Though the workers’ compensation laws in most states define who is an employee, and therefore who is eligible for workers’ compensation benefits, most states adhere in some manner to the checklist used by the Internal Revenue Service (IRS) to identify when a worker should be treated as an employee and when a worker should be treated as an independent contractor. See IRS Topic 762 – Independent Contractor v Employee. Basically, according to the IRS, a worker should be treated as an employee if the employer has:
Behavioral Control: the right to direct and control what work the worker accomplishes and how the worker does the work.
Financial Control: the right to direct or control the financial and business aspects of the worker’s job, which includes:
• The extent to which the worker has unreimbursed business expenses
• The extent of the worker’s investment in the facilities or tools used in performing services
• The extent to which the worker makes his or her services available to the relevant market
• How the business pays the worker, and
• The extent to which the worker can realize a profit or incur a loss
Type of Relationship: a relationship with the worker and that relationship includes:
• Written contracts describing the relationship the parties intended to create
• Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay
• The permanency of the relationship, and
• The extent to which services performed by the worker are a key aspect of the regular business of the company
Professional athletes are employees. Therefore, professional athletes, even those with million dollar salaries, are covered employees under most workers’ compensation laws and entitled to benefits when injured on the job. Recently, however, during the labor negotiation between the NFL Players Association (NFLPA) and the National Football League (NFL), the issue of how professional athletes have been allowed to forum shop their workers’ compensation benefits came front and center.
While every state pays basic medical benefits essentially uniformly, states pay out additional medical benefits, disability benefits and death benefits differently. For instance, the state of California has allowed retired NFL players to apply for workers’ compensation in California if the player played in at least one scheduled NFL game within the state. Because California generally pays out a higher workers’ compensation benefit than many other states, and California’s statute of limitations is longer, many retired NFL players file for workers’ compensation benefits in California instead of the state or states where the team(s) they played for is (are) located.
Since professional teams, including NFL teams, are self-insured, higher workers’ compensation benefits create higher insurance costs. Therefore, many NFL teams now include a forum selection clause in their player contracts that only allows a current or once retired NFL player to file for workers’ compensation benefits in a certain state. And the recent case of Booker v Cincinnati Bengals should make more NFL, and other professional, teams, begin to include a forum selection clause for workers’ compensation in their player contracts. Booker v Cincinnati Bengals, Case No. ADJ4661829 (May 1, 2012)
In Booker, Vaughn Booker, a former player for the NFL Cincinnati Bengals, filed a workers’ compensation claim in California. During his career, Mr. Booker played one of his 48 scheduled football games in California. California denied Booker’s claim on the basis that the state of California did not have jurisdiction. California held that a forum selection clause in Booker’s contract with the Bengals gave jurisdiction to Ohio. Specifically, the clause said the following:
“As a tangible incentive for the club, to employ the services of players, the players and promises agree that the demand for workers’ compensation, dispute or action resulting from the use of the player with the club is to be subjected ‘compensation laws of Ohio and are not just workers, workers’ compensation laws of another state. The player further agrees that any claim, filing, petition or cause of action in any way on the rights of workers compensation or benefits from the use of the player with the club, including, without limitation, the applicability and enforceability of this change, only and exclusively in the courts of Ohio, Industrial Commission of Ohio, or any other such court to be brought Ohio has jurisdiction over the matter. ”
California also noted that Booker only temporarily worked in California, Ohio and California had similar workers compensation laws, Ohio laws covered Booker when he was playing (working) in California; and Ohio had reciprocity with California in accordance with section 3600.5(b).
The Las Vegas law office of Lagomarsino Law did not represent anyone involved in the above-referenced case. The commentary is for educational and commentary purposes only. If you would like to be represented by a Nevada attorney, contact our office for a free confidential case review and receive a response within hours. Call Toll Free 866-414-0400.