LONGSHOREMEN'S AND HARBOR WORKERS'

AMENDMENTS

WEDNESDAY, NOVEMBER 29, 1967

U.S. SENATE,

SUBCOMMITTEE ON LABOR

OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C. The subcommittee met at 10:05 a.m., pursuant to recess, in room 4232, Senate Office Building, Senator Ralph Yarborough (chairman of the subcommittee) presiding.

Members present: Senators Yarborough and Morse.

Committee staff members present: John S. Forsythe, general counsel to the committee; Robert O. Harris, counsel to the subcommittee; Eugene Mittelman, minority counsel; and Peter C. Benedict, minority labor counsel.

Senator YARBOROUGH. The Subcommittee on Labor will come to order, and the hearing will continue on S. 2485, to amend the Longshoremen's and Harbor Workers' Compensation Act to improve its benefits, and for other purposes.

And the witness today, the first witness will be Mr. Edward D. Vickery, attorney at law of Houston, Tex., of the firm of Royston, Rayzor & Cook, speaking on behalf of the Houston Maritime Association, Galveston Maritime Association, and other maritime associations, listed. Mr. Vickery, come forward, and if you have anyone with you whom you desire to sit with you with briefs or data or associate counsel on statistician, bring those with you.

STATEMENT OF EDWARD D. VICKERY, ATTORNEY AT LAW, HOUSTON, TEX., ON BEHALF OF THE HOUSTON MARITIME ASSOCIATION, THE GALVESTON MARITIME ASSOCIATION, THE BROWNSVILLE MARITIME ASSOCIATION, THE NEW ORLEANS STEAMSHIP ASSOCIATION, THE MOBILE STEAMSHIP ASSOCIATION, THE PENSACOLA STEAMSHIP ASSOCIATION, AND THE TAMPA MARITIME ASSOCIATION

Mr. VICKERY. Thank you very much, Senator Yarborough. We Texans are rather independent, as you know, so I will try to row this boat by myself, if I may.

Senator YARBOROUGH. The Senate is in session now; we have gotten special permission from the Senate to meet while the Senate is in session. However we shall, of course, have to interrupt testimony whenever a vote occurs. The first vote will probably be about 10:30.

We will have to leave for other votes, too. The bill on the floor is a bill for which I have great responsibility, so I won't be able to attend all the hearings this morning. This is the postal rate increase and the Federal pay bill for 2,900,000 Federal civil employees, about 3 million Federal civil employees, and chairman of the Post Office Committee and ranking majority member on the Post Office and Civil Service Committee, I am supposed to be on the floor helping Mike Monroney floor manage the bill, so I make that explanation as to why I will not be able to be here all the morning. However, Senator Morse has agreed to conduct the hearings in my absence.

Mr. VICKERY. Yes, sir.

Senator YARBOROUGH. In fact, this hearing also is particularly important, because it has been postponed once, and we wanted to have an opportunity to hear you this year, before the matter is recessed until next year.

Mr. Vickery, will you proceed in your own way?

Mr. VICKERY. Thank you very much. I appreciate the special consideration accorded to us today and the opportunity to appear before the committee.

(The prepared statement of Mr. Vickery follows:)

PREPARED STATEMENT OF EDWARD D. VICKERY, ATTORNEY AT LAW, HOUSTON, TEX., ON BEHALF OF HOUSTON MARITIME ASSOCIATION, GALVESTON MARITIME AssoCIATION, BROWNSVILLE MARITIME ASSOCIATION, NEW ORLEANS STEAMSHIP AssoCIATION, MOBILE STEAMSHIP ASSOCIATION, PENSACOLA STEAMSHIP ASSOCIATION, TAMPA MARITIME ASSOCIATON

I am E. D. Vickery, a senior partner in the law firm of Royston, Rayzor & Cook, of Houston and Galveston, Texas. The Associations listed above who have asked me to represent them at these hearings are composed primarily of steamship owners, steamship agents and stevedoring contractors on the Gulf Coast from Florida to the Mexican border.

