New California Law Drastically Slashes Workers’ Compensation Benefits For Former Professional Athletes

A group of former NFL Players gather in front of the California State Capitol to protest against Assembly Bill 1309, which effectively cut off workers' compensation claims for out-of-state professional athletes. (Photo courtesy of Fresno Bee)

2013 is unquestionably the year of concussions. Between a massive settlement with the NFL, new lawsuits against the NCAA and NHL, and countless rule changes slowly eliminating that thing called “defense,” it would appear that retired athletes are finally garnering at least some of the attention and money they deserve for their debilitating efforts on the field. The state of California, however, just turned the tables against injured professional athletes.

Long considered an easy target for dubious workers’ compensation claims, California recently passed a law, Assembly Bill 1309, requiring former athletes to prove they played for California-based teams for either two years or 20 percent of their career in order to claim workers’ compensation benefits. (full text of the bill after the jump)

In the past, former athletes, whether in minor or major leagues, could file for workers’ compensation disability benefits in California so long as they could prove that they played at least some part of their career in California even if employed out of state, and that they suffered a specific or “cumulative injury.” California defined “cumulative injury” as “repetitive mentally or physically traumatic activities extending over a period of time, the combined effect of which causes any disability or need for medical treatment” such as concussions, lower back pain, and knee arthritis from running into 300-pound linemen for a living.

Basically as long as a former professional athlete had a diagnosed injury and played at least one game in California, he or she could likely collect workers’ compensation. Those days are now long gone.

Thousands of athletes who played elsewhere in the country were filing claims in California because many other states do not recognize cumulative trauma such as chronic traumatic encephalopathy (CTE). California’s statute of limitations also had a provision allowing some workers to file years or even decades after retirement.

About 4,500 out-of-state players have won judgments or settlements since the early 1980s, according to a study commissioned by the professional sports leagues. Not surprisingly then, an alliance of different California teams as well as the MLB, NBA, NFL, and NHL pushed hard for Bill 1309 to become law, claiming that the exploitation of the California workers’ compensation system was a huge detriment to team and league finances and could potentially bankrupt minor leagues such as the ECHL. (In full disclosure, I interned at the ECHL and the Commissioner’s Office was always worried about the liability exposure for its California teams. The cost of California claims seemed be a real fear.)

Professional teams and leagues feared California’s relaxed workers’ compensation laws so much because workers’ compensation is 100% employer funded and does not depend on taxpayers’ support.

However, Richard Berthelson, a consulting lawyer with the National Football League Players Association, told the LA Times that “A prorated share of a team’s workers’ compensation bill is calculated into athletes’ salary caps, so, in effect, they’re paying for their own insurance coverage. They pay for their own benefits.”

Despite the lobbying efforts of retired athletes, labor unions and the NFLPA, NBAPA, and NHLPA, the bill easily passed. The General Assembly approved the bill 34-2 on September 6, 2013 and it then passed the Senate 66-3 on September 9, 2013. Governor Jerry Brown signed the bill into law on October 8, 2013.

California Assemblyman Henry Perea, the sponsor of Bill 1309

But who was behind the law? Well, that’s easy. Follow the money.

On February 22, 2013, California Assemblyman Henry Perea, a Democrat from Fresno, introduced the bill. Perea, who is Chairman of the Assembly Insurance Committee, receives his largest donations from — drumroll — the insurance industry. In the last election cycle, Perea received $101,800 from the insurance industry — his No. 1 special interest donor. So although it would seem odd for a Democrat to introduced an anti-labor bill, Assemblyman Perea clearly knows that the insurance industry pays his bills.

Additionally, there is one overlooked portion of this bill that other states might want to correct if they pass similar versions. Section 3600.5(g)(1) defines “professional athlete” as an athlete who is employed at either a minor or major league level in the sport of baseball, basketball, football, ice hockey, or soccer. This means horse jockeys at Santa Anita, NASCAR drivers at Fontana Speedway or the Santa Barbara beach volleyball players on the AVP tour escaped exclusion under this bill.

In the end, score another major victory for the leagues over the players. Not only does Bill 1309 close a supposed loophole in California, but it could serve as a model for other states to avoid costly disability hearings and claims while attracting the adoration of the major sports leagues. Those hurt from this bill, literally the ones hurting from arthritis, CTE, and degenerative disc disease, are now left with one fewer legal avenue to try to alleviate the financial pain of mounting medical bills.

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