Los Angeles Business Journal

Too Easy of a Score

OP-ED: Out-of-state pro athlete’s workers’ comp claims put stress on California’s system. By Gary L. Toebben Monday, July 29, 2013

Professional sports are part of the excitement Los Angeles offers to residents and visitors. We have the privilege of cheering for some of the world’s best teams and finest athletes right here in our backyard.

What most of us did not know until recently was that our state workers’ compensation laws allow professional players from teams in 49 other states to file claims within California for the same workers’ compensation benefits that the hardworking citizens of California rely on.

Recent media reports have outlined the generous payouts, typically six figures, that out-of-state athletes have received for playing as little as one to two games or even one inning in California. Due to a loophole in the state’s workers’ compensation system, these athletes are able to file claims for “cumulative trauma” or nonspecific injuries in California and then file the same or a similar claim in their home state. To date, 4,500 claims have been filed, resulting in $747 million in payouts, with an additional 5,000 cases pending.

Loophole exists

Because this loophole exists, athletes use it. Terrell Davis played his entire National Football League career for the Denver Broncos – but received $199,000 in California. Moses Malone excelled for numerous out-of-state National Basketball Association teams – but was awarded $155,000 in California. Michael Irvin played for the NFL’s Dallas Cowboys and danced on “Dancing With the Stars” – then received $249,000 in California.

Assemblyman Henry T. Perea (D-Fresno) has introduced AB 1309 to close this loophole and put into place clear, common-sense jurisdictional standards for when professional athletes should be able to claim benefits in our state. The Los Angeles Area Chamber of Commerce fully supports this legislation.

Opponents of the bill argue that workers’ comp is funded by team employers and their insurers, not directly by taxpayers, and it shouldn’t matter that California has been become a magnet for billions of dollars in out-of-state pro-athlete claims.

This argument ignores the extra cost to fans who purchase tickets and the impact this loophole has on the integrity of the workers’ comp system for all employers in the state. The California Insurance Guarantee Association pays all claims if an insurance company goes insolvent – through a surcharge on all California businesses. That total to date is $70 million and growing. As more claims are filed, insurers will feel increased pressure to raise workers’ compensation rates on all employers to cover these costs.

California’s employers and employees are the lifeblood of our state and it is only fair that we do everything in our power to protect their benefits under our workers’ compensation system. AB 1309 does that by freeing our system from unjustified claims by professional athletes who play for teams located outside of California.

Gary L. Toebben is president and chief executive of the Los Angeles Area Chamber of Commerce.