California: W.C.A.B. Declines to Accept Jurisdiction over Out of State NFL Player

The Workers' Compensation Appeals Board has issued a decision in what can best be called a niche case involving professional sports specifically professional football. In McKinley v. Arizona Cardinals, the W.C.A.B. has issued an en banc decision specifically declining to exercise jurisdiction over the applicant's workers' compensation claim for injuries alleged to have been sustained during his career as a professional football player on a cumulative basis. This case addresses a couple of issues in what has become a cottage industry in the State of California of filing workers' compensation claims for employees who have tenuous connections with California but sufficient contacts that the State has the ability to make findings of injury particularly on a cumulative trauma basis and award benefits.

Dennis McKinley played football from 1999 through 2003 for the Arizona Cardinals. During his career approximately half of his games were played in Arizona and the other half were played in other jurisdictions including a total of 7 (out of his career 80 games) in California. The applicant also testified he participated in a training camp of five days during that four-year period of employment in California. Mr. McKinley, during the time he played for the Cardinals, resided in Arizona and regularly performed most of his work duties in that state where the team not only played but also practiced.

McKinley filed a workers' compensation claim in 2010 asserting industrial injury to multiple body parts as a result of cumulative trauma incurred while playing and practicing for the Cardinals during the four-year period ending in 2003. Jurisdiction was asserted in California on the basis the employee had played seven games as well as participated in a training camp in California therefore creating sufficient contact with the State of California for jurisdiction to attach. In response to the application the Arizona Cardinals (insured initially by TIG Specialty Insurance Company and subsequently by Travelers Insurance Company) raised the issue of the contract provision designating Arizona as the choice of forum and law for filing a WC claim. The contract contained the following language:

"This contract has been entered into the State of Arizona and no other state, and the parties acknowledge that the Player's principal place of employment shall be within the State of Arizona and in no other state. Claims for workers' compensation shall be filed with the Industrial Commission of Arizona, and the parties agree they shall be subject to the workers' compensation laws of the State of California and of no other state."

The Arizona Cardinals requested the Workers' Compensation Appeals Board in California to decline to exercise jurisdiction and give effect to the parties' contractual agreement that any claim for work injuries should be filed only in Arizona and would only apply Arizona law. The WCJ issued a decision finding the W.C.A.B. had jurisdiction over the applicant's claim by virtue of his occasional employment within the State of California but also found applicant's contacts with California were not sufficient to warrant exercising the Board's jurisdiction in light of the applicant's contractual provision with his employer to file his workers' compensation claims in Arizona. Based upon those findings the WCJ ordered the applicant take nothing for his claim in California Workers' Compensation effectively dismissing the claim. Applicant petitioned for Reconsideration asserting that the W.C.A.B. had jurisdiction to adjudicate his claim and that the forum selection clause in his contract now was unenforceable under California law.

The W.C.A.B. granted Reconsideration and assigned the matter to the Board en banc to consider the issues involving jurisdiction as well as choice of forum within the contractual provisions. In reviewing the case the W.C.A.B. went through a multi-stage evaluation process the first step of which was to determine if the W.C.A.B. had jurisdiction to even consider the workers' compensation claim. The Board concluded personal jurisdiction existed over the Arizona Cardinals by virtue of their repeated appearances within the State of California to play California teams as well as the practices within the State of California.

Having determined that the W.C.A.B. had sufficient contacts with the Arizona Cardinals to assume jurisdiction the W.C.A.B. determined it did not need to decide the question of whether it was the proper forum to adjudicate applicant's workers' compensation claim instead relying upon the contractual provisions to determine Arizona was the contractually defined forum for this claim. In arriving at that conclusion the W.C.A.B. cited the Matthews v. National Football League Management Counsel and Tennessee Titans Federal District Court opinion which ruled a similar provision provided a valid obligation to apply the laws from the State of Tennessee and declining to determine that the applicant's appearance in California on a periodic basis was sufficient to confer entitlement to California workers' compensation benefits. The court in Matthews had noted that while every game, including games in California, likely contributed to the employee’s injuries it was not clear that as a matter of California law it meant that he fell within the category of employees to whom California extends workers' compensation coverage. The Board also cited a series of both California and other jurisdiction cases holding that simply because an employee appears in this state does not necessarily require the state to apply its workers' compensation laws to claims particularly for cumulative trauma injuries. The Board did note that in prior claims where there was not a forum selection clause included in the contractual provisions the W.C.A.B. had assumed jurisdiction over claims where employees appeared in California but were not based in California. On the basis of its review of the case authorities, the Board held it had jurisdiction to determine if it was a proper forum to adjudicate the claim of injury.

