[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 96-9288
________________________
BRB #94-0507, OWCP #6-136921
SEACO AND SIGNAL MUTUAL ADMINISTRATION,
Petitioner,
versus
ALONZO RICHARDSON and DIRECTOR,
OFFICE OF WORKERS COMPENSATION PROGRAMS,
UNITED STATES DEPARTMENT OF LABOR
Respondents.
________________________
Petition for Review of an Order of the Benefits Review Board
United States Department of Labor
_________________________
(March 11, 1998)
Before ANDERSON and BLACK, Circuit Judges, and HOEVELER*, Senior District
Judge.
PER CURIAM:
_______________________
* Honorable William M. Hoeveler, Senior U.S. District Judge for the Southern District of
Florida, sitting by designation.
In this case, SEACO and Signal Mutual Administration1 (“the petitioners”) petition
for review of an order of the United States Department of Labor Benefits Review Board
affirming a decision by an Administrative Law Judge (ALJ) in which the ALJ denied the
petitioners’ request for a credit for certain payments made to the respondent, Alonzo
Richardson, during the period of his disability. Because we conclude that the container
royalty and holiday/vacation payments received by Richardson do not constitute “advance
payments of compensation” under 33 U.S.C. § 914(j) and do not represent post-injury
“wage-earning capacity” under 33 U.S.C. § 908(h), we affirm the Benefits Review
Board’s affirmance of the ALJ’s decision denying the petitioners’ request for a credit.
I. FACTS AND PROCEDURAL HISTORY
On April 8, 1991, Alonzo Richardson injured his lower back and stomach while
in the course of his employment as a longshoreman with SEACO. This injury resulted
in Richardson’s absence from work during the period from April 9, 1991, through
January 31, 1992.2 SEACO paid compensation to Richardson for temporary total
disability from April 9, 1991, to August 1, 1991, and from September 5, 1991, to
December 18, 1991. In December 1991, pursuant to his International Longshoremen
Association (“ILA”) contract, Richardson received a lump sum payment of
1
Signal Mutual Administration is the insurance
carrier for SEACO.
2
Richardson worked on August 21 and 23, 1991, and
did not seek temporary total disability benefits for
those two days.
2
approximately $10,000 in “container royalty” and “holiday/vacation” pay.3 In a
hearing before an ALJ, Richardson sought temporary total disability compensation for
the brief periods of time not already paid by SEACO; at the same hearing the
petitioners sought a credit for alleged overpayments of compensation due to the
container royalty and holiday/vacation pay Richardson received pursuant to his ILA
contract.4 In a September 22, 1993, order, the ALJ granted Richardson’s request for
temporary total disability compensation during the disputed time periods and denied
the petitioners’ request for a credit for the container royalty and holiday/vacation
3
The parties stipulated that under Richardson’s
ILA contract, a longshoreman with 700 hours of work in
the contract year, which runs from October 1 to
September 30, qualifies for container royalty pay and
holiday/vacation pay. These payments are made from the
Container Royalty and Holiday/Vacation Funds and are
made in December for each contract year ending the
previous September 30. Under the ILA contract, if an
employee is injured while in the course of employment
and receives temporary total disability payments, then
the employee is entitled to 3 hours per day toward his
container royalty pay requirement and 20 hours per week
toward his holiday/vacation pay requirement. These
hours are referred to as “gratuity” hours. Richardson
had worked 635 hours prior to his injury on April 8,
1991, and worked 12 more hours when he returned to work
on August 21 and 23, 1991. He was credited with the
remaining 53 hours necessary to meet the 700 hour
requirement by virtue of receiving “gratuity” hours
during the period of his disability.
4
The petitioners also claimed that Richardson
received similar container royalty and holiday/vacation
payments in December 1992 for the 1992 contract year,
and they also sought a credit for these payments.
3
payments made to Richardson during the period of his disability.5 Only the latter
ruling was challenged by the petitioners in their appeal to the Benefits Review Board.
The ALJ’s decision was deemed affirmed by the Benefits Review Board pursuant to
Public Law 104-134 because the petitioners’ appeal was pending before the Board for
longer than a year and was not acted upon before September 12, 1996. This affirmance
is considered a final order of the Benefits Review Board, and thus the petitioners filed
a petition for review of the order before this court.
II. DISCUSSION
The only issue raised in this appeal is a legal question, and thus we will engage
in de novo review of the ALJ’s decision. The petitioners contend that they are entitled
to a credit under § 14(j) of the Longshore and Harbor Workers’ Compensation Act, 33
U.S.C. § 914(j), et seq. (“LHWCA”), which provides that “[i]f the employer has made
advance payments of compensation, he shall be entitled to be reimbursed out of any
unpaid installment or installments of compensation due.” 33 U.S.C. § 914(j) (1986).
We conclude that the petitioners are not entitled to a credit under § 14(j) because they
have introduced no evidence that the container royalty and holiday/vacation payments
made to Richardson were intended as advance payments “in lieu of compensation,” as
is required under § 14(j) of the LHWCA. See Branch v. Ceres Corp., 29 BRBS 53, 55
(1995), aff’d mem., 96 F.3d 1438 (4th Cir. 1996). The fact that Richardson and other
5
The ALJ resolved a number of other issues that
are not relevant to this appeal.
