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California Workers' Compensation Act - The Board

California

,

United States of America

Issue

If the employee of a California employer is injured while temporarily working for the employer out-of-state, is the employee entitled to California workers’ compensation benefits?

Conclusion

Employees hired in or regularly working in California are entitled to compensation for injuries suffered in the course of employment outside of the state. (Sustarich v. Workers' Compensation Appeals Bd., United Airlines, PSI, RSKCO Claims Servs., Bowen v. Workers' Comp. Appeals Bd., Cal. Lab. Code § 3600.5)

The Workers' Compensation Appeals Board ("the Board") has jurisdiction over all controversies arising out of injuries suffered outside of California's territorial limits if the contract of hire was made in California. (Benguet Consol. Mining Co. v. Industrial Acci. Com., Cal. Lab. Code § 5305)

A contract is considered to have been made in California if the acceptance takes place in California. (Sustarich v. Workers' Compensation Appeals Bd., United Airlines, PSI, RSKCO Claims Servs.)

California law applies to determine the issue of whether at the time the applicant was injured the applicant was working under an employment contract made in California because California has a strong interest in applying its law to an issue involving the right of an injured Californian to benefits under California's Workers' Compensation Act. This strong interest stems from the possibility of economic burden upon the state resulting from noncoverage of the injured worker, and from the risk that the family of the worker might require relief if the worker does not receive compensation for their injury. The Workers' Compensation Act was structured to avoid these risks and thus, even if the employee may be able to obtain benefits under another state's compensation laws, California retains its interest in ensuring the maximum application of this protection afforded by the California Legislature. (Travelers Ins. Co. v. Workmen's Compensation Appeals Bd.)

The employer's obligation to furnish medical treatment to cure and relieve an injured worker from the effects of an industrial accident is not restricted to medical care rendered within the State of California. (State Compensation Ins. v. Workers' Comp. App. Bd.)

Law

Subdivision (a) of Cal. Lab. Code § 3600.5 provides that employees hired in or regularly working in California are entitled to compensation for injuries suffered in the course of employment outside of the state:

If an employee who has been hired or is regularly working in the state receives personal injury by accident arising out of and in the course of employment outside of this state, he or she, or his or her dependents, in the case of his or her death, shall be entitled to compensation according to the law of this state.

Cal. Lab. Code § 5305 further provides that the Workers' Compensation Appeals Board ("the Board") has jurisdiction over all controversies arising out of injuries suffered outside of California's territorial limits when the employee is a California resident and the contract of hire was made in California:

The Division of Workers' Compensation, including the administrative director, and the appeals board have jurisdiction over all controversies arising out of injuries suffered outside the territorial limits of this state in those cases where the injured employee is a resident of this state at the time of the injury and the contract of hire was made in this state. Any employee described by this section, or his or her dependents, shall be entitled to the compensation or death benefits provided by this division.

In Benguet Consol. Mining Co. v. Industrial Acci. Com., 4 Cal. Comp. Cases 256, 1939 Cal. Wrk. Comp. LEXIS 385, 36 Cal. App. 2d 158, 97 P.2d 267 (Cal. App. December 19, 1939), the California Court of Appeal for the First District held that the portion of Cal. Lab. Code § 5305 that purports to limit the provision of workers' compensation benefits to residents of California is unconstitutional discrimination, and thus the benefits of the act are extended to nonresidents if the contract of hire was entered into in the state of California (at 163-165):

Section 5305 of the Labor Code (formerly sec. 58 of the Workmen's Compensation Act) provides:

"The commission has jurisdiction over all controversies arising out of injuries suffered without the territorial limits of this State in those cases where the injured employee is a resident of this State at the time of the injury and the contract of hire was made in this State." It will be noted that the section purports to require that, to confer upon the commission jurisdiction for injuries received outside the state, the employee must be a resident of California [**9] at the time of injury, and the contract of hire must be made in this state. Little need be said as to the first requirement—residence in the state at the time of injury. In the first place, the word "resident" as there used cannot possibly mean that the injured employee must be physically living in the state at the time of injury, because the statute presupposes that the employee is out of the state when injured. The word "resident" as there used must be construed to be synonymous with domicile. (Quong Ham Wah Co. v. Industrial Acc. Com., 184 Cal. 26, 