MICHAEL W. WHEELER,		)
				)
Employee,			)	DECISION AND ORDER
Applicant,			)	AWCB Case No. 8901347
				)	AWCB Decision No. 90-0058
v.				)
				)	Filed with AWCB Anchorage
TRIDENT SEAFOODS CORPORATION,	)	March 30, 1990
				)
Employer,			)
				)
and				)
				)
NATIONAL UNION FIRE INSURANCE,	)
				)
Insurer,			)
Defendants.			)
				)

This review of the Reemployment Benefits Administrator's determination was heard at Anchorage, Alaska, on March 21, 1990. Employee was present telephonically and represented by attorney Joseph Kalamarides. Defendants were represented by attorney Patricia Zobel. The record closed at the end of the hearing.

Did the Rehabilitation Administrator abuse his discretion in determining under AS 23.30.041(f)(3) that Employee is not eligible for reemployment benefits?

It is undisputed that Employee was injured in the course and scope of his employment on January 19, 1989, while working as a fish processor. he fell down the steps leading to his work area and injured his right hip.

Defendants began paying Employee temporary total disability (TTD) benefits effective January 19, 1989. employee provided wage documents for his earnings during the two years before his injury. His earnings in those two years totaled $3,746.88. Under AS 23.30.220(a)(1) this provided gross weekly earnings (GWE) of $37.47. Because Employee provided wage documents, Defendants have paid Employee weekly TTD benefits of $154.00 even though this is not required by AS 23.30.175. Defendants terminated TTD benefits on June 18, 1989, when Employee was released for light-duty work. (June 21, 1989 Compensation Report).

It is undisputed that at the time of the injury Employee earned $4.50 per hour, plus time and one-half when he worked in excess of 40 hours per week. In addition, Employer provided room and board as well as transportation to the work site.

Employee's condition has been diagnosed by several doctors, and the diagnoses include a right hip contusion, grade I spondylosis, and lumbar strain with grade I or grade II, L5 spondylolisthesis. Employee was examined by Richard McCollum, M.D., at Defendants' request. Dr. McCollum indicated in his May 11, 1989, report that "if this history is true and he has never had any prior back problems, then he has aggravated a dormant condition and now has back pain secondary to . . . lumbar spondylolisthesis." Employee's treating physician, John Wilcox, D.C., indicated in his June 1989 letter, that Employee was medically stationary and he would never return to pre-injury status. Dr. Wilcox stated he rated Employee's impairment under the AMA Guidelines as a 20 percent impairment of the whole man.

Employee requested an eligibility evaluation for reemployment benefits. Because Employee resided in Washington, the Rehabilitation Benefits Administrator (RBA) assigned R. Chris Simmons of Vocational Resources of Washington, Inc., to perform the evaluation. At the time of the assignment on August 7, 1989, Employee was represented by Kalamarides, and the "A sent Kalamarides notification of the assignment.

Simons submitted his report on October 2, 1988. He did not send a copy of his report to Employee, his attorney or Defendants. On October 17, 1989, the RBA wrote to Employee advising him that he was determined conditionally not eligible for reemployment benefits because Simmons indicated that Employer had offered Employee a job, which appeared to make Employee ineligible under AS 23.30.041(f)(1) for reemployment benefits. However, the RBA wanted Simmons to provide additional information SO the RBA could confirm his tentative opinion that Employee was ineligible. The RBA sent a copy of his letter to Employee's attorney as well Defendants. He did not send the parties a copy of Simmons' report, nor did he advise the parties that they could comment or submit other documents for his consideration.

On February 5, 1990, Simmons submitted the additional information which the RBA had requested in October 1989. Neither Simmons Nor the RBA sent a copy of this additional information to the parties. On February 12, 1990, the RBA notified Employee that under AS 23.30.041 (f) he was not eligible for reemployment benefits because the medical reports indicated Employee could return to the jobs offered by Employer, and the job offered paid wages equal to 75 percent of Employee gross hourly earnings (GHE) at the time of the injury.

Employee has filed a claim requesting additional compensation benefits. However, a hearing on that claim will be held at a later date. The only issue to be addressed in this decision is whether the RBA abused his discretion in denying reemployment benefits.

At the start of the hearing, we advised the parties that we would follow our established practice and would not allow the parties to introduce evidence for our consideration that was not submitted to the RBA, unless it was newly discovered and could not have reasonably be submitted to the RBA. Employee contends the RBA's procedures, our procedures, and AS 23.30.041 violate due process and are unconstitutional.