Our law firm specializes in admiralty and maritime law and since I first became associated with this firm in 1948 upon graduation from law school, I have actively handled claims on both a formal and informal basis under the Longshoremen's & Harbor Workers' Compensation Act. During this time, I have also observed the almost complete emasculation of the so-called exclusive liability provisions in Section 5 of the Act by the Federal Courts. The result being that the limited liability which Congress intended that anyone employing longshoremen and harbor workers should have under the Act has virtually become an idle dream. This, for the reason that the longshoremen and harbor workers not only receive as a minimum the compensation and medical care under the Longshoremen's Act, but in most instances either through a direct action against their employer or indirectly through an action against the vessel as a third party, they are permitted to recover whatever damages might be assessed by a Court or jury based on either the alleged negligence or unseaworthiness of the shipowner or of their own employer. While it may sound immodest, I do not think it is inaccurate to say that I have lived almost daily during the 19 years of my professional career as a lawyer with this Act and the various types of litigation arising in connection with it.

During the last two years I have also had the privilege of observing and working with the American maritime industry, as the National President of The Propeller Club of the United States, an organization devoted to the promotion of a strong, modern and efficient American Merchant Marine and related maritime matters. This has given me the opportunity to observe on a nationwide basis the problems and difficulties besetting employers of maritime workers in connection with the Longshoremen's Act and the emasculation of some of its provisions by the Courts. In this way, my personal experiences in my own area have been confirmed as substantially true on a nationwide basis.

The Longshoremen's & Harbor Workers' Compensation Act was originally passed in 1927 and except for the periodic amendment of it to liberalize the

benefits payable under the Act, it has remained substantially unamended since that time. The present Bill before this committee is another bill which deals almost entirely with amendments to the Act to drastically increase the benefits payable under the Act. Except for those portions of the bill which deal with the so-called user charges, all of the other amendments are designed to substantially liberalize benefits payable under the Act. No proposal is made to in any way deal with the provisions of the Act which are producing substantial injustices and inequities insofar as employers covered by the Act are concerned. When substantial new concepts such as those proposed in the present bill are being suggested insofar as benefits are concerned under the Longshoremen's Act, the associations which I represent believe that it is time that a study in depth into the Longshoremen's Act should be made to eliminate inequities which exist in and which have been sanctioned by the Act through judicial interpretation, or as some people like to call it, through judicial legislation.

While I propose to discuss both the present Bill and its potentials, and then discuss briefly other amendments to the Act which should be made to cure inequities that exist in it, one of these inequities is so gross that a brief mention of it here seems appropriate.

The foremost inequity which has been brought about by judicial interpretation or judicial legislation is that occasioned by the decisions of the United States Supreme Court in the Sieracki and Ryan cases, which involved third party liabilities ultimately to be paid by the employer and in the YAKA case which involved a direct action for unlimited damages against the employer, himself. Both Ryan and YAKA are directly contrary to the plain language of Section 5 of the Longshoremen's Act. Since one of the witnesses who will follow me will deal with this problem of third party and YAKA liability in detail, to avoid as much duplication as possible, I will defer substantially to his presentation to the committee. Suffice it to say that no other worker in the United States, and probably in the world, has as many remedies against his employer other than compensation as do those workers covered under the Longshoremen's & Harbor Workers' Compensation Act. Even the seamen who sail the ship on hazardous seas do not have as many remedies as the longshoremen and harbor workers. The Longshoremen receive not only the compensation provided by the Act, but in a substantial majority of the cases, whatever damages a judge or jury might find that he sustained as a result of the injury in excess of his compensation benefits. The costs of these additional remedies to the maritime industry are staggering indeed. It is respectfully suggested that this committee not only should but must address itself to this substantial inequity and injustice.

I will now turn first to a consideration of the specific amendments proposed to the Longshoremen's Act by S. 2485.

In the relatively brief period since these hearings were called it has not been possible to obtain accurate estimates on what the additional cost of all these proposed amendments will be, but preliminary figures indicate that the cost increase will be well in excess of 30% if all of the proposed amendments are enacted. Likewise it has not been possible to assemble detailed wage information with respect to the proposed increase in the weekly compensation rate. It is respectfully submitted that the record should be left open or additional hearings held when more detailed informaiton is available on these two matters which must be carefully considered in this Committee's determination of what amendments should be made to the Act.

