IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-60662

MCGILL C. PARFAIT, 

 Petitioner

v.

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, 

UNITED STATES DEPARTMENT OF LABOR; PERFORMANCE ENERGY 

SERVICES, L.L.C.; SIGNAL MUTUAL INDEMNITY ASSOCIATION, 

LIMITED, 

 Respondents

Petition for Review of an Order of the

Benefits Review Board

Before DAVIS, OWEN, and ENGELHARDT, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

McGill C. Parfait filed this Petition for Review to challenge a ruling by 

the Benefits Review Board (“BRB”) in a proceeding in which Parfait sought 

benefits under the Longshore and Harbor Workers’ Compensation Act 

(“LHWCA”). Parfait’s employer, Performance Energy Services, L.L.C. 

(“Performance” or “Employer”), and its insurer, Signal Mutual Indemnity 

Association, Ltd. (“Signal” or “Insurer”), moved to dismiss the Petition for 

Review based on 33 U.S.C. § 933(f) and (g) of the LHWCA. The motion charged 

that Parfait had received funds in settlement of a tort action with a third party, 

United States Court of Appeals

Fifth Circuit

FILED

September 11, 2018

Lyle W. Cayce

Clerk

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Apache Corporation (“Apache”), and a judgment against another third party, 

Wood Group PSN, Inc. (“Wood Group”), for the injuries for which he sought 

compensation benefits. The Employer and Insurer argued that Parfait failed 

to obtain approval or provide notice of the settlement and judgment as required 

by the above sections of the LHWCA. 

Based on written responses by Counsel for Parfait to questions posed by 

this Court, it is clear that Parfait received substantial sums from a settlement 

with and judgment against third parties and that the required notice was not 

given. Based on the plain language of the statute, we must dismiss this 

Petition for Review. 

A. BACKGROUND

In December 2013, Petitioner filed a claim with the Office of Workers’ 

Compensation Programs for total/permanent disability benefits under the 

LHWCA for back and chest injuries he sustained in an accident on June 30, 

2013, while working for Performance. Following a formal hearing, the 

administrative law judge (“ALJ”) awarded Petitioner $1,493.60 in temporary 

total and temporary partial disability benefits for his chest injury. The ALJ 

denied his claim for benefits for his back injury. The Petitioner then appealed 

the ALJ’s award to the BRB, which affirmed. The Petitioner then lodged this 

Petition for Review challenging the BRB’s ruling denying total/permanent 

disability benefits for his back injury. 

Petitioner also filed a third-party tort action against Apache and Wood 

Group in the Southern District of Texas arising out of his June 30, 2013 

accident. While Petitioner’s appeal to the BRB was under submission, the 

Employer learned from counsel for Apache that Petitioner had settled a portion 

of the third-party tort action. The Employer also learned, after inquiring of 

Wood Group’s counsel, that a judgment had been entered in favor of Petitioner 

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against Wood Group. After the appeal was lodged in this Court, the Employer 

and Insurer moved to dismiss the appeal alleging that Petitioner failed to 

obtain their approval of the third-party settlement, or to notify them of the 

third-party judgment, as required by § 33(g) of the LHWCA. In an effort to 

determine whether any factual issues were presented that required remand of 

this case to the BRB, we submitted questions to counsel for Petitioner and 

Respondents. On August 13, 2018, Counsel for Parfait, in response to 

questions from the Court, divulged that1: 

(1) On or about April 25, 2016, Petitioner compromised a suit he had 

pending against Apache in the Southern District of Texas, with Petitioner 

receiving $325,000. Petitioner reserved his right in his release with Apache to 

proceed against Wood Group.

 

1 Response of Petitioner to Question 1 (State the net amount the Claimant 

received in the two settlements that he made with third parties): 

On or about April 25, 2016, Claimant McGill Parfait entered into a release and 

indemnity agreement with Apache Corporation in order to settle the suit 

initiated by McGill Parfait against Apache Corp., et. al. in the U.S. District 

Court for the Southern District of Texas – Galveston Division, C.A. No. 3:14-

cv-00213. The net amount of this settlement was $325,000.00 (three-hundred 

twenty-five thousand dollars) to McGill Parfait. Expressly excepted from this 

settlement was Wood Group PSN, Inc., its parents, subsidiaries, affiliates and 

interrelated companies, against all of whom Claimant McGill Parfait expressly 

reserved his rights, actions and causes of action. 

