United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

S.L., Appellant 

and 

DEPARTMENT OF VETERANS AFFAIRS, 

VETERANS ADMINISTRATION MEDICAL 

CENTER, Battle Creek, MI, Employer 

__________________________________________ 

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Docket No. 14-485 

Issued: February 19, 2015 

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

PATRICIA HOWARD FITZGERALD, Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On December 24, 2013 appellant, through his attorney, filed a timely appeal from a 

November 21, 2013 merit decision of the Office of Workers’ Compensation Programs (OWCP). 

Pursuant to the Federal Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 

501.3, the Board has jurisdiction over the merits of this case. 

ISSUE 

The issue is whether OWCP properly reduced appellant’s compensation benefits effective 

April 22, 2013 based on his capacity to perform the duties of a laundry worker. 

FACTUAL HISTORY 

OWCP accepted that on December 18, 1998 appellant, then a 49-year-old housekeeping 

aid, sustained a low back strain and herniated disc at L5-S1 as a result of pushing a floor 

 1

 5 U.S.C. § 8101 et seq.
2

scrubber up a back ramp. He stopped work on December 21, 1998 and has not returned to work. 

OWCP authorized a L5-S1 discectomy performed on January 1, 1999, a single fusion at L5-S1 

on January 3, 2001, a posterior spinal fusion at L5-S1 with left iliac crest bone grafting on 

October 10, 2002 and an extension of the fusion to L4 on December 21, 2006. Appellant was 

placed on the periodic rolls. 

In a September 26, 2008 work capacity evaluation, Dr. Gregory P. Graziano, an attending 

Board-certified orthopedic surgeon and appellant’s treating physician, advised that appellant was 

disabled for work. 

By letter dated August 5, 2010, OWCP requested that Dr. Graziano provide a report 

addressing whether appellant had any continuing residuals or disability related to his accepted 

employment injuries.2

 

In an August 13, 2010 report, Dr. Graziano stated that he was unable to comment on 

appellant’s current conditions since he had not seen him since December 14, 2007. 

By letter dated September 8, 2011, OWCP referred appellant, together with a statement 

of accepted facts and the medical record, to Dr. Emmanuel Obianwu, a Board-certified 

orthopedic surgeon, for a second opinion. In an October 3, 2011 report, Dr. Obianwu diagnosed 

chronic lumbar disc disease and a herniated lumbar disc at L5-S1. He advised that, while 

appellant no longer had any residuals of his employment-related lower back strain he had 

residuals of his employment-related herniated disc condition. Dr. Obianwu opined that appellant 

could not perform his housekeeping aid job, but he could work with restrictions that included no 

reaching above the shoulder, climbing, repetitive bending, twisting, and lifting more than 20 

pounds. 

On December 16, 2011 OWCP referred appellant for vocational rehabilitation services. 

Appellant met with a vocational rehabilitation counselor on January 5, 2012. The vocational 

rehabilitation counselor determined that appellant’s transferable skills included light assembly 

from a bench, sorting, and folding. He indicated that the employing establishment was prepared 

to offer appellant a job sorting laundry which was within his functional restrictions and 

transferable skills. The vocational rehabilitation counselor stated that his determination was 

based on appellant’s past experience as a bridge builder, brake assembler, and maintenance and 

casual laborer. 

On January 21, 2012 the employing establishment offered appellant a full-time laundry 

worker position with retained grade and pay. The primary duties of the position included 

sorting, folding, and stacking clean linens. Additional duties included sorting personal clothing 

for residents by ward, color, and name, and sorting undergarments and socks, by name, ward, 

