* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-60541

M & M PROJECT STAFFING; GRAY INSURANCE COMPANY

Petitioners

v.

DIRECTOR, OFFICE OF WORKER’S COMPENSATION PROGRAMS, U.S.

DEPARTMENT OF LABOR; RAMIRO C. CARDENAS

Respondents

Petition for Review of an Order 

of the Benefits Review Board

No. 06-0778

Before JONES, Chief Judge, and BARKSDALE and STEWART, Circuit Judges.

PER CURIAM:*

M&M Project Staffing and Gray Insurance Company petition for review

of a final order of the Benefits Review Board (BRB) affirming an order by the

Administrative Law Judge (ALJ) awarding compensation to Ramiro Cardenas

under the Longshore and Harbor Workers’ Compensation Act (“LHWCA”),

33 U.S.C. § 901, et seq. Because substantial evidence does not support the ALJ’s

calculation of Cardenas’s average weekly wage, we REVERSE and REMAND.

United States Court of Appeals

Fifth Circuit

F I L E D

August 20, 2008

Charles R. Fulbruge III

Clerk
No. 07-60541

2

I.

On April 7, 2004, Ramiro Cardenas injured his lower back while working

as a welder for M&M Project Staffing (“M&M”). Cardenas had worked for M&M

on multiple occasions before his injury. He was never terminated for

misconduct, but was frequently laid off after finishing a project. Cardenas

received unemployment compensation in 2002, 2003, and 2004.

Cardenas sought disability benefits under the LHWCA for his back injury,

and the parties proceeded to trial before the ALJ on multiple issues. The ALJ

entered an Order awarding Cardenas benefits based on an average weekly wage

of $1,038.70. The ALJ reached this figure by dividing the amount Cardenas

earned in the year before his injury, $34,276.98, by 33, the number of weeks

Cardenas worked during that year.

Petitioners filed a motion for reconsideration solely on the average weekly

wage calculation, arguing that the ALJ erred by not dividing Cardenas’s

earnings by 52 weeks. The ALJ denied the motion, and the BRB affirmed the

ALJ’s decision. Petitioners timely filed this appeal.

II.

We review the BRB’s decision only for errors of law and to determine

whether it properly concluded thatthe ALJ’s factual findings were supported by

substantial evidence on the record as a whole. James J. Flanagan Stevedores,

Inc. v. Gallagher, 219 F.3d 426, 429 (5th Cir. 2000). Substantial evidence is

evidence that provides “a substantial basis of fact from which the fact in issue

can be reasonably inferred,” or such evidence that “a reasonable mind might

accept as adequate to support a conclusion.” New Thoughts Finishing Co. v.

Chilton, 118 F.3d 1028, 1030 (5th Cir. 1997). The substantial evidence standard

is less demanding than that of preponderance of the evidence, and the ALJ’s

decision need not constitute the sole inference that can be drawn from the facts.

Id.
No. 07-60541

3

On appeal, the only dispute between the parties concerns the ALJ’s

computation of Cardenas’s average weekly wage. A claimant’s average weekly

wage is calculated in two steps: First, a claimant’s average annual earnings are

determined by utilizing one of three methods set forth in 33 U.S.C. § 910(a)-(c).

Section 910(a) applies when the claimant worked in the same or comparable

employment for substantially the whole of the year immediately preceding the

injury. It provides a specific formula for calculating annual earnings based on

the average daily wage the claimant actually earned on the days he was

employed. When a claimant’s employment is regular and continuous but the

claimant has not been employed in that employmentfor substantially the whole

of the year, § 910(b) may be applied. Calculations under § 910(b) are based on

the wages of comparable employees, engaged in comparable work, in a similar

locale. Section 910(c) is used when the claimant’s work is “inherently

discontinuous or intermittent.” Empire United Stevedores v. Gatlin, 936 F.2d

819, 822 (5th Cir. 1991). Section 910(c) provides:

If either [subsection (a) or (b)] cannot reasonably and fairly be

applied, such 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 of the 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, including the

reasonable value of the services of the employee if engaged in

self-employment, shall reasonably represent the annual earning

capacity of the injured employee.