Following a jury trial in April 2017, on or about July 2017, McGill Parfait 

entered into a release and indemnity agreement with John Wood Group PLC 

(“Wood Group”) in order to settle the suit initiated by McGill Parfait against 

Wood Group, et al., in the U.S. District Court for the Southern District of 

Texas–Galveston Division, C.A. No. 3:14-cv-00213. This ‘settlement’ did not 

represent a compromise of Parfait’s claim, and followed a jury trial that was 

held in April 2017, which resulted in a favorable verdict for Parfait which was 

published as public record by the District Court on June 2, 2017, as Doc. No. 

204 in that cause. The net amount of this post-verdict settlement was 

$41,542.17 (forty-one thousand, five-hundred forty-two dollars and 17 cents) to 

McGill Parfait. 

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(2) Following a jury trial in April 2017, Petitioner received a favorable 

verdict against Wood Group, and a judgment was entered on that verdict from 

which Petitioner enjoyed a net recovery of $41,542.17. 

With respect to notice of this settlement and judgment to the 

Employer/Insurer, Petitioner’s counsel responded to the Court’s question as 

follows: 

Question: Describe or furnish a copy of any notification Claimant or 

counsel gave to the employer or insurer of Claimant’s intent to settle with 

either of the third parties with whom settlement was made. 

Response: 

Counsel for Employer/Carrier were specifically invited to attend a 

mediation session that was held March 10, 2016, and was 

contacted during the mediation session by Claimant’s counsel. 

This session was specifically called in order to resolve 

compensation issues and third-party claims. In addition, Parfait’s 

claims against Wood Group were tried to a jury over five days in 

April of 2017, which resulted in a favorable verdict to Claimant, 

and which judgment was published by the District Court on June 

2, 2017, and of which Respondents plainly were aware. Parfait’s 

claims against Wood Group claims were not compromised by 

settlement. 

Claimant contends that counsel for Employer/Carrier received 

adequate notice of any settlement(s) for which any prior notice was 

legally required. 

B. ANALYSIS

Section 33 of the LHWCA guarantees prompt payment of compensation 

to an employee injured through the negligence of a third party. Under this 

scheme,2 the employee may receive longshore benefits and still maintain a civil 

 2 33 U.S.C. § 933, Compensation for injuries where third persons are liable, provides:

(a) Election of remedies

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action against a negligent third party. To ensure that the employee does not 

receive a double recovery, the employer is granted rights to full reimbursement 

of all benefits paid, including compensation and medical benefits, from net 

third-party recoveries. If such recoveries exceed benefits already paid, the 

employer is allowed to credit any remainder against its future liability under 

the LHWCA. 

The Employer relies on § 33(g) of the LHWCA. Section 33(g)(1) provides:

 If on account of a disability or death for which compensation is payable under this 

chapter the person entitled to such compensation determines that some person other than 

the employer or a person or persons in his employ is liable in damages, he need not elect 

whether to receive such compensation or to recover damages against such third person.

. . . . 

(f) Institution of proceedings by person entitled to compensation

If the person entitled to compensation institutes proceedings within the period 

prescribed in subsection (b) the employer shall be required to pay as compensation under this 

chapter a sum equal to the excess of the amount which the Secretary determines is payable 

on account of such injury or death over the net amount recovered against such third person. 

Such net amount shall be equal to the actual amount recovered less the expenses reasonably 

incurred by such person in respect to such proceedings (including reasonable attorneys' fees).

