REVISED, July 25, 2000

UNITED STATES COURT OF APPEALS For the Fifth Circuit

___________________________

No. 99-60587 ___________________________

STAFTEX STAFFING and HOUSTON GENERAL INSURANCE COMPANY

Petitioners,

VERSUS

DIRECTOR, OFFICE OF WORKER’S COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, and RAMIRO LOREDO

Respondents.

___________________________________________________

Petition for Review of an Order of the Benefits Review Board ___________________________________________________ July 18, 2000

Before REAVLEY, DAVIS and BARKSDALE, Circuit Judges.

DAVIS, Circuit Judge:

In this appeal, Petitioner, Staftex Staffing, challenges an

order of the United States Department of Labor Benefits Review

Board, which affirmed an Administrative Law Judge’s (“ALJ”) order

awarding attorney’s fees and compensation payments to Claimant,

Ramiro Loredo, pursuant to the Longshore and Harbor Worker’s

Compensation Act (“LHWCA”),

. Staftex argues

-1- that the ALJ erred in calculating Claimant’s average weekly wage

and thereby awarded Claimant an excessive compensation rate.

Staftex also challenges the Board’s award of attorney’s fees to

Claimant. For the reasons that follow, we affirm the ALJ’s wage

calculation and compensation rate but reverse his award of

attorney’s fees.

I.

Ramiro Loredo injured his back on October 11, 1990, while

working as a welder for Staftex Staffing. Within thirty days of

receiving notice of Loredo’s injury, Staftex began to pay voluntary

benefits to Loredo based upon an average weekly wage of $438.47.

Several months later, Staftex reduced its payments to Loredo,

explaining that it had previously overcalculated Loredo’s wages by

$12,934.14. In response, Loredo filed an “Employee’s Claim for

Compensation” with the United States Department of Labor,

requesting that Staftex compensate him based upon an average weekly

wage of $490.24. Staftex acceded to this demand without requiring

an informal compensation conference.

Despite Staftex’s agreement with Loredo on the appropriate

compensation rate, the parties could not agree as to the nature,

extent, or permanency of Loredo’s injury. The parties referred

these disputes to the Department of Labor for an informal

conference. The Department issued a written recommendation on these

issues and referred the case to an ALJ for a formal hearing and

-2- resolution. Neither party requested, either before or during the

informal conference, that the Department address the issue of

average weekly wage.

At the formal hearing, however, the parties agreed that Loredo

was temporarily and totally disabled but could not agree upon the

average weekly wage for which Loredo would be compensated. Staftex

contended that it should compensate Loredo based upon his actual

earnings for the five years prior to his injury. Loredo contended

that he was entitled to an average weekly wage based upon his

earnings in the year immediately prior to his injury, excluding the

twenty-five weeks during which he was out of the labor market due

to a different on-the-job injury and for which he was compensated

under the LHWCA.

The ALJ accepted Loredo’s method of calculating his average

weekly wage and concluded that Loredo was entitled to compensation

based upon a weekly wage of $504.32. Furthermore, the ALJ held

that Loredo’s counsel was entitled to $7,239.28 in attorney’s fees

plus expenses.

Staftex appealed to the United States Department of Labor’s

Benefits Review Board, arguing that the ALJ erred both in

calculating Loredo’s average weekly wage and in awarding an

attorney’s fee. The Board affirmed the judgment of the ALJ and its

decision to award attorney’s fees. This appeal followed.

II.

-3- This Court gives “broad discretion to ALJs in determining

appropriate wage awards.” Louisiana Ins. Guaranty Assoc. v.

Director, Office of Worker’s Compensation Programs, U.S. Dept. of

Labor,

(5th Cir. 2000). We review the decisions

of the Benefits Review Board using the same standard that the Board

applies to review a decision of the ALJ: whether the decision is

supported by substantial evidence and is in accordance with law.

New Thoughts Finishing Co. v. Chilton,

(5th Cir.

1997). We may neither substitute our judgment for that of the ALJ

nor “reweigh or reappraise the evidence.” SGS Control Serv. v.

Director, Office of Worker’s Compensations Programs, US Dept. of

Labor,

(5th Cir. 1996). The ALJ’s decision need

not “constitute the sole inference that can be drawn from the

facts.” Avondale Industries v. Director, Office of Worker’s

Compensations Programs, U.S. Dept. of Labor,

(5th

Cir. 1992). Moreover, we must resolve all doubts “in favor of the

employee in accordance with the remedial purposes of the LHWCA.”

