Workers’ Compensation Landmark: Vaughn Booker v. Cincinnati Bengals

bengalsIn general, workers’ compensation does not receive the same level or exposure and attention from both the world of academia and the media that other areas of law garner. However, in recent months there have been multiple decisions by courts that are being labeled as “landmark” in the workers’ compensation arena, especially in regards to professional sports teams.  Professional athletes have long used the state of California to receive favorable decisions by exploiting its weak workers’ compensation laws and system by filing claims for career-long cumulative trauma. These athletes argue for jurisdiction in California, although only one or very few games actually take place in California. After such athletes’ careers come to an end, they often find themselves suffering from long terms injuries and trauma that they attribute to their time spent participating in sports. One such example is the case of Booker.

Background:

On February 16, 2000, Vaughn Booker signed an NFL Player Contract with the Cincinnati Bengals, which covered five football seasons. The contract included an addendum which stated in relevant part that:

As a material inducement for the Club to employ Player’s services, Player promises and agrees that any workers compensation claim, dispute, or cause of action arising out of Players employment with the Club shall be subject to the workers compensation laws of Ohio exclusively and not the workers’ compensation laws of any other state. Player further agrees that any claim, filing, petition, or cause of action in any way relating to workers compensation right or benefits arising out of Players employment with the Club, including without limitation the applicability or enforceability of this addendum, shall be brought solely and exclusively with the courts of Ohio, the Industrial Commission of Ohio, or such other Ohio tribunal that has jurisdiction over the matter.

In the three seasons that Vaughn Booker played for the Cincinnati Bengals, he played in one game in the State of California. After an unfavorable outcome in the decision regarding his workers’ compensation claim, Booker filed a petition seeking reconsideration of the February 8, 2012 Opinion and Decision After Reconsideration. In that decision, the Workers’ Compensation Appeals Board (“Board”) concluded that under California Labor Code section 3600.5(b), there was no subject matter jurisdiction (“SMJ”) over the applicant’s claim against the Bengals. The applicant contended in his petition that:

(1) where an employee is injured while temporarily employed in California, section 3600.5(b) provides for subject matter jurisdiction unless certain elements are met and, here, the Bengals did not satisfy all of these elements; (2) he paid California income taxes on his earnings for the game he played here and, therefore, he is entitled to equal protection under California laws; and (3) our decision left him without a remedy in the State of Ohio.

The Board followed the February 8, 2012 decision and conclusion regarding their jurisdiction over the applicant’s cumulative injury claim against the Bengals. The Board found that even if they were to assume SMJ were established, they would still decline to exercise jurisdiction since the contract between the applicant and the Bengals contained a forum selection clause requiring that any and all workers’ compensation claims be made in Ohio.

SMJ Exception:

The Board has SMJ over all injuries sustained in California with the exception stated in section 3600.6(b). Under this section, the laws of a state other than California provide the exclusive remedy for an employee hired outside of California who is injured while working in California if:

(1) the employee is working only “temporarily” in California; (2) the employer has workers’ compensation insurance coverage under the workers’ compensation insurance or similar laws of a state other than California; (3) this insurance covers the employee’s work in California, and (4) the other state recognizes California’s extraterritorial provisions and likewise exempts California employers and employees covered by California’s workers’ compensation laws from application of the laws of the other state.

1.      Evidence of Sufficient Coverage-

The Applicant first argued in his petition that the evidence failed to show that for the one game he played in California, the Bengals:

[f]urnished workers’ compensation insurance coverage under the workers’ compensation insurance or similar laws of a state other than California, so as to cover such employee’s employment while in this state.

The applicant attempted to supplement his claim by referencing to the second paragraph of 3600.5(b), asserting that this paragraph “unambiguously requires a certificate” and not “an unauthenticated photocopy of a letter” from the duly authorized appeals officer of the appeals board or a similar department of the other state. However, section 3600.5(b) merely requires evidence of the insurance coverage, but not that the evidence be in any particular form. Additionally, the last paragraph of section 3600.5(b) allows such a “certificate” to serve as prima facie evidence that the requisite insurance coverage exists when it is:

[f]rom the duly authorized officer of the appeals board or similar department of another state certifying that the employer of such other state is insured therein and has provided extraterritorial coverage insuring his employees while workin[g]…within California.

The Board found it sufficient that the Bengals provided evidence including a letter from the Director of the Self-Insured Department of the Ohio Bureau of Workers’ Compensation (“OBWC”) as well as the Chief Legal Officer and General Counsel, verifying the team’s authorization to operate as a self insuring employer. In addition, testimony of the executive vice president was used to support the Board’s decision as she was the individual who coordinated the team’s workers’ compensation coverage.

