Palombo v. Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor

• Decision Date: 26 June 1991
• Docket Number: D,No. 678,678
• Citation: 937 F.2d 70
• Parties: Richard L. PALOMBO, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and General Dynamics Corporation, Respondents. ocket 90-4047.
• Court: U.S. Court of Appeals — Second Circuit

Page 70

937 F.2d 70

Richard L. PALOMBO, Petitioner, v. DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and General Dynamics Corporation, Respondents.

No. 678, Docket 90-4047.

United States Court of Appeals Second Circuit.

Argued Dec. 10, 1990.

Decided June 26, 1991.

Matthew Shafner, Groton, Conn. (Carolyn P. Kelly, Cynthia Fausold Schwanz, Nathan J. Shafner, O'Brien, Shafner, Bartinik, Stuart & Kelly, P.C., of counsel), for petitioner.

Marianne Demetral Smith, Atty., U.S. Dept. of Labor, Office of the Sol., Washington, D.C. (Robert P. Davis, Sol. of Labor, Carol A. De Deo, Associate Sol., Janet R. Dunlop, Counsel for Longshore, U.S. Dept. of Labor, of counsel), for respondent Director, Office of Workers' Compensation Programs.

Norman P. Beane, Jr., Boston, Mass. (Diane M. Broderick, Murphy & Beane, of

counsel), for respondent General Dynamics Corp.

Before KEARSE, PIERCE and MINER, Circuit Judges.

PIERCE, Senior Circuit Judge:

This is a petition for review of a final order of the Benefits Review Board affirming a denial by the Administrative Law Judge ("ALJ") of petitioner's claim for permanent total disability benefits under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. Secs. 901-950 (1988) ("LHWCA"). We grant the petition and reverse the Board's order on two grounds. First, we hold that a claimant may rebut his employer's showing of suitable alternative employment by demonstrating that he diligently tried and was unable to secure such employment. Second, we additionally hold that a claimant's prima facie entitlement to total disability benefits continues until the date when suitable alternative employment is found to be first available to the claimant.

I.

Petitioner Richard Palombo began working for General Dynamics Corporation in May 1982. He was employed as a carpenter at General Dynamics' Electric Boat shipyard in Groton, Connecticut. On July 27, 1982, during the course of his employment, Palombo slipped while climbing down a ladder and injured his left knee. He has undergone surgery four times since his injury to repair torn cartilage and a fracture of the tibial plateau of the left knee. In January 1984, Palombo's treating physician informed him that he was "fit for full-time employment, if such employment does not involve any significant ambulatory activity." Palombo has not worked since his injury, although he testified that he repeatedly sought light duty work at General Dynamics and sedentary employment with other employers.

In September 1983, Palombo, who had been receiving temporary total disability benefits from the date of his injury, filed a claim under the LHWCA for permanent total disability benefits. The ALJ held a hearing on Palombo's claim in April 1987. In a Decision and Order filed on August 12, 1988, the ALJ first found, based on medical testimony, that Palombo had a permanent ten percent impairment of his left knee and could not return to his pre-injury employment as a carpenter. This finding established Palombo's prima facie entitlement to total disability benefits and shifted the burden to the employer to show the existence of suitable alternative employment. General Dynamics responded by offering the testimony and reports of a vocational rehabilitation counselor who had prepared labor market surveys showing jobs available in August 1985 and July 1987, including tool repairer, bench worker, assembler, and plastics repairer.

The ALJ determined that three of the jobs in the July 1987 survey were reasonably available to Palombo considering his age, education, vocational history and physical limitations and that General Dynamics had therefore met its burden. "For these reasons," the ALJ concluded, "I find that the Claimant is not permanently and totally disabled but rather that he is permanently and partially disabled." The ALJ accordingly awarded Palombo permanent partial disability benefits, and ordered that benefits begin as of January 7, 1984, the date Palombo reached "maximum medical improvement." Palombo appealed the ALJ's decision to the Board.

In a brief per curiam Decision and Order, the Board affirmed, holding that the ALJ's decision "is supported by substantial evidence, is rational and is in accordance with law." Palombo timely filed a petition for review of the Board's decision. ¹ Palombo argues, inter alia, that the Board erred in affirming the ALJ's finding of partial disability without considering Palombo's alleged efforts to find suitable alternative employment. Alternatively, Palombo argues that the Board and ALJ erred in ordering that partial disability benefits begin as of the date of maximum medical improvement rather than the date when suitable alternative employment identified by General Dynamics first became available. The Director of the Office of Workers' Compensation Programs of the U.S. Department of Labor joined as a respondent in support of petitioner, urging reversal of the Board's decision on the above two grounds.

II.

