547 Third Party Liability

547.1 Purpose

This section instructs control office or control point personnel on how to collect damages from a third party who is responsible for causing an injury to a postal employee who receives benefits under the FECA, 5 U.S.C. 8101–50, as a result of that injury.

547.2 Background

547.21 Requirement to Take Action

FECA provides that if the injury or death (which is compensable under the Act) is caused by a third party, the claimant can be required to take action against that third party. The Office of the Solicitor of Labor (SOL) is delegated authority to administer the subrogation aspects of certain FECA claims for OWCP. Either OWCP or SOL can require an employee receiving benefits under FECA to do one of the following:

  1. Assign to the United States any right of action he or she may have to force the third party to pay damages or assign any right the employee may have to share in money received in satisfaction of a liability claim.
  2. Prosecute the action in his or her own name.
547.22 Penalty for Refusal

Any employee who refuses to assign right of action to the United States or to prosecute an action in his or her own name when required to do so by the secretary of the Department of Labor (DOL) may be denied compensation by DOL.

547.23 Postal Service Administrative Pursuit

The agreement between the director of OWCP and the Postal Service provides that to more efficiently and effectively accomplish the stated purpose of FECA, OWCP agrees that the Postal Service may administratively pursue collection of damages from the third party who is responsible for the injury sustained by a Postal Service employee in all cases of traumatic injury except in any of the following cases:

  1. When the injury results in the death of the employee.
  2. When the injury occurs outside of the United States or Canada.
  3. When the third party is a common carrier.
  4. When malpractice or product liability is involved.
  5. When injuries are sustained by more than one employee in the same incident (group injuries).

547.3 Definitions and Use of Terms

The definitions in this section apply to 547 only and are not included under 541.2. They do not change the terms of the Act, the regulations of the Department of Labor, or other sections of the ELM.

  1. Assignment — a written agreement whereby the employee or beneficiary transfers his or her right to recover damages from a third party to the Postal Service and such offer is accepted by the Postal Service.
  2. Legal liability a determination that a third party is responsible for the payment of money damages to an injured employee.
  3. Negligence — the failure of a third party to act as an ordinary prudent person would act under the same or similar circumstances and such failure is the proximate cause of an injury to an employee.
  4. Prosecute any action taken to recover damages from the third party.
  5. Serious injury — a personal injury that results in death, dismemberment, significant disfigurement, a fracture, or permanent loss of use of a body organ, member function, or system.
  6. Third party — a person or organization, other than the United States and its agencies, who is believed to be responsible for injury to a postal employee while in the performance of employment.
  7. Tort a wrongful act committed by a third party that is done intentionally or negligently and that causes injury to an employee.

547.4 Responsibility

The Injury Compensation control office carries out the responsibilities outlined in these instructions. At installations that do not have an Injury Compensation control office, the Injury Compensation manager designates a qualified control point supervisor responsible for coordinating these instructions with the control office. The Injury Compensation manager must ensure that control point personnel are properly trained to carry out the responsibility of making third party recoveries.

547.5 Third Party Recovery Action

547.51 Traumatic Injury

Upon receipt of Form CA–1, the control office or control point supervisor reviews the form to determine if a third party is involved in the injury to the employee and whether the third party could be responsible for the injury.

547.52 Occupational Illness or Disease

Third party cases for which a claim is filed on Form CA–2 must be identified and forwarded to OWCP. OWCP continues to be responsible for third party recoveries in these cases. The control office or control point supervisor monitors the progress of OWCP action and obtains periodic status reports until these cases are closed.

547.53 Potential Third Party Injuries

Although a third party recovery case can arise from many circumstances in which a third party’s act or failure to act results in the injury or death of an employee, the most common circumstances are, but are not limited to, these:

  1. Automobile accidents.
  2. Animal attacks.
  3. Conditions that cause tripping, slipping, and falling on sidewalks, steps, and other portions of nonfederal property.
  4. Defective machinery, automobiles, and equipment.
  5. Physical attacks and other assaults.
  6. Defects in leased postal premises.
547.54 Investigation

When a possible third party recovery case is identified, the control office or control point supervisor should coordinate an investigation of the incident and do the following:

  1. If possible, obtain a detailed, written statement from:
    1. The injured employee, if the Form CA–1 is not sufficient to determine third party liability or is otherwise inadequate.
    2. Any witness to the incident.
    3. Any other person who may be acquainted with the facts or is identified as having pertinent information.
  2. Obtain the name, address, and telephone number of the third party.
  3. Obtain a detailed description of the place where the incident occurred, and all the circumstances concerning the incident.
  4. If an investigation of the incident was previously made by the local police, Postal Service Vehicle Services, Postal Service safety personnel, Inspection Service, Office of Inspector General, or any other organization, obtain a copy of the reports and the investigative file.
  5. Consult Handbook PO–702, Accident Investigation — Tort Claims, for information and procedures regarding investigative techniques and guides.
547.55 Notification

In all cases when it appears that a third party recovery is a possibility, a completed PS Form 2562, Injury Compensation Program — Notice of Potential Third Party Claim (Exhibit 547.55), should be obtained from the injured employee. If the claim has already been submitted to OWCP, a copy of the completed form should be forwarded to that office with the employee’s claim for benefits as soon as possible after it is received from the employee. (See 544 for submission of claims to OWCP.) Do not delay the submission of the claim to OWCP pending receipt of third party information. When OWCP is responsible for making the third party recovery (see 547.23), no action to recover should be taken by the control office.

Exhibit 547.55

PS Form 2562, Injury Compensation Program — Notice of Potential Third Party Claim

Sample PS Form 2562, page 1.

Exhibit 547.55 (p. 2)

PS Form 2562, Injury Compensation Program — Notice of Potential Third Party Claim

Sample PS Form 2562, page 2.

547.56 OWCP Responsibility

In all cases in which OWCP is responsible for making a recovery, the control office or control point supervisor monitors the progress of OWCP’s action and obtains periodic status reports until the case is closed. Any such cases that are closed without a payment from the third party are referred to the area human resources analyst for injury compensation for review and appropriate action.

547.57 Postal Service Responsibility

When a third party collection responsibility has been assumed by the Postal Service, the control office or control point supervisor forwards copies of all letters issued together with other pertinent third party claim documents to OWCP district office. The control office or control point supervisor should then proceed as follows when the employee is represented by an attorney:

  1. If the answer to the question on PS Form 2562 “Does the employee or beneficiary(ies) intend to take action against the third party?” is Yes, and the PS Form 2562 or other information shows that the employee is represented by an attorney, forward the following to the employee’s attorney:
    1. Sample letter A, Notice to Attorney of Government’s Lien (see Exhibit 547.57a), with the papers and forms referred to in that letter.
    2. Sample letter B, Request for Status and Transmittal of Information (Exhibit 547.57b).
  2. If a response to sample letter A is not received within 90 days after mailing, obtain a status report on the progress of the case by contacting directly the attorney who is representing the postal employee. Status reports from the postal employee’s attorney should be obtained as frequently as is considered necessary by the control office or control point supervisor. If no reply is received from the attorney within 90 days after any request for a status report has been made, send a follow–up letter to the attorney. If there is no response after 15 days, contact the employee regarding status of cases. If recovery still has not been made, do one of the following:
    1. Contact your area human resources analyst for injury compensation or field general council for further guidance.
    2. Monitor progress if the case is still in the process of recovery.
  3. Upon receipt of notification from the postal employee’s attorney that the case has been terminated, verify the nature of termination (i.e., with or without settlement).
    1. If the case is terminated without settlement, do one of the following:
      1. Attempt to obtain from the employee a voluntary assignment if the case has merit.
      2. If the attorney indicates that a suit for damages is unlikely to prevail, close the file and assist the employee in requesting release from his or her obligation to proceed. The request should be in writing and provide evidence of the attorney’s opinion.
    2. If the case is settled, obtain settlement sheet, PS Form 2556, Third Party Statement of Recovery (see Exhibit 547.57c), and payment due the Postal Service. Verify the accuracy of PS Form 2556 and forward settlement sheet in accordance with 547.73.
547.58 Employee Not Represented by Attorney

The control office or control point supervisor should proceed as follows:

  1. If the answer to the question on the PS Form 2562 “Does the employee or beneficiaries intend to take action against the third party?” is Yes, and the PS Form 2562 or other information shows that the employee desires to pursue the recovery him– or herself and is not represented by an attorney, furnish the employee sample letter C, Notice to Employee of Government’s Lien (see Exhibit 547.58a), and mail sample letter D, Notice to Third Party of Government’s Lien (see Exhibit 547.58b), to the third party and/or insurer.
  2. At least every 60 days after the date sample letter C is given the employee, check with the employee to determine the status of the case.
  3. If a recovery has not been made within 6 months after the accident, or if prior to that time there is information that the action on the claim has been terminated, contact the employee for status of recovery action. If the employee has decided not to pursue or has been unsuccessful in the recovery attempt, proceed in accordance with 547.59d.
  4. When a recovery statement (see PS Form 2557, Employee’s Third Party Recovery Statement, Exhibit 547.58c) is received from the employee, review it for accuracy, take the necessary action to correct any errors, and forward the recovery statement together with the payment, in accordance with 547.73.

Exhibit 547.57a

Sample Letter A, Notice to Attorney of Government’s Lien

Exhibit 547.58a Sample Letter C, Notice to Employee of Government’s Lien

Exhibit 547.57b

Sample Letter B, Request for Status and Transmittal of Information

Exhibit 547.57b

Exhibit 547.57c

PS Form 2556, Third Party Statement of Recovery

Sample PS Form 2556, page 1.

Exhibit 547.57c (p. 2)

PS Form 2556, Third Party Statement of Recovery

Sample PS Form 2556, page 2.

Exhibit 547.58a

Sample Letter C, Notice to Employee of Government’s Lien

Exhibit 547.58a

Exhibit 547.58b

Sample Letter D, Notice to Third Party of Government’s Lien

USPS logo.

Exhibit 547.58c

PS Form 2557, Employee’s Third Party Recovery Statement

Sample PS Form 2557.

547.59 Employee Not Pursuing Third Party Action

The control office or control point supervisor should proceed as follows:

  1. If the answer to the question on Form 2562 “Does the employee or beneficiaries intend to take action against the third party?” is No, or the employee is undecided, or it is unclear what action the employee contemplates, furnish the employee with sample letter E, Request for Information From Employee and Notice of Government’s Lien (Exhibit 547.59a), and PS Form 2559, Third Party Claim — Information Request (Exhibit 547.59b).
  2. If PS Form 2559 is not received within 15 days, contact the employee directly or through the employee’s supervisor to determine what action the employee intends to take against the third party.
  3. If the employee advises that he or she will seek recovery against the third party, proceed in accordance with 547.57 or 547.58, as appropriate.
  4. If the employee indicates that he or she will not seek recovery against the third party, or is unable to decide what action he or she will take, ask whether the employee will agree to assign his or her claim against the third party to the Postal Service by signing PS Form 2577, Assignment of Claim to the USPS (Exhibit 547.59c). If the employee declines to make the assignment, refrain from saying or doing anything to the employee that could be regarded as pressuring or coercing the employee to agreeing to the assignment. Point out that the Postal Service is not ordering or directing the employee to either sue or assign the claim, but advise the employee of the following information:
    1. By assigning a claim to the Postal Service, the employee will enable the Postal Service to attempt to shift the financial liability for the employee’s injury from the Postal Service to the true wrongdoer, i.e., the third party.
    2. The ultimate recovery that the employee will realize for the injury cannot possibly be reduced by the employee’s agreement to the assignment. An employee is entitled to a minimum of 20 percent of the net recovery after the expense of the recovery (attorney’s fees, property damage, and court costs only) have been deducted. In addition, any surplus amount realized in the third party action that exceeds the amount of the employee’s compensation payments and the expense of realization or collection, will be paid to the employee.
    3. OWCP is authorized to require an assignment of the claim and to terminate an employee’s entitlement to past or future compensation payments if he or she refuses to pursue or assign what appears to be a valid third party claim.
  5. If the employee continues to refuse to pursue or assign his or her claim, then refer the file to the area human resources analyst for injury compensation. Use PS Form 2560, Referral of Third Party Material (Exhibit 547.59d) to transmit the file. Take no further action to obtain an assignment after the file is referred.
  6. Upon receipt of an assignment of the employee’s claim on PS Form 2577 send sample letter F, Notice of Assignment of Postal Employee’s Claim and Request for Settlement (Exhibit 547.59e), to the third party and to his or her insurer, if known.
  7. When a reply to sample letter F is received, attempt to negotiate a settlement of the government’s and the employee’s claim (see 547.7, Settlement of Claims).
  8. Contact the Postal Service Field Counsel if it is felt that assistance is necessary.