4
longshoremen are able to “earn” these payments regardless of whether they are
disabled “belies a finding that these payments were intended as advance payments of
compensation.” Trice v. Virginia International Terminals, Inc., 30 BRBS 165, 168
(1996) (reversing ALJ’s decision to grant employer a credit under § 14(j) for container
royalty and vacation/holiday payments made to employee during his period of
disability). Section 14(j) deals with situations in which an employer voluntarily
continues the salary of an injured employee and the employee subsequently establishes
an entitlement to disability benefits that are lower than the voluntary salary payments
made by the employer. See generally, Tibbetts v. Bath Iron Works, Corp., 10 BRBS
245, 247-248 (1979) (concluding that employer was entitled to a credit under § 14(k)
of the LHWCA).6 In that situation, the employer is entitled to a credit under § 14(j) for
its advance payments of salary because the salary continuation is considered an
advance on disability benefits. The instant situation simply is not contemplated by §
14(j) of the LHWCA.
The petitioners argue that denying an employer a credit for container royalty and
holiday/vacation payments made to an employee during a period of disability is unfair
because container royalty and holiday/vacation payments are included in determining
6
Section 14(k) was the precursor to § 14(j) and
also allowed a credit for employers that made “advance
payments of compensation” to an employee.
5
an employee’s pre-injury “average weekly wage.”7 See Lopez v. Southern Stevedores,
23 BRBS 295, 300 (1990) (holding that container royalty and holiday/vacation
payments should be included in determining an employee’s pre-injury “average weekly
wage” because these payments are part of an employee’s income). Under the
petitioners’ theory, container royalty and holiday/vacation payments must be treated as
“wages” for all purposes, including employer credits, in order to avoid double recovery
for the employee. See Codero v. International Terminal Operating Co., 25 BRBS 332,
337-338 (ALJ) (1991); Mitchell v. Smith & Kelly Co., 25 BRBS 201, 207 (ALJ)
(1991). The two ALJ decisions relied on by the petitioners, Codero and Mitchell, did
not find that the employer was entitled to a credit under § 14(j) of the LHWCA. See
Codero, 25 BRBS at 339 (specifically noting that the employer was not seeking a
credit under § 14(j)); Mitchell, 25 BRBS at 207-208 (same). Rather, Codero and
Mitchell allowed the employer a credit because the ALJ found that container royalty
and holiday/vacation payments represented post-injury “wage-earning capacity” to the
7
Pre-injury “average weekly wage” is used to
calculate a disabled employee’s entitlement to
disability benefits. If an employee is found to be
temporarily totally disabled, his disability benefits
are equal to two-thirds of his pre-injury “average
weekly wage.” 33 U.S.C. § 908(b). If an employee is
only temporarily partially disabled, then he receives
two-thirds of the difference between his pre-injury
average weekly wage and his remaining earning capacity.
33 U.S.C. § 908(c)(21) (1986).
6
employee and thus the employee was partially,8 rather than totally, disabled. This
reasoning was recently rejected in both Eagle Marine Services v. Director, Office of
Workers Compensation Programs, 115 F.3d 735, 737 (9th Cir. 1997), and Branch v.
Ceres Corporation, 29 BRBS 53, 55-56 (1995), aff’d mem., 96 F.3d 1438 (4th Cir.
1996). In Eagle Marine Services, the court concluded that the disabled employee’s
receipt of holiday pay did not reflect post-injury “wage-earning capacity” under § 8(h)
of the LHWCA9 because, under the ILA contract, the employee’s entitlement to the
holiday pay “was based principally upon his working a certain number of hours in the
previous year.” Eagle Marine Services, 115 F.3d at 737 (concluding that the
employee’s holiday pay was “a measure of pre-injury earning capacity, not of post-
injury earning capacity” and that the employer’s emphasis on the timing of the receipt
of the wages “erroneously equates earning with receipt and obscures the distinction
between wages and wage-earning capacity”). We agree. The lump-sum container
royalty and holiday/vacation payments received by Richardson in December 1991 were
principally earned as a result of Richardson’s pre-injury employment during the
8
In the case of a temporary partial disability,
the employer gets credit for the employee’s post-injury
“wage-earning capacity.” See supra note 7.
9
Section 8(h) provides that the wage-earning
capacity of an injured employee for purposes of
determining temporary partial disability under § 8(e)
“shall be determined by his actual earnings if such
actual earnings fairly and reasonably represent his
wage-earning capacity.” 33 U.S.C. § 908(h) (1986).
7
contract year ending September 1991. The “gratuity” hours that Richardson received
during his period of disability were credited to Richardson pursuant to the terms of the
ILA union contract and were not based on any services rendered by Richardson to
SEACO. Therefore, we hold that Richardson’s receipt of container royalty and
holiday/vacation payments does not represent post-injury “wage-earning capacity”
under § 8(h), that the payments do not convert his temporary total disability to a partial
disability, and thus that the petitioners are not entitled to any credit for these payments
to Richardson during the period of his disability.
For the foregoing reasons, we hold that the petitioners are not entitled to a credit
under § 14(j) for container royalty and holiday/vacation payments made to Richardson
during the period of his disability; and we hold that those payments do not represent
post-injury “wage-earning capacity” under § 8(h) and thus those payments do not
convert Richardson’s temporary total disability into a partial disability. Accordingly,
the Benefits Review Board’s administrative affirmance of the ALJ’s decision denying
the petitioners’ request for a credit is affirmed.
AFFIRMED.
8