The increased presence of U.S. military personnel around the world has led to a heightened number of U.S. civilian contractors overseas. If injured, these workers are often entitled to workers’ compensation coverage under the Defense Base Act (DBA).1
Currently, there are more than 130,000 workers covered by the DBA in Iraq alone,2 and more than 100 insurance carriers have been authorized to write Defense Base Act coverage.3 The Office of Workers’ Compensation Programs reports that approximately 1,200 new claims from Iraq and Afghanistan alone are filed each month.
Despite these growing numbers, only a handful of attorneys in Washington are experienced in handling this complex extension of the Longshore and Harbor Workers’ Compensation Act (LHWCA).4 The LHWCA itself is multifaceted and covers more than 500,000 workers through its provisions and extensions.5
The DBA contains no substantive provisions; the entirety of the Act consists of procedural and definitional provisions specifically tailored to DBA claimants. All of the DBA’s “substantive” provisions are found in the LHWCA.6
The original intent of the DBA was to provide uniform workers’ compensation coverage to civilians employed on foreign U.S. military bases. That coverage has since been extended to “civilians working on overseas construction projects for the United States government or its allies, and … to protect employees fulfilling service contracts tied to such a construction project or to a national defense activity.”7
To be compensable under the DBA, a benefit claim must stem from a contract with the United States to perform public work overseas, public work constituting government-related construction projects, work connected with the national defense, or employment under a service contract supporting either activity.8
The DBA is unique in that once a worker is employed under a DBA-covered contract, he or she will be covered under the Act, whether or not he is actually engaged in work benefiting his employer at the time of injury. This is because of the “zone of special danger” where the employment takes place. This gives the DBA the perception of providing 24-hour coverage.9
Workers covered under the DBA are not subject to the usual arising-out-of and in-the-course-of-employment restrictions found under other forms of workers’ compensation coverage, such as Washington’s Industrial Insurance Act or the LHWCA. For example, coverage was allowed in a case where a worker in Guam drowned during a rescue attempt.10 The drowning occurred in a channel that ran next to the employer-provided recreation area. The channel was clearly posted as dangerous and swimming in the channel was strictly prohibited.
The O’Leary decision established the “zone of special danger” doctrine, holding that the test for recovery is not a causal relation between the nature of the worker’s employment and his accident. “[N]or is it necessary,” the Court held, “that the employee be engaged at the time of the injury in activity of benefit to his employer. All that is required is the obligations or conditions of employment create the zone of special danger out of which the injury arose.”11
In another drowning case, coverage was allowed under the DBA when a worker at a defense base in South Korea died while boating on a Saturday outing more than 30 miles from his job site.12 Similarly, a worker’s death resulting from a car accident on the island of San Salvador, outside a U.S. defense base where the decedent worked, also was compensable under the DBA.13
In Gondeck, the worker and three others left the defense base for a recreational trip to a nearby town in a vehicle that was to be used only for work-related purposes. The accident occurred upon their return to the base. The court held that the worker’s activities were “reasonable recreation;” therefore, the condition of employment created the “zone of special danger” out of which the injury or death arose.14
In yet another recreation-related accident, the court held that a worker killed in a motor-scooter accident on Grand Turk Island in the British West Indies while returning from a social visit after work hours was covered under the DBA.15 The O’Keeffe court held: “Employees working under the Defense Base Act, far away from their families and friends, in remote places where there are severely limited recreational and social activities, are in different circumstances from employees working at home.”16 It is, therefore, a fair conclusion to state the DBA provides nearly 24/7 coverage for the overseas defense worker.
In occasions where the worker was engaged in criminal, drug or alcohol-related, or intentional or self-destructive behaviors, workers have been denied DBA claims. In Gillespie v. General Electric Co.,17 coverage for the widow was denied where the worker accidentally died after self-asphyxiation as part of an autoerotic activity. The Benefits Review Board held the widow had not established a relationship between the worker’s job and the “activity which occasioned his death.”
Two years later, the Board in Kirkland v. Air America, Inc.,18 denied coverage where the claimant-widow was linked to the murder of her husband, the worker. In Kirkland, the Board stated that the “claimant’s participation in the murder of her husband effectively severed any causal relationship which may have existed between the conditions created by his job and his death.”19
While initial coverage under the DBA is relatively favorable toward approval of the worker’s claim, calculating compensation is not as simple. One of the most complex areas of DBA litigation involves the issue of the correct compensation rate. Civilian contractors working overseas are often paid multiple times the amount they were earning at home.
