Earlier this year, the U.S. Fifth Circuit authored an opinion in Meche v. Doucet, 777 F.3d 237 (5th Cir. Jan. 22, 2015) that touched on important issues related to the McCorpen defense against a seaman’s claim for maintenance and cure. See McCorpen v. Central Gulf Steamship Corp., 396 F.2d 547 (5th Cir. 1968).
McCorpen allows a Jones Act employer to deny maintenance and cure benefits to an injured seaman who “knowingly fail[s] to disclose a pre-existing physical disability during his [or her] pre-employment physical examination.” To establish a successful McCorpen defense, the employer must prove that: (1) the seaman intentionally misrepresented or concealed medical facts; (2) the non-disclosed facts were material to the employer’s decision to hire the seaman; and (3) a connection exists between the withheld information and the injury complained of in the lawsuit. But, there is an important and dispositive distinction between nondisclosure and concealment of preexisting injuries. If during the pre-employment application process, the employer did not specifically ask about prior injuries, the seaman is not obligated to volunteer his previous injury unless the seaman believes (in his own opinion) that his employer would find it important to his employment. On the other hand, if the seaman is asked about his pre-existing injuries and fails to disclose or misrepresents any material medical facts related to those injuries, the seaman may be precluded from recovering maintenance and cure from his employer.
In Meche, Plaintiff sued his employer, Key Energy Services, for an alleged back injury sustained while working as a vessel captain. Key Energy disputed that the injury ever occurred and additionally argued that Meche forfeited any right to maintenance and cure by lying on his pre-employment application about his preexisting back injuries. What is interesting about this argument is that Meche never filled out a pre-employment application with Key Energy. Instead, he had completed one with Moncla Marine, which was later purchased by Key Energy. Meche represented to Moncla Marine that he had no prior back injuries despite three prior work-related back injuries. At trial, the district court found the McCorpen defense inapplicable to Key Energy because Meche did not conceal his prior injuries specifically to Key Energy and credited his testimony that he did not believe his prior injuries to be important to his employment. The district court awarded Meche maintenance and cure and punitive damages, interest, and costs for Key Energy’s bad faith refusal to pay maintenance and cure. Key Energy appealed the district court’s ruling.
On appeal, the Fifth Circuit reversed, finding that Key Energy was entitled to the protections of McCorpen based on Meche’s clear and intentional concealment from Moncla Marine. In doing so, the Circuit Court found that when one company acquires another, it makes “little economic or logical sense” to require the acquiring company to reexamine the employees of the predecessor company solely for the purpose of avoiding liability for maintenance and cure. Therefore, when one company purchases another and maintains in its employ the seaman of the predecessor company, the purchasing company is entitled to the McCorpen defense based on representations made by employees to the predecessor company. The Court also rejected Meche’s argument that any concealment on his part was corrected when he verbally disclosed his prior injuries to Moncla Marine before he was hired. The Court found that a seaman who intentionally provides false medical information on a pre-employment questionnaire does not cure the concealment by later contradicting that information verbally. Lastly, the Fifth Circuit rejected Meche’s argument that his concealment was not intentional because he didn’t personally fill out the paperwork, finding that his signature sufficiently endorsed the responses. Accordingly, the Fifth Circuit reversed the award of maintenance, cure, and punitive damages against Key Marine.
For those companies who employee Jones Act seaman, Meche underscores the importance of requiring pre-employment (or post-offer) examinations and medical questionnaires concerning prior injuries. Without such measures, Jones Act employers must carry the difficult burden of proving that the employee was aware that his prior injuries would be important to the employer. And, given the ever changing landscape in the maritime industry, a successor or acquiring company whose corporate acquisition includes Jones Act seamen can rest assured that they are protected by McCorpen so long as the predecessor company adequately protected themselves during the pre-employment application process. Meche should also serve to remind those successor entities to review the acquired company’s pre-employment application and examination process as part of their due diligence in the acquisition phase should they choose to retain the seaman employees.