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Coming to California for Workers' Comp

  • State: California
California workers’ compensation does not often get attention from the world at large.  Most people work, some people get injured, and the lawyers usually fight it out – your typical newspaper or anchor will not discuss workers’ compensation because of its narrow application.  But then, something happens now and again, which shines a flood-light onto the swamp, and sends all of workers’ compensation’s dirty little secrets scurrying for cover.

One such light-bringing event was the front-page story of the Wall Street Journal (this one is behind a pay-wall), which covered, at length, the extent to which small hospitals go to perform expensive and often unnecessary treatments, using an army of lien-representatives to exploit the weakness of California’s workers’ compensation system.  Another is the problem plaguing professional sports.  Your humble blogger had the privilege of summarizing the problem for Lockout Lowdown, a sports law blog, some time ago.

The problem faced by professional sports teams is very real – players will have a lengthy career of several years, play as little as a single game in California, and then file a claim for a career-long cumulative trauma, seeking California benefits.  Often enough, the player’s only contact with California is the one game.  This was the case with Cleveland Crosby, who played between 1980 and 1985, and played a single game in California in 1982.

In Injured Workers’ Insurance Fund of the State of Maryland v. Workers’ Compensation Appeals Board (2001) 66 Cal. Comp. Cases 923 (writ denied), the Workers' Compensation Appeals Board held that, because Cleveland Crosby played a game in California while employed by the Baltimore Colts, California had jurisdiction over the Colts for Applicants cumulative trauma injury.

Defendant fought back, naively invoking common sense and reason before bringing out the big guns of Labor Code section 3600.5(b). But Insurance Fund didn’t have the right ammunition: it did not provide certification of reciprocity with California, and the insurance coverage did not appear to cover out-of-state injuries.  Because the defendant in this case failed to prove reciprocity or extra-territorial coverage, applicant prevailed.

This problem doesn’t only apply to professional athletes – they just get all the attention.  The same law applies to traveling non-athlete employees.  California hosts conferences.  California hosts training seminars.  California is just a nice place to visit.  And often enough, if you’re looking for skilled talent, California can be a great place to send your agents to do some recruiting.

But while your employees are conferencing, training, visiting, or recruiting, they’re exposing you to liability under California’s workers’ compensation system.  Are you prepared to pay Golden State rates after a lifetime of reasonable prices?  Maybe you don’t have to.

Your hypnotically eloquent blogger may have worked you into a frenzy over the exploitation of employers and insurers nationwide by one-time California visits and the effect of subjecting non-California defendants to California workers’ compensation jurisdiction.

Put down the torches and pitchforks, take apart the guillotine, and please, please, please, stop holding your formerly favorite football star or conference speaker hostage – I assure you there is a better way!

California does jump the gun on claiming jurisdiction as often as possible for workers’ compensation matters, but Labor Code section 3600.5(b) provides a reprieve.  As the law holds, California will not claim jurisdiction over a non-California employee injured in California, even if that injury is part of a cumulative trauma, if the following conditions are met:

    •    The employee is only “temporarily” in California;
    •    The employee is covered by extra-territorial insurance (meaning the policy applies to the worker even when he or she is out of the state in which he or she normally works);
    •    The laws of the state where the employee is normally employed are “similar” to those of California; and
    •    The state where the employee is normally employed has a reciprocity rule with California.  In other words, California keeps its hands off state X, and state X keeps its hands of California employees injured in state X.

In an example contrary to the case mentioned in yesterday’s post, the recent panel opinion in the case of Vaughn Booker v. Cincinnati Bengals held that California did not have jurisdiction over a case in which Vaughn Booker played one game out of 48 in California.

Mr. Booker sought to invoke California’s workers’ compensation system to adjudicate his cumulative trauma claim.  But the Bengals had done their homework, and the WCAB held that (1) applicant only temporarily worked in California; (2) Ohio and California have “similar” workers’ compensation laws; (3) Ohio’s laws cover applicant while he is working in California; and (4)Ohio has reciprocity with California in accordance with section 3600.5(b).

In other words, the Bengals escape to their home territory with their stripes very much intact.

So what can you do other than boycotting the State of California?  Unless you're willing to give up on medicinal marijuana, body-builder governors, and the nation's largest concentration of happy cows, you need a solution to help you visit California and stay workers’ compensation liability-light.

So what can you, the employer, insurer, or the self-insured employer do to keep your liability down when you send your employees into California?  For starters, either purchase a California workers’ compensation insurance policy or make sure your current policy covers employees when they are out of the state.  Next, ask your attorney to secure a certificate from your state regarding its workers’ compensation reciprocity laws with California.

And what do you do if your state doesn’t have reciprocity or similar laws?  Lobby, and get them passed.  In 2011, Florida adopted House Bill 723, establishing reciprocity laws.  Michigan followed suit later that year with House Bill 5002.  If your state does not have a reciprocity law, perhaps some lobbying dollars spent now can save workers’ compensation dollars in the future.

Kansas has taken another approach.  A recent arbitration ruling in a case between the Kansas City Chiefs and the NFL Players Association held that Chiefs players must bring their workers’ compensation claims in Kansas, ordering the players to abandon their California cases.

The basis of this ruling appears to be the contract terms between the players and the team.  From noted sports-law blogger Daniel J. Friedman, of LockoutLowdown:

"Article 41 of the newly ratified NFL CBA encompasses the NFL and NFLPA's 'Worker Compensation' plan.  As part of this agreement, under Art. 41, Sec. 5 states 'The parties shall immediately establish a joint committee that will make good faith efforts to negotiate a possible California Workers' compensation alternative dispute resolution program on a trial basis (i.e., carve out).'  However, Sec. 6 Reservation of Rights states, 'The parties shall retain the positions they held prior to this Agreement with respect to all existing litigation and arbitration involving workers' compensation issues, including without limitation, the federal and state courses in California (Titans), Illinois (Bears) and New York (Mawae, Harvey) regarding offset issues or choice of law and forum provisions contained in NFL Player Contracts, and nothing in this Article shall affect positions taken in any such pending litigation.'

 I do not think that the carve out provision has been agreed to yet but the resolution in this case likely tilts the balance of power back to the League's favor as they continue to make 'good faith efforts' in coming to an agreement related to carve-out.  I would not be surprised if the players in this situation appeal.  However, because this was an arbitration, it will be very difficult to have the ruling overturned unless they can prove their was an abuse of process."

But, given the fact that California regards contract terms waiving access to California’s workers’ compensation system to be unenforceable, it remains to be seen how effective this approach will prove.

The State of Oregon has put together a list of the reciprocity laws of various states.  You can review it here.  Your humble blogger does gently suggest you verify for yourself any citations found on this website – I certainly have not done so and can not make any claims as to its accuracy or whether the citations are stale or current.

So, will this fearless blogger, cumulatively traumatized by California's workers' compensation system, be seeing you in the Golden State anytime soon?

Gregory Grinberg is an associate for the Harbinson Tune Kasselik workers’ compensation defense law firm in San Francisco.  This column was reprinted with his permission from his blog, http://wcdefenseca.wordpress.com.

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