The DBA Applies if Claimant Worked Under a Contract “Approved and Financed” by the U.S.

Claimant, an airplane mechanic in Abeche, Chad, alleged work-related injuries to his hip, lower back and legs.  Employer successfully argued to the administrative law judge (“ALJ”) that the Defense Base Act did not cover Claimant’s injuries because Claimant was not working under a contract with the United States.  Instead, Employer’s “humanitarian air transport services in Chad [were] funded through a cooperative agreement with the United States Department of State (DOS) and a grant from the United States Agency for International Development (USAID) . . . .”  Because the term “contract” was not defined by the Defense Base Act, the ALJ interpreted “contract” in accordance with the Federal Grant and Cooperative Agreement Act of 1977, 31 U.S.C. § 6301, et seq.   The ALJ determined that Claimant was not working under a “contract” within the meaning of Section 1(a)(5) of the Defense Base Act.  Consequently, the ALJ granted Employer’s Motion for Summary Decision.

Section 1(a) of the Defense Base Act discusses when coverage is afforded.  Section 1(a)(5) states that the Defense Base Act shall apply to the injury or death of an employee engaged in any employment:

Under a contract approved and financed by the United States or any executive department, independent establishment, or agency thereof (including any corporate instrumentality of the United States), or any subcontract or subordinate contract with respect to such contract where such contract is to be performed outside the continental United States . . . and every such contract shall contain provisions requiring that the contractor . . . (A) shall, before commencing performance of such contract, provide for securing to or on behalf of employees engaged in work under such contract the payment of compensation and other benefits under the provisions of this Act, and (B) shall maintain in full force and effect during the term of such contract . . . or while employees are engaged in work performed thereunder, the said security for the payment of such compensation and benefits . . . .

See 42 U.S.C. § 1651(a)(5) (2013).

On appeal, the Benefits Review Board (“BRB”) disagreed with the ALJ’s determination.  By comparing Section 1(a)(4) and Section 1(a)(5) of the Defense Base Act, the BRB was able to glean a distinction between the two subsections.  Whereas Section 1(a)(4) would have required a contract with the United States, or any agency thereof, Section 1(a)(5) “requires only that the employee’s employment be ‘under a contract approved and financed by the United States,” or any agency thereof.  See 42 U.S.C. § 1651(a)(5) (emphasis added).  Accordingly, summary decision was not appropriate in this case because genuine issues of material fact existed with respect to whether Claimant’s employment was “approved and financed” by the United States.

Delgado v. Air Serv Int’l, Inc., BRB No. 12-0283 (2013).