Second, the claimant’s average annual earnings are divided by 52 pursuant to

§ 910(d)(1), which states that an employee’s average weekly wages “shall be one

fifty-second part of his average annual earnings.”

In this case, the ALJ applied § 910(c) and determined that Cardenas’s

average annual earnings were $34,276.98. The ALJ then divided this figure by
No. 07-60541

4

33, the number of weeks Cardenas worked in the year before his injury, to reach

an average weekly wage of $1,038.70.

The parties agree that the ALJ correctly utilized § 910(c), as opposed to

subsections (a) or (b), in calculating Cardenas’s average annual earnings.

However, Petitioners contend that the ALJ violated § 910(d)(1) by dividing

Cardenas’s average annual earning by 33 instead of 52.

Despite the plain language of § 910(d)(1), the ALJ’s failure to divide by 52

does not necessarily require reversal. In Gallagher, an ALJ divided the

claimant’s annual earning by 48,to accountfor four weeks thatthe claimant was

unable to work due to a previous injury. 219 F.3d at 433-434. The employer

argued that using the number 48 as a divisor violated the clear mandate of

§ 910(d)(1). This court found, however, that “the ALJ’s decision to carve out the

four-week period of lost work facilitated the goal of ‘mak[ing] a fair and accurate

assessment’ of the amount that [the claimant] ‘would have the potential and

opportunity of earning absent the injury.’” Id. at 434. This court has likewise

affirmed an ALJ’s use of 27 weeks as a divisor, when the ALJ did so to account

for time the plaintiff was out of work due to a previous injury. See Staftex

Staffing v. Director, OWCP, 237 F.3d 404, 407-08 (5th Cir. 2000). In Staftex,this

court explained:

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. Thus, although the ALJ should

have increased its estimation of [the claimant’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.

Id. at 408 (internal citations omitted).

Cardenas argues that, as in Staftex and Gallagher, the ALJ’s decision to

divide by fewer than 52 weeks is harmless. Cardenas maintains that the ALJ
No. 07-60541

1

In denying Petitioners’ motion for reconsideration, the ALJ likewise stated that it

would have reached the same result on rehearing by performing this alternative calculation.

5

could have reached the same average weekly wage of $1,038.70 by increasing his

average annual earnings to $54,012.40 to reflectthe amount he could have made

had work been available year-round, and then dividing by 52.1

However, in order to credit an intermittent worker with the earning

capacity of a full-time worker, the record must contain evidence that the

claimant would have the opportunity to be employed year-round. See New

Thoughts, 118 F.3d at 1031. To hold otherwise would defeat one of the central

purposes of having three different methods of calculating a claimant’s average

weekly wage. Id. at 1031 n.3. As this court has explained, “one of the primary

reasons for the differentiation in § [910(c)] is that it would be unfair to the

employer to calculate an intermittent employee’s wage under §§ [910(a) or (b)],

since to do so would treat the claimant as a full-time worker and thereby

exaggerate his loss.” Id. (quoting Tri-State Terminals, Inc. v. Jesse, 596 F.2d

752, 756 n.3 (7th Cir. 1979)).

In New Thoughts, the claimant testified that his work in the construction

industry during the previous three years had been intermittent. Id. at 1030. He

worked when work was available, but had been laid off frequently. Id. The ALJ

awarded an average weekly wage based solely on the claimant’s earnings in the

last full year the claimant worked, which was four years before his injury. Id.

at 1030-31. This court reversed, stating “[c]ontrary to the ALJ’s decision, the

record is devoid of evidence that [claimant] at the time of his injury, unlike in

the immediately preceding three years, would have had the opportunity to be

employed year-round.” Id. at 1031.

