California Jurisdiction over Industrial Injury Claims of Professional Athletes: The Saga Continues

By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, Workers’ Compensation Appeals Board

The primacy of the Workers’ Compensation Appeals Board (“Appeals Board) over extra-territorial industrial injuries sustained by California residents is sacrosanct. In no uncertain terms, Labor Code § 5305 confirms the Appeals Board’s jurisdiction over all controversies over injuries sustained outside of California’s territorial limits where the injured employee is a resident of the state of California at the time of the injury and the contract of hire was made in California. For professional athletes injured outside of California, the extent of the Appeals Board’s jurisdiction is further detailed in Labor Code § 3600.5. That statute prescribes exemptions and exclusions from California’s jurisdiction if specified circumstances are met. In tandem, these two statutes should avert disputes over the appropriate workers’ compensation forum, but they don’t always do so. California’s jurisdiction under Labor Code §§ 5305 and 3600.5 was the subject of a recent panel decision, Moore v. Cleveland Browns, 2022 Cal. Wrk. Comp. P.D. LEXIS 380. In the 19-page opinion (along with a 7-page concurrence), the panel held that California has jurisdiction over the extraterritorial cumulative trauma injury claims of a professional athlete who signed written employment contracts out of state and played no games in California, based solely on his oral acceptance of employment while physically present in California.

The Facts

Evan Moore (applicant) was a professional football player from 2008 to 2013. Throughout his professional athletic career, applicant was represented by sports agents, Dubin & Yee (agents), whose offices were in Los Angeles, California. Applicant gave his agents full authority to negotiate on his behalf and bind him to contracts. He never negotiated a contract of employment with any of the franchises for whom he played.

Applicant’s professional football career began with short term employment as a weekender for the New Orleans Saints. When he was released from that employment, applicant returned to California. His agents were then contacted by the Green Bay Packers with an offer of an employment contract. Applicant directed his agents to accept the contract, which they did. Applicant was unable to recall where the written contract was signed.

After his release from the Green Bay Packers, applicant returned to California. While in California, applicant’s agents informed him of an offer to play on the practice squad for the Cleveland Browns. Applicant directed his agents to accept the offer on his behalf. Although applicant could not recall where he signed the initial written contract, he did sign another contract to join the Cleveland Brown’s active roster while in Cleveland approximately four weeks later. Applicant signed two further written contracts in 2010 and 2011 while he was in Cleveland.

When applicant was released by the Cleveland Browns, the Seattle Sea Hawks contacted his agents to express interest in signing him. Applicant’s agents negotiated the contract, and applicant directed his agents to accept the contract. Applicant then flew from Cleveland to Seattle, where he signed the written contract.

Following his release from the Seattle Sea Hawks, the Philadelphia Eagles offered applicant a contract, which he directed his agents to accept. The written contract was signed in Philadelphia.

Applicant filed a cumulative injury claim alleging injury to multiple body parts while employed as a professional football player by the Green Bay Packers, the Cleveland Browns, the Seattle Sea Hawks and the Philadelphia Eagles (referred to collectively as “defendants”). Defendants disputed California jurisdiction over the claimed injury, and a trial was held.

The WCJ issued a decision determining that California did not have jurisdiction over the claimed injuries under Labor Code § 3600.5 because applicant failed to show that his contracts for hire were made in the State of California. Relying on Tripplet v. Workers’ Comp. Appeals Bd. (2018) 25 Cal. App. 5th 556 [83 Cal. Comp. Cases 1175], the WCJ reasoned that applicant’s agents’ presence in California when they entered into negotiations with defendants was insufficient to establish that an oral contract was formed because applicant always had the final say as to whether to accept or reject a contract and because applicant always directed his agents to accept the various contracts on his behalf. In addition, the WCJ observed that the Standard Representation Agreement (SRA) precluded any agent authority to bind or commit applicant to a contract.

Reconsideration

On reconsideration applicant claimed that valid contracts of employment were formed in California when his agents accepted the offers made by defendants because the agents had the authority to bind him to an employment contract. According to applicant, his agents’ acceptance of oral offers of employment from defendants provided a valid basis for the Appeals Board to assert its jurisdiction under Labor Code §§ 5303 and 3600.5, and that the later execution of written contracts was merely a condition subsequent to his actual hire. Defendants disputed that claim, arguing that not only did applicant’s agents lack authority to bind him to a contract, the specific terms of their employment agreements between defendants and applicant were spelled out in the written employment contracts, none of which were signed by applicant when he was in California.

Panel’s Analysis

The panel begins its analysis with a brief review of Labor Code §§ 3600.5 and 5303. Section 3600.5 grants the Appeals Board jurisdiction over industrial injuries occurring outside of California where the injured employee was hired in or regularly working in California. Section 5305 further provides for Appeals Board jurisdiction over disputes arising out of injuries suffered outside of California “in those cases where the injured employee is a resident of this state at the time of the injury and the contract of hire was made in this state.” (Lab. Code § 5305.) The panel then describes the salient question in determining applicability of Labor Code § 5305 to a contract of hire as whether the acceptance of the offer took place in California.

