adjustercom.com News

The battle over workers’ compensation reform for professional athletes isn't new; it’s just now getting a lot of attention because AB 1309 was passed by the California Assembly last week on Thursday, May 2nd. The debate has already gone on in Florida, Arizona and Louisiana.

Out-of-state players who weren't informed of their workers compensation rights by their teams, or had injuries surface after the statute-of-limitations expired in their home state-- could have their cases heard in California. California is one of the nine states that embraces cumulative trauma as a legitimately compensable form of workers’ compensation injury.

It’s good news that legislators in California are responding swiftly to take action in order to further prevent swarms of out-of-state athletes from getting six figure awards in California. After a brutalizing recession and an anemic economic recovery in California, the last thing the golden state needs is more drain on the workers’ compensation system which puts more expense upon businesses, i.e. employers.

Yes, football teams are employers just like all other employers although of an esoteric type. What’s happening to the California

Proponents contend that AB 1309 would close the "loophole" that allows active and retired athletes to "double-dip"...

franchise football teams is that they are taking on the burden of the expense of way more worker’s compensation claims than the other state franchises.

Proponents contend that AB 1309 would close the "loophole" that allows active and retired athletes to "double-dip" by filing claims in both their home state and California, sometimes without ever having actually played in California. Opponents counter that the bill would retroactively wipe out hundreds, if not thousands, of pending cases and deny medical care to athletes who paid into the system during their careers.

California team owners have workers comp costs that are sometimes two-thirds higher than their out-of-state colleagues. The California NFL owners contend the discrepancy puts them at a competitive disadvantage because they're left with less revenue for expenses like coach and player salaries, team travel, and facility upgrades.

Each year the NFL and the union meet to estimate the costs for workers compensation. That figure is then averaged among the 32 teams, with each receiving an equal credit (also known as a benefit) against the salary cap. If the estimated cost is $32 million, each team would receive a $1 million credit.

The problem is that clubs in Texas or Ohio might spend only $750,000 on workers comp while franchises in California might spend as much as $4.75 million. That's a net loss of $4 million for the California owners, who argue that if player costs are going to increase across the board in things like salaries, retirement benefits, and medical care, the expenses should be shared evenly by the clubs, especially in workers’ compensation which is one of the largest expenses.

It’s a big competitive issue when the California teams are spending so much more for workers’ compensation. Most of the California NFL officials feel that if a player spends most of his career on a team outside the state, they shouldn’t be paying for his workers' compensation.

One official admitted that workers comp is one of the issues to consider when his team is weighing whether to sign an out-of-state free agent who might be at the end of his career but could still contribute for a year or two.

"We're less likely to bring in a guy like that and that's what we're trying to take off the table," said the official. "We don't want California teams to not be a destination for some players because of workers comp."

The simple solution is to pool the workers comp credits and pay claims as they're awarded, but out-of-state owners have been unwilling to accept such a proposition because it would mean less money for them. And with potentially two more franchises settling in Los Angeles through expansion or relocation, it's understandable that California has become the latest battleground in this fight.

Still, critics contend AB 1309 is too drastic. They say it not only would retroactively erase legitimate cases in which teams failed to notify players of their rights before the statute of limitations lapsed, but also prohibit athletes who spent a significant majority of their career with California clubs from filing claims if they ended their careers with out-of-state clubs.

Judge David O’Brien spoke vociferously at a late March 2013 luncheon of the Employers’ Fraud Task Force in the City of Commerce, California, about the critical importance for employers to notify employees of their rights under workers’ compensation. They need to do this from the very get-go of the employment or else the statute of limitations does not start to tick until the employee is informed of his rights.

He has published booklets for employers to hand out to their employees which satisfy the legal requirement of notification by employers to their employees of their rights to workers’ compensation. Perhaps the NFL should hire David O’Brien to create a proprietary booklet for them (david.obrien@fsklaw.com).

The aggressiveness of the bill stems from accusations that the system is being abused. In a March op-ed piece in the Orange County Register, bill co-sponsor Curt Hagman (R-Chino Hills) wrote that "when the state of California pays six figures to an injured out-of-state millionaire, fewer resources are available for the average worker, who often desperately needs assistance to make ends meet.”

It has also long been a complaint in California that work comp judges bend beyond reason to liberally construe workers’ comp cases in favor of the applicants. Some even have been accused of advocating cases for applicants’ attorneys. So, with injuries as extensive as many sustained by professional athletes, judges have more fodder with which to give their generous awards.

How serious are sports team owners about reforming workers comp? In Louisiana, Saints owner Tom Benson supported an unsuccessful bill that would've deducted workers comp awards from a player's salary on a dollar-for-dollar basis. In Tennessee, owner Bud Adams' Titans have filed cease and desist orders against at least two dozen retired players, including notable stars Eddie George and Frank Wycheck, because their contracts precluded them from filing in multiple states for the same injuries or conditions.

Retired fullback Lorenzo Neal is among those who has filed in California. The four-time Pro Bowler played for seven teams over 16 years, including five with the San Diego Chargers. Yet in spite of being a lifetime California resident who still resides in his hometown of Fresno, he'd be ineligible for workers comp under the bill because he ended his career with an out-of-state club. He says people shouldn't be surprised that players don't file claims while they're still capable of being employed by a team.

"Let's be real," he says. "You don't want to file a claim while you're still playing because teams will use it against you and you won't have a job. Just like with concussions, guys still try to get back on the field because they want to stay employed and you only have so many years that you can play the game. So, yes, you see guys go out on the field and play because they love the game, but you also understand what happens if you don't play."

There’s the possibility that AB 1309 could be passed in a watered-down form. The sides could grandfather in some current claimants so they maintain their existing benefits, or phase out their benefits gradually instead of abruptly terminating their benefits.