(g) Compromise obtained by person entitled to compensation

(1) If the person entitled to compensation (or the person's representative) enters into 

a settlement with a third person referred to in subsection (a) for an amount less than the 

compensation to which the person (or the person's representative) would be entitled under 

this chapter, the employer shall be liable for compensation as determined under subsection 

(f) only if written approval of the settlement is obtained from the employer and the employer's 

carrier, before the settlement is executed, and by the person entitled to compensation (or the 

person's representative). The approval shall be made on a form provided by the Secretary 

and shall be filed in the office of the deputy commissioner within thirty days after the 

settlement is entered into.

(2) If no written approval of the settlement is obtained and filed as required by 

paragraph (1), or if the employee fails to notify the employer of any settlement obtained from 

or judgment rendered against a third person, all rights to compensation and medical benefits 

under this chapter shall be terminated, regardless of whether the employer or the employer's 

insurer has made payments or acknowledged entitlement to benefits under this chapter.

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If the person entitled to compensation (or the person's 

representative) enters into a settlement with a third person 

referred to in subsection (a) for an amount less than the 

compensation to which the person (or the person's representative) 

would be entitled under this chapter, the employer shall be liable 

for compensation as determined under subsection (f) only if written 

approval of the settlement is obtained from the employer and the 

employer's carrier, before the settlement is executed, and by the 

person entitled to compensation (or the person's representative). 

The approval shall be made on a form provided by the Secretary 

and shall be filed in the office of the deputy commissioner within 

thirty days after the settlement is entered into.

Subsection 33(g)(2) provides further: 

If no written approval of the settlement is obtained and filed as 

required by paragraph (1), or if the employee fails to notify the 

employer of any settlement obtained from or judgment rendered 

against a third person, all rights to compensation and medical 

benefits under this chapter shall be terminated, regardless of 

whether the employer or the employer’s insurer has made 

payments or acknowledged entitlement to benefits under this 

chapter.

Section 33(g), quoted above, which requires the employee to obtain 

written approval of certain third-party settlements and to give notice of all 

third-party settlements and judgments, is designed to ensure that the 

employer’s rights are protected in the settlement and to prevent the claimant 

from unilaterally bargaining away funds to which the employer or its carrier 

might be entitled under 33 U.S.C. § 933(b)-(f). In particular, the notice 

requirement enables an employer to protect its right to set off the settlement 

amount against its future obligations and its right to reimbursement of its 

previous payments from the settlement proceeds. Further, it ensures against 

fraudulent double recovery by the employee. 

Parfait has conceded in the filings with the Court that he did not give 

notice to the Employer or Insurer of his settlement with Apache or the 

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judgment obtained from Wood Group. Specifically, with respect to the Apache 

settlement, Parfait argues that inviting counsel for the Employer/Insurer to a 

mediation session where settlement was being discussed with Apache put the 

Employer/Insurer on notice that a settlement might be made in the future. 

With respect to the judgment Petitioner obtained against Wood Group, Parfait 

contends that publication of the judgment on the verdict filed in the public 

records following the trial was sufficient to put the Employer/Insurer on notice 

of that judgment. We are unpersuaded that Parfait gave adequate notice as 

required under § 33(g)(2) with respect to either the settlement or judgment.

Estate of Cowart v. Nicklos Drilling Co. is the most relevant Supreme 

Court authority on the questions presented to us.3 In that case, Cowart hurt 

his hand while working for Nicklos Drilling Company (“Nicklos”) on Transco 

Exploration Company’s (“Transco”) offshore drilling rig.4 Although Cowart 

had received no formal award and was not receiving compensation, the 

Department of Labor notified Nicklos’s carrier that it owed Cowart $35,592.77 

for permanent partial disability.5 Cowart made a third-party settlement with 

Transco in his tort action against the platform owner from which he received 

a net amount of $29,350.60.6 The settlement was funded by Nicklos under an 

indemnity agreement with Transco. 7 Although Nicklos had notice of the 

settlement, Cowart did not obtain written approval from Nicklos to make this 

settlement.8

Because Subsection (g)(1) begins “[i]f the person entitled to compensation 

. . . enters into a settlement with a third person,” the ALJ found that because 

 3 505 U.S. 469 (1992).