The opinion reviews case law from nearly 100 years ago and acknowledges prior consistent holdings that the formation of a contract of hire, by itself, is sufficient to confer California jurisdiction over an industrial injury that occurs out of state. (Alaska Packers Asso. v. Industrial Acci. Com. (Palma) (1934) 1 Cal. 2d 250 [1034 Cal. LEXIS 358], affd. (1935) 294 U.S. 532 [55 S. Ct. 518, 79 L.Ed. 1044, 20 I.A.C. 326]; McKinley v. Arizona Cardinals (2013) 78 Cal. Comp. Cases 23 [2013 Cal. Wrk. Comp. P.D. LEXIS 2] (Appeals Board panel decision).)

Next, it points out that the formation of an oral contract in California is sufficient to confer jurisdiction on the Appeals Board under Labor Code § 5303, citing Janzen v. Workers’ Comp. Appeals Bd. (1977) 61 Cal. App. 4th 109 [71 Cal. Rptr. 2d 260]. The opinion then explains that an oral contract consummated over the telephone is deemed made when the offeree states words of acceptance. The rationale is that consent to an oral offer is deemed to be fully communicated between the parties as soon as the party accepting the offer has transmitted acceptance of the proposal to the proposer of the offer. (See Paula Insurance Co. v. Workers’ Comp. Appeals Bd. (2000) 65 Cal. Comp. Cases 426 [2000 Cal. Wrk. Comp. LEXIS 6264] (writ. den.).) In this case applicant testified without rebuttal that he was in California when he was informed by his agents of the Cleveland Brown’s offer of employment, and he directed his agents to accept the offer on his behalf. Just like in Janzen, supra, the panel concludes that applicant’s oral instructions to communicate his acceptance of the offer to the Cleveland Browns was an acceptance that was put into the course of transmission, resulting in a contract of employment made in California. (See Ledbetter Erection Corp. v. Workers’ Comp. Appeals Bd. (Salvaggio) (1984) 156 Cal. App. 3d 1097 [49 Cal. Comp. Cases 447]; Reynolds Electrical & Engineering Co. v. Workers’ Comp. Appeals Bd. (Egan) (1966) 65 Cal. 2d 429 [31 Cal. Comp. Cases 415]; and Pierce v. Washington Redskins, 2017 Cal. Wrk. Comp. P.D. LEXIS 244 (Appeals Board panel decision).)

The trial testimony revealed that when applicant accepted the oral offers of employment, he was not aware of all the terms to be set forth in the written employment contracts. Notwithstanding, the opinion explains that California courts have held that a contract for hire is formed for purposes of California jurisdiction even when not every term has been negotiated, so long as the essential terms of the engagement have been agreed upon. The opinion cites Globe Cotton Oil Mills v. Industrial Acci. Com. (1923) 64 Cal. App. 307 [1923 Cal. App. LEXIS 130], which involved a contract for hire made in California for work to be performed out of state. Although the parties reached an oral agreement that the worker would work for the company outside of California, they did not reach an agreement regarding the worker’s wages until he had been working for several days. The court reasoned that a contract was formed in California when the parties reached a meeting of the minds regarding the employment, although issues such as the rate of pay had not yet been negotiated.

The opinion also discusses two additional Supreme Court cases in which contracts of hire were found based on oral offers of employment made to and accepted by the employee while in California, even where not all conditions of employment had been finalized. The first is Egan, supra, 65 Cal. 2d. 429 at 431-432. In that case, the employee was in California at the union hall when he received an offer of employment for work in Nevada. The employment contract required the completion of a lengthy questionnaire in Nevada and required the employee to obtain a security clearance to work in Nevada before starting work. In addition, the employer could reject the employee when he reported to the job site in Nevada. Nonetheless, the court held that the contract of hire was made in California. Similarly, the Supreme Court found that a contract for hire in California was established even where all the conditions of employment were not yet finalized. (Travelers Ins. Co. v. Workers’ Comp. Appeals Bd. (Coakley) (1967) 68 Cal. 2d 7 [32 Cal. Comp. Cases 527].) In Coakley, supra, the employee received an oral offer of employment to work in Wyoming, which he accepted. The employee then traveled to Wyoming, where he was required to complete additional documents that spelled out the terms of his work. He was also required to complete a medical examination and driver’s test, and his job title was changed following the initial employment agreement. In holding that a valid contract of hire was formed in California, the Supreme Court acknowledged that an employment contract is not required to detail every condition of employment and that the later agreement on the unspecified terms does not rescind the original contract, particularly if the parties’ performance indicates that they intended to be bound by the original agreement.

Applicant testified without any rebuttal that he was physically in California when he received and accepted the offer of employment from the Cleveland Browns. Applicant was aware that he would have to undergo a physical and sign a written contract when he arrived at the training facility in Ohio. One of applicant’s agents testified that the contract terms he reached telephonically with each team and verbally conveyed to applicant were ultimately reflected in each subsequent written agreement.

