In a case of first impression concerning the amended version of Section 2(3)(F) of the Longshore and Harbor Workers’ Compensation Act, and its implementing regulation, 20 C.F.R. § 701.501, the Benefit Review Board reviewed the Decision and Order and the Supplemental Decision of the Administrative Law Judge holding Claimant, who worked at Employer’s sport-fishing and recreational yacht facilities, engaged in commercial services within the meaning of the regulation and the Act, the vessels Claimant worked on were non-recreational, and Claimant was a longshoreman entitled to benefits under the Act. The Benefit Review Board reversed the ALJ, finding Claimant repaired only recreational vessels, he is covered by Florida state workers’ compensation law, and he is excluded from coverage under Section 2(3)(F) of the Act.
The facts on appeal were not in dispute. Claimant worked for Employer at its two Riviera Beach, Florida facilities repairing recreational yachts ranging from 42 to 82 feet in length. Services at the Florida facility included general repairs and maintenance of sport-fishing yachts manufactured and sold by employer’s New Jersey division, as well as other sport-fishing boats and private motor yachts. Employer’s Florida facilities also maintained and repaired the stock vessels the new Jersey division used in boat shows and sea trials to entice customers to purchase the yachts. On February 2, 2010, Claimant suffered a forehead contusion while working on a 63.5 foot yacht. Employer paid Claimant medical and disability benefits for the injury under Florida state workers’ compensation law, but Claimant filed a claim contending his injuries should be covered under the Longshore and Harbor Workers’ Compensation Act. The Administrative Law Judge accepted Claimant’s assertion that because he repaired and maintained some vessels that were used by Employer’s New Jersey division for boat shows and sea trials (which included taking passengers out on the water), those vessels were “commercial,” not “recreational,” as those vessels were used for the commercial purpose of promoting sales for the New Jersey division.
Section 2(3)(F) of the Act states, in pertinent part, “the term ‘employee’ … does not include individuals employed to build any recreational vessel under 65 feet in length, or individuals employed to repair any recreational vessel … if individuals described are subject to coverage under a State workers’ compensation law. The term ”recreational vessel” is defined by 20 C.F.R. § 701.501(a) as a vessel (1) being manufactured or operated primarily for pleasure; or (2) leased, rented, or chartered to another for the latter’s pleasure. Section 701.501(b)(2) states, in pertinent part, “a vessel being repaired … is not a recreational vessel if the vessel had been operating, around the time of its repair in one or more of the following categories on more than an infrequent basis: (1) passenger vessel; (2) small passenger vessel; (3) uninspected passenger vessel; (4) vessel routinely engaged in commercial service, or (5) vessel that routinely carrier passengers for hire.”
Employer contended it used vessels at the New Jersey facility to move passengers, but it had no license to do so and was merely showcasing the boat’s primary purpose as a recreational vessel for pleasure. Employer argued, the ALJ erroneously extended the definition of “commercial service” to convert its stock vessels to non-recreational status when the purpose of the promotional vessels is non-commercial in nature. In resolving the tension between Sections 701.501(a) and (b), the regulations note, “occasional non-recreational use does not alter the vessel’s core recreational purpose and should not take the vessel outside of the ‘recreational vessel’ definition. To clarify this point and to resolve the tension, the final rule provides that a vessel remains recreational unless it falls within the designated Coast Guard vessel categories on a more than infrequent bases during the time the vessel is in operation.” The BRB further clarified the definition of recreational as “any unchartered passenger vessel used for pleasure carrying no passengers-for-hire (i.e. paying passengers); and any chartered passenger vessel used for pleasure with no crew provided and with fewer than 12 passengers, none of whom is for hire. All other passenger -carrying vessels fall into one of the following three non-recreational categories: uninspected passenger vessel, small passenger vessel, and passenger vessel.” In the case at hand, Employer’s vessels were primarily for sale as recreational sport-fishing yachts. Their occasional use at boats shows or to bring passengers out on the water did not alter their primary recreational use, thus could not alter their classification to the category of commercial vessels.
Of note, although the number of stock vessels in the facilities fluctuated, at the time of Claimant’s injury, only nine of the forty vessels being serviced were stock vessels, thus it would be interesting to know if the outcome of the case might have been different had the ratio of stock boats to purely recreational sport-fishing vessels been different. The BRB’s decision was published on January 28, 2014, and counsel for Claimant has indicated he does not intend to appeal the decision even though he disagrees with the BRB’s final adjudication.
DeJesus v. Viking Yacht Co., Inc., — Ben. Rev. Bd. Serv. (MB) —-, 2014 WL 352618 (2014) (published).