The essential question arising is the extent to which the worker’s new, higher wage should be considered in determining the correct compensation rate. This is complicated further when one considers many overseas contracts include bonuses, which may not have been awarded when the worker was injured.
Compensation under the DBA is calculated pursuant to provisions in the LHWCA.20 There are essentially three competing methods for determining a worker’s compensation rate: (1) section 10(a) is a calculation based loosely on the previous year’s earnings and whether work was performed five or six days a week; (2) section 10(b) is based on the earnings of other similarly situated workers; and (3) section 10(c) is based on a reasonable representation of the injured worker’s annual earning capacity.21
Both sections 10(a) and 10(b) are generally not applicable in DBA cases. While there is a presumption that section 10(a) will determine a worker’s compensation rate, this section often does not apply in DBA cases.22 DBA workers generally have not been employed in their job of injury for “substantially the whole of the year immediately preceding (the) injury,” as required by the LHWCA.23 Further, workers covered under the DBA often work seven days a week, but the 10(a) formulas only apply to a five- or six-day week.24
Under section 10(c), there have been two major approaches in determining the correct compensation rate. The Zimmerman approach determines the compensation rate by dividing the worker’s total earnings for the overseas employer by the number of days the worker was employed overseas.25 The “blended” approach combines both a worker’s earnings in the U.S. with the overseas earnings to establish an average over the 52 weeks preceding injury.26 Neither of these approaches has established itself as dominant.
Because of the increased presence of U.S. military and civilian personnel around the world and the associated increase in DBA claims, the case law in this area is expanding at a rapid rate. An attorney experienced in the Longshore and Harbor Workers’ Compensation and the Defense Base acts is required to help navigate the waters and mine fields of the existing authority and to ensure a just outcome for his or her client.
n
William Hochberg is the principal of the Law Office of William D. Hochberg in Edmonds. Hochberg is a WSTLA EAGLE member whose practice emphasizes workers’ compensation (state and longshore), asbestos disease claims, automobile accidents and Social Security disability.
1 42 U.S.C. § 1651.
2 Office of Workers’ Compensation Programs; see www.dol.gov/esa/owcp_org.htm.
3 See http://www.dol.gov/esa/owcp/dlhwc/ lscarrier.htm (retrieved September 14, 2007).
4 33 U.S.C § 901, et seq.
5 U.S. Department of Labor Employment Standards Administration Fact Sheet ESA 91-22. See http://www.dol.gov/esa/regs/compliance/owcp/91-22.htm (retrieved September 14, 2007).
6 Kerry J. Anzalone, “The Defense Base Act — A Growth Industry?”, Office of Administrative Law Judges, U.S. Department of Labor, http://www.oalj. dol.gov (retrieved September 14, 2007).
7 University of Rochester v. Hartman, 618 F.2d 170, 173 (2nd Cir. 1980).
8 Id. at 176.
9 Kurt A. Gronau, “Jurisdictional Considerations under the Defense Base Act,” in The Longshore Textbook 49, 50 (Lawyers & Judges Publishing Company, Inc., 2005).
10 O’Leary v. Brown-Pacific-Maxon, Inc., 340 U.S. 504, 71 S. Ct.470 (1951).
11 Id. at 507.
12 O’Keeffe v. Smith, Hinchman & Grylls Assocs., 380 U.S. 359, 85 S. Ct. 1012 (1965).
13 Gondeck v. Pan Am. World Airways, Inc., 382 U.S. 25, 86 S. Ct. 153 (1965).
14 Id. at 27.
15 O’Keeffe v. Pan Am. World Airways, Inc., 338 F.2d 319 (5th Cir. 1964). William M. O’Keeffe, then-deputy commissioner of the U.S. Dep’t of Labor, was the putative appellant in these cases.
16 Id. at 321.
17 21 Benefits Review Board Service (BRBS) 56 (1988).
18 23 BRBS 348 (1990).
19 Id. at 349.
20 33 U.S.C. § 910(a)–(d).
21 33 U.S.C. § 910; Zimmerman v. Service Employees Int’l, Inc., BRB No. 05-0580 (February 22, 2006).
22 See id.
23 See 33 U.S.C. § 910(a).
24 See generally Zimmerman, supra.
25 Id.
26 K.S. v. Service Employees Int’l, OALJ No. 2007-LDA-40 (July 16, 2007).
