BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
William W. Monning, Chair
Date of Hearing: July 10, 2013 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:No
Urgency: No
Bill No: AB 1309
Author: Perea
As Introduced/Amended: April 25, 2013
SUBJECT
Workers' compensation: professional athletes.
KEY ISSUE
Should the Legislature limit workers' compensation benefits for
professional athletes who end their careers outside of
California?
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law provides that medical, surgical, chiropractic,
acupuncture, and hospital treatment, including nursing,
medicines, medical and surgical supplies, crutches, and
apparatuses, including orthotic and prosthetic devices and
services, that is reasonably required to cure or relieve the
injured worker from the effects of his or her injury shall be
provided by the employer.
(Labor Code �4600)
Existing law provides that if an employee who has been hired or
is regularly employed in California receives personal injury by
accident arising out of and in the course of employment outside
of California , the employee or the employee's dependents shall
be entitled to compensation according to the law of California .
(Labor Code �3600.5)
Existing law provides that, for employees hired outside of
California and temporarily in California, the employer and his
or her employer must be exempted from California's workers'
compensation laws while such employee is temporarily within this
state doing work for his employer if:
1) The employer has furnished workers' compensation
insurance coverage under the workers' compensation
insurance or similar laws of a state other than California,
so as to cover such employee's employment while in this
state; and
2) The extraterritorial provisions of California's Workers'
Compensation law are recognized in such other state and
provided employers and employees who are covered in this
state are likewise exempted from the application of the
workmen's compensation insurance or similar laws of such
other state.
If the following requirements are met, the laws of the other
state shall be the exclusive remedy against such employer for
any injury , whether resulting in death or not, received by such
employee while working for such employer in this state.
(Labor Code �3600.5)
Existing law provides that no claim to workers' compensation
benefits shall be maintained unless within thirty days after the
occurrence of the injury the employer is served notice in
writing, signed by the person injured or someone in his behalf,
or in case of the death of the person injured, by a dependent or
someone in the dependent's behalf. (Labor Code �5400)
Existing law also provides that knowledge of an injury , obtained
from any source, on the part of an employer, his or her managing
agent, superintendent, foreman, or other person in authority, or
Hearing Date: July 10, 2013 AB 1309
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Senate Committee on Labor and Industrial Relations
knowledge of the assertion of a claim of injury sufficient to
afford opportunity to the employer to make an investigation into
the facts, is equivalent to service of a notice described above.
(Labor Code �5402)
Existing law specifies that the statute of limitations to being
proceedings for the collection a workers' compensation claim is
one year from the date of injury. (Labor Code �5405)
Existing law specifies that date of injury in cases of
occupational diseases or cumulative injuries is that date upon
which the employee first suffered disability therefrom and
either knew, or in the exercise of reasonable diligence should
have known, that such disability was caused by his present or
prior employment. (Labor Code �5412)
This bill would create restrictions on the ability of
professional athletes who play outside of California to file in
California for workers' compensation benefits.
Specifically, this bill would:
1)Provides that a professional athlete employed by an out of
state team who is temporarily within California performing for
that out of state team is not covered by California's workers'
compensation system if:
a) The employer furnished workers' compensation coverage
under the laws of another state;
b) That workers' compensation coverage covers the
professional athlete's work performed in California.
2)Specifies that, if the above conditions are met, the laws of
the other state shall be the exclusive workers' compensation
remedy for injuries to the professional athlete while in this
state.
3)Defines "professional athlete" as an athlete employed at
either the minor league or major league level in the sports of
football, basketball, baseball, hockey, and soccer.
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4)Defines "temporarily within this state" as an athlete who,
within the 365 days immediately prior to the last day he or
she performed in this state, had less than 90 days of service
for that out of state employer in California.
5)Provides that where a professional athlete employed by a
California team commences employment with an out of state
team, he or she has one year from the date the player ended
employment with the California team to file a claim for
occupational disease or cumulative injury against the
California team.
This bill would provide an exemption to the above limitation if
the professional athlete was employed for eight or more
consecutive years by the same California-based employer pursuant
to a contract of hire entered into in California , and 80 percent
or more of the professional athlete's employment as a
professional athlete.