As in New Thoughts, the record in this case contains no evidence that

Cardenas would have the opportunity to work year-round. Cardenas testified

that he had worked for M&M on “many” different occasions before his injury,
No. 07-60541

2 Petitioners repeatedly assert that Cardenas would return to Mexico to visit family

while collecting unemployment benefits. However, substantial evidence supports that

Cardenas was willing to work year round; the issue is whether he would have the opportunity

to do so.

3

In the 52 weeks before his injury in April 2004, Cardenas earned $34,276.98.

Cardenas earned $40,062.50 in 2003 and $42,362.00 in 2002.

6

and that he was often laid off once a specific job was completed. Cardenas

collected unemployment compensation in 2002, 2003, and 2004.2 Moreover, an

average weekly wage of over $54,000 far exceeds Cardenas’s actual earnings in

previous years.3 There is also no evidence that Cardenas enjoyed consistent

employment in the years before he began working as welder for M&M, or that

his employment situation had changed such that his future employment would

have been more constant than in past years.

This lack of evidence distinguishes Cardenas’s case from those relied upon

by the ALJ and BRB. This court and the BRB have held that an ALJ may

increase a claimant’s average annual earnings to account for periods where the

claimant did not work due to circumstances such as previous injury, a labor

strike, a death in the family, or incarceration. See Gallagher, 219 F.3d at 434

(previous injury); Staftex, 237 F.3d at 408 (previous injury); Browder v.

Dillingham Ship Repair, 24 BRBS 216 (1991) (death of family member);

Daugherty v. Los Angeles Container Terminal, 8 BRBS 363 (1978)

(incarceration);Le Batard v. Ingalls Shipbuilding Division,Litton Systems, Inc.,

10 BRBS 317, 324 (1979) (labor strike). In these cases, year-round employment

was available to the claimants, but the claimants were unable to take the

opportunity due to a non-recurrent event. In contrast, employment that is itself

intermittent is likely to remain so, absent some evidence of changed

circumstances.

Cardenas also cites this court’s decision in Gatlin to support the

proposition that an ALJ may increase an intermittent worker’s average weekly
No. 07-60541

7

wage to reflectthe amountthe worker could have made had work been available

year-round. 936 F.2d at 822. In Gatlin, the ALJ based an intermittent

longshore worker’s average annual earnings, in part, on the wage the worker

earned in a previous job as a salesman. Id. However, evidence of the claimant’s

consistent employment as a salesman two years before his injury provided some

basis for the ALJ in Gatlin to conclude that the claimant would have a similar

opportunity for continuous employmentin the future. Here, the record contains

no evidence that Cardenas had been consistently employed in any field during

any previous year. Nor is there any evidence Cardenas’s employment situation

had changed such that his future employment would have been more consistent

than in past years. Compare Miranda v. Excavation Constr., Inc., 13 BRBS 882

(1981) (claimant started new, more lucrative work seven weeks before his

injury).

Finally, Cardenas notes that income from unemployment is not included

in a claimant’s average weekly wage. Strand v. Hansen Seaway Serv., Ltd.,

614 F.2d 572, 576 (7th Cir. 1980); Blakney v. Del. Operating Co., 25 BRBS 273

(1992). He argues that “it is simply unjust” to exclude the income from

unemployment while including the time spent on unemployment in the divisor

because doing so would artificially reduce the claimant’s average weekly wage.

As explained, infra, however, the propriety of excluding time spent on

unemployment from the divisor depends upon the circumstances of the case. If

there is no evidence that the claimant had the opportunity to work continuously

at the time of the injury, it is unfair to the employer “to treat the claimant as a

full-time worker and thereby exaggerate his loss.” See New Thoughts, 118 F.3d

at 1031 n.3; see also Strand,614 F.2d at 576-77 (excluding unemployment

benefits from average annual earnings and approving a divisor of 52).

Because no substantial evidence supports an assumption that Cardenas

would have had the opportunity to work continuously in future years, we cannot
No. 07-60541

8

say that the ALJ’s decision to use 33 weeks as a divisor was harmless.

Accordingly, we REVERSE and REMAND to the ALJ for a redetermination of

Cardenas’s average weekly wage.