Pre‑Existing Permanent Partial Disability

Two theories have developed to define permanent partial disability under Section 908(f).  The first is the “economic disability theory.”  Under the “economic disability theory,” pre‑existing permanent partial disability is defined in accordance with Section 902(10) of the LHWCA, such that an incapacity to earn wages must be demonstrated.  The second theory is the “cautious employer” test.  Pursuant to the “cautious employer” test, the respondent may establish his employee’s permanent partial disability by showing that the employee had such a serious physical disability in fact, that a conscientious employer would have been motivated to discharge the handicapped employee because of a greatly increased risk of employment-related accident and compensation liability.  See C & P Telephone Co. v. Director, OWCP (D.C. Cir. 1977) 564 F.2d 503, 513.

The Ninth Circuit has embraced the “cautious employer test” in assessing pre‑existing partial disability.  Todd Pacific Shipyards v. Director, OWCP (8th Cir. 1990) 913 F.2d 1426, 1430.  For example, in Lockheed Shipbuilding v. Director, OWCP (9th Cir. 1991) 951 F.2d 1143, the Ninth Circuit granted Section 8(f) relief, finding that a seven-year history of ongoing back problems was sufficient to motivate a cautious employer to discharge the worker.  Also within the Ninth Circuit, where psychological testing revealed that the worker suffered from borderline retardation, this mental limitation was sufficient to establish pre‑existing permanent partial disability pursuant to the “cautious employer test.”  Todd Pacific Shipyards Corp. v. Director, OWCP (Mayes) (9th Cir. 1990) 913 F.2d 1426, 24 BRBS 25 (CRT).

Other conditions which have met judicial approval as pre‑existing permanent partial disability include arthritis, cervical sprain, alcoholism, diabetes, drug addiction, low IQ, bulging discs, heart disease, and degenerative changes.  It should be noted, however, that the mere fact of a past injury or ailment is not alone sufficient to establish “disability.”  Rather, as a result of the past injury or ailment, a serious, lasting physical problem must persist.  Director, OWCP v. Campbell Industries, Inc. (9th Cir. 1982) 678 F.2d 836, 14 BRBS 974, rev’g Lostaunau v. Campbell Industries, Inc. (1981) 13 BRBS 227.

Manifestation Prong of Section 8(f)

Known as the manifestation program of Section 8(f), this judicially created requirement for obtaining Special Fund relief requires the worker’s pre‑existing permanent partial disability to be “manifest” to the employer.  This prong can be met with either actual or constructive knowledge of a pre‑existing disability.

For example, the mere existence of medical records, from which a pre‑existing condition is objectively determinable, has been deemed sufficient to meet the manifestation prong, whether or not the employer was aware of the records at the time of injury.  See C & P Telephone v. Director, OWCP (D.C. Cir. 1977) 564 F.2d 503, 6 BRBS 399.