BILL ANALYSIS �
AB 1309
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CONCURRENCE IN SENATE AMENDMENTS
AB 1309 (Perea)
As Amended September 5, 2013
Majority vote
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|ASSEMBLY: |61-4 |(May 2, 2013) |SENATE: |34-2 |(September 6, |
| | | | | |2013) |
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Original Committee Reference: INS.
SUMMARY : Limits access to the California workers' compensation
system for professional athletes employed by out-of-state teams.
The Senate amendments :
1)Delete a special statute of limitations rule that would have
applied only to professional athletes.
2)Recast the definition of "temporarily within this state" for
professional athletes by adopting a formula based on less than
20% of the athlete's duty days within the past year occurring
within the state in lieu of a 90-day rule.
3)Provide that professional athletes who are employed by out of
state teams may access the California workers' compensation
system if:
a) The athlete played at least two years for a California
team, or
b) Played more than 20% of his or her career for a
California team.
4)Provide that professional athletes employed by out of state
teams who may file a claim against a California team by virtue
of qualifying prior service with that team lose the right to
file if the athlete plays a total of seven seasons for out of
state teams.
5)Define California team as a team that plays a majority of its
home games in California.
6)Provide that the bill's provisions apply to all claims filed
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on or after September 15, 2013.
7)Add a severability clause.
8)Declare the intent of the Legislature that the bill applies
only to professional athletes and their employers, and to no
other employees or employers.
9)Declare the intent of the Legislature that the bill shall have
no impact on a specified California Court of Appeal decision
and a specified Workers Compensation Appeals Board decision.
10)Declare the intent of the Legislature that a specified
Workers Compensation Appeals Board decision applies only to
professional athletes as defined by the bill.
EXISTING LAW :
1)Provides that an employee who has been hired or regularly
employed in California is protected by California's workers'
compensation laws.
2)Provides that an employee who is hired outside of California
is exempted from California's workers' compensation laws when
temporarily within California if the employer has furnished
workers' compensation coverage under the laws of the other
state that protects the out of state employee while
temporarily in California, provided the other state has a
jurisdictional law similar to California's ("reciprocity").
3)Provides that, where there is reciprocity, the workers'
compensation laws of the other state shall be the exclusive
remedy for injuries incurred by the out of state employee
while temporarily employed in California.
4)Provides in most workers' compensation cases where there are
multiple employers who might be responsible for the effects of
an injury, the costs of benefits are apportioned among those
employers.
5)Provides, with respect to occupational disease or cumulative
injury, that the last employer is responsible for the entire
amount of benefits.
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6)Establishes, based on case law, that the "last employer" rule
means "the last employer over which California has
jurisdiction."
7)Provides that a proceeding for workers' compensation benefits
must be commenced within one year of the date of injury.
8)Provides, with respect to an occupational disease or
cumulative injury, that the date of injury is the date the
employee first suffered disability from the injury, and knew
or should have known that the disability was caused by his or
her present or prior employment.
9)Provides, based on case law, that the statute of limitations
is tolled after an injury until the injured employee is
provided notice of his or her workers' compensation rights.
10)Establishes the California Insurance Guarantee Association
(CIGA) to, among other things, pay workers' compensation
benefits to injured employees whose employer was covered by a
now-insolvent insurer.
11)Finances CIGA through direct employer assessments and the
issuance of bonds that are supported by direct employer
assessments.
COMMENTS :
1)Purpose . According to the author, out of state professional
athletes are taking advantage of loopholes in California's
workers' compensation system to the detriment of substantial
California interests, and to the detriment of California
sports teams. Specifically, 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. In addition, out of
state sports teams are having claims filed against them in
California that are resulting in a number of serious
consequences for California, including: 1) clogging the
workers' compensation courts with cases that should be filed
in another state, thereby delaying cases of California
employees, 2) causing all insured California employers to
absorb rapidly escalating costs being incurred by CIGA, and 3)
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placing increasing pressure on insurers to raise workers'
compensation rates generally in California to cover these
rapidly rising unanticipated expenses. In many of these cases
the players have already received workers' compensation
benefits from other states, as well as employment benefits
covering the same losses they are seeking compensation for in
California.