Exhibit 547.59a

Sample Letter E, Request for Information from Employee and Notice of Government’s Lien

Exhibit 547.59a

Exhibit 547.59b

PS Form 2559, Third Party Claim — Information Request

Sample PS Form 2559.

Exhibit 547.59c

PS Form 2577, Assignment of Claim to the USPS

Sample PS Form 2577.

Exhibit 547.59d

PS Form 2560, Referral of Third Party Material

Sample PS Form 2560.

Exhibit 547.59e

Sample Letter F, Notice of Assignment of Postal Employee’s Claim and Request for Settlement

USPS logo.

547.6 Release of Information

547.61 Privacy Act Protection

All records, medical and other reports, statements of witnesses, and other papers relating to the injury or death of an employee or other person entitled to compensation or benefits under the Act are sensitive in nature, and no employee of the Postal Service may disclose information from or pertaining to the records to any person except as directed in these instructions. Upon the employee’s death, records lose much of their sensitivity; i.e., the Privacy Act no longer applies to them. Release of records on deceased employees should be guided by the Postal Service release of information guidelines (Administrative Support Manual (ASM) 352).

547.62 Release to Employee or Beneficiary
547.621 General

If (a) an employee, or (b) in the case of death, an employee’s beneficiary, or (c) the authorized representative of an employee or beneficiary requests information from the Postal Service in connection with a third party recovery case, refer the request to the control office or control point supervisor, who permits the requester to examine the records of the case, except where release of the information is not in the best interest of the employee (see 547.622).

547.622 Release to Physician

When the control office or control point supervisor, based upon consultation with the postal physician or occupational health nurse administrator, determines that release of medical reports directly to the employee clearly is not in the best interest of the employee, the control office or control point supervisor should request authorization from the employee to release the information to the employee’s personal physician.

547.623 Limitation to Germane Information

In honoring requests, the control office or control point supervisor discloses only that information that is germane to the request and the third party action.

547.63 Release to Other Parties

Information requested for use in third party recovery cases by persons who are interested in third party action other than the employee or other legal representative may be released only upon written authorization of the employee or of the authorized representative. Direct all such requests to the control office or the control point supervisor.

547.64 Release to Court or Other Authority

Any employee of the Postal Service who is served with a demand by federal or state courts or other administrative bodies for records or information relating to third party recovery matters must promptly, and without awaiting appearance before the court or other authority, contact field counsel for instructions concerning the response to the demand.

547.7 Settlement of Claims

547.71 Employee Pursuing Collection of Damages From Third Party

The Postal Service, with certain adjustments, is entitled to collect from the proceeds paid to an employee by a third party the amount of compensation and medical and related expenses paid by OWCP on behalf of the employee. Therefore, when information is received that a third party recovery is imminent, the control office or control point supervisor contacts OWCP for an up-to-date statement of all disbursements made by OWCP and advises the employee or the employee’s attorney of those disbursements. If settlement has already been made, PS Form 2556 should be reviewed to see that the total disbursements made by OWCP have been accurately computed.

547.72 Employee Not Pursuing Third Party Recovery

When the postal employee has indicated that he or she does not wish to pursue a recovery from a third party and has been requested to and has signed PS Form 2577 the Postal Service, with certain adjustments, is entitled to recover from the third party or his or her insurer the compensation and medical and related expenses paid by OWCP on behalf of the employee. In addition, the Postal Service is entitled to collect on behalf of the employee those damages to which the employee may be entitled. Such damages may consist of payment for pain and suffering sustained by the employee, any damage to the employee’s personal property, and out-of-pocket expense not covered by FECA benefits. Upon recovery, the employee is to provided with a copy of PS Form 2556, which indicates the employee’s total entitlement. Further, the control office or the control point supervisor should ensure that OWCP district office is provided with copies of all documents pertaining to the recovery.

