Opinion ID: 355513
Heading Depth: 1
Heading Rank: 2

Heading: the employer's s 8(f) claim

Text: 10 All the medical experts agreed that prior to December 28, 1972, De Nichilo had a heart disease and a diabetic condition which made him more susceptible to a heart attack than someone not suffering from those conditions. The employer contends that even if the attack on that date was work-related, it was a second injury within the meaning of § 8(f). Accordingly, the employer claims that its liability should be limited by the terms of that provision. 2 11 On June 18, 1976, the administrative law judge held that (s)ince his (De Nichilo's) pre-existing heart disease and diabetes did not affect his earning capacity, he did not suffer from an existing disability within the meaning of Section 8(f). App. at 20a. In reaching this decision, the administrative law judge relied heavily on the Benefits Review Board's decision in Aleksiejczyk v. Atlantic & Gulf Stevedores, Inc., 1 BRBS 541, BRB No. 74-202 (1975). But Aleksiejczyk's construction of § 8(f), which the administrative law judge below accepted, was overruled by this court on June 23, 1976, in Atlantic & Gulf Stevedores, Inc. v. Director, Office of Workers' Compensation Programs (Aleksiejczyk), supra. 12 The employer in the instant case pressed its § 8(f) contention before the Benefits Review Board. By the time of the Board's decision, it had become clear that the administrative law judge's reliance on the Board's Aleksiejczyk opinion was misplaced. Nevertheless, the Board rejected the employer's claim on a ground not considered by the administrative law judge namely, that De Nichilo's prior condition was not manifest to the employer at the time that he was hired. The Board reasoned as follows: 13 The principal purpose of the special fund in regard to second injuries is to assist the handicapped in obtaining employment. Congress, however, did not intend that all previous disabilities come within the scope of Section 8(f), but only those manifest to the employer at the time of hiring. The availability of knowledge of the pre-existing condition to the employer, not necessarily his actual knowledge, is the relevant standard. Pye v. General Dynamics Corp., BRBS BRB No. 76-188, 76-188A (Feb. 18, 1977); American Mutual Ins. Co. of Boston v. Jones, (138 U.S.App.D.C. 269), 426 F.2d 1263 (D.C.Cir. 1970). 14 The nature of claimant's previous disability, a weakness of the cardiovascular system, was not a disability patently obvious to an employer. There is record evidence that the claimant regularly performed his duties in spite of his heart problems. The employer may have been able to discover claimant's condition through an employment physical, but there is no evidence that the employer availed himself of that opportunity or that the employer had actual knowledge of claimant's previous disability. While the record in this case may indeed substantiate several elements of the employer's argument on the Section 8(f) issue, an essential element has not been established, namely that the previous disability be manifest to the employer at the time of hiring. Therefore, we sustain the law judge's finding that the special fund provisions do not apply to this case. 15 App. at 28a-29a. 16 Naturally, the employer endorses our interpretation of § 8(f) in Atlantic & Gulf Stevedores, where we held that the test for a prior disability is a physical one rather than an economic one. A good part of the Director's brief addresses a reconsideration of that interpretation. However, our construction of § 8(f) has been followed by both the Fifth and the District of Columbia Circuits. See C & P Telephone Co. v. Director, Office of Workers' Compensation Programs, 184 U.S.App.D.C. ---, 564 F.2d 503 (1977); Equitable Equip. Co. v. Hardy, 558 F.2d 1192, 1198 (5th Cir. 1977). Only the court in banc could reconsider our decision in Atlantic & Gulf Stevedores. E. g., Krolick Contracting Corp. v. Benefits Review Bd., 558 F.2d 685, 689 (3d Cir. 1977). The present dispute is between two competing insurance funds, and in the long run the certainty of coverage is probably as important as the correctness of our prior holding. Moreover, the underlying congressional purpose in creating the special fund was to encourage the employment of partially disabled persons. We remain convinced that our rejection of the economic test for disability is consistent with that purpose. Thus, we conclude that the administrative law judge erred in applying the economic test for disability. 17 As we pointed out above, the Benefits Review Board did not rely on the economic test to reject the employer's § 8(f) claim. Instead, the Board ruled that § 8(f) did not apply because the employer had not established its knowledge of the prior disability. The employer concedes that it did not offer evidence of De Nichilo's prior disability. But the employer objects to the Benefits Review Board's deciding the case on a ground not considered by the administrative law judge and requests at least a remand so that it can prove its knowledge. The employer points out, however, that due to the nature of longshoring employment, in which a transitory labor force reports to a hiring hall, employers generally have no opportunity to conduct physical examinations for the purpose of discovering pre-hire physical disabilities. Thus, the employer concedes that in most cases within the coverage of the Act an employer will lack such knowledge. It urges, however, that if the test for § 8(f) coverage is the second employer's actual knowledge of the prior disability, employers will insist upon pre-hire physical examinations, thereby erecting barriers to the employment of the partially disabled. 18 At oral argument the Director's attorney conceded that this would be a possible if not likely consequence of an actual knowledge requirement and that such a consequence would be inconsistent with the policy underlying § 8(f). The Director points out, however, that in Atlantic & Gulf Stevedores we said: 19 . . . The courts have adopted a latent-manifest test for determining when an employer will receive the benefit of § 8(f) treatment. Strong policy considerations dictate that only those employers who hire the handicapped with knowledge of their disabilities qualify for limited liability. The latent-manifest test is one method for separating eligible from ineligible employers. In view of the difficulty of proving actual knowledge of a disability, the test is ordinarily an objective one. Conditions that are latent rather than manifest to a prospective employer do not qualify as § 8(f) disabilities. If this court determines that Aleksiejczyk's medical history was latent, the Board's order finding against Atlantic & Gulf on the § 8(f) issue must be sustained. 20 The Administrative Law Judge found that the employer was aware of the medical problems of the decedent. . . . 21 542 F.2d at 609 (footnotes omitted). The quoted language might have been more carefully chosen, since it could be construed to refer to an actual knowledge requirement. Certainly the employer's actual knowledge of the disability, which the administrative law judge found in Atlantic & Gulf Stevedores, sufficed to establish a manifest rather than a latent disability. But we did not intent to hold in that case that actual knowledge was the only means for determining that a pre-hire disability was manifest for § 8(f) purposes. An examination by an employer may establish affirmatively that a disability was latent. E. g., Duluth, M. & I. R. Ry. v. United States Dep't of Labor, 553 F.2d 1144, 1151 (8th Cir. 1977). But an employer's lack of knowledge that an employee has an artificial limb or a glass eye is irrelevant, since such a pre-hire disability is clearly manifest in the sense that it is objectively determinable and free from doubt. 22 Heart disease is not as obviously manifest a disability as is the loss of a limb or an eye. Nevertheless, in many instances heart disease is objectively determinable and objectively determined. The record before the administrative law judge contains the evidence of De Nichilo's prior hospitalization for a possible myocardial infarction and the testimony of Dr. Edward S. Wally that De Nichilo suffered from a coronary artery disease. The administrative law judge relied upon this evidence of De Nichilo's abnormal heart condition to conclude that the degree of stress De Nichilo underwent on December 28, 1974, produced the attack he suffered on that date. Although the administrative law judge did not use the word manifest, he found that De Nichilo had pre-existing physical infirmities of heart disease and diabetes mellitus. These were readily discoverable by any employer who looked at De Nichilo's medical record. That record makes the disability manifest. No more is required for the purpose of assuring that only eligible employers receive the insurance coverage provided by § 8(f) of the Act. Therefore, since the findings of the administrative law judge establish the existence of a manifest condition, we hold that the employer is covered by the special fund provision.