Document bBEy0mQMxbwe1MxRKzJYBe8rk

FILE NAME: Shipbuilders Council of America (SHIP) DATE: 1972 Dec 13 DOC#: SHIP077 DOCUMENT DESCRIPTION: Minutes of Shipbuilders Council Special Meeting on Longshoremens' and Harbor Workers' Compensation Act with List of Shipyard Reps Attending P L A IN T IF F 'S EXHIBIT SBCA 5025 ---------- ' SHIPBUILDERS COUNCIL OF AMERICA ` SPECIA L M EETING.ON - * LONGSHOREMEN'S AND HARBOR WORKERS COMPENSATION ACT - D EC EM B ER 13, 1972 - In accordance w ith le tte r to All Shipyard D elegates dated N ovem ber 28, 1972, a sp ecial m eeting of shipyard re p re se n ta tiv e s w as held at the W a t e r g a t e H o te l D e c e m b e r 13, 1972 to d i s c u s s th e r a m i f i c a t i o n s o f P u b l i c . Law 92-576, the L ongshorem en's and H arbor W o rk ers' Com pensation Act A m endm ents of 1972.. ' ' ' E . P. Ruddy, S e c re tary of the Council presided. The following, representing shipyards, w ere p resen t: Dorothy Alleback . Henry Brown W illiam B utler M. J. C a r ro ll H arry Fisher M. R. Guy R. M. H a rtm a n M ichael L. H arris H arry G. Hill . Harold Knebel R. L. N orsw orthy V. G. Noel Richard J. Q uerrey Edward Renshaw M. P . R edford Lloyd R ials Robert F. Sherm an J. S; S tra tto n R. A. S tubblefield Charles F. Tucker J. D. W ech sler D elm ar J. Young Sun Shipbuilding Dravo C orporation Sun Shipbuilding , Jeffboat Todd Shipyards Bethlehem Steel B ethlehem Steel Jeffboat - Todd Shipyards St. Louis Shipbuilding N ew port News Shipbuilding Dravo C orporation St. Louis Shipbuilding St. Louis Shipbuilding N orfolk Shipbuilding Newport News Shipbuilding Savannah M achine & Shipyard Ingalls Shipbuilding N ew port News Shipbuilding N o r f o l k S h ip b u ild in g Sc D. D. Ingalls Shipbuilding K aiser Engineers The following w ere guests of the Council at the m eeting: Eugene M ittelman John E. Stocker John Sidwar M inority G eneral Counsel Senate C om m ittee on L abor and - Public W elfare . ' Acting Deputy D irecto r, Office of W orkm en's C om pensation P ro g ram s D ep artm en t of L abor O f f i c e o f Workmen's Compensation Programs. Deoartmpnt of T.ahnr - 2- The m eeting was called to o rd e r at 9:45 and a fte r g en eral announce m ent and introductions, M r, Ruddy described b riefly the organization and r e p r e s e n t a t i v e p o s itio n of the S h ip b u ild e rs C o u n cil of A m e r ic a in the U. S. shipbuilding and ship re p a ir industry. The purpose of the special m eeting was then explained as a m eeting of appropriate re p resen tativ es fro m the m em b er shipyards fo r an inform al exchange of views and the possible d e v e l o p m e n t o f u n i f i e d i n d u s t r y p o s i t i o n s <pn t h e a m e n d e d A c t w h ic h b e c a m e effective N o v em b er 27, 1972. It was pointed out that w hatever recom m endations cam e out of the m eeting would have to be acted on by the B oard of D ire c to rs of the Council. At this point, M r. M ittelm an a rriv e d and was introduced. , ' The chair then asked for a rep o rt by M r. Edw ard Renshaw, P resid en t of St. Louis Shipbuilding, on a m eeting that had been held in New O rleans D ecem ber 4 by the Shipbuilding Com m ittee of the A m erican W aterw ays, of which he is a m em b er, fo r d iscu ssio n of the new am endm ents to the Act. M r. Renshaw is also a m em b er of the Shipbuilders Council and is Regional Vice P resid en t, Inland R iv ers. M r. R enshaw re p o rte d th at the D e c e m b e r 4 m eetin g of AWO had been attended by re p resen tativ es of a large num ber of the sm aller shipyards with em ploym ent in the individual y a rd s running fro m as sm all as 50 up to s e v e ra l thousands of em ployees, ' He noted that all aspects of the am endm ent had been discussed at the m eeting but that the g re a test concern, by far, was the extension of ju ris diction to co v er all shipbuilding and ship re p a ir em p lo y ees. It.ap p eared that the m ajority of the yards w ere booked well in advance with fixed price co n tracts and th e re is no way to recoup the additional cost arising fro m the am endm ents. - O n e y a r d o f a b o u t 1, 300 e m p l o y e e s w a s r e p o r t e d to h a v e e s t i m a t e d t h a t it would su stain a lo ss of about one-half m illion d o llars. O ther yards reported estim ates of potential lo sse s which varied fro m sta te -to -sta te depending on the level of state com pensation benefits. - M r, Renshaw noted that other featu res of the legislation discussed at the m eeting included the concern that 66-2/3 of the em ployee's weekly wage approached the tak e-h o m e pay of the em ployee and th e re would be g reat d ifficulty in getting people b a ck to w o rk once on c o m p e n sa tio n . A lso, the new rig h t of se le c tio n of the doctor by the em ployee w as felt to be a m ost unw elcom e change w hich w ould le a d to m a lin g e rin g . He noted, how ever, that overriding all of this was the extension of jurisdiction. - 3- M r. Renshaw re p o rte d th at the AWO Shipbuilding C om m ittee'had form ed a com m