SUMMARY OF AND COMMENTS ON S. 2485 TO AMEND THE LONGSHOREMEN'S AND HARBOR WORKERS' COMPENSATION ACT

For convenience of discussing the various sections of S. 2485, we will use the Summary of its provisions from the Bureau of Employees Compensation immediately prior our comments.

Section 1: Title-Designates title "Longshoremen's and Harbor Workers' Compensation Act Amendments of 1967."

Section 2: Waiting Period-Amends section 6(a) of the Act to permit payment of compensation without a waiting period when the disability exceeds 21 days. A three day waiting period is now specified unless the disability exceeds 28 days. Comment: This amendment requires payment of compensation from the date of the injury if the disability exceeds 21 days which is a change from the present law that requires a disability to exceed 28 days before compensation must be paid for the first three days of disability. This may not be of much significance but

the Bureau of Employees' Compensation should have statistics to indicate the impact of this amendment which should be made available to all interested parties.

Section 3: Maximum and Minimum-Amends section 6(b) to increase the maximum of $70 a week to $105; the minimum from $18 to $35; and repeals section 14 (m) which provides a limit of $24,000 on money allowance benefits for temporary and partial disability.

Comment: The proposed amendments in this section deal with two separate and distinct matters. The first increases the maximum weekly compensation from $70 a week to $105 a week and the minimum from $18 to $35. In the short time available to prepare for these hearings it has not been possible to obtain wage information from ports all over the country on the average earnings of longshoremen and only limited information is available from the Gulf ports that I represent. Some increase in the weekly compensation rate may be indicated when the wage information is available from all over the country, although the incomplete information we have been able to obtain to date from the ports of Houston, Galveston, New Orleans, Mobile and Tampa indicates the average weekly wages overall for these 5 ports to be approximately $110 per week. Compensation on the present basis of % of this would mean an increase in the maximum rate to about $74 would be all that was indicated.

It is respectfully suggested that the record should be held open in order that full information may be made available before a decision is made on this proposed amendment.

A real danger from the standpoint of costs and the practical administration of the Act is in Section 3, paragraph (b) of the proposed amendment which provides for the repeal of subsection (m) of Section 14 of the Act. The repeal of this section would eliminate all monetary limits on benefits payable under the Act except the weekly maximum. At this time there is no limit on the benefits payable under the Act for total permanent disability or for death, but for all other disability the present Act provides a maximum of $24,000. The repeal of Section 14(m) would mean that any award of compensation for permanent loss of wage earning capacity would have to be paid throughout the continuance of this disability and as the Act has been administered in the past this would mean for the balance of the longshoreman's life. For example, any longshoreman who receives an injury to his back that results in any permanent loss of wage earning capacity would have to be paid for this loss for the balance of his life. This is a very dangerous and a very expensive proposal for it usually takes very little evidence to convince the deputy commissioner that a longshoreman has some permanent loss of wage earning capacity under the Act which would permit the deputy commissioner to put him on a weekly payment that could run for the balance of his life at $5, $10, $15 a week or whatever sum the deputy commissioner might determine. We think it very important to maintain the monetary limitation in Section 14 (m) and believe that the proposed repeal of it is inadvisable. This is particularly true since it is extremely difficult to get an order entered terminating these payments upon a showing of a change in condition or mistake in a determination of fact, in view of the human reluctance of a deputy commissioner to admit he was in error in finding his loss of wage earning capacity to be permanent in the first place. If the weekly compensation rate is increased a proportionate increase in the monetary maximum should probably be made. For example, if the weekly rate goes to the full $105 proposed, since the present maximum in 14(m) is $24,000, the new maximum on a proportionate basis would be $36.000.

Doing away with all monetary limitations as proposed will make it almost impossible for an insurance carrier to adequately reserve its cases from which reserves insurance rates are determined. The employer is the real loser here as the rates will have to increase substantially. The problems and difficulties this amendment would cause so far outweigh any real benefit to injured workers that it should not be enacted.