The opinion then reviews the actions of the parties after applicant orally agreed to the offers of employment. They observe that in each instance, the parties’ performance reflected an intention to be bound by the primary agreement, just as in Coakley, supra. Once applicant directed his agents to convey to the Cleveland Brown’s his acceptance of their oral offer of employment, the Cleveland Browns arranged and paid for applicant’s travel to their training facility for a workout and contract signing. Applicant, in turn, promptly traveled to Cleveland, participated in a workout and signed the written contract. In the panel’s view, these circumstances demonstrate that the parties reached an accord regarding applicant’s employment while applicant was still in California, and promptly acted in accordance with that accord with no subsequent alteration or re-negotiation of the initial oral agreement.

What about Tripplet?

The panel acknowledges that Tripplet, supra, relied on by the WCJ and defendants, raises similar issues but finds it factually distinguishable. Tripplet, a professional football player with the Indianapolis Colts, filed a claim of industrial injury in California. Tripplet initially asserted that he signed the contract of employment while with his agent at the agent’s office in Newport Beach, California. The actual signature pages of the contract of hire, however, showed that applicant and the agent signed the contract separately. Tripplet then admitted that he did not remember where he signed the agreement. An Appeals Board panel found no California jurisdiction since the evidence demonstrated that neither Tripplet nor his agent were in California when the contract was signed. Further, the contract contained an integration clause that specified that the written contract supersedes any prior oral agreement between the parties. The Court of Appeal affirmed the determination, finding that Tripplet failed to meet his burden of proof that a contract of hire was formed in California.

The opinion points out that in this case, applicant presented unrebutted testimony that he was physically present in California when the contract of hire was communicated to him, and that he accepted the offer and instructed his agents to inform the Cleveland Browns of his acceptance, thereby putting his acceptance in the course of transmission. Thus, a contract of hire was formed. As to defendants’ assertion that per Tripplet, supra, the standardized NFL Player Contract contains an integration clause declaring the written contract to be the entire agreement, obviating any prior oral or written agreement except as attached to and incorporated in the written contract, the opinion observes that the impact of an integration clause was not raised or discussed at the trial level or in subsequent WCAB proceedings. Even so, the opinion explains that the integration clause set forth in each of the NFL Player Contracts in evidence would not preclude California jurisdiction if that jurisdiction was previously conferred when the parties entered into an oral contract of hire from within California. That is because once jurisdiction is conferred, it cannot be increased or diminished by contract. Since applicant’s contract for hire was formed in California, his subsequent signing of a written employment contract does not invalidate California’s statutory jurisdiction.

Moreover, the opinion acknowledges that the conferral of jurisdiction arising out of California contracts of hire as embodied in Labor Code §§ 5000, 5305, and 3600.5(a) reflects the public policy of California in extending workers’ compensation benefits to all persons hired in California and precludes the enforcement of forum selection or related clauses that purport to deprive California of jurisdiction.

The Concurring Opinion

Concurring Commissioner Sweeney endorses her colleagues’ determination that a valid and binding oral contract of hire was formed when applicant accepted the offer made by the Cleveland Browns while physically present in California. She points out that in the exercise of its plenary powers, the legislature determined that a hiring in California, standing alone, is sufficient to confer California jurisdiction, and reflects the public policy interests of the legislature. (See Lab. Code §§ 5305, 3600.5.)

Although in agreement with the conclusions reached by the majority opinion, the concurrence writes separately to discusses the NFL Standard Representation Agreement (SRA) that must be executed by players and their agents. The concurrence explains that the SRA bears many of the indications of a contract of adhesion.  The form is mandatory and pre-drafted by an entity with a superior bargaining position; it is a standard form that must be used, not an agreement negotiated by the agent and player.

It is essentially a take-it-or-leave-it proposition that fails to disclose the jurisdictional consequences of barring an agent from accepting a contract of hire on a player’s behalf. Additionally, the concurrence observes that the SRA also appears to be substantively unconscionable because it extinguishes any possibility of California jurisdiction through the player’s chosen representative even when the agent is physically present in California and, after conferring with the player, accepts an offer of employment on the player’s behalf.

Commentary

Many practitioners anticipated that the legislative amendments to Labor Code § 3600.5 would curtail the large numbers of workers’ compensation claims filed by professional athletes for injuries sustained outside of California. Certainly, those amendments have provided a practical framework for determining California jurisdiction based on a player’s contacts with this state and likely have resulted in a decrease in claims by athletes with only remote connections to California. But, as this case makes clear, there are other factors that will continue to compel California to exercise its jurisdiction over the extraterritorial injuries of professional athletes. We can be sure that the Appeals Board will assert its jurisdiction where the contract of hire was formed through acceptance of an oral offer of employment made while the professional athlete was physically present in California, and the subsequent actions of the parties reflect their intention to be bound by the initial agreement. It is likely, however, that future cases will raise the matter of the Standard Representation Agreement as a bar to the formation of an oral contract of hire within the state of California. When they do, the concurring opinion provides a roadmap of the various counter arguments we can expect to be raised. Stay tuned.

Reminder: Board panel decisions are not binding precedent.

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