 2

 Investigative surveillance performed from March 16, 2002 to March 17, 2004 revealed that appellant was 

observed walking, driving in a normal unrestricted fashion, assisting three individuals with holding, lifting, and 

moving large plastic tubing, carrying a carry-on size bag over his right shoulder, attempting to extend a slide on a 

compartment on his camper with the help of another male, bending, kneeling, pushing, and pulling a metal bar with 

both hands to jack up the camper, laying and rolling under the camper, reaching under the camper while propped up 

on one elbow, turning a hand crank with his left and right hands while standing, and bending and turning a crank to 

raise the stabilizers in the rear of the camper. 
3

and size. The employee may be assigned to mark patient clothing, scrubs, uniforms, and 

laboratory coats as needed. The administrative duties of the position included answering the 

telephone, making copies, shredding paperwork marked for destruction, and assembling and 

stapling paperwork. The physical requirements included good use and dexterity of hands for 

tasks such as, sorting and stacking clothing items, and performing repetitive work. This work 

could be accomplished either sitting or standing. There were intermittent periods of walking, 

standing, and sitting while performing administrative tasks. The physical requirements also 

included lifting items weighing less than one to two pounds. 

On January 30, 2012 appellant refused the job offer, stating that his doctors found that he 

could not work. 

By letter dated January 31, 2012, OWCP informed appellant that it had been advised that 

he had impeded the efforts of the vocational rehabilitation counselor. It informed him that 

Dr. Obianwu’s October 3, 2011 report constituted the weight of the evidence unless appellant 

were to submit evidence refuting Dr. Obianwu’s opinion within 30 days. Appellant was notified 

of the penalty provisions of section 8113(b) of FECA3

 and section 10.519 of OWCP regulations.4 

He did not respond. 

On March 5, 2012 OWCP requested that Dr. Obianwu submit an addendum report 

clarifying his climbing and lifting restrictions. It further requested that he review the position 

description for a laundry worker and indicate whether appellant could perform the duties of that 

position. 

In an April 6, 2012 report, Dr. Obianwu advised that appellant had the following 

permanent restrictions: he should not engage in work that required reaching above the shoulder; 

twisting; bending; or stooping more than four hours. Appellant could not lift above 20 pounds. 

He could work as many hours as he wished. Appellant should not be expected to climb up 

scaffolding, etc. Dr. Obianwu reviewed the laundry work position description and advised that 

he was capable of performing the laundry worker position. 

By letter dated April 13, 2012, OWCP advised appellant that Dr. Obianwu found that he 

could perform the laundry worker position offered by the employing establishment. 

Dr. Obianwu was afforded 30 days to provide an explanation justifying his refusal to participate 

in the vocational rehabilitation effort. 

On May 3, 2012 appellant advised OWCP that his doctors had submitted everything and 

that he could not work. 

By letter dated May 18, 2012, OWCP informed appellant that the offered position of 

laundry worker dated July 26, 2013 was suitable work as it complied with the medical limitations 

set forth by Dr. Obianwu. It further informed him that the position remained available to him. 

OWCP allowed appellant 30 days to accept or provide a written explanation of his reasons for 

 3

 5 U.S.C. § 8113(b). 

4

 20 C.F.R. § 10.519. 
4

refusal and advised that an employee who refuses an offer of suitable work without reasonable 

cause is not entitled to compensation under 5 U.S.C. § 8106(c). 

Appellant retired from the employing establishment on disability and elected to receive 

retirement benefits from the Office of Personnel Management effective May 9, 2012. On 

May 29, 2012 OWCP was advised that he wished to change his retirement election back to 

FECA compensation benefits. Appellant submitted a December 23, 2011 report from 

Dr. Ireneo Y. Diaz, Jr., an infectious disease specialist. Dr. Diaz listed a history of the 

December 18, 1998 employment injuries and appellant’s medical treatment. He provided 

findings on physical examination and diagnostic test results. Dr. Diaz advised that appellant was 

unable to perform any jobs due to low back pain. 

On June 20, 2012 OWCP determined that there was a conflict in medical opinion 

between Drs. Obianwu and Diaz on the issue of whether appellant was totally disabled for work. 

By letter dated June 22, 2012, it referred appellant, together with a statement of accepted facts 

and the medical record, to Dr. Michael E. Holda, a Board-certified orthopedic surgeon, for an 

impartial medical examination. 

