By Hong Hoang
The National Football League (NFL) and the NFL Players’ Association (NFLPA) have been quarrelling for years over whether professional football players injured in the course of their employment may file for workers’ compensation benefits in California. The Golden State is the most desirable venue for the NFLPA, representing the players, because obtaining a workers’ compensation award is generally easier in California than in other jurisdictions and California has a reputation for granting larger awards. Thus, if possible, players typically file for workers’ compensation in California in hopes of receiving larger payouts.
However, former player Bruce Matthew’s attempt at claiming California’s workers’ compensation benefits was recently denied. On August 6, 2012, the U.S. Court of Appeals for the Ninth Circuit affirmed the lower court’s decision denying Matthews’ request to vacate a collectively bargained for arbitrator’s ruling, which ordered Matthews to “cease and desist” from seeking California benefits because doing so violated his contract with the Tennessee Titans. The arbitrator found that Matthews’ player contract with the Titans bound the parties to resolve workers’ compensation claims under Tennessee law, precluding Matthews’ from seeking such benefits under California law. While the Ninth Circuit’s decision is expected to effect future California workers’ compensation claims, the Matthews ruling is extremely narrow, and any such effect will likely only impact the specificity of injuries plead in workers’ compensation claims.
Matthews argued that the arbitrator’s holding that the Tennessee choice of law clause was enforceable, and thus prohibiting him from pursuing benefits under California law, violated California public policy barring contractual waivers of workers’ compensation benefits and federal labor policy prohibiting employment agreements (including collective bargaining agreements) from preempting minimum state labor standards. Thus, Matthews’ federal labor policy contention necessarily relied on his California public policy argument, as Matthews had to show that the choice of law clause in his player contract with the Titans waived his rights to workers’ compensation benefits in violation of California’s minimum labor standards.
While the Ninth Circuit agreed that arbitration awards which violate public policy cannot be enforceable, the Court held that to vacate an arbitration award on such grounds, an “explicit, well defined and dominant public policy” must exist, and such a policy is “one that specifically militates against” the arbitration award. Furthermore, the Court held that such a public policy cannot be based on general considerations of alleged public interests, but rather it must be grounded in established laws and legal precedent.
Matthews’ argument failed because it was based on the flawed principle that California guaranteed a universal right to seek workers’ compensation benefits. Matthews asserted that well established California public policy prohibited an employee from contractually waiving such a right, no matter how feeble the connection between California and the employee or the employment. In rejecting Matthews’ argument, the Ninth Circuit interpreted California’s policy more narrowly to read that only employees that are otherwise eligible for, and employers who are otherwise liable for California benefits cannot contractually waive or evade such benefits and liabilities respectively. Therefore, for a claimant’s “no waiver” argument to succeed, the burden is placed on the claimant to show that the employment relationship at issue has sufficient contacts with California to apply California’s workers’ compensation statute.
The Court conceded that it is enough to show that an out-of-state employee suffered a distinct injury while temporarily working in California, and that the costs attendant to such injury may impact California’s medical system or other resources, and that recent case law even suggests that the discrete injury suffered in California in and of itself may be sufficient to establish sufficient contacts with California to apply its workers’ compensation law. While the Court took judicial notice of the fact that Matthews did play 13 games in California during his career, as he also pled in his complaint, such a pleading was insufficient as he failed to allege any specific or discrete injury suffered in California, or the need for any California medical services or burden on the state’s resources. Typical of many former NFL players’ workers’ compensation claims, Matthews pled that he suffered cumulative injuries sustained throughout his playing career in various locations, including California, all of which contributed to the conditions he currently suffers. However, the Court found that such a pleading was too general and insufficient to establish the required contacts with California to justify the application of California law. Moreover, because Matthews failed to establish that his workers’ compensation claim was within the scope of California’s statutory regime, he also failed to show that the arbitration award preventing him from seeking California benefits violated minimum state labor standards, and thus, his federal labor policy argument was similarly rejected.
In narrowing its decision, the Court held that an employee need only make a prima facie showing that his workers’ compensation claim falls within the scope of California law to establish that an arbitration award prohibiting the claimant from seeking California benefits violates California policy. There is no requirement for the employee to show any likelihood of success on his workers’ compensation claim, and employers may not avoid the application of California law, where it would otherwise apply, with the use of a binding arbitration choice of law clause.
Matthews also claimed that the arbitration award should be vacated because it violated the Full Faith and Credit Clause of the United States Constitution, which provides that each state shall recognize the public acts, records, and judicial proceedings of every other state. Matthews based this argument on two United States Supreme Court decisions, which upheld the California Supreme Court in Alaska Packers and Pacific Employers, holding that the US Constitution did not prohibit the application of California’s workers’ compensation statute in conflict with the laws of the states where the claimants’ resided. See Alaska Packers Ass’n v. Indus. Accident Comm’n of Cal., 294 U.S. 532 (1935); Pac. Emp’rs Ins. Co. v. Indus. Accident Comm’n of Cal., 306 U.S. 493 (1939). Matthews argued that these decisions gave California an “absolute right” to apply its workers’ compensation statute within the state and to prohibit any employee from waiving such rights, and thus, the arbitration award ignored this principle in violation of the US Constitution.
However, the Ninth Circuit rejected Matthews’ “absolute right” argument, and held that for Matthews to succeed on this contention, as with his public policy arguments, he must show sufficient minimum contacts with California such that California’s laws and its workers’ compensation statute would apply to him. The Court “emphasized California’s substantial interest in the controversy” in both Alaska Packers and Pacific Employers to apply California’s workers’ compensation statute. In Alaska Packers, the Court recognized “California’s strong interest in regulating employment relationships entered into within the state” where the employment contract was executed within California. Similarly, the Court deemed that the “bodily safety and economic protection of employees injured within” California were a legitimate state concern when an employee suffered a discrete injury in California and required medical services which burdened the state’s resources.
As with his policy arguments, Matthews’ failure to plead a specific or discrete injury suffered in California that contributed to his current ailments was fatal to his claim for California workers’ compensation benefits. Thus, while the Ninth Circuit’s most recent decision concerning the eligibility for California workers’ compensation benefits may have everlasting implications, the most likely effect will only be to ensure that future claimants will make sure to plead a specific and discrete injury suffered in California in order to fall within the scope of California’s workers’ compensation regime.
