The WCAB issued a favorable decision in favor of an out-of-state employer under the AB-1309 amendments to Labor Code Section 3600.5. While the WCAB stopped short of finding the entire CT claim barred per Labor Code Section 3600.5(d), the WCAB found the Philadelphia Phillies satisfied the requirements for exemption under Labor Code Section 3600.5(c) and therefore could not be found liable for the alleged CT claim.

CCMPT represented the Philadelphia Phillies in a matter that proceeded to trial on the threshold issue of jurisdiction. The dual arguments at trial were that the Phillies should be exempt from liability per Labor Code Section 3600.5(c) and that the entire claim should be barred per Labor Code Section 3600.5(d).

The trial Judge on two occasions found both that the claim was not barred per Labor Code Section 3600.5(d) and that the Phillies were subject to liability despite satisfaction of Labor Code Section 3600.5(c). The trial Judge sided with the applicant and the California defendant that the Phillies were subject to liability despite Labor Code Section 3600.5(c) pursuant to the Court of Appeal decision in Federal Insurance Co. v. WCAB (Johnson) (2013) 78 CCC 1257 [221 Cal. App. 4th 1116] and the subsequent Court of Appeal decision in New York Knickerbockers v. WCAB (2015) 80 CCC 1141 (Macklin).

After its grant of reconsideration, the WCAB found the Phillies had the better argument. The WCAB found no compelling argument for an overriding of the exemption of liability per Labor Code Section 3600.5(c) once its requirements were met. It was clear the applicant’s two games in California over the course of two seasons fell well below the 20% threshold of California contacts that must be reached to be considered more than temporary California employment. The WCAB also noted the Phillies provided proof of extraterritorial coverage during any temporary California employment through their pertinent multi-state coverage policy. CCMPT highlighted the fact the appellate court in Macklin specifically commented its decision had no effect whatsoever on CT claims subject to the AB-1309 amendments, which includes Labor Code Section 3600.5(c).

The WCAB stopped short of finding the entire claim barred due to its interpretation that an employee is considered employed for a California-based team for purposes of the Labor Code Section 3600.5(d) statutes whenever under the employ of a California organization and regardless of whether the employee is actually playing for the organization’s minor league affiliate based inside or outside of California. As has been demonstrated by prior WCAB panel decisions, the WCAB determined the California employer’s control over the employee to be controlling.

Labor Code Section 3600.5(d) requires that the last employer(s) in the last 365 days of employment be exempt from liability under Labor Code Section 3600.5(c) or any other law. In this case, this first step was met where the Phillies were deemed exempt from the California workers’ compensation laws per Labor Code Section 3600.5(c). Once this first hurdle is met, the claim may still be allowed to proceed if two exceptions are met. The first requirement requires 20% of the professional athlete’s career duty days to have occurred in California or for the professional athlete to have spent two seasons playing for a California-based team. The second requirement is that the applicant must have spent fewer than seven seasons playing for out of state-based teams.

The claim undisputedly met the first requirement with more than two seasons of regular California employment. The dispute hinged on whether the second exception of fewer than seven seasons of employment with non-California-based teams was met. This issue was not clear prior to trial where the applicant spent some seasons with the California Angels, both with their California minor league affiliates and their out-of-state-based affiliates. Due to the WCAB’s interpretation of a California-based team, the WCAB found all seasons employed with the California Angels counted as seasons with a California-based team such that the applicant was deemed to have spent fewer that seven seasons playing for out of state-based teams.

The WCAB’s decision is highly significant for the California sports CT claims. The case demonstrates non-California professional sports franchises will have an easier time avoiding liability for California CT claims post AB 1309 in the event the applicant did not form his contract for hire in California and assuming the applicant did not spend more than 20% of his duty days for the out-of-state employer in California. The decision also strongly suggests that future arguments seeking to have the entire claim barred per Labor Code Section 3600.5(d) under fact patterns such as Grahe that involve primarily California baseball organizations that send players to non-California-based minor league affiliates will likely have to proceed beyond the WCAB level to attempt to override what appears to be a current WCAB consensus on the issue.

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