In addition, Employee contends that the RBA abused his discretion in computing Employee's GHE because he excluded room, board, transportation and overtime. If these items were included, the jobs offered by Employer would be less than 75 percent of Employee's GHE at the time of the injury. Employee contends our regulation for calculating the GHE is contrary to the Act and, therefore, is invalid.

Defendants contend that the RBA followed the statute in making his determination, and his determination is supported by the evaluation and documents in our file. Therefore, we must affirm his determination as there is no abuse of discretion. In addition, Defendants contend our regulation for computing the GHE has a rationale basis, and is not contrary to the Act. Therefore, the RBA was correct in finding Employee ineligible for benefits based on Employer's job offers. Finally Defendants argue if the RBA committed error, it was harmless error because Employee has no permanent impairment as a result of the injury, and Employee has returned to work.

AS 23.30.041(d) provides in part:

Regarding Employee's argument that AS 23.30.041 is unconstitutional, we have previously ruled that such an argument is within the purview of the judicial branch, rather than within the scope of administrative review. Kelley v. Sonic Cable Television, AWCB Decision No. 89-0169 (July 6, 1989). Consistent with that opinion, we again decline to rule on this challenge to the statute.

Instead, we address Employee's arguments that the RBA's computation of Employee's GHE is an abuse of discretion and that the manner in which the RBA made his determination was an abuse of discretion. In Sheehan V. University of Alaska, 700 P.2d 1295, 1297 (Alaska 1985), the court stated, "This court has explained abuse of discretion as issuing a decision which is arbitrary, capricious, manifestly unreasonable, or stems from an improper motive.' (footnote omitted] Tobeluk v. Lind, 589 P.2d 873, 878 (Alaska 1979).11 The court has also stated that abuse of discretion exists only when the court is "left with the definite and firm conviction on the whole record that the trial judge has made a mistake." Brown v. State, 563 P.2d 275, 279 (Alaska 1977). We have adopted these standards in our review of the RBA's decisions. Sullivan v. Gudenau and Co., AWCB Decision No. 89-0153 (June 16, 1989); Garrett v. Halliburton Services, AWCB Decision No. 89-0013 (January 20, 1989). Recently, in Super v. Providence Hospital, AWCB Decision No. Unassigned (AWCB No. 8909879) (March 12, 1990), we noted that "misapplication of the law and a failure to exercise sound, reasonable and legal discretion also fall within the common definition of abuse of discretion.' Black's Law Dictionary 10 (Fifth Edition 1979)." Id. at 9.

The definition of "gross earnings" is included for purposes of computing an employee's spendable weekly wage under AS 23.30. 220(a) which states in part:

1. The gross weekly earnings are computed by dividing by 100 the gross earnings of the employee in the two calendar years immediately preceding the injury.
2. If the employee was absent from the labor market for 18 months or more of the two calendar years preceding the injury, the board shall determine the employee's gross weekly earnings for calculating compensation by considering the nature of the employee's work and work history, but compensation may not exceed the employee's gross weekly earnings at the time of the injury. . . .

(Emphasis added).

Because the phrase "gross hourly earnings" is not defined in the Act, we conclude that under AS 23.30.005(h) the Board had the authority to adopt a regulation to define "gross hourly earnings."

In this particular case, Employee received room and board at the time of the injury. Therefore, his GHE is computed under 8 AAC 45.490(3) which provides: "It at the time of injury the employee received bonuses, commissions, gratuities, or room and board during the course of employment, gross hourly wages are computed by dividing the gross weekly earnings, as determined under AS 23.30.220, by 40."

Employee's GWE were computed under AS 23.30.220(a)(1) by taking his earnings for the two years before injury, adding them together, and dividing by 100 weeks. Employee has no basis to complain about our regulation as it applies to him because it is entirely consistent with the Act. in addition, dividing by only 40 hours weights the result in Employee's favor if he had worked overtime in the two years before injury

In Employee's case his GWE based on his past two year's earnings and using AS 23.30.220(a)(1) are only $37.47.¹Because Employee provided wage documents, Defendants paid compensation at the weekly rate of $154.00, even though AS 23.30.175(a) permits them to pay at a rate less than that without obtaining an order from us first. Dividing $154.00 by 40 produces a GHE of $3.85. The RBA did not abuse his discretion in determining that Employer's job offers, which paid $3.38 to $4.75, exceeded 75 percent of Employee's GHE at the time of injury, and thus disqualified him under AS 23.30.041(f)(1) for reemployment benefits.²

Next we consider the RBA's procedures under AS 23.30.041 and due process. Defendants argue that if the RBA committed error, it was harmless error.