This bill would, with respect to professional athletes who are
within the jurisdiction of the California workers' compensation
system, redefine the date of injury for a claim for compensation
for occupational disease or cumulative injury to the later of:
a) The date of last injurious exposure while employed
anywhere as a professional athlete; or
b) The date of diagnosis by a licensed physician.
The date of diagnosis by a licensed physician is the date the
physician informed the professional athlete of the medical
diagnosis.
This bill would also provide that the one-year statute of
limitations from the date of injury may be tolled only for the
employee's mental incompetence during the period during the
one-year limitations period.
This bill would also RETROACTIVELY apply to all pending claims
for benefits by professional athletes that have not yet been
adjudicated.
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Senate Committee on Labor and Industrial Relations
COMMENTS
1. Sports in California: A Tradition of Excellence
In the United States, there are few institutions that are
treated with the reverence and respect of professional sports.
Whereas earlier cultures shaped their calendar by the seasons
and agricultural cycles, today's calendar is shaped by the
sports cycle: baseball in April; football in September;
basketball in October; and play-offs and training in-between.
As with all great institutions, the foundation of the
institution rests on a social contract. In the case of
professional sports, the social contract is between the
athletes who play the games, the owners who shape the teams,
and the fans who support them both.
Nowhere is this truer than in California. With the advent of
professional baseball in San Francisco and Oakland in 1887,
professional sports began to leave its imprint on the Golden
State. Teams in California have won 12 NBA Championships, 11
World Series Championships, and 8 Super Bowls (San Francisco
49ers: 5; Oakland Raiders: 3; San Diego Chargers: 0). This
excellence, however, did not come without cost to the players.
Both Sandy Koufax and Don Drysdale were forced to retire due
to arm and shoulder pain; Steve Young retired due to injuries
and concussions; Elgin Baylor retired with chronic knee
problems. For professional athletes, it is the rare player
who closes his career for non-injury related reasons.
AB 1309 addresses under what circumstance a professional
athlete may file for workers' compensation benefits in
California. As AB 1309 touches on access to what is
fundamentally a public good, this bill also touches on the
fundamental relationship between the players and owners, as
well as what is the fundamental interest of the people and the
State of California in ensuring appropriate medical access to
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injured professional athletes. It is, in short, an
exploration and discussion of the social contract of
professional sports.
2. Who Does AB 1309 Impact?
As currently written, AB 1309 only applies to professional
athletes, and only to specified professional athletes: players
at the minor or major league level in of football, basketball,
baseball, hockey, and soccer. For the professional athletes
who play at that level in those sports, AB 1309 only applies
if you play for a team which is located outside of California
(discussed below). Therefore, an athlete who played his or
her entire career in California would not be impacted by AB
1309.
Additionally, an athlete who signed his or her contract in
California would not be impacted by AB 1309 and would be able
to access California's workers' compensation system, even if
that athlete never played in California. This is due to
long-standing case law (see Bowen v. Workers' Comp. Appeals
Bd. (1999) 73 Cal.App.4th 15), and AB 1309 would not impact
these precedents.
AB 1309, therefore, only impacts athletes who played
exclusively for out-of-state teams and former California
players who played outside of California for more than a year .
3. The Montana Exception and Former California Players:
As noted above, players who played for California teams, but
then leave to play for out-of-state teams for several years,
would lose their ability to file for workers' compensation
benefits under AB 1309. This raised some objections in the
Assembly, and the author responded with what some refer to as
the "Joe Montana" Exception: if a player signs a contract in
California and plays for a team for 8 years AND 80% of their
career, the player would have standing to file for workers'
compensation benefits in California.
While this addresses some players with long-standing careers,
it does lead to some perverse outcomes. For example, Alex
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Smith was recently traded from the San Francisco 49ers to the
Kansas City Chiefs. Assuming Alex Smith plays for the Kansas
City Chiefs for longer than a year, he would lose his ability
to file for workers' compensation benefits in California.
Even though he played for nearly 100% of his career for the
49ers, he was with the team for less than 8 years by 5 months
(July 2005 to February 2013).
Despite the fact that Alex Smith suffered at least one
concussion and several shoulder injuries while playing for the
49ers, he would be denied the ability to file in California.
It is unclear what the policy justification is for such an
arbitrary cut-off. Nor is it clear why a worker who suffered
injuries while employed by a California employer should be
denied workers' compensation benefits in California, athlete
or otherwise.