Empire United Stevedores v. Gatlin,

(5th Cir.

1991).

Both parties agree that

(c) provides the basic

formula for determining the compensation to which Loredo is

entitled. Section 910(c), in relevant part, states that:

average annual earnings shall be such sum as, having regard to the previous earnings of the injured employee in the employment in which he was working at the time of the injury, and of other employees in the

-4- same or most similar class working in the same or most similar employment in the same or neighboring locality, or other employment of such employee . . ., shall reasonably represent the annual earning capacity of the injured employee.

(c) (1999). Once a court has determined the

claimant’s average annual wage, it must determine the average

weekly wage by dividing the average annual wage by fifty-two.

(d)(1). The average weekly wage provides the basis for

the compensation rate. See

.

In this case, the ALJ calculated Claimant’s compensation

solely by considering his earnings in the year immediately prior to

his injury. The undisputed evidence established that Loredo earned

$13,616.53 in the year preceding his back injury. The evidence

further established that Loredo worked during only 27 weeks of that

year due to a knee injury for which he was compensated under the

LHWCA. On this basis, the ALJ concluded that section 910(c)

entitled Loredo to compensation based upon a weekly wage of $504.32

–- $13,616.53 divided by 27.

Staftex argues that the one-year period considered by the ALJ

misrepresented Claimant’s earning capacity and that the ALJ should

have looked instead to a five year period preceding the injury.

Staftex notes that during the five years preceding Loredo’s back

injury he never made more than $9896.56 in a single calendar year1

1 Although Loredo earned $13,616.53 in the fifty-two-week period leading up to his injury, he never made that much in any single calendar year.

-5- and that Loredo’s average yearly earnings during that period

amounted to only $5617. Finally, Staftex explains that because it

is a temporary staffing company the duration of Loredo’s employment

is uncertain.

Based upon our review of the record, we conclude that the ALJ

acted well within his discretion in estimating Claimant’s average

weekly wage. First, no case law supports Staftex’s contention that

an ALJ cannot rely exclusively on the most recent year of

employment. While we have held that an ALJ should not randomly

pick and choose certain years from a period simply because the

judge believes that the other years in that period under-

represented the claimant’s earning capacity, see Chilton,

, we have never held that a court cannot base its

calculation on the claimant’s most recent year of employment. In

Chilton, we simply reaffirmed that if “the ALJ looks beyond the 52

weeks immediately preceding the injury, ‘he must take into account

the earnings of all the years within that period.’”

(quoting

Gatlin,

); accord Meehan Seaway Service Co. v.

Director, Office of Workers’ Compensation Programs, U.S. Dept. of

Labor,

(8th Cir. 1997)(explaining that an ALJ may

“calculate average annual earnings under section 910(c) based on a

claimant’s earning pattern over a period of years . . . where . .

. all of the years within that period are taken into account”).

Indeed, “the prime objective of section 910(c) is to arrive at a

-6- sum that reasonably represents a claimant’s annual earning capacity

at the time of the injury.” SGS Control Serv.,

(emphasis in original)(citations omitted). And as we explained in

Hall v. Consolidated Employment Systems,

(5th Cir.

1998), “[t]ypically, a claimant’s wages at the time of injury will

best reflect the claimant’s earning capacity at that time. It will

be an exceedingly rare case where the claimant’s earnings at the

time of injury are wholly disregarded as irrelevant, unhelpful, or

unreliable.”

.

Second, Staftex has failed to present any evidence that

Loredo’s most recent year of employment does not accurately reflect

his current earning capacity. In calculating average weekly wage,

the ALJ must consider not simply the future of a claimant’s

employment with a particular employer, but rather the future of his

employment in his chosen field. Hall,

. In this

respect, the record supports the ALJ’s conclusion that the most

recent year most accurately reflected Loredo’s current earning

capacity.2

Staftex further argues that the district court erred in giving

2 Loredo presented evidence to the ALJ suggesting that his current employment with Staftex was likely to be more permanent than his past employment. Both he and his wife testified that, but for the injury, Mr. Loredo would have continued his work as a marine welder. Loredo explained that his previous low wages resulted from a downturn in the ship-building industry, which forced him to find work in other, less lucrative, fields. The ALJ was entitled to credit this testimony.

