When the Benefits Review Board issued Cathey v. Service Employees International in December 2012, we published a blog post calling into question some of the Board’s language. As it turns out, the Director took issue with some of the language too. Specifically, the Director averred that the Board incorrectly included language indicating that an employer is permanently relieved of liability once a Defense Base Act claim is accepted for reimbursement. The Board reconsidered its language and issued an amended Cathey decision, which states in pertinent part:
In her motion, the Director requests that the Board delete language in the decision that indicates that the federal government’s acceptance of employer’s claim for reimbursement under Section 104 of the War Hazards Compensation Act (WHCA), 42 U.S.C. § 1704, permanently relieves employer of its liability under the Defense Base Act, 42 U.S.C. § 1651 et seq. (DBA). The Director asks the Board to clarify its statements to reflect that employer remains liable under the DBA and that the payment of benefits by the federal government is only for administrative purposes. The Director does not take issue with the Board’s affirmance of the administrative law judge’s decision granting employer’s motion for summary decision. We grant the Director’s motion for reconsideration and clarify the Board’s decision. 20 C.F.R. § 802.409.
To the extent the Board’s decision states that an employer is relieved of liability for benefits upon having its application for reimbursement under the WHCA accepted, it is overbroad. If an employer applies for reimbursement under the WHCA after having been held liable for a claimant’s disability and/or medical benefits under the DBA, and the Division of Federal Employees’ Compensation (DFEC) approves the employer’s application, the DFEC may opt to reimburse the employer for future benefits as they are administered and paid out by the employer, or it may opt to administer the process itself and pay future benefits to the claimant directly. Either way, the employer remains a party to the case and remains primarily liable for the claimant’s benefits under the DBA. If a dispute arises between the DFEC and the claimant regarding his entitlement or the employer’s liability, the dispute is resolved under the DBA. At no time is the employer entirely “relieved” of its liability; rather, until such time as, and if, the DFEC transfers the case back to the employer, the employer is relieved only of its current responsibility to administer and pay the claimant’s benefits. 42 U.S.C. §§ 1704, 1711; 20 C.F.R. §§ 61.2, 61.100 et seq.
(Note: I originally published this post on Navigable Waters: A Maritime, Longshore and Defense Base Act Blog.)