4. Retroactivity and Constitution:
As noted above, AB 1309 would apply retroactively to pending
claims in the California workers' compensation system for
injured professional athletes. Without question, this is
totally unprecedented in the State of California. For
example, Senate Bill 863 (DeLeon) of 2012 (Statutes of 2012,
Chapter 363) INCREASED benefits to injured workers, but even
this increase was for claims on or after the enactment of the
bill. Retroactively halting claims is simply not a part of
the legislative history of California's workers' compensation
system.
Additionally, it is almost certainly unconstitutional . By
halting the claim of an injured professional athlete, AB 1309
would deny payment to medical professionals and others solely
because they gave treatment to a professional athlete who,
until the passage of AB 1309, was legally and constitutionally
entitled to treatment. There is a strong chance that this
would meet the criminal penalty threshold of Calder v. Bull, 3
U.S. 386 (1798), and therefore be unconstitutional. In the
meantime, there would be significant litigation and injured
workers would be denied treatment.
5. Date of Injury and the Statute of Limitations:
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Since 1947, the date of injury for an employee who suffered
for an occupational disease is a year from when the employee
suffered disability and knew, or should have known, that it
was occupationally related. In 1973, cumulative trauma was
added to the date of injury standard. Therefore, for 66 years
and 40 years, respectively, all employers and injured workers
in the State of California have operated under this statute of
limitations without change.
As noted above, AB 1309 would change the definition of date of
injury, thereby beginning the statute of limitations on when
an injured athlete can file for benefits. Noting that AB 1309
restricts access to California's workers' compensation system
for out-of-state players and former California players, and
does so retroactively, it is hard to understand the policy
rationale of restricting access for California players who,
under all possible scenarios, would qualify for workers'
compensation benefits in California. Moreover, it is unclear
what would qualify as a diagnosis, which will almost certainly
lead to increased litigation.
6. Reciprocity and Similarity:
Under current California law, an injured worker is viewed as
temporarily in California, and therefore unable to file for
workers' compensation benefits in California, if it meets the
following four-point test:
1) The employee is temporarily in California;
2) The employer provides workers' compensation coverage
under similar laws of another state;
3) The other state's workers' compensation laws cover the
employee while he or she was in California; and
4) The other state recognizes California's extraterritorial
rights and likewise exempts California employers and
employees from that state's workers' compensation laws.
AB 1309 only requires that 2) and 3) apply, though with 2) the
standard is changed from "similar" to "equivalent". This
means that professional athletes would be excluded from
California's workers' compensation system even if the state
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Senate Committee on Labor and Industrial Relations
declines to provide California employers with a similar
exclusion or provides a similar level of workers' compensation
protection. The Committee may wish to consider what impact
this will have on California employers and employees, as well
as professional athletes.
7. California Insurance Guarantee Association (CIGA) and AB 1309:
The California Insurance Guarantee Association (CIGA) was
created in 1969 to pay the claims of insolvent insurers,
including insolvent workers' compensation insurers. Due to
the tumultuous workers' compensation market in the late 1990s
and early 2000s, there were many insolvent workers'
compensation insurers who found their claims dumped into CIGA.
This includes insurers of professional athletes, which has
led several stakeholders to raise concerns about the rise in
claims by injured athletes on CIGA.
This concern, however, does not appear to take into account
recent ruling by the Workers' Compensation Appeals Board.
Specifically, Vaughn Booker v. Cincinnati Bengals (2012) and
Michael Jameson v. Cleveland Browns (2012) clarify that an
injured athlete needs to have actually played a game in
California to qualify for benefits. Noting the rulings in
McKinley v. Arizona Cardinals (2013), Wesley Carroll v.
Cincinnati Bengals (2013), and Matthews v. National Football
League Management Council, 688 F.3d 1107 (2012), it is further
clear that the athlete must have significant ties to
California in order to file.
In short, it appears that developing case law will limit
liability against CIGA (as well solvent insurers) for claims
by out-of-state athletes with limited ties to California.
This would include out-of-state athletes that were unable to
document an injury in California or played few to no games in
California.
7. Proponent Arguments :
According to proponents, out of state professional athletes
are taking advantage of loopholes in California's workers'
compensation system to the detriment of substantial California
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interests, and to the detriment of California sports teams.