In a July 30, 2012 report, Dr. Holda reviewed the medical record and statement of 

accepted facts. He discussed a history of the December 18, 1998 employment injuries as well as 

appellant’s medical treatment and family, social, and work background. Dr. Holda noted 

appellant’s current complaints of low back pain that radiated to his left leg and foot. He listed 

findings on physical examination and diagnosed chronic low back pain, a history of disc 

herniation at L5-S1, and degenerative disease of the lumbar spine. Dr. Holda also diagnosed 

post L5-S1 discectomy, post anterior laparoscopic fusion at L5-S1, post L5-S1 posterior spinal 

fusion with liberty instrumentation, and post L4-5 transforaminal interbody fusion with Capstone 

cage. Based on his orthopedic examination and review of medical records, he opined that 

appellant’s ongoing pain was related to his accepted work-related disc herniation at L5-S1 which 

resulted in his four lumbar spine surgeries. Dr. Holda further opined that appellant was unable to 

return to his previous employment, but could work eight hours a day with restrictions. He 

recommended permanent restrictions of no repetitive bending and twisting at the waist, and no 

lifting over 15 pounds. 

On August 14, 2012 OWCP requested that Dr. Holda submit an addendum report. 

Dr. Holda was asked to differentiate between the work and nonwork-related diagnoses. He was 

also asked to review the laundry worker position description and indicate whether appellant 

could perform the duties of the position. 

In a February 28, 2013 report, Dr. Holda advised that his diagnosis of degenerative 

disease of the lumbar spine was due to the aging process and not related to appellant’s work 

injury. The diagnoses of chronic low back pain and history of disc herniation at L5-S1 and 

subsequent surgery were related to his work injury. Dr. Holda reviewed the job description for a 

laundry worker and opined that appellant was physically capable of performing the duties 

delineated in the job description. He concluded that the job fell within his recommended 

restrictions. 
5

In a March 19, 2013 notice, OWCP informed appellant that it proposed to reduce his 

compensation benefits as the medical and factual evidence of record established that he was no 

longer totally disabled and had the capacity to earn the wages of a laundry worker. Appellant 

was afforded 30 days to submit any additional evidence regarding his capacity to earn wages in 

the position described. 

Also, on March 19, 2013 the employing establishment advised OWCP that the offered 

position was still available. 

In an April 22, 2013 decision, OWCP finalized the March 19, 2013 proposed decision 

based on appellant’s capacity to earn wages as a laundry worker. It determined that the position 

was medically and vocationally suitable and readily available in his geographical location. 

OWCP applied the principles identified in Albert C. Shadrick,

5

 finding that he had zero loss of 

wage-earning capacity. 

By letter dated April 25, 2013, appellant, through his attorney, requested a telephone 

hearing with an OWCP hearing representative. 

During the telephone hearing on September 4, 2013 appellant’s attorney argued that the 

offered laundry worker position was not within appellant’s physical restrictions. 

In a November 21, 2013 decision, the hearing representative affirmed the April 22, 2013 

decision. She accorded special weight to Dr. Holda’s opinion as an impartial medical specialist 

in finding that appellant was capable of performing the offered laundry worker position. 

LEGAL PRECEDENT 

Once OWCP accepts a claim, it has the burden of proving that the disability has ceased or 

lessened in order to justify termination or modification of compensation benefits.6

Section 8115 of FECA7 provides that wage-earning capacity is determined by the actual 

wages received by an employee if the earnings fairly and reasonably represent his or her 

wage-earning capacity. If the actual earnings do not fairly and reasonably represent wageearning capacity or the employee has no actual earnings, his or her wage-earning capacity is 

determined with due regard to the nature of his or her injury, the degree of physical impairment, 

his or her usual employment, his or her age, his or her qualifications for other employment, the 

availability of suitable employment and other factors or circumstances which may affect his or 

her wage-earning capacity in his or her disabled condition. 