In American Stevedores, Inc. v. Salzano, 538 F.2d 933 (2d Cir.1976), we set forth a two-step burden-shifting scheme to be applied in analyzing claims under the LHWCA. Once a claimant demonstrates an inability to return to his job because of a work-related injury, he is considered totally disabled within the meaning of the LHWCA and the burden shifts to the employer to prove the availability of suitable alternative employment in the claimant's community. See id. at 935-36. If the employer establishes the existence of such employment, the employee's disability is treated as partial, not total. Director, Office of Workers' Compensation Programs v. Berkstresser, 921 F.2d 306, 312 (D.C.Cir.1991). Today, we add an additional, complementary step to the burden-shifting scheme outlined in Salzano: the claimant may rebut his employer's showing of suitable alternative employment--and thus retain entitlement to total disability benefits--by demonstrating that he diligently tried but was unable to secure such employment.

Other circuits applying the same general burden-shifting rule to LHWCA claims have expressly held that an injured employee can rebut the employer's showing of suitable alternative employment by showing diligent efforts to find work. See Newport News Shipbuilding & Dry Dock Co. v. Tann, 841 F.2d 540, 542 (4th Cir.1988); Roger's Terminal & Shipping Corp. v. Director, Office of Worker's Compensation Programs, 784 F.2d 687, 691 (5th Cir.), cert. denied, 479 U.S. 826, 107 S.Ct. 101, 93 L.Ed.2d 51 (1986). In its decisions, the Benefits Review Board has also incorporated this addition to the burden-shifting scheme. See Dove v. Southwest Marine of San Francisco, Inc., 18 Ben.Rev.Bd.Serv. 139, 141 (1986); Royce v. Elrich Constr. Co., 17 Ben.Rev.Bd.Serv. 157, 159 n. 2 (1985). For the reasons that follow, we agree that this is an appropriate refinement of the burden-shifting rule, consistent with our holding in Salzano and with the policies of the LHWCA.

The Supreme Court has long held that the LHWCA must be " 'liberally construed in conformance with its purpose, and in a way which avoids harsh and incongruous results.' " Director, Office of Workers' Compensation Programs v. Perini N. River Assocs., 459 U.S. 297, 315-16, 103 S.Ct. 634, 646, 74 L.Ed.2d 465 (1983) (quoting Voris v. Eikel, 346 U.S. 328, 333, 74 S.Ct. 88, 92, 98 L.Ed. 5 (1953)); see also O'Keeffe v. Smith, Hinchman & Grylls Assocs., Inc., 380 U.S. 359, 362-63, 85 S.Ct. 1012, 1014-15, 13 L.Ed.2d 895 (1965). Like state workers' compensation laws, the LHWCA seeks to compensate employees for injuries sustained in the course of their work, and to pass that cost on to the employer, who benefits most from the employee's labor. See Baltimore & Philadelphia Steamboat Co. v. Norton, 284 U.S. 408, 414, 52 S.Ct. 187, 189, 76 L.Ed. 366 (1932). Affording the employee an opportunity to prevail by showing he diligently sought but was unable to secure another job is in accord with the remedial goals of the LHWCA. Moreover, we believe it is unduly "harsh and incongruous" to find that suitable alternative employment was reasonably available if the claimant demonstrates that, through his own diligent efforts, he could not find such a job.

We note here that the burden of establishing suitable alternative employment is placed on the employer merely to avoid placing on the injured employee "the difficult burden of proving a negative, requiring him to canvass the entire job market." Bumble Bee Seafoods v. Director, Office of Workers' Compensation Programs, 629 F.2d 1327, 1329 (9th Cir.1980). To satisfy this evidentiary burden, the employer does not have to find an actual job offer for the claimant, but must merely establish the existence of jobs open in the claimant's community that he could compete for and realistically and likely secure. See New Orleans (Gulfwide) Stevedores v. Turner, 661 F.2d 1031, 1042-43 (5th Cir. Unit A Nov.1981). Typically, as in this case, this is accomplished by vocational experts who prepare surveys of job openings. However, "there is no requirement that the vocational expert must actually contact potential employers to inquire whether they would hire someone of the claimant's general age, background, and disability, or convey information about job openings to the claimant." Tann, 841 F.2d at 543. Given the limited nature of this showing by the employer, we believe that a claimant's lack of success after diligently searching for a suitable job may be equally or even more probative of actual job availability.

Finally, allowing injured employees to prevail by showing they are unable to find work despite their best efforts comports with other important goals of the LHWCA. The LHWCA seeks not only to compensate workers for their injuries, but to promote their rehabilitation and return to the workforce. See Stevens v. Director, Office of Workers' Compensation Programs, 909 F.2d 1256, 1260 (9th Cir.1990), ...