BRB: ALJs are Not Required to Use K.S. to Calculate Average Weekly Wage

The Benefits Review Board (“BRB”) recently discussed average weekly wage calculations in an unpublished Defense Base Act decision.  In Hamidzada v. Mission Essential Personnel, the Employer and Carrier appealed an administrative law judge’s (“ALJ”) average weekly wage decision.  The ALJ calculated Claimant’s average weekly wage using only the wages Claimant earned overseas during his employment for Employer in Afghanistan.  Employer appealed, arguing that the ALJ erred in relying on the BRB’s K.S. decision–which used to be the seminal average weekly wage decision for DBA claims–because a federal court vacated K.S.

Why was K.S. so important?  For years, K.S. was used in connection with Proffitt v. Serv. Employers Int’l to more or less bar ALJs from blending together overseas and stateside earnings to determine an injured worker’s average weekly wage.  Instead, K.S. wanted average weekly wage calculations to be based on only overseas wages when the employee was paid “higher wages for more dangerous work under at least a one-year contract….”  After K.S. was appealed to the Southern District of Texas, the federal court vacated the decision in Service Employees Int’l, Inc.  The court reasoned that ALJs are not mere calculators required to blindly apply prior BRB precedent–precedent with no statutory, regulatory, or common-law support–to determine an injured worker’s AWW.

In the present case (Hamidzada), the Employer raised a legitimate issue with the ALJ’s average weekly wage calculation.  The BRB (in a footnote) conceded that it was “without any published precedent on the [average weekly wage] issue,” and it chose to vacate the ALJ’s calculation of Claimant’s average weekly wage.  As stated by the BRB (with internal citations omitted):

We agree with employer that the administrative law judge believed that he was compelled to apply [K.S.], based on his statements about “controlling” law and that claimant’s average weekly wage “must be based on what [Claimant] earned in Afghanistan” given his findings of fact.  Given the district court’s order vacating [K.S.], we vacate the administrative law judge’s average weekly wage finding, and we remand this case for findings of fact under Section 10(c).  In its decision, the district court based its holding on the administrative law judge’s “wide discretion,” specifically noting, “[I]t is within the administrative law judge’s discretion to determine whether or not the facts of the two cases [K.S. and Proffitt] are similar enough to merit similar outcomes.”  On remand, the administrative law judge must determine the facts pertinent to the average weekly wage calculation, apply relevant case precedent, and calculate an average weekly wage that represents claimant’s wage-earning capacity at the time of injury.

Hamidzada v. Mission Essential Personnel, BRB No. 13-0312 (Mar. 21, 2014).