The vessel status of [derrick barges] creates a difficult employment scheme for waterfront employers to navigate

Along the industrial waterfront of Hampton Roads derrick barges are ubiquitous and serve an integral role in sustaining our marine based economy. Moving cargo, securing salvage, assisting with vessel repairs, and assisting with construction projects are just some of the jobs marine employers task them and their operators to accomplish. Shipyards, marine terminals, marine construction companies, and other waterfront industries either own or lease these nautical cranes to complete not only their own business demands but also to honor their contractual requirements with their customers. Although these special barges generally do not possess their own power to move across the waves, federal and state courts will often define them as vessels subject to maritime and admiralty laws. These rulings may apply regardless of whether the barge is moving or spudded or anchored for extended periods of time. As vessels, derrick barges can have crews and seamen possessed of the statutory rights granted by the Jones Act as well as the common law rights recognized by general maritime law. And, where those laws do not apply, the scope of the Longshore and Harbor Workers Compensation Act can reach.

"Any company using a derrick barge must fully appreciate the insurance, contractual and legal ramifications that arise from their status as vessels and examine their use on a case by case basis."

The vessel status of these derricks, therefore, creates a difficult employment scheme for waterfront employers to navigate. For instance, if a barge employee suffers an injury on the job, must the employee receive workers compensation benefits under the administrative law scheme of the Longshore Act or should the employer pay civil law relief in the form of maintenance and cure to avoid the threat of a punitive damage award and consider Jones Act and unseaworthiness settlements as well. To further complicate this dilemma, employers must be mindful that an employee’s acceptance of administrative law benefits such as longshore indemnification and medical payments does not necessarily preclude the employee from subsequently demanding maintenance and cure and other relief afforded seamen. Moreover, even if an employee is ultimately found to be a longshoreman, the Longshore Act does not always prevent an injured employee from seeking civil relief against his employer as a vessel owner. And, in certain cases even the Virginia Workers Compensation Act can still come into play. It is within these shifting shadows of jurisdictional lines that employees assigned to derrick barges work and their employers must sustain and grow their businesses.

General rules of thumb offered by some experts only appear to offer a straight path through the maze of employer liability. For example, one such rule general rule is that an employee assigned to a derrick barge for at least 30% of his employment will likely drift into the status of seaman. But, this is not a hard and fast rule applicable to every case, and sometimes courts allow juries to decide the seaman status for an employee with half the amount of work time onboard a vessel. And, employers with more than one vessel in its fleet may find the cumulative amount of time the employee spends on the water on all its vessels will establish seamen status for the injury onboard a specific vessel. Seasonal employment can also affect the application of this rule of thumb. In short, an employer should have each contemplated and existing use of a derrick barge examined on a case by case basis.

In addition to the aforementioned shifting jurisdictions that a marine based business must consider, legal doctrines such as the borrowed servant can place the responsibility of making payments under these various employer-employee schemes with unsuspecting companies who labor under a notion that their position as independent contractors or general contractors shelter them from employer liability. Their incorrect positions that they have no need to understand the aforementioned distinctions and no need to analyze the underlying facts of each project or injury on a case by case basis can lead to painful financial consequences. Despite carefully drawn contracts attempting to define the employment relationships between general contractors and their subcontractors, the element of who controlled the injured employee and how that control arose often throws these jurisdictional loops of liability around businesses that do not directly employ the injured worker. In those cases, the lack of appropriate insurance and contractual protections can force bankruptcy, breaches of contract, and complete shutdown.

If an employer finds itself in a quagmire of employment uncertainty created by its use of a derrick barge, then general maritime and statutory laws are not the only laws coming into play. The rules of admiralty can also take effect and play a decisive role in how a case proceeds in either state or federal court. For example, limitation of liability afforded by Rule F of the Supplemental Rules for Admiralty may rescue an employer’s business from a devastating financial loss associated with Jones Act, unseaworthiness or what is known as 905(b) relief. Seeking this relief requires prompt action because it may be waived in just a short time by inaction and the poor decision to bury one’s head in the sand.

Any company using a derrick barge must fully appreciate the insurance, contractual and legal ramifications that arise from their status as vessels and examine their use on a case by case basis.