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                                 BRB Nos. 97-1232
                                   and 97-1232A

EDWARD E. WEST                               )
                                             )
          Claimant-Respondent                )    DATE ISSUED:   06/05/1998 
              
          Cross-Petitioner                   )
                                             )
     v.                                      )
                                             )
NEWPORT NEWS SHIPBUILDING AND                )
DRY DOCK COMPANY                             )
                                             )    
          Self-Insured                       )
          Employer-Petitioner                )
          Cross-Respondent                   )    
                                   )
DIRECTOR, OFFICE OF WORKERS'            )
COMPENSATION PROGRAMS, UNITED )
STATES DEPARTMENT OF LABOR         )         
                         )
          Party-in-Interest             )    DECISION and ORDER

     Appeals of the Decision and Order on Reconsideration of Pamela Lakes
     Wood, Administrative Law Judges, United States Department of Labor.

     Robert A. Rapaport (Knight, Clarke, Dolph & Rapaport, P.L.C.), Norfolk,
     Virginia, for claimant.
     
     James M. Mesnard (Seyfarth, Shaw, Fairweather & Geraldson), Washington,
     D.C., for self-insured employer.

     Before: SMITH, BROWN and McGRANERY, Administrative Appeals Judges.

     PER CURIAM:

     Employer appeals and claimant cross-appeals the May 6, 1997, Decision and
Order on Reconsideration  (86-LHC-1016) of Administrative Law Judge Pamela Lakes Wood rendered
on a claim filed pursuant to the provisions of the Longshore and Harbor Workers'
Compensation Act, as amended, 33 U.S.C. §901 et seq. (the Act).  We
must affirm the findings of fact and conclusions of law of the administrative law
judge which are rational, supported by substantial evidence, and in accordance with
law.  O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359
(1965); 33 U.S.C. §921(b)(3).  

     This case, which has been before the Board previously, has a lengthy
procedural history.  On or about January 21, 1983, while in the course of his
employment as a welding machine repairman working the second shift for employer,
claimant sustained an injury to his back.  Claimant returned to work in a light-duty capacity on July 12, 1983.  On May 13, 1985, as a result of his restrictions
resulting from his work injury, claimant was transferred to a position as a drawing
clerk on the first shift.  The parties stipulated that the drawing clerk job paid
$7.16 per hour at the time of claimant's  injury.   October 18, 1986 Tr. at 17. 
Employer voluntarily paid claimant temporary total, temporary partial, and
permanent partial disability compensation for various periods of time from the date
of claimant's injury through the date of the hearing.  33 U.S.C. §908(b), (c),
(e).

     In his original Decision and Order, Judge Lawrence awarded claimant temporary
total disability compensation from January 21, 1983 through May 31, 1984, for all
periods of time that claimant was off work, and permanent partial disability
thereafter, accepting the parties' stipulation that claimant's average weekly wage
was $435.72, and finding  that he  had a post-injury wage-earning capacity of
$286.40 per week adjusted to 1983 wage levels.  In addition,  the administrative
law judge found that employer was entitled to Section 8(f) relief.  33 U.S.C.
§908(f). West v. Newport News Shipbuilding & Dry Dock Co., No. 86-LHC-1016 (June 24, 1987).

     Employer appealed, contending that the administrative law judge erred in not
relying on claimant's actual earnings to establish his post-injury wage-earning
capacity. In a Decision and Order dated October 30, 1989, the Board vacated the
administrative law judge's post-injury wage-earning capacity finding, and remanded
for him to explicitly consider whether claimant's actual post-injury wages, which
included a shift differential, overtime, and merit pay increases reasonably
represented his post-injury wage-earning capacity. West v. Newport News
Shipbuilding & Dry Dock Co., BRB No. 87-1819 (Oct. 30, 1989)(unpublished).

     In a Decision and Order On Remand dated January 18, 1993, Judge Lawrence found
that claimant's actual post-injury wages reasonably represented his  wage-earning
capacity and determined that as he was actually earning more post-injury when the
$.47 shift differential, 11 hours of  overtime, and merit increases were added to
his basic pay rate, he was not entitled to any disability compensation. West v.
Newport News Shipbuilding & Dry Dock Co., No. 86-LHC-1016 (January 18, 1993). 
Thereafter, however, in response to claimant's motion for reconsideration, Judge
Lawrence issued a subsequent Decision and Order on February 3, 1994, in which he
found that claimant's actual earnings were not representative of his wage-earning
capacity because while claimant's stipulated average weekly wage was  based on his
working only approximately 3.8 hours of overtime per week, he currently had to work
11 hours of overtime to approximate his prior earnings.  Accordingly, Judge
Lawrence determined that only the 3.8 hours of overtime previously necessary to
reach his pre-injury average weekly wage were properly included in claimant's post-injury wage-earning capacity.  Judge Lawrence also determined that the $.47 shift
differential which claimant received for working the second shift should not be
included because employer had removed him from the second shift and claimant thus
no longer had the capacity to earn these wages.  Finally, he determined that while
the $ .21 an hour merit increase claimant received in 1986 was properly included in
claimant's post-injury wage-earning capacity, the subsequent  merit increase of
$.40  an hour claimant received in 1990 was not as it had not been earned as of the
time of the hearing. West  v. Newport News Shipbuilding & Dry Dock Co., No.
86-LHC-1016 (Feb. 3, 1994).

