Relationships Matter: Harbor worker's claim against vessel owner precluded under the LHWCA and the "Borrowed Servant" Doctrine

Let’s face it, vessels usually have a running list of repairs for both deck and engine side. Given the limited time in port and the crews’ extra hours on duty for the inland transits, owners often look to repair vendors or local unions for extra assistance to keep the crew in compliance with STCW work hour requirements. Those laborers hired out of a local union hall on the engine side are referred to as “day engineers". For any work-related injury, their status as a harbor worker should not be in dispute under the Longshore Harbor Worker’s Compensation Act (“LHWCA”). However, the question of the acting employer and that employer’s immunity for tort liability to the injured employee may not be as straightforward.

The immunity for tort liability for a work related injury is in exchange for liability to the injured harbor worker for no-fault benefits provided for under the LHWCA. Land based maritime workers, such as harbor workers, may find work is often transient in nature with assignments from their general employer to special projects or voyages completely controlled by another entity. In this scenario, more commonly known as the “borrowed-servant” doctrine, an employee may be leased or permitted to work for another employer essentially becoming their “borrowed servant” in performing requested services. When such an arrangement exists, the “borrowing employer” assumes the liability for the harbor worker as opposed to their general employer. The “borrowing employer” will be liable for any benefits paid under the LHWCA no-fault scheme for an injury incurred in the newfound employment relationship. In the context of the LHWCA, the borrowed servant doctrine renders the borrowing employer liable for the no-fault compensation benefits in exchange for immunity to all tort liability for the employee’s work-related injury.

Plaintiff in Fetter v. Maersk Line Limited, No. 21-1426, 2021 WL 2978881 at *1 (3d Cir. July 15, 2021) was a licensed third-assistant engineer, worked through the union bidding on both day engineer and shipping contracts. Plaintiff (as well as other day engineers from the local union) and a repair vendor (“Vendor)” boarded the vessel to complete the planned repairs. Engineering officers met with the day engineers in the engine room for a toolbox talk, going through the day’s work and general engine room safety. From there, the Vendor had a secondary meeting with the First Assistant Engineer to talk specifics of each repair, then divvying up and assigning repairs to the day engineers. They retrieved any tools necessary for the job from the ship’s tool locker and began work. Plaintiff’s job, removing a stuck fuel injector, resulted in an injury when a rigged chain fall snapped, striking plaintiff in the head.

An entity will be a “borrowing employer” when they control the time, manner and method of a transient employee’s job. In the Fetter decision, the 3^rd Circuit applied the 5^th Circuits test, asking: (1) who has control over the employee and his or her work? (2) Whose work is being performed? (3) Was there an agreement between the original and borrowing employer? (4) Did the employee acquiesce to the new work situation? (5) Did the original employer terminate his relationship with the employee? (6) Who furnished the tools and place for performance? (7) Was the new employment over a considerable length of time? (8) Who has the right to discharge the employee? (9) Who had the obligation to pay the employee? The Court, however, focused on two condensed points: (a) whether the borrowing employer was responsible for the borrowed employee’s working conditions and (b) whether the employment was of such duration that the borrowed employee could be presumed to have acquiesced in the risks of his new employment.

The summary

On a motion for summary judgment, the trial court found Plaintiff to be the borrowed servant of the vessel owner for the duration of the day engineer contract, thereby precluding him from recovery under a common law negligence theory. Plaintiff’s proper remedy was the LHWCA’s no-fault benefits for any injury sustained onboard. The 3^rd Circuit subsequently affirmed the decision finding the vessel owner set the parameters for the job, exercised the requisite control over the job, provided the tools, retained ultimate control of the engine room. Further, Plaintiff’s familiarity with the day engineer position allowed him to understand and acquiesce to the risks of working onboard and in the engine room. Plaintiff’s counterargument over the supervisory function of the Vendor failed as the Court found that very authority only derived from the First Assistant Engineer. In sum, the engineering staff never ceded control of the engine room, dictating the time, manner and method of repairs thereby rendering the day engineers as borrowed servants.

The UK Club would like to offer sincere thanks to Kevin Albertson , Senior Claims Executive at the TT Club for penning this article.