This is not a major problem now for the many imponderables in all other cases are not present in death and total permanent disability cases to which no limitation is applicable now.

Section 4: Re-examination costs-Amends section 7(e) which provides that when the deputy commissioner believes that a medical examination has not been impartial he may require an examination by a physician of his own selection and charge the cost of the second examination to the carrier if the first examination is shown not to have been impartial. The amendment permits

the deputy commissioner to charge the second examination to the carrier whether or not partiality in the first examination is shown.

Comment: We do not believe that any amendment is indicated to this section of the Act and that the amendment as proposed is an open invitation to the deputy commissioners to have nearly every claimant claiming any permanent disability examined by a doctor of their selection and charge the cost of this examination to the insurance carrier. What the proposed amendment does is permit the deputy commissioner in his discretion to charge the cost of any examination he might order to the carrier and this even though the treating physician selected by the employee himself from a panel of doctors approved by the Deputy Commissioner has been fair and impartial in assessing the amount of disability. Since the deputy commissioner can obtain examinations of claimants through the United States Public Health Service facilities at no cost to himself or to the injured employee, and the employee chooses his doctor from a panel of physicians all of whom must be approved by the deputy commissioner, there is no need for this amendment. Of course it will be contended that you have to assume that the deputy commissioners will not order examinations as an almost invariable practice, but our experience indicates to us that we must be skeptical that this would be the approach taken by the deputy commissioners and especially so if the employee requested it. Additionally, it is potentially a powerful weapon which could be used by the deputy commissioners to force acceptance of their recommendations in excess of the estimates made by the treating doctor or doctors or even to force employers to use doctors that they consider not adequately qualified.

Section 5: Disfigurement—Amends section 8(c) (20) to expand the meaning of compensable disfigurement to include disfigurement of the face, head or neck, or of any normally exposed area likely to result in failure to obtain or hold employment.

Comment: This amendment does not increase the compensation for disfigurement but extends it from the areas now covered of the face, head or neck to "any normally exposed areas likely to handicap the employee in securing or maintaining employment." The Bureau of Employee's Compensation's justification for this amendment is the fact that the Act also applies to the District of Columbia and there are many occupations in the District where disfigurement of other normally exposed areas of the body serve as a handicap to employees in the District of Columbia in securing or maintaining employment. While acknowledging that this would probably not apply to a manual laborer such as a longshoreman, we are skeptical about the deputy commissioners following the purpose of this amendment and limiting it to those situations in which a person is likely to be handicapped because of some disfigurement of other normally exposed parts of his body. We are skeptical because the interpretation of the words "serious disfigurement" in the statute as it now stands as applied by the deputy commissioners with whom we have come in contact is not very realistic. It is our experience that almost any sort of a scar of any kind on the face, head or neck results in some monetary award to the injured longshoreman and this even though the scar might be noticeable only upon a reasonably close inspection. They are only $100, $200, or $300 in many instances, but we are inclined to believe that if this amendment is made that almost any laceration which produces any kind of a scar on a normally exposed part of a person's body is going to have to be compensated for on the same basis that an insignificant and almost invisible scar is now required to be compensated when the statute says that equitable compensation is to be awarded only for "serious disfigurement."

Section 6: Compensation after Scheduled Award-Adds a new sub-section (23) to section 8(c) to provide for continuation of compensation for loss of wageearning capacity or for total disability after payment of an award for permanent partial disability under the schedule set forth in that section for specific member injuries.

Comment: This amendment is not a necessary one and its cost potential is very substantial. It is made even more substantial in its financial potentials by the proposed amendment in section 3 of the Bill discussed above which removes any monetary limitation on the total amount of compensation payable. This Section 6 of the Bill would mean that where a longshoreman sustains a permanent partial disability to one of the specific parts of the body enumerated in section 8(c) such as an arm, a leg, or an eye, etc., that once he has been paid his compensation for this permanent partial disability for the specified period of weeks that if this permanent disability is still producing a loss of wage earning capacity or if the