UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SEACO AND SIGNAL MUTUAL
INDEMNITY ASSOCIATION, LIMITED,
Petitioner,

v.
                                                                  No. 96-2635
BOBBY BESS; DIRECTOR, OFFICE OF
WORKERS' COMPENSATION PROGRAM,
UNITED STATES DEPARTMENT OF
LABOR,
Respondents.

On Petition for Review of an Order
of the Benefits Review Board.
(No. 94-2370)

Submitted: May 6, 1997

Decided: August 7, 1997

Before HALL and WILKINS, Circuit Judges, and
BUTZNER, Senior Circuit Judge.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Stephen E. Darling, SINKLER & BOYD, P.A., Charleston, South
Carolina, for Seaco and Signal. Ralph R. Lorberbaum, ZIPPERER &
LORBERBAUM, P.C., Savannah, Georgia, for Bess. J. Davitt
McAteer, Acting Solicitor of Labor, Carol A. De Deo, Associate
Solicitor, Michael S. Hertzig, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C., for Director.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Respondent Bobbie Bess, a longshoreman, injured his back in
August 1991 while at work. Bess received disability benefits until
March 1992, when two of his treating physicians opined that he could
return to work. An administrative law judge ("ALJ") awarded bene-
fits, and Petitioners appealed to the Benefits Review Board. Since the
Board failed to resolve the appeal (which had been pending for over
one year) before September 12, 1996, the ALJ's decision was consid-
ered affirmed by the Board on that date for purposes of obtaining
judicial review. See Omnibus Appropriations for 1996, Pub. L. No.
104-134, § 101(d), 110 Stat. 1321-219 (Apr. 26, 1996). In their timely
petition for review in this court, Petitioners challenge whether the
ALJ adequately supported his decision granting benefits, whether
there was substantial evidence to support the ALJ's decision, whether
the award should have been for permanent total disability rather than
temporary total disability, and whether they are entitled to relief pur-
suant to 33 U.S.C. § 908(f) (1994). Since we find that the ALJ failed
to adequately discuss the reasons for his decision, we decline to
address Petitioners' other claims. Accordingly, we vacate the Board's
order and remand with instructions for the Board to remand this
action to the ALJ for the ALJ to address the issue of suitable alternate
employment.

It was undisputed that Bess could not physically return to work as
a longshoreman. In the initial hearing before the ALJ, Petitioners
presented evidence on the availability of suitable alternate employ-
ment. The ALJ deferred ruling on this issue and an award of benefits

                    2
pending a psychiatric evaluation to determine whether Bess was
malingering. After receiving the psychiatric reports, the ALJ found
that Bess was not malingering and awarded him temporary total dis-
ability benefits, without ever ruling on the issue of suitable alternate
employment.

Decisions of the ALJ are reviewable only as to whether they are
in accordance with the law and supported by substantial evidence in
light of the entire record. 33 U.S.C. § 921(b)(3) (1994). To provide
a basis for thorough review, the ALJ is statutorily required to give a
detailed explanation of his findings and conclusions, especially where
there is evidence in the record contradicting his conclusion. See v.
Washington Metro. Area Transit Auth., 36 F.3d 375, 384 (4th Cir.
1994).

There is a three-step process used to determine whether an award
of disability benefits is appropriate. Newport News Shipbuilding &
Dry Dock Co. v. Tann, 841 F.2d 540, 542 (4th Cir. 1988). First, the
employee must show that he is unable to return to his former job. Sec-
ond, the burden then shifts to the employer to show that suitable alter-
nate employment is available. Finally, the burden shifts back to the
employee to show that he has tried to obtain such alternate employ-
ment, but was unable to do so.

It is virtually undisputed that Bess met his burden as to the first
step. Though the medical and psychological reports were contradic-
tory, we find that there was substantial evidence to support a finding
that Bess was physically and psychologically unable to return to long-
shore work. The record also shows that Petitioners presented evidence
of allegedly suitable alternate employment, including a light-duty job
offered by Seaco. Since this evidence, if credited, may be sufficient
to satisfy the employer's burden under the second step, the ALJ was
required to address it in arriving at his final decision. However, he
failed to do so. This failure to address the issue of suitable alternate
employment renders the ALJ's decision inadequate for review. We
further find that this failure was material given the evidence presented
by Petitioners.

We therefore vacate the order of the Benefits Review Board and
remand the case with instructions for the Board to further remand to

                     3
the ALJ for further proceedings consistent with this opinion. We dis-
pense with oral argument because the facts and legal contentions are
adequately presented in the material before the court and argument
would not aid the decisional process.

VACATED AND REMANDED

                    4