ittee of five, representing geographically the sm all yards, to plan a c o u rse of action hopefully as a joint v enture w ith a sim ila r sm all group representing the Shipbuilders Council the thought being that th ere should be unified in d u stry effort to seek som e relief fro m the am endm ents w hich w ere felt to be d isc rim in a to ry ag ain st the sh ip y ard industry. Responding to an inquiry as to how the y ard s had p riced out the poten- tial added costs, M r. Renshaw reported that d iscussion w ith the u n d erw riters and national com pensation board disclosed that the in creased benefits and jurisdiction change would raise base ra te s for the fir s t y e ar fro m about $5 o r $6 to o v e r $13 p e r $100 o f p a y r o l l , . During the discussion which followed, a num ber of points w ere m ade including the following: . . * In the Inland R ivers yards before enactm ent of P L 92-576, the state c o v e ra g e of e m p lo y e e s w as about 95 p e r c e n t w hile th e F e d e r a l w as f r o m 3 to 5 p e r c e n t. U n d e r th e a m e n d m e n ts , n e a r l y 100 p e r c e n t a r e c o v e re d by the F e d e ra l Act. ... - * In a ty p ic a l sh ip r e p a i r y a rd , c o v e ra g e p r i o r to th e new A ct w a s 75 p e r c e n t F e d e r a l aind o n ly 25 p e r c e n t by th e s t a t e , w h ile in sh ip b u ild in g a s o p p o sed to r e p a ir , about 75 p e rc e n t of the y a r d 's e m p lo y e e s w e re u n d e r state coverage. Thus the jurisdictional change had a m uch g reater im pact on shipbuilding yards than in ship rep air. - * Q uestion w as ra is e d as to how the new am en d m en ts should be in te r p reted with re g a rd to coverage and the point was m ade that the am endm ents could be in te rp re te d to m ean that everybody that w alks in the gate of a sh ip yard is now covered. ' . * C ertain office people, even though within the gate, m ay not be covered. * In the State of W ashington, a p re lim in a ry ruling has been issu e d - holding that the only people still covered by the State Act are clerical. * It was recognized that clean cut in terp retatio n s of the jurisdiction change m ay u ltim a te ly have to be m ade by the C ourts but the apparent intent is to e n d a s i t u a t i o n w h e r e two m e n in a s h i p y a r d o n th e s a m e kind of w o r k could be under different statutes m erely because of the location of the work. - 4- F u rth e r d iscu ssio n of this la st point brought out that during the hearings it was clearly understood by the Congress that except for a few y ard s, the sh ip y ard in d u stry was opposed to the expansion of coverage throughout the yard. However, the C ongress m ade a deli b e ra te choice to so expand the F e d e ra l ju risd ictio n w ith the p rim a ry re a so n being to bring an end to this anom aly of two m en w ith the sam e injury receiving d isp arately different benefits because of the location in the yard w here injury o ccu rred . It was rep o rted th at at one point the C ongress did co n sid er am ending the law to provide that w ithin a certain geographic a re a all would be covered. H ow ever, this approach was abandoned. . . ' T h e fo llo w in g w a s q u o ted f r o m pag e 75 of th e p r in t e d " L e g is la tiv e H istory" of the Act by M r. M ittelm an in support of his explanation of the jurisdictional change: " . . . The C om m ittee does not intend to cover em ployees who a re not engaged in loading, unloading, repairing, or building a vessel, just because they are injured in an area adjoining navigable w aters used for such activity. Thus, ,s e m p l o y e e s w h o s e r e s p o n s i b i l i t y i s o n ly to p i c k u p s t o r e d cargo for fu rth er tra n s-sh ip m en t would not be covered, nor would purely c le ric a l em ployees whose jobs do not require th e m to p a rtic ip a te in the loading o r unloading of carg o . ' How ever, ch eck ers, for exam ple, who a re directly involved in the loading o r unloading functions a re covered by the new am endm ent. L ikew ise the C om m ittee has no intention of extending coverage under the Act to individuals who a re not em ployed by a p e rso n who is an em ployer, i.e. a p erson at le ast som e of whose em ployees a re engaged, in whole or in p art in som e fo rm of m aritim e em ploym ent. Thus, an individual em ployed by a person none of whose em ployees work, in whole o r in part, on navigable w aters, is not covered even if injured on a p ier adjoining navigable w aters. " ' M r. M ittelm an em phasized that this language m ean t that the intent is to co v er all blue c o lla r em ployees engaged in building o r rep airin g but not everyone who w orks in the yard. It also w as em phasized in the d iscu ssio n that no bill could have been rep o rted out of the C ongressional C om m ittee that did not comply with the re p o rt of the N ational C om m ission on State W orkm en's Compen sation Laws. H ow ever, this was not a stum bling block; the big problem was to d ra ft a bill w hich would effectively