2)What does the bill do ? The bill essentially prohibits
professional athletes employed by out of state teams from
filing California workers' compensation claims, but allows
some of these athletes who have defined prior contacts with
California teams to file claims. The bill also applies these
rules to claims filed on or after September 15, 2013.
3)The Senate amendments . Amendments in the Senate narrow
application of the bill in three primary ways: 1) elimination
of a special statute of limitations for professional athletes,
2) elimination of the provision applying the bill's rules to
existing cases, and 3) more liberally defining when a player
from an out of state team who played earlier in his or her
career for a California team may file against the California
team.
4)CIGA . California experienced several major workers'
compensation insurer insolvencies - in the mid-1980s as well
as in the late 1990s and early 2000s. As a result of these
insolvencies, many of the claims being addressed by the bill
are not being paid by the insurer that provided workers'
compensation coverage during the time the player played for
the particular team. Rather, these claims are being paid by
CIGA, which is financed by a broad-based assessment on all
insured California employers.
According to CIGA, it has paid over 800 of these claims in
recent years, and has over 1,000 claims pending. Of even
greater concern to CIGA, the pace of new filings has been
rapidly increasing, and it is receiving an average of 34 new
claims per month. CIGA also notes that the claims are
increasingly from non-Californians, and that while former
National Football League (NFL) players used to be the bulk of
the claims, players from other sports are now increasingly
filing. CIGA interprets this trend as suggesting total claims
will continue to increase as non-football players recognize
the opportunity to file. As confirmation of CIGA's concern,
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Major League Baseball reports that it is experiencing similar
escalating frequency of claims - over 30 per month in the past
year.
5)Medical treatment and player benefits . One of the primary
arguments made by players is that their injuries sustained
during their careers require ongoing medical treatment. And
in many cases this is without doubt true. However, it is not
true that California workers' compensation claims are the only
routes to obtain that medical care. And, in fact, in excess
of 90% of the out of state professional athlete claims that
have been settled do not include future medical awards because
the players have settled out medical care for lump sum
payments. While it is not universally the case, the leading
reason that players settle future medical rights for a lump
sum is that they have secured medical care through other
sources - often their league or the team they played for. For
example, NFL players have post-career disability income
benefits, medical insurance benefits, and league-paid medical
savings accounts, depending on length of career, among other
collectively bargained benefits. In addition, there is the
recent $765 million brain injury settlement reached between
the NFL and the NFL Player's Association.
It should also be noted that, starting January 1, 2014, under
the federal Affordable Care Act, retired players otherwise
without access to comprehensive health insurance will be
eligible for coverage without limitation for pre-existing
conditions.
6)Collective bargaining . All of the major sports have
well-established and well-funded player associations, and to
varying degrees have entered into collective bargaining
agreements that contain a range of benefits that provide
protection for the same issues that workers' compensation
benefits cover, often with better coverage than workers'
compensation. Player representatives argue that this process
has worked well, and that player benefits should be resolved
at the bargaining table, and not in the Legislature. They
contend that the bill's proponents are attempting to obtain by
legislation that which they should be discussing at the
bargaining table.
7)Reciprocity . Current California law contains what is referred
to as a "reciprocity" provision that operates to preclude out
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of state players from filing a claim in California if their
home state has enacted the proper statute. Where there is an
adequate other state law, such as Ohio's, the claims at issue
in this bill are barred in California. Thus, Cincinnati
Bengals', Cincinnati Reds', Cleveland Indians', and Cleveland
Cavaliers' former players, otherwise in similar circumstances
with players from a number of other states, are barred from
coming to California with their workers compensation claims.
Proponents of the bill argue that this long-standing provision
evidences a policy that requires out of state employees to
turn to their own state's workers' compensation system. The
problem, they argue, with this approach is that it places the
policy decisions raised by this bill in the hands of other
states that may or may not adopt a conforming law.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0002616