A California statute that affords protections to employees on temporary work assignment in the state has attracted attention after St. Paul Fire and Marine Insurance sued the Denver Broncos of the National Football League (NFL) over workers’ compensation claims filed in California by nine former Denver players.
Experts say hundreds of out-of-state claims are pending. The claims are allowed under Section 3600.5(b) of the California Labor Code.
A leading California Republican said he would push to change the law. Curt Hagman, the ranking Republican on the Assembly Committee on Insurance, told Insurance Journal it is “outrageous” that the state allows retired professional athletes with no significant nexus to California to file claims for long-term injuries in the state.
“It’s ridiculous and there definitely needs to be an investigation,” said Hagman, R-Chino Hills, a member of the Assembly Republican leadership.
Saul Allweiss, a California worker’s compensation defense attorney, said the ambiguity in Section 3600 often draws frustration. “This is not a football player issue; it has to do with jurisdictional questions in general,” said Allweiss.
St. Paul’s complaint for declaratory judgment seeks an end to a long-running coverage dispute it has with the football club.
St. Paul is not challenging the legality of any part of California’s workers’ compensation framework. Rather, in its filing in U.S. District Court in Denver, the insurer is seeking resolution of the claims dispute, involving five, decades-old policies. The oldest policy took effect Feb. 1, 1974; the last policy expired Oct. 10, 1977.
St. Paul said none of the policies ever afforded coverage for worker injuries. The Broncos former owner, Rocky Mountain Empire Sports (RMES), purchased the policies on an “if any” basis for non-player employees the franchise had in New Mexico, the complaint alleges.
Because they were “if-only” policies, St. Paul said the identities of employees covered were never provided to the insurer. “No payroll was provided by RMES to St. Paul to identify any employees to be covered by the policies,” the complaint says. As a result, RMES was charged only a minimum premium from $70 to $158 per year.
If St. Paul prevails with a declaratory ruling, it could mean legal trouble for the Broncos franchise, especially if the players had no workers’ compensation coverage, said California plaintiffs’ attorney Michael Gerson, a partner with Boxer & Gerson LLP in Oakland.
“If they have no coverage, the players could sue the Broncos for civil remedy as opposed to limiting their liability through workers’ compensation,” Gerson told Insurance Journal.
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