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Concealing Injury Doesn’t Negate Benefts Claim

(CN) - Transocean seamen who concealed medical conditions to get hired may still have a shot at seeking benefits for workplace injuries, the divided 5th Circuit ruled.

Transocean hired Wallace Boudreaux in 2005 after he falsely indicated on a pre-employment questionnaire that he had no history of back problems.

Within five months of getting the job, Boudreaux claimed he hurt his back servicing equipment, and Transocean paid him unemployment and medical benefits for five years.

Boudreaux then filed an April 2008 federal complaint for punitive damages against Transocean, claiming that he had a right to further benefits and that the company mishandled his past benefits.

In discovery Transocean found evidence of Boudreaux's pre-employment back problems, and it said it has a defense to liability from the 1968 ruling McCorpen v. Central Gulf.

That 5th Circuit decision exempts maritime employers from owing benefits where they can prove the claimant misrepresented or concealed a pre-existing medical condition, material to them getting hired and connected to the injury they allegedly suffered.

After a federal judge in New Orleans credited the defense, Transocean then filed a counterclaim to recover the benefits it had already paid Boudreaux, arguing that its successful McCorpen defense automatically established its right to restitution.

Again the district court sided with Transocean and ordered Boudreaux to pay restitution.

A divided three-judge panel of the 5th Circuit reversed Thursday, and rendered judgment for Boudreaux.

Though concern for Boudreaux's egregious conduct is understandable, "the sweeping counterclaim it endorses would mark a significant retreat from our hoary safeguard to the well-being of seaman," the seven-page ruling states.

Citing U.S. Supreme Court precedent established more than 50 years ago, the ruling notes that a seaman's fraudulent misrepresentations of his health history does not terminate his employment, or take the employer off the hook for benefits if he suffers a workplace injury.

Because seamen retain their right to damages in the face of their fraud to get hired, they also should retain their right to benefits, the court found.

"We are offered no reason to depart from precedent," Judge Patrick Higginbotham wrote for a three-member panel. "There is only the change of advocates and judges, by definition irrelevant to the settling force of past jurisprudence - always prized but a treasure in matters maritime. All this against the cold reality that the sea has become no less dangerous, and the seaman no less essential to martime commerce."

Judge Edith Brown Clement disagreed with the majority.

"There is no question as to whether Boudreaux is entitled to the benefits of maintenance and cure as a result of his misrepresentations," her four-page dissent states. "He is not and was not, and I would therefore hold that Transocean is entitled to restitution.

"There is no reason to reject this general equitable principle in the face of willful and intentional misconduct engaged in on land by a non-maritime employee, simply because, by virtue of that very misconduct, the individual later obtained maritime employment and became unjustly enriched at the expense of his maritime employer."

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