On March 20, 2012, the U.S. Supreme Court announced its decision in Roberts v. Sea-Land Services. This case involves the Longshore and Harbor Workers’ Compensation Act (LHWCA), which provides compensation in cases of disability but caps benefits at twice the national average weekly wage for the fiscal year in which the injured worker is “newly awarded compensation.” The question here was whether the determination as to when the worker is “newly awarded compensation” is affected by the issuance of a compensation order on the worker’s behalf.
After his employer discontinued voluntary workers compensation payments in 2005 for an injury the claimant received in 2002, claimant filed a claim. The ALJ awarded benefits at the 2002 statutory maximum rate under the LHWCA. Claimant disagreed, arguing his benefits should be based on the statutory maximum compensation rate in effect on the date the award was issued, not the date of his injury. The BRB and the Court of Appeals for the Ninth Circuit affirmed the ALJ’s decision.
In an opinion delivered by Justice Sotomayor, the Court affirmed the ALJ and held by a vote of 8-1 that “an employee is ‘newly awarded compensation’ when he first becomes disabled and thereby becomes statutorily entitled to benefits, no matter whether, or when, a compensation order issues on his behalf.”
The Supreme Court conducted a thorough analysis of statutory construction, utilized dictionary definitions of key terms and considered congressional intent. In the end, however, the Supreme Court affirmed due to the potential negative repercussions of basing the compensation amount on the order date. For example, the alternative would make it more difficult for an employer to calculate benefit costs; result in granting disparate awards to similarly situated employees; reward employees who initiate unnecessary administrative proceedings in order to secure higher rates, and frustrate the LHWCA’s purpose in compensating employees for the wages the employee was receiving at the time of injury.
This decision unifies the Circuit Courts, and lays down the law for ALL injured workers. It eliminates on of the incentives for injured workers being voluntarily paid benefits to seek unnecessary adjudication in order to secure a compensation award, thereby allowing employers and carriers to avoid unnecessary litigation costs.
If you have a claimant who is entitled to the statutory maximum compensation rate, and you have questions about the impact of this new decision, or want to ensure that you do not ‘overpay’ the injured worker, please contact us.