By Jonathan L. Israel
Imagine it is 1985. You are 35 years old and play professional football for the New York Giants. In your 10-year career with the team, you played two games in California: in 1978 at the Los Angeles Rams; and in 1984 at the San Francisco 49ers. You decide to retire and move to Florida, where you spend the next 25 years at a sedentary desk job. In 2010, you are 65 years old and short on money; your knees are arthritic and your body aches for reasons you attribute to your NFL days.
What do you do? There is a good chance you do what hundreds of retired players have done: file a claim for workers’ compensation benefits in California, where the cumulative injuries you allegedly suffered from playing professional football might garner you a lump sum benefit payment of up to $250,000, based solely on the fact you played two NFL games in California more than 25 years ago.
Now, imagine instead that you are the team’s general counsel in 2010, and this particular California claim lands on your desk. What do you do? You suspend disbelief and begin defending this insanely remote claim, because chances are good that you have seen this before. Indeed, for the past 20 years, retired professional athletes — many of whom never played for a team based in California — have been exploiting the California workers’ compensation system to extract from their former teams (or their insurance carriers) significant benefit payments to cover their alleged disabilities and ongoing and related medical expenses.
As team counsel, you also should review the decision recently issued by the California Workers’ Compensation Appeals Board in Carroll v. New Orleans Saints and consider whether New York workers’ compensation law would bar the player’s claim under certain jurisdictional limitations in California law. Indeed, the Carroll case offers a welcome ray of hope for professional sports teams ensnared in the California workers’ compensation system, which over time has effectively been transformed into a pension/retirement fund for former professional athletes and has unfairly forced teams based outside of California to bear the system’s ever-increasing costs.
The complicated intersection of professional sports and the California workers’ compensation system rests on three key components of California law.
First, in California, compensable injuries include not only specific injury, but also cumulative injury, which is defined as “repetitive mentally or physically traumatic activities extending over a period of time” that cause “any disability or need for medical treatment.” This broad definition of cumulative trauma covers the regular physical activity of professional athletes and its potential long-term effects. While the physical aspects of a professional athlete’s work differ from most other types of employment, California courts have concluded that teams still must compensate a player for their work-related injuries.
Second, under California law, the limitations period for a workers’ compensation claim is one year from the date of injury (which, for cumulative trauma, is deemed to occur when the employee knew or should have known the injury was caused by employment). That period, however, does not start to run until the employer gives the employee specific written notice of the employee’s rights and the claims procedures under California law. A team based outside California will not likely appreciate the need to deliver such notice to players it sends irregularly into California for games. Consequently, where no such notice is given, the limitations period is tolled, meaning there can be no repose for these unwitting teams, which in recent years, have defended claims from players who retired as long ago as the 1960s.
Third, the jurisdictional reach of the California system is incredibly broad and extends to employees injured while working temporarily in the state. In the context of professional sports, as noted above, a player can become eligible for California benefits simply by playing a single game in the state.
To the uninitiated, these interpretations of California law are jaw dropping. Not surprisingly, leagues and teams, with little success, have attempted to stem the flow of claims into California through litigation and proposed legislative change.
In the late 1990s, the NFL pushed hard, but failed, to change California law to restrict or eliminate workers’ compensation benefits for professional athletes. Yet, by denying benefits to all professional athletes, even those who played for California teams, the proposed legislative fix was too ambitious and failed to target more practically appealing objectives, includingclosing the California system (or even just cumulative trauma remedies) to players never employed by a California team. Indeed, the incentives that lure retired players into the California system would all but disappear if California limited or apportioned workers’ compensation awards to the actual amount of work time spent, or cumulative injury occurring, in California.
Any such legislative change in California would seem difficult to attain in 2010, where negatively impacted local interests are hard to identify or have little political clout. The system itself imposes no direct economic burden on California, with the benefits being funded by the teams and their insurance carriers. The system’s resources (which do cost California) are dedicated to transferring money from teams to players, including those with little or no California connection. Consequently, California legislators should, but do not, take interest in local workers who are injured on the job but must wait in line for benefits behind the hundreds of retired athletes who are dipping into the system from outside the state.
In the courts, the NFL’s Cincinnati Bengals are at the forefront of the fight. Only weeks ago, in Cincinnati Bengals v. Khalid Abdullah, an Ohio federal district court utterly quashed the Bengals’ attempt to use Ohio law and courts to stop more than 30 of the team’s former players from pursuing workers’ compensation benefits in California.
Undeterred, and taking the fight back into California, the Bengals have delivered temporary victory in Carroll, a California workers’ compensation case brought by Wesley Carroll, a wide receiver who played for the Bengals and the New Orleans Saints in a three-year NFL career from 1991 to 1994. The Bengals contend that Carroll’s claim is barred under California law which expressly disclaims jurisdiction in circumstances where an employee hired outside of California is working temporarily in California for an employer which has furnished workers’ compensation insurance under the laws of another state that will cover the employee while in California; provided, however, that the other state recognizes California’s own extraterritorial workers’ compensation prerogatives and similarly exempts employers and employees covered under California law from application of the other state’s workers’ compensation laws. In such case, the benefits under the law of the other state are to be the exclusive remedy for any injury occurring while the employee is in California.
In apparent agreement with the Bengals, the WCAB reversed the decision of the workers’ compensation judge and remanded the case for factual findings on the jurisdictional exception, including with respect to the Bengals’ applicable coverage and the relevant Ohio law. Should the Bengals’ jurisdictional argument ultimately be sustained, it could create a new opportunity for teams based outside California to close the interstate pipeline to California, as these teams may find it easier to persuade legislators in their own states to establish laws that qualify for the jurisdictional exemption in Section 3600.5(b) of the California Labor Code. As many as 13 states may already provide the requisite legal context cited by the Bengals in Carroll.
Whatever the legal landscape, the California worker’s compensation system may simply be seen as a matter of cost allocation within the labor-management relationship.
Currently, those costs are borne directly by the teams in ways and amounts that may not have been anticipated or fully appreciated when current player compensation systems were created. As recently reported by the New York Times, these costs may soon explode as retired players have begun to claim benefits for sports-related brain injuries, which, given the cost of related medical treatment, could result in multi-million dollar awards. With this development, and with each of the major professional leagues and their respective players unions now or soon negotiating for new collective bargaining agreements, long-simmering issues relating to the California workers’ compensation system may soon come to boil.
Israel is an attorney at Greenberg Traurig, LLP and former Assistant General Counsel of the National Basketball Association