     Employer then sought  reconsideration, arguing that Judge Lawrence erred in
refusing to include  the $.47 shift differential and the 1990 merit increase in
claimant's post-injury wage-earning capacity, and in considering claimant's loss of
overtime as a basis for awarding compensation.  In a Decision and Order dated May
6, 1997,[1]   Judge Wood agreed with Judge Lawrence
that claimant's actual post-injury wages did not represent his wage-earning
capacity, but found that his inclusion of  3.8 hours of overtime was speculative
because employer conceded in its motion for reconsideration and through the
testimony of its personnel supervisor, Mr. Larson, that overtime work is not
regularly available.  She further found that the $.47 shift differential should be
included, as it was included in setting the average weekly wage, claimant had
earned it for at least part of the time post-injury, the shift differential is
intended to compensate employees for working a less desirable shift which claimant
no longer did as of March  1992, and  regardless of whether claimant's transfer
back to the first shift in March 1992 was  voluntary, there was no evidence that
it occurred as a result of his injury.  Finally, she concluded that both claimant's
1986 and 1990  merit increases should be included in claimant's wage-earning
capacity, noting that although the second increase occurred post-hearing Judge
Lawrence had allowed the parties to submit post-hearing evidence, and that it was
in the interest of judicial economy to include the second increase rather than
requiring employer to filed a motion for modification. 

     Employer appeals, arguing that inasmuch as claimant has regularly worked overtime every year
since he became a drawing clerk in May 1985, Judge Wood erred in excluding overtime earnings
entirely in calculating claimant's post-injury wage-earning capacity.  Employer
avers that the case should be remanded for a determination of the amount of
overtime to be included in claimant's residual wage-earning capacity.  Claimant
cross-appeals, arguing that Judge Wood erred in including  the $.47 shift
differential in his post-injury wage-earning and in including the $.21 and $.40
merit increases he received in his post-injury wage-earning capacity, as the latter
amounts were due to his extraordinary efforts to succeed in his new job and regain
his pre-injury earning level.  In the alternative, claimant argues that if the
Board determines that claimant's merit pay increases are properly included in his
post-injury wage-earning capacity, Judge Wood erred in including the last increase
which claimant did not receive until December 17, 1990, in his post-injury wage-earning capacity prior to that date.  Employer responds, urging affirmance. 
Claimant replies, reiterating the arguments raised in his Petition for Review.

     An award for permanent partial disability for an injury which is not covered
by the schedule is based on the difference between claimant's pre-injury average
weekly wage and his post-injury wage-earning capacity.  33 U.S.C. §908(c)(21);
Johnson v. Newport News Shipbuilding & Dry Dock Co, 25 BRBS 340, 344-345
(1992).   Section 8(h) of the Act, 33 U.S.C. §908(h), provides that claimant's
wage-earning capacity shall be his actual post-injury earnings if these earnings
fairly and reasonably represent his wage-earning capacity. Avondale Shipyards,
Inc. v. Guildry, 967 F.2d 1039, 26 BRBS 30 (CRT) (5th Cir. 1992); Penrod
Drilling Co. v. Johnson, 905 F.2d 84, 23 BRBS 108 (CRT) (5th Cir. 1990).  The
party contending that the employee's actual earnings are not representative of his
wage-earning capacity bears the burden of establishing an alternative reasonable
wage-earning capacity. Peele v. Newport News Shipbuilding & Dry Dock Co.,
20 BRBS 133, 136 n.3 (1987).  Only if such earnings do not represent claimant's
wage-earning capacity does the administrative law judge calculate a dollar amount
which reasonably represents claimant's post-injury wage-earning capacity. Cook
v. Seattle Stevedoring Co., 21 BRBS 4 (1988).  The administrative law judge
must consider all relevant factors and evidence in making findings regarding
claimant's wage-earning capacity. Randall v. Comfort Control, Inc., 725 F.2d
791, 16 BRBS 56 (CRT)(D.C. Cir. 1984).  Loss of overtime earnings may provide a
basis for determining that a claimant has demonstrated a loss in wage-earning
capacity, where, as here, overtime was a normal and regular part of claimant's pre-injury employment and accordingly was included in determining claimant's average
weekly wage. Everett v. Newport News Shipbuilding & Dry Dock Co., 23 BRBS
316 (1990); Butler v. Washington Metropolitan Area Transit Authority, 14
BRBS 321 (1981).  