In Super, AWCB No. 8909879 at 9, the employer also argued about due process.

Unlike Super, the parties in this case were never provided with a copy of the rehabilitation specialist's report before the RBA made his decision. Unlike Super, the RBA in this case did not notify the parties of an opportunity to submit documents or comment upon the rehabilitation specialist's report before he made his decision. While it is true that subsection 41 does not require these procedures and while it is also true as stated in Super at 12 that "[t]he new rehabilitation amendments, effective July 1, 1988 have put the RBA under significant time constraints to . . . make his eligibility decisions . . .", we agree with Employee that minimum due process requires notice and an opportunity to be heard.³

We are unable to substantiate Defendants' argument that the RBA's failure to give the parties an opportunity to be heard is harmless error. Defendants contend that Employee has no permanent impairment which also disqualifies him under AS 23.3d.041(f)(3) from receiving reemployment benefits. Dr. Wilcox rated Employee's impairment at 20 percent of the whole man. (Wilcox June 13, 1989 letter). Dr. McCollum indicated that Employee's injury aggravated a dormant pre-existing condition. (McCollum May 11, 1989 letter). It may be that under AS 23.30.190(c), Employee's impairment rating is reduced because of pre-existing permanent impairment, but we have no evidence of that in our record.

Defendants also argued that Employee is now employed, and therefore any error the RBA made is harmless error. We note that the evidence of this employment was not available for the RBA's consideration as we did not receive it until February 28, 1990; We have no way of determining if we can consider the evidence of employment because it was not available and could not have reasonably been made available to the RBA at the time of his decision. In addition, we cannot determine if this employment is with Employer. Unless it is, it would not disqualify Employee from receiving reemployment benefits unless he has held the job long enough to obtain the skills to compete in the labor market. AS 23.30.041(o). Again to make this determination, we would need to consider evidence that was not available to the RBA, and that would be inconsistent with our abuse of discretion standard.

We agree in part with Defendants, argument that Employee knew the RBA found him conditionally not eligible, and he had ample opportunity to submit any-thing he wanted before the RBA made his final determination. When Employee was notified that he was conditionally not eligible, he was represented by an attorney who regularly appears before us, who handles a large volume of injured workers' claims, and who is very knowledgeable about the Act. However, we are concerned that neither party had an opportunity to review Simmons' final report and to comment upon it.

Having reviewed the record as a whole and considering the process adopted by the RBA, we find the RBA failed to adopt sound, reasonable and legal discretion because he did not provide the parties with Simmon's report and an opportunity to address that report. It is true that it may be harmless error because the RBA will reach the same conclusion after considering the parties' comments, but that is something we cannot determine unless the RBA considers those comments. Accordingly, we conclude we must remand the RBA's determination in order to provide the parties an opportunity to comment upon and submit additional documents in response to Simmon's final evaluation. we note that the parties have had ample opportunity to collect information since the RBA'S determination was made. Therefore, to keep this process as speedy as possible, Hewing v. Peter Kiewit Sons, 586 P.2d. 182 (Alaska 1978), we direct the parties to file their comments and/or other documents with the RBA within five days after receipt of this decision. The RBA shall have 14 days after the parties have filed their comments and/or other documents in which to reconsider his eligibility determination.

The Rehabilitation Benefits Administrator's decision is remanded for proceedings in accordance with this decision.

DATED at Anchorage, Alaska this .30th. day of March 1990.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Rebecca Ostrom
Rebecca Ostrom, Designated Chairman

/s/ Donald R. Scott
Donald R. Scott, Member

/s/ Darrell F. Smith
Darrell Smith, Member

RJO:rjo

If compensation is payable under the terms of this decision, it is due on the date of issue and penalty of 25 percent will accrue if not paid within 14 days of the due date unless an interlocutory injunction staying payment is obtained in Superior Court.

APPEAL PROCEDURES

A compensation order may be appealed through proceedings in Superior Court brought by a part in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

A compensation order becomes effective when filed in the office of the Board, and unless proceedings to appeal it are instituted, it becomes final on the 31st day after it is filed.

CERTIFICATION

I hereby certify that the foregoing is a full, true and correct copy of the Decision and order in the matter of Michael W. Wheeler, employee/applicant, v. Trident Seafoods Corporation, employer, and National Union Fire insurance, insurer/defendants; Case No. 8901347; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 30th day of March 1990.

Flavia Mappala, Clerk