Specifically, proponents argue that, as a result of the "last
employer over which California has jurisdiction" rule, and the
absence of an enforceable one-year limitations period,
California teams are facing cumulative injury claims from
players with extremely minimal California contacts, but
substantial playing histories for teams in other states.
Proponents argue that the out of state claims are clogging the
workers' compensation courts with cases that should be filed
in another state, and causing all insured California employers
to absorb rapidly escalating costs being incurred by CIGA.
Proponents argue that AB 1309 will resolve this by
appropriately requiring that out-of-state athletes file in the
home state of their team, rather than in California.
8. Opponent Arguments :
Opponents argue that AB 1309 is fundamentally unfair, as the
costs of the athletes' workers' compensation coverage are paid
out of salary cap, which limits available salaries for
players. Opponents also note that the workers' compensation
claims made by out-of-state players do not impact California
taxpayers and only have a limited impact on CIGA that the
athletes are willing to take on. Additionally, opponents
argue AB 1309 creates additional state liabilities, as injured
players in California without access to California's workers'
compensation system will need state assistance. Opponents
also argue that the retroactivity of AB 1309 is fundamentally
unjust and note that the "Joe Montana Exception" sets too high
a bar for most injured players to reach.
9. Double Referral:
This bill has been double referred and, if approved by this
committee, it will be sent to the Senate Rules Committee for
further review.
10. Prior Legislation :
SB 863 (DeLeon), Statutes of 2012, Chapter 363, was discussed
above.
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Senate Committee on Labor and Industrial Relations
SUPPORT
American International Group
Anaheim Ducks
Angels Baseball LP
Association of California Insurance Companies
Bay Area Council
California Chapters of the National Electrical Contractors
Association
California Chiropractic Association
Chivas USA
Golden State Warriors
International Brotherhood of Electrical Workers, Local Union
No.18
Liberty Mutual Group
Los Angeles Area Chamber of Commerce
Los Angeles Clippers
Los Angeles Galaxy
Los Angeles Kings Hockey Club, LP
Los Angeles Lakers, Inc.
Major League Baseball
Major League Soccer
National Basketball Association
National Football League
National Hockey League
Sacramento Kings
San Diego Chargers
San Diego Padres
San Francisco 49ers
San Francisco Giants
San Jose Earthquakes
San Jose Sharks
The Oakland Athletics
The Oakland Raiders
The Zenith Insurance Company
Valley Industry and Commerce Association
OPPOSITION
Albert R. Dennis, III
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Senate Committee on Labor and Industrial Relations
American Federation of State, County and Municipal Employees,
AFL-CIO
California Alliance for retired Americans
California Applicants' Attorneys Association
California Association of Highway Patrolmen
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists and Aerospace Workers
California Federation of Teachers
California Labor Federation, AFL-CIO
California Neurology Society
California Nurses Association
California Professional Firefighters
California Psychological Association
California School Employees Association, AFL-CIO
California Society of Industrial Medicine and Surgery
California Teamsters Public Affairs Council
Consumer Attorneys of California
Engineers and Scientists, IFPTE Local 20
International Federation of Professional and Technical Engineers
AFL-CIO & CLC, Local 21
International Longshore and Warehouse Union
JJ Stokes
Jockeys' Guild
Labor Coalition
Laborers International Union of North America
Laborers' International Union of North America Locals 777 & 792
Larry Kaminski
Law Offices of Howard F. Silber
Los Angeles County Federation of Labor
Major League Baseball Players
Major League Baseball Players Association
Major League Soccer Players Union
Monterey Bay Central Labor Council
National Basketball Players Association
National Football League Players' Association
National Hockey League Players Association
Peace Officers Research Association of California
Professional and Technical Engineers, IFPTE Local 21, AFL-CIO
Professional Hockey Players Association
Service Employees International Union California, AFL-CIO
State Building and Construction Trades Council of California
The Building and Construction Trades Department, AFL-CIO
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Senate Committee on Labor and Industrial Relations
The Jockeys Guild
UNITE HERE, AFL-CIO
United Food and Commercial Workers, Western States Council
Utility Workers Union of America, AFL-CIO
Voters Injured at Work
Women's National Basketball Players Association
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Senate Committee on Labor and Industrial Relations