     We agree with employer that Judge Wood's decision to completely exclude claimant's post-injury overtime
earnings from her calculation of claimant's post-injury wage-earning capacity cannot be affirmed.  Initially, we note that
in concluding that the amount of overtime available was too speculative to be included in assessing claimant's post-injury
wage-earning capacity, Judge Wood misinterpreted the testimony of Mr. Larson, employer's personnel supervisor, that
planned overtime was not guaranteed and that the amount of overtime varies, 1986 Tr. at 109, to mean that overtime was
not regularly available.  Although the administrative law judge may exclude overtime wages
in determining the employee's post-injury wage-earning capacity where the
employee's ability to obtain these wages is unduly speculative, see Thompson v.
McDonnell Douglas Corp., 17 BRBS 6, 9 (1984), the record in the present case
contains uncontroverted evidence which reflects that overtime was available to
claimant in the drawing clerk job.  Employer's payroll records reflect that between
May 1985 and June 28, 1993, claimant worked a total of 2146.7 hours of overtime,
or an average of 5.16 hours of overtime each week.  Remand EX-2; CX-D.[2]   Given this evidence, the administrative law
judge's exclusion of claimant's overtime wages from his post-injury earnings
because they were not "guaranteed" and were merely speculative cannot be accepted.

     In addition,  Judge Wood stated  that, regardless of the amount of overtime
available, if claimant must work additional overtime in his post-injury job in
order to maintain his pre-injury earnings in his former employment, the amount of
overtime should be discounted. See Devillier v. National Steel & Shipbuilding
Co., 10 BRBS 649 (1979).  However, the administrative law judge's factual
findings here do not support the conclusion that all of claimant's post-injury
overtime was necessary in order for him to earn the same wages.  In this case, as
claimant was placed in light duty work at a lower base rate of pay, if he maintains
earnings comparable to his prior wages only by working more overtime, this fact is
properly considered. Id.  at 658.  However, as claimant worked some overtime
pre-injury which was included in his average weekly wage, the record does not
support the elimination of all overtime from his post-injury wage-earning capacity. 
We therefore  vacate the award of permanent partial disability compensation and
remand for the administrative law judge to reconsider claimant's loss in wage-earning capacity.  On remand, the administrative law judge must reconsider the effect of overtime earnings on
claimant's post-injury wage-earning capacity.  In addition to employer's evidence, discussed above, the administrative
law judge should consider claimant's testimony that there were fewer overtime opportunities available to him in his post-injury drawing clerk job than in his  pre-injury work as a welder, 1986 Tr. at 80, and other relevant factors in
determining the amount of overtime reasonably representing post-injury wage-earning capacity. 

     With regard to the shift differential, we agree with claimant that Judge Wood
erred in including  this amount, which claimant could only earn while working on
the second shift, in the calculation of his post-injury wage-earning capacity for
the entire period in which permanent partial disability compensation was awarded. 
At the time of his injury, claimant was working as a tool keeper, primarily on the second shift.  Tr. at 83.  After
undergoing disc surgery on February 17, 1983, claimant returned  to work in employer's MRA shop.  On May 13, 1985,
claimant was permanently transferred to a position on the first shift as a drawing clerk to accommodate his work
restrictions due to his January 21, 1983 work injury, and he remained there until  June 22, 1985, when as a result of his
own initiative, he  was able to switch positions with another worker and  accordingly returned to work on the second
shift.  Claimant thereafter remained on the second shift until March 1992, when he was switched back to the first shift,
for reasons which are  in dispute.