When OWCP makes a medical determination of partial disability and of specific work 

restrictions, it may refer the employee’s case to a vocational rehabilitation counselor authorized 

by OWCP for selection of a position, listed in the Department of Labor’s Dictionary of 

 5

 5 ECAB 376 (1953); 20 C.F.R. § 10.403(d). 

6 P.M., Docket No. 12-1451 (issued February 19, 2013). 

7

 5 U.S.C. §§ 8101-8193, 8115. 
6

Occupational Titles or otherwise available in the open market, that fits that employee’s 

capabilities with regard to his or her physical limitations, education, age, and prior experience. 

Once this selection is made, a determination of wage rate and availability in the open labor 

market should be made through contact with the state employment service or other applicable 

service. Finally, application of the principles set forth in Shadrick8 will result in the percentage 

of the employee’s loss of wage-earning capacity. The basic rate of compensation paid under 

FECA is 66 2/3 percent of the injured employee’s monthly pay.9

ANALYSIS 

The Board finds that OWCP did not properly determine appellant’s wage-earning 

capacity. 

As stated above, there are two methods for determining wage-earning capacity: 

(1) determining that actual earnings fairly and reasonably represent wage-earning capacity; and 

then calculating loss of wage-earning capacity by applying the Shadrick formula to the actual 

earnings; and (2) if actual earnings do not fairly and reasonably represent wage-earning capacity, 

then a constructed position may be used, based on the factors enumerated under section 8115 and 

in accordance with established procedures, followed by application of the Shadrick formula.10

In the present case, OWCP found that the laundry worker position offered to appellant by 

the employing establishment represented his wage-earning capacity as it was medically and 

vocationally suitable. The Board notes that appellant never accepted the position. As appellant 

had no actual earnings, the analysis must follow the principles utilized for determining wageearning capacity based on a constructed position.11 The Board finds that OWCP failed to follow 

established procedures in this regard. At the time of OWCP’s November 21, 2013 decision, 

procedures pertaining to the determination of wage-earning capacity based on a constructed 

position required a labor market survey conducted by a rehabilitation counselor. While the 

rehabilitation counselor determined that appellant had the transferable skills to perform the 

offered job based on his previous experience as a bridge builder, brake assembler, and 

maintenance and casual laborer, appellant did not conduct a labor market survey to determine 

whether the offered position was actually performed in sufficient numbers within appellant’s 

commuting area so as to be considered reasonably available.12 In addition, the vocational 

rehabilitation counselor did not contact the state employment service or other applicable service 

to determine whether the wages of the offered position fell within the pay range for such 

 8 Supra note 5; 20 C.F.R. § 10.403. 

9 Karen L. Lonon-Jones, 50 ECAB 293 (1999). 

10 The Board notes that since OWCP had made a suitability determination on May 18, 2012 regarding the offered 

laundry worker position, it alternatively could have reviewed appellant’s refusal of the job offer pursuant to 5 U.S.C. 

§ 8106(c). Federal (FECA) Procedure Manual, Part 2 -- Claims, Determining Wage-Earning Capacity Based on a 

Constructed Position, 2.816.3.f (June 2013). 

11 5 U.S.C. § 8115. 

12 Id. at 2.816.6.b (June 2013). 
7

positions in the relevant geographical area.13 For the stated reasons, the Board finds that OWCP 

failed to properly determine appellant’s wage-earning capacity. It is OWCP’s burden of proof to 

justify a subsequent reduction of compensation benefits and it did not meet its burden.14 

CONCLUSION 

The Board finds that OWCP improperly reduced appellant’s compensation benefits 

effective April 22, 2013 based on his capacity to earn wages in the constructed position of 

laundry worker. 

ORDER 

IT IS HEREBY ORDERED THAT the November 21, 2013 decision of the Office of 

Workers’ Compensation Programs is reversed. 

Issued: February 19, 2015 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia Howard Fitzgerald, Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board 

 13 See Richard Alexander, 48 ECAB 432 (1997); see Hattie Drummond, 39 ECAB 904 (1988). 

14 P.M., Docket No. 12-1451 (issued February 19, 2013).