The widow of a Fairfax County man who was killed while working on the Metro subway system lost a long-running legal battle yesterday when the U.S. Supreme Court reversed a decision that would have entitled her to increased death benefits from the construction firm that employed her husband.

The court, in an 8-to-1 vote, struck down a D.C. Court of Appeals ruling two years ago that held that the Morrison-Knudsen Construction Co. should pay Sonia Hilyer death benefits based on both her husband's salary and payments the firm had made in his behalf into union trust funds.

The inclusion of such fringe benefits in the calculation of death benefits would have had a far-reaching effect throughout the country, E. Barrett Prettyman Jr., a lawyer for Morrison-Knudson said yesterday. "It would have had an extraordinarily dramatic impact," he said. "You would have had attorneys around the country making similar claims."

The case arose from the 1974 death of James Hilyer, who was run over by a cement truck while working on Metro at the corner of 16th and I streets NW. The company had paid Hilyer's wife death benefits based on a percentage of his actual wages, according to accepted interpretation of the Longshoremen's and Harbor Workers' Compensation Act, which covered Hilyer. That law has been incorporated into the D.C. Workmen's Compensation Act.

Sonia Hilyer's attorney, George Leonard, argued that because fringe benefits have played an increasing role in union-management collective bargaining agreements, they should be counted as wages for the purpose of computing death benefits. However, the majority opinion by Chief Justice Warren E. Burger concluded that Congress did not intend to include employer contributions to union trust funds as wages within the terms of the longshoremen's act.

Leonard said yesterday that if Hilyer had won the case she would have received about $17.50 a week more in benefits.