2.      Notice of Extraterritorial Coverage-

Applicant argued that the Board had jurisdiction under 3600.5(b) because the Bengals did not comply with an Ohio Revised Code requirement that notice be given to an Ohio administrative agency of its extraterritorial insurance coverage. In response, the Board reiterated that section 3600.5(b) requires only that the out-of-state employer have valid extra-territorial insurance coverage under that other state’s laws. It was further stated that even if the applicant’s allegations were accepted, the applicant did not show that under Ohio law such an omission on the part of the Bengals would lead to the invalidation of their extra-territorial workers’ compensation self-insurance coverage.

However, in Ohio, if an employer elects to obtain extra-territorial workers’ compensation insurance coverage from an out-of-state insurance carrier, only then is notice required to be given to the Administrator. The Board determined that section 4123.292(A) of Ohio law was inapplicable since the Bengals instead chose to be self-insured for extra-territorial coverage. Ohio Revised Code § 4123.292(A).

3.      Coverage of Employment in California-

Another argument raised by the applicant was that the Bengals did not furnish insurance that would cover his employment in California since his injuries were not covered by Ohio Workers’ compensation law. Applicant claimed that Ohio law did not cover his injuries and he would not have a remedy in the State of Ohio because:

1) there was no evidence that Ohio recognized cumulative trauma injuries; and 2) Ohio does not toll its statute of limitations for workers’ compensation claims if an employer fails to give notice to the employee of his workers’ compensation rights.

Under California law, it is required that the out-of-state employer have extraterritorial workers’ compensation coverage that is valid under that other State’s laws so that the employee is covered during their temporary employment in California. The Board did not agree with the applicant’s first assertion because Ohio Workers’ compensation law did cover both professional athletes and the cumulative injuries of professional athletes and the fact that neither the Bengals nor the Board cited to a case addressing this issue could not in itself provide the applicant with an argument that Ohio law does not provide such coverage.

In addressing the applicant’s second argument for why Ohio law did not cover his injuries, the Board stated that nothing under California law requires the other State’s statute of limitations to be the same or even stronger than that of California and if the applicant fails to timely file his injury claim in a state that has a shorter statute of limitations period, this does not mean that the insurance lacks coverage, but instead simply means that the applicant failed to comply with the other state’s statute of limitations.

Payment of Income Tax to Establish SMJ:

The applicant raised both legal and public policy arguments that SMJ in California should be established because nonresident professional athletes pay California income taxes. The Board responded by stating that these arguments were “unavailing,” better suited for the state legislature, and although nonresident professional athletes pay California income taxes for games played there based on a “duty day” formula, such taxes do not establish a basis for SMJ even if playing there caused or contributed to the athlete’s injury.

Forum Selection Clauses:

Forum selection clauses may be used to negate the ordinary assumption that when a judicial body has jurisdiction over a case, they must exercise that jurisdiction by hearing and determining the case of its merits. In dealing with the issue of forum selection clauses, a California court stated that:

[T]he parties may not deprive courts of their jurisdiction over causes by private agreement… [however,] courts possess discretion to decline to exercise jurisdiction in  recognition of the parties’ free and voluntary choice of a different foru[m].

It was further stated that forum selection clauses are valid and may be given effect:

(1) in the court’s discretion and (2) in the absence of a showing by the plaintiff that enforcement of such a clause would be unreasonable.

The court’s discretion has typically been swayed in the interest of judicial economy. In Booker, the Board did not find the forum selection clause used by the Bengals to be unreasonable because it was not an adhesion contract in light of the circumstances. The employee in this case did in fact have bargaining power, which was evidenced in the contract by the fact that he was represented by a “certified agent,” received a multi-million dollar signing bonus, and during the years in question received a yearly salary of 1 million dollars or more. The Board also found Ohio to be a reasonable forum in light of the facts that the Bengals were based in the state and the applicant played half his games there.

Conclusion:

Although Booker is a case involving professional sports teams that have constantly traveling athlete employees, the same problem applies to all businesses that have traveling non-athlete employees. Since California is often a desirable location for conferences, training, and even recruiting, similar claims and arguments to those made in Booker can be used in the future by disgruntled employees seeking damages for trauma or injuries sustained while participating in company activities in California. Therefore, it is important for such employers, insurers, and even self-insured employers to protect themselves from liability against workers’ compensation claims made by employees seeking jurisdiction in California.

Much can be taken from the Booker decision to limit liability.  First, employers should purchase a California workers’ compensation insurance policy or confirm that the current policy covers employees when traveling out of the state. Secondly, employers should obtain a certificate from the state concerning its workers’ compensation reciprocity laws with California. Employers can only hope that their state does have reciprocity or similar laws, otherwise it might be worth lobbying the legislature to establish legislation to that effect. For example, in 2011, Florida adopted House Bill 723, which finally established a set of reciprocity laws in the state. Finally, all employment contracts should contain a valid and enforceable forum selection clause such as the California approved one in the Booker case. The Booker decision provides a road map for all employers to limit the liability of any workers’ compensation claims made against them, and if followed, can afford employers a certain level of protection that will save mass amounts of money in the long run.

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