elim inate the third p a rty suits 5 - based on the w a rra n ty of seaw orthiness. % M r. M ittelm an also rem inded the group that the extension of ju ris diction was only a p relude to a future adoption of the F e d e ra l benefit levels by all of the states and that the co nsideration and enactm ent of national w orkm en's com pensation standards will be a high priority item at the 93rd C ongress. (See statem en t by Senator Javits attached to these m inutes). A nother elem en t pointed to as having been co n sid ered in the d e c i sion to go fo rw ard w ith an extension of ju risd ic tio n w as that m any in the C o n g ress saw the bill as a w ay to equalize co sts betw een sh ip y ard s in various sections of the country. The elim ination of com petitive disparities between yard s in different a re a s was stated as being a firm goal considered by the Senate C om m ittee. . It was also pointed out that the C om m ittee rep o rt on the bill was drafted after the N ational C om m ission rep o rt had becom e available in . d raft fo rm and that the C om m ittee had taken the re p o rt into co n sid era tion in considering the bill. D iscu ssio n b y the sh ip y ard re p re s e n ta tiv e s p re s e n t seem ed to co n firm the understanding that the am ended Act applies to all shipbuilding and ship rep air em ployees w ithin the p e rim e te r of the yard. On the question of why the expansion of jurisdiction was not applied to o th er fa c ilitie s along the w a terfro n t, such as a s te e l m ill which has som e m arine loading and unloading facilities, it was explained that the ra tio n a le w as th a t to do so w as not r e a lly p r a c tic a l b e c a u s e "you could not stop th ere. " The re su lt would have been a national w orkm en's com pensation statute p ro p o sa l w hich would have been too fa r afield politically from the legislation under consideration. ' One of those p re se n t noted that if anyone covered under the state act, such as a clerk or office w orker, goes aboard a v e sse l and is injured and coverage is handled under the state act, then the exclusive liability p ro v isio n of the F e d e r a l statu te no lo n g e r p ro te c ts the em ployee fro m the third p arty suit exposure provision in the new am endm ents. T here was ag re em e n t by the attorneys p re sen t that the am endm ents a re constitutional and that am ple authority ap p ears to ex ist under the com m erce clause of the Constitution, W ith re g a r d to the new p ro v isio n s on the ch o ice of the p h y sician by the em ployee, pro b lem s can be kept at a m inim um by providing v ery good . 6 . - - \ * m edical care. It was explained that the am endm ents a re patterned after New York com pensation procedure and experience. Shortly before the m eeting adjourned, the following m otion was offered to the group and adopted by those p re se n t. ' Resolved, That an ad hoc group fro m the Shipbuilders' Council be established to w ork with the ad hoc C om m ittee of the Shipbuilders' C om m ittee of the A m erican W aterw ays O p erato rs, Inc. , to explore possible re lie f fro m the eco n o m ic effect of th a t p a r t of the 1972 A m e n d m e n ts to the L ongshorem en's and H arbor W orkers' Com pensation Act w hich call for the extension of ju risd ictio n to include all em ployees engaged in shipbuilding or ship repairing. . The following com panies indicated an in te re st in serving on the Council ad hoc group if form ed - Ingalls Shipbuilding, D ravo, St. Louis Shipbuilding, and Newport News Shipbuilding. . The group re c e s s e d at noon for luncheon in the T e rra c e Room of the W atergate and w ere joined by M essrs Stocker and Sidw ar of the Office of W orkm en's Com pensation P ro g ra m s. ' During the afternoon session, the rep resen tativ es of the Office of W orkm en's C om pensation P ro g ra m s outlined the change in law contained in the new legislation and disclosed that revised regulations are being d ra fte d to cover- the changes. The d ra ft re g u la tio n s w e re to be av ailab le b e f o r e y e a r ' s end b u t c o n t r a r y to p r e v i o u s r e p o r t s it was indicated th a t the 30 days fo r pub lic c o m m e n t p r i o r to ad o p tio n w ould not be a v a ila b le . In this context, those p re s e n t w ere asked to su b m it any views and re c o m m endations as p ro m p tly as p o ssib le and not to w ait fo r the issu an ce of draft regulations. During discussion, Mr. Stocker distributed sev eral proposed form s to all p re sen t w hich w ere d escrib ed as for use in connection with selection of physician and the reporting of claim s. The q u e stio n of se lf in s u r e r v e rs u s in s u ra n c e c o v e ra g e led to a su g gestion that the rules for s e lf-in s u re rs m ight be useful f o r review by the shipyard re p re se n ta tiv e s. A rep rin t of the cu rre n t rules now undergoing revision is attached. It is u n d e rsto o d th at the re v isio n s to be m ade are quite m inor. T h e m e e t in g a d jo u r n e d a t 3:15 p. m .