loading equipment of the vessel. Pope & Talbot, Inc. v. Hawn, 346 U.S. 406 (1953). The doctrine of unseaworthiness also was applied to shipowners where the injuries occurred as a result of equipment provided by the stevedoring contractors who employed the injured employees. Alaska Steamship Co. v. Petterson, 347 U.S. 396 (1954); Rogers v. United States Lines, 347 U.S. 984 (1954). MORE RECENT CASES In 1956, the Supreme Court held in Ryan Stevedoring Co., Inc. v. PanAtlantic Corp., 350 U.S. 124, that a longshoreman's employer might be held liable to a shipowner for damages paid by the latter to the injured longshoreman in a third party action. This result was bottomed upon the existence of a contractural obligation of indemnity, expressed or implied, flowing from the stevedoring concern to the third party shipowner. Section 5 of the Longshoreman's Act, which provides that the liability of an employer for compensation under that Act shall be exclusive and in place of all other liability of the stevedoring company to its employee-the longshoreman-was held not to preclude liability on the indemnity warranty. Weyerhaeuser S. S. Co. v. Nacirema Co., 355 U.S. 563 (1958), involved the respective recovery rights of a longshoreman and the owner of the ship on which he was injured. The longshoreman was injured in Boston by a board which fell from a temporary winch shelter previously erected in New York by his stevedore-employer. Due to the flimsy nature of these structures they are customarily dismantled by the ship's crew when the vessel leaves port. In this case, the shelter was not removed, but was still in place when the ship arrived in Boston. The longshoreman sued the shipowner claiming both negligence and unseaworthiness, and the latter impleaded the stevedore company, claiming a right of indemnity. The employee recovered on the issue of negligence but not seaworthiness, so the trial court directed a verdict for the impleaded stevedore. The Supreme Court held that the shipowner was entitled to a jury determination of the merits, stating that the stevedore's duty to perform with reasonable safety related not only to cargo handling, but also to the use of equipment incidental thereto, including the winch shelter; and that if "a substandard performance ... led to foreseeable liability of [the shipowner], the latter was entitled to in |