-7- Loredo credit for twenty-five weeks during which, due to another

on-the-job injury, Loredo did not work. Staftex argues that by

dividing Loredo’s earnings by twenty-seven, which the district

court did to account for Loredo’s twenty-five weeks on disability,

the ALJ violated

(d). This argument is without

merit.

Although section 910(d) states that the ALJ should divide

annual earnings by fifty-two, the Board has frequently held that,

when calculating annual earnings, an ALJ may account for time lost

due to a claimant’s job-related injury. See, e.g., Brien v.

Precision Valve, 23 BRBS 209 (1990); see also Hawthorne v.

Director, Office of Worker’s Compensation Programs, U.S. Dept of

Labor,

, 320 (8th Cir. 1988)(holding that ALJs should

account for time lost due to a strike or an injury caused by a

strike). Thus, although the ALJ should have increased its

estimation of Loredo’s annual wage, rather than increased his

weekly wage, in order to account for his knee injury, this error

was harmless. Either approach yields the same mathematical result.

As such, the Board did not err in affirming the wage calculations

of the ALJ.

III.

Staftex argues that

(b), which exclusively

governs the award of attorney’s fees in LHWCA cases, did not

authorize the ALJ to award attorney’s fees in this case. According

-8- to Staftex, section 928(b) authorizes the award of attorney’s fees

only where the employer refuses to accept a written recommendation

of compensation that the Department of Labor issues following an

informal conference. As Staftex notes, although the parties

brought other elements of their dispute before an informal

conference, they never submitted their wage dispute to the

conference and thus never received a written recommendation.

Section 928(b), in relevant part, provides that:

If the employer or carrier pays or tenders payment of compensation without an award . . . and thereafter a controversy develops over the amount of additional compensation, if any, to which the employee may be entitled, the deputy commissioner or Board shall set the matter for an informal conference and following the conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy. If the employer or carrier refuse to accept such written recommendation . . . they shall pay or tender to the employee in writing the additional compensation, if any, they believe the employee is entitled. If the employee refuses to accept such payment or tender of compensation, and thereafter utilizes the services of an attorney at law, and if the compensation thereafter awarded is greater than the amount paid or tendered by the employer or carrier, a reasonable attorney’s fee based solely upon the difference between the amount awarded and the amount tendered or paid shall be awarded in addition to the amount of compensation. If a claimant is successful in review proceedings before the Board or court in any such case an award may be made in favor of the claimant and against the employer or carrier for a reasonable attorney’s fees for claimant’s counsel in accord with the above provisions. In all other cases any claim for legal services shall not be assessed against the employer or carrier.

(b)(1999).

-9- The plain wording of this section precludes Loredo from

obtaining attorney’s fees in this case. Section 928(b) permits

claimants to obtain attorney’s fees only where: (1) the board has

held an informal conference on the disputed issue; (2) the board

issues a written recommendation on that issue; and (3) the employer

refuses to accept the recommendation. Loredo failed to submit the

average weekly wage dispute to informal conference and thus did not

obtain a recommendation for Staftex to accept or reject.3 As we

explained in FMC Corp. v. Perez,

(5th Cir. 1997),

“[a]n award of attorney’s fees under section 928(b) is appropriate

only if the dispute has been the subject of an informal conference

with the Department of Labor.” Accord Todd Shipyards Corp. v.

Director, Office of Worker’s Compensation Programs,

(9th Cir. 1991)(“Section 928(b) authorizes a payment of

attorney’s fees only if the employer refuses to pay the amount of

compensation recommended by the claims examiner following an

informal conference.”). Because Loredo failed to submit the

question of average weekly wages to informal conference, the ALJ

could not, as a matter of law, award him attorney’s fees.

Accordingly, we reverse the Board’s award of attorney’s fees.

3 Apparently, the dispute regarding Loredo’s average weekly wage did not develop until after the Board had completed its informal conference. Loredo does not allege that Staftex waited to challenge Loredo’s average weekly wage until after the conference in a strategic attempt to avoid liability for attorney’s fees or that he attempted, without success, to obtain another conference after the dispute arose.

-10- IV.

For the reasons stated above, the Benefits Review Board’s

affirmance of the ALJ’s award of compensation under section 910(c)

of the LHWCA is AFFIRMED and the ALJ’s award of attorney’s fees

under section 928(b) of the Act is REVERSED.

AFFIRMED in Part.

REVERSED in Part.

-11-