547.73 Disbursement of Recovered Third Party Funds

When a settlement is made, the control office or control point supervisor makes disbursement of the funds as follows:

  1. When the third party check includes OWCP payments only, send the check and PS Form 2556 or 2557, as applicable, directly to OWCP unless the check is made payable to the Postal Service. If this is the case, deposit the check and issue a Treasury check or no–fee money order to OWCP.
  2. When the third party check includes OWCP payments and the employee’s share, payments issued in installments, COP that has been collected in error, or checks made payable to the postmaster, the following procedures apply:
    1. Deposit the check or monies in the postmaster’s trust account.
    2. Request a receipt PS Form 3544, Post Office Receipt for Money. Include the employee’s name and OWCP claim number on the receipt.
    3. Forward a memorandum (see Exhibit 547.73, Sample Letter G) to the accounting office advising them of the proper disbursement to be made along with PS Form 2556 or 2557, whichever is applicable.
    4. Have the accounting office issue a no–fee money order or Treasury check that includes the employee’s name and OWCP claim number to the appropriate parties, i.e., OWCP and postal employee.
  3. For installment payments made by the third party, disbursement should be issued at periodic intervals (3 or 6 months) to the postal employee until the total expected monies from the third party are collected.
547.74 Settlement Verification

The control office or control point supervisor furnishes the employee and OWCP a copy of the PS Form 2556 or PS Form 2557 on all recoveries made.

547.75 Control Point Supervisor Requirements

All efforts on the part of control point supervisors concerning these instructions, to include case closure, settlement, or assistance, must be coordinated with the assigned control office.

547.76 Recovery Assistance

When the control office desires any advice on matters relating to the settlement of a third party recovery case or other legal matters, the appropriate field counsel should be contacted.

547.77 Delegation of Authority

The following are authorized to accept voluntary assignment of an employee’s claim against a third party and sign a release on behalf of the Postal Service when requested by the third party or insurance carrier:

  1. Manager of Injury Compensation.
  2. Qualified control point supervisor.
  3. Field counsel.

Exhibit 547.73

Sample Letter G

Sample Letter G

547.8 Third Party Recovery Action — Court Action

547.81 General

FECA provides that an employee who is required to appear as a party or witness in the prosecution of a third party court action is in an active duty status while so engaged (5 U.S.C. 8131(a)(2)). Therefore, when an employee assigns a third party claim to the Postal Service and appears in court as a witness, or when an employee prosecutes a third party claim in his or her own name and appears in court as a party, such an employee is compensated for the court appearance as provided in 547.82.

547.82 Compensation for Court Appearances

The following provisions apply to compensation for court appearances:

  1. A postal employee who appears as a witness in a third party action that has been assigned to the Postal Service is in an official duty status for the time spent in court (see 516.41) and for the time spent traveling between the court and the employee’s work site. However, any time spent traveling between an employee’s residence and the court is considered commuting time and, therefore, is not compensable.
  2. An employee who prosecutes a third party action in his or her own name is not in an official duty status as that term is defined in 516.41. However, in order to implement FECA provision requiring compensation of such an employee, the Postal Service compensates that employee as if the employee were in an official duty status. Accordingly, such an employee is compensated to the same extent as that explained in 547.82a for the time spent in court and for the time spent traveling between the court and the employee’s worksite. Any time spent traveling between the employee’s residence and the court is considered commuting time and is not compensable.
547.83 Documentation of Court Appearances

An employee who is prosecuting a third party action in his or her own name and who appears in court must document the time required to appear in court on the memorandum, Third Party Court Appearance Sheet (see Exhibit 547.83). The employee is considered in an active duty status; therefore, a PS Form 3971, Request for Notification of Absence, is not required. Rather, the hours on the time card for third party appearances are recorded as work only — and not as court leave or any other type leave. The completed memorandum is to be returned to the control office or control point as appropriate.

547.84 Case Preparation

An employee who is prosecuting a third party action in his or her own name is not treated as if in an official duty status for the time spent developing the case. Any time used for this purpose within the employee’s regular work schedule is charged to annual leave or LWOP.

Exhibit 547.83

Third Party Court Appearance Sheet

Exhibit 547.83