4 Id. at 471.

5 Id. at 471, 473-74.

6 Id. at 471.

7 Id. at 471-72.

8 Id.

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Cowart was not receiving compensation, the written approval requirement did 

not apply to him.9 This Court reversed, holding that the approval requirement 

applied regardless of the fact that the employee was not receiving 

compensation and no award had been made in his favor.10 The Supreme Court 

agreed and, in affirming this en banc Court’s judgment, found that while 

§ 33(g)(1) requires the employer’s written approval of settlements for amounts 

less than the employee’s compensation entitlement, only notice to the employer 

is required for other settlement amounts and for any judgment obtained 

against a third party. Specifically, the Court stated: 

An employee is required to provide notification to his employer, 

but is not required to obtain written approval, in two instances: (1) 

Where the employee obtains a judgment, rather than a settlement, 

against a third party; and (2) Where the employee settles for an 

amount greater than or equal to the employer’s total liability. 

Under our construction the written-approval requirement of 

§ 33(g)(1) is inapplicable in those instances, but the notification 

requirement of § 33(g)(2) remains in force. That is why subsection 

(g)(2) mandates that an employer be notified of ‘any settlement.’11

The Court also explained the reasons that notice is sufficient in those 

instances: 

In cases where a judgment is entered . . . the employee does not 

determine the amount of his recovery, and employer approval, 

even if somehow feasible, would serve no purpose. And in cases 

where the employee settles for greater than the employer’s 

liability, the employer is protected regardless of the precise 

amount of the settlement because his liability for compensation is 

wiped out. Notification provides full protection to the employer in 

these situations because it ensures against fraudulent double 

recovery by the employee.12 

 9 Id. at 473-74.

10 See id. at 471, 473-75. We affirmed this decision in an en banc opinion. Id. at 474.

11 Id. at 475, 482 (emphasis added).

12 Id. at 482-83.

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Under the above language from the Supreme Court in Cowart, Parfait’s 

rights to compensation and medical benefits under the LHWCA must be 

terminated. The Employee (Parfait) received $325,000 in the settlement of his 

claim against Apache. He has appealed the ALJ’s award of $1,493.60 and 

challenges the BRB’s denial of benefits for his back injury. If the settlement 

amount is less than the compensation to which the Employee would ultimately 

be entitled, § 33(g)(1) required him to obtain his Employer’s written approval 

(which he undisputedly did not obtain). And if the settlement amount is 

greater than the compensation to which he would ultimately be entitled, 

§ 33(g)(2) required him to give his Employer notice of the settlement (which he 

did not give).

In addition, the Employee received sums in the amount of $41,542.17 by 

way of a judgment against another third party, Wood Group. Subsection 

33(g)(2) required the Employee to give his Employer notice of this judgment 

(which he did not give). 

Under the statutory scheme, if an employee makes a settlement with or 

obtains a judgment against a third party, at a bare minimum, the employee 

must give notice of the settlement or judgment to his employer. Here, the 

ultimate benefits to which the Employee is entitled have never been finally 

determined. That determination is not necessary here because whatever the 

outcome of this appeal, his failure to give notice of the settlement and judgment 

would terminate his right to compensation. 

The Supreme Court’s reasons outlining the consequences of Cowart’s 

failure to obtain written approval from the employer of a settlement apply 

equally to the failure of Parfait to give notice of the sums he received in 

settlement and judgment from third parties. 

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First, the Court stated that with respect to § 33(g)(1) (requiring the 

employee to obtain written approval for certain settlements), “Congress has 

spoken with great clarity to the precise question raised by this case. It is the 

duty of the courts to enforce the judgment by the Legislature.”13 The same can 

be said for the clarity of § 33(g)(2) to the question presented in this case relative 

to the requirement of the employee to give notice of judgment and settlement. 

The Court also observed that accepting Cowart’s interpretation would 

conflict with the goals of § 33(f). “It mandates that an employer’s liability be 

reduced by the net amount a person entitled to compensation recovers from a 

third party.” 14 The same difficulty would be presented by accepting 

Petitioner’s argument in this case. 

There is a dearth of federal circuit court opinions on the type of notice 

that must be given in order to satisfy § 33(g)(2). The BRB, however, has given 

a strict interpretation to that section. In Fisher v. Todd Shipyards Corp., the 

employer challenged an ALJ’s determination that compensation was not 

barred by § 33(g)(2) since the employer had denied liability for compensation 

and was not prejudiced by the settlement.15 The BRB disagreed with the ALJ, 

stating:

[T]he plain language of Section 33(g)(2) places on claimant an 

affirmative duty to notify employer, before the entry of an award 

of benefits, of any third-party settlement or judgment obtained by 

claimant. Employer’s mere knowledge of settlements or the 

absence of prejudice to employer will not suffice to prevent the 

absolute bar to compensation from being invoked. To hold 

otherwise would virtually read Section 33(g)(2) out of the statute.16

 13 Id. at 483-84.

14 Id. at 479.

15 21 BRBS 323 (1988).

16 Id.

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Since Cowart, the BRB has consistently employed this strict 

interpretation, holding that if the employee settles for an amount greater than 

the total liability of the employer and fails to give notice of that settlement, the 

employee suffers the termination of his benefits.17 This is required to protect 

the employer’s right to offset third-party recovery against its liability for 

compensation and also to prevent a fraudulent double recovery. 

It is clear to us that Petitioner’s counsel’s telephonic notice on March 10, 

2016 to Respondents’ counsel that a mediation was being held to attempt to 

compromise the Petitioner’s claim against Apache was just that -- notice that 

Parfait was trying to settle that case. That is clearly inadequate notice of the 

settlement that was ultimately made on April 25, 2016. Similarly, we reject 

the argument that the court’s filing of the judgment obtained against Wood 

Group in the public record amounted to the required notice to the Employer. 

A finding that this constituted the requisite notice would, in the language of 

the Supreme Court in Cowart, be contrary to “the clear meaning”18 of § 33(g)(2) 

as written,19 and the “affirmative duty to notify.” 

 17 Edwards v. Marine Repair Servs., Inc., 49 BRBS 71 (2015) (“The Board has held 

that the plain language of subsection (g)(2) places on the claimant an affirmative duty to 

notify his employer of the third-party settlement, and the employer’s mere knowledge of the 

settlement or the absence of prejudice to the employer will not suffice to prevent the bar to 

compensation from being invoked.”); Cooley v. Huntington Ingalls, Inc., 49 BRBS 45 (UBD) 

(2014) (“Although employer gained knowledge of agreements through the discovery process, 

the administrative law judge must address whether claimant satisfied his affirmative duty 

to notify employer . . . of any third-party judgment he obtained.”); H.S. v. Pacorini USA, Inc., 

No. 07-0991 (BRB June 30, 2008) (UBD) (“Pursuant to the Supreme Court’s decision in 

Cowart, 505 U.S. 469, 26 BRBS 49 (CRT), if claimant either fails to comply with the written 

approval requirement of Section 33(g)(1) or fails to give notice to employer in the instances 

where written approval is not required, i.e., a settlement exceeding compensation entitlement 

or a judgment, the forfeiture provision applies.”); Dilts v. Todd Shipyard Corp., No. 02-0434 

(BRB Mar. 12, 2003) (UBD) (“There is no requirement under Section 33(g) that employer 

establish prejudice in order for Section 33(g) to bar a claim for compensation.”). 

18 Cowart, 505 U.S. at 476.

19 33 U.S.C. § 933(g)(2) (requiring “the employee . . . to notify the employer of any 

settlement obtained from or judgment rendered against a third person”).

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C. CONCLUSION

We find no reason to remand this case to the BRB for fact-finding. The 

Employee in this case did not comply with the approval and notice 

requirements of § 33(g) (1) and (2) with respect to his third-party settlement 

with Apache or his judgment against Wood Group. This failure requires 

termination of any right to compensation or medical benefits Petitioner might 

otherwise have under the LHWCA. We therefore grant Respondents’ motion 

and dismiss this appeal. 

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