The W.C.A.B. further noted there were potentially 16 other states besides California and Arizona which could assert jurisdiction based on the history employee had passed through their territory during his employment with the Cardinals. The Board, while not specifically indicating, certainly implies the multitude of potential forums is an additional reason to consider the contractual provision to fix the rights and obligations of the parties for workers' compensation benefits. The Board took note that the employee was not a resident of California when he entered into the contract to play football for the Cardinals nor did he reside in California during the time that he played with the team. Indeed it does not appear he was a resident of California at the time the claim was filed. His connection to California was the 7 out of 40 games played in jurisdictions other than Arizona which constituted less than 10% of his games and well under 10% of his overall employment. The W.C.A.B. cited the employee’s description of his employment arrangement wherein he played in 80 games but also a multitude of practices, overwhelmingly within the State of Arizona, as well as in season and out of season training programs all performed in Arizona. Given the overwhelming amount of activity within Arizona and the minimal activity in California as well as other states the Board concluded that while there was sufficient activity within California to extend jurisdiction there was only a limited connection to California with regard to employment and the claim of cumulative injury.

The Board then reviewed the law regarding forum selection clauses holding first that the contract itself was certainly not entered into within the State of California and therefore California did not have jurisdiction over the contractual provisions. One of the issues that frequently arises in professional sports cases is the establishment of where the contractual provisions were finalized. If the contractual provisions were finalized within the State of California then typically California is considered to have jurisdiction over the contractual arrangement and workers' compensation benefits can be established. The Board also noted that until recently forum selection clauses were not favored and many courts declined to enforce them on the ground that jurisdiction was a matter of law and could not be either established or denied on the basis of contract. However in 1972, the U.S. Supreme Court decided in a maritime case that "a forum clause should control absent a strong showing that it should be set aside" and described four grounds that could overcome the presumption of validity:

  • The clause was a product of "fraud or overreaching".
  • Enforcement would be unreasonable and unjust.
  • Proceedings in the contractual forum would be so gravely difficult and inconvenient that the party challenging the clause will for all practical purposes be deprived of his day in court and
  • Enforcement would contravene a strong public policy of the forum in which suit is brought whether declared by statute or by traditional decision.

The Board reviewed each of these potential defenses to enforcement of the forum clause and determined none were applicable to the facts of this case. There was certainly no indication of either fraud or overreaching as the applicant was represented by an agent who negotiated the terms of the contract with the team. And while the Board does not so indicate the employee is also represented by a bargaining unit for which the contractual provisions have been negotiated. The Board had little difficult with the other issues cited by the U.S. Supreme Court as a basis for rejecting a forum selection provision, concluding that Arizona was certainly a reasonable form given the applicant's residence there, his employment there as well as being a convenient forum for applicant. The W.C.A.B. was also unable to find a violation of a fundamental California public policy to enforce such a clause. The Board distinguished this case from prior decisions where the existence of a forum selection clause was a tactical issue by an employer to deprive employees of the ability to pursue claims. In the instant case the Board could not find any such indication. The Board found no compelling public policy to require the State of California to extend workers' compensation benefits to the thousands of players participating in the National Football League (and certainly by inference the thousands of players performing in other professional sports including basketball, baseball, soccer, etc.) where contacts with California were minimal but each employee likely had a significant contact with at least one other state based upon the location of their employer. The Board specifically found

"We have identified no California fundamental public policy that requires the W.C.A.B. to develop limited resources for the claim in this case."

COMMENTS AND CONCLUSIONS:

It is a virtual certainty that this case will be appealed further. As noted above there have been developments in multiple forums over attempts but out of state NFL teams to get claims out of California and back to the state of employment. While filing in California for cumulative trauma (and on occasion specific) injuries for out of state professional athletes (our office is involved in several hundred such cases involving NFL, NBA, MLB and NHL) is becoming common for many sports, it is a particularly prevalent practice for retired NFL player many of whom never played for California teams, to file CT claims alleging multiple body parts.

There are still many jurisdictional and venue issues to be decided in this rather specialized area of WC. Other issues where we do not have definitive case or statutory law would include:

  • Application of Labor Code § 3600.5(b) which excuses out of state employers whose employees work temporarily in California and where the state of employment has a reciprocal provision excusing California employers from obtaining coverage in their states for similar temporary employment.
  • This case does not address the issue how to apply Labor Code § 5500.5 where the athlete played for multiple teams, some in California and some out. Does the declination to assume jurisdiction over an out of state team push liability back to prior in-state team employment. It would seem that if the W.C.A.B. is holding it has jurisdiction over the injury but is declining to assert jurisdiction; this would preclude simply moving the CT claim back to the in state employer under Labor Code § 5500.5.
  • If the W.C.A.B. does allow an employee to proceed with a CT claim against a prior in-state team, will the later excluded employment be treated as part of the same CT case or as a separate injury for apportionment purposes.
  • Can the discussion by the W.C.A.B. in Section III F regarding California’s lack of interest in professional athletes with minimal contacts to CA apply where there is not a choice of law or choice of forum provision in the contract? As noted in the Matthews decision, there is a question as to whether a state should apply its protection to an employee of another state where the contacts are infrequent.
  • Does the Choice of Forum rational apply to specific injuries that occur within California as well as CT claims?

These and many more issues will still have to be worked out by the W.C.A.B. and the Courts.

© Copyright 2013 Richard M. Jacobsmeyer. All rights reserved. Reprinted with permission.

Shaw Jacobsmeyer Crain Claffey LLP

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