     After noting this history,  Judge Wood found that as claimant no longer works the less desirable shift, there is
no reason he should be compensated for the loss of the $.47 shift differential and determined accordingly that the shift
differential  should be included in his post-injury wage-earning capacity. The analysis employed by Judge Woods,
however, fails to account both for the fact that the shift differential was a part of claimant's pre-injury earning capacity,
and for the fact that claimant lacked the capacity to earn these wages from  May 13, 1985 until July 22, 1985, after he
was initially transferred to the drawing clerk position on the first shift due to his injury.  While the shift differential was
clearly properly included in determining claimant's post-injury wage-earning capacity during the period from July 22,
1985 until March 1992, when claimant was actually working the second shift, in March 1992, claimant was again
transferred back to the first shift.  Although Judge Wood found that it did not matter whether claimant changed shifts
voluntarily in March 1992, because there is no evidence that claimant's switch to the first shift was related to his injury,
we disagree.  If employer transferred claimant to the first shift at that time, and
as a result of employer's action, claimant is precluded from earning the shift
differential he had earned pre-injury, claimant  has sustained a compensable loss
in his wage-earning capacity because of the injury.  See generally Kubin v. Pro-Football, Inc., 29 BRBS 117 (1995).   Accordingly, Judge Wood's finding that
the shift differential is properly included in the determination of claimant's
post-injury wage-earning capacity is affirmed for the period from July 1985
to March 1992, but is reversed for  the period between May 13, 1985 and July 22,
1985, as claimant did not have the capacity to earn the shift differential while
working on the first shift. [3]   With regard to
the period after claimant's return to the first shift in March 1992, we
vacate Judge Wood's determination that the shift differential was properly included
in claimant's post-injury wage-earning capacity and remand the case for
consideration of the reason for claimant's transfer.  If, on remand, she determines
that the transfer back to the first shift was voluntary, she should reinstate her
prior determination that the shift differential was included in claimant's wage-earning capacity for this period, as the loss of the shift differential would be
for reasons unrelated to claimant's injury.  If, however,  the transfer  was
involuntary, the shift differential should not be included.

     Claimant's argument that Judge Wood erred in including the $.21 per hour merit
increase claimant received in 1986 and the $.40 per hour increase he received in
1990 in determining claimant's wage-earning capacity, however, is without merit. 
Claimant reiterates on appeal the argument he made below that these wages should
not be included in his post-injury wage-earning capacity because they reflect his
own extraordinary efforts to succeed in his new job and attempt to regain his pre-injury earning level.  Judge Wood considered this argument but  rationally
determined based on the testimony of claimant's supervisor, David Brown, Tr.  118-119, that the merit increases which claimant received were for performing well in
his drawing clerk job and not for taking on additional or harder work.  Inasmuch
as her finding in this regard is rational and supported by substantial evidence,
it is affirmed. See O'Keeffe, 380 U.S. at 359.  Claimant correctly asserts, 
however, that as he did not receive the second merit pay increase until December
17, 1990, Judge Wood erred in including this increase in his post-injury wage-earning capacity prior to that date.  Accordingly, on remand the  $.40 merit
increase claimant received in December 11, 1990 is not includable in claimant's
post-injury wage-earning capacity prior to that date.  In addition, we agree with
claimant that in determining his post-injury wage-earning capacity, Judge Wood erred 
in failing to adjust the level of the merit increases to reflect those paid at the time of claimant's injury to account for
inflationary effects. See Bethard v. Sun Shipbuilding & Dry Dock Co., 12 BRBS 691 (1980).  Accordingly,
in recalculating the award of permanent partial disability on remand, the administrative law judge must properly account
for inflation; the percentage increase in the National Average Weekly Wage,  see 33 U.S.C.
§906(b)(1)-(3), may be used to adjust claimant's merit increase downward if the actual amount paid at the time
of injury is unknown. See Quan v. Marine Power & Equipment Co., 30 BRBS
124, 127 (1996); Richardson v. General Dynamics Corp., 23 BRBS 327 (1990). 
   Accordingly, the post-injury wage-earning capacity determination of Judge Wood
is vacated, and the case is remanded for further consideration consistent with this
opinion.

   SO ORDERED.



                                                                   
                       ROY P. SMITH
                       Administrative Appeals Judge



                                                                   
                       JAMES F. BROWN
                       Administrative Appeals Judge



                                                                   
                       REGINA C. McGRANERY
                       Administrative Appeals Judge



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Footnotes.


1)Judge Wood received this case due to Judge's Lawrence's retirement. Back to Text
2)Employer has attached additional new evidence relating to claimant's overtime earnings to its Petition for Review. The Board, however may not consider this evidence, as its scope of review is limited to consideration of evidence admitted into the record by the administrative law judge. See Williams v. Hunt Shipyards, Geosource, Inc., 17 BRBS 32 (1985). Back to Text
3) The inclusion of the shift differential for the period between June 1, 1984 and May 13, 1985, prior to his transfer to the drawing clerk position, is also affirmed as it is unchallenged on appeal. Back to Text

NOTE: This is an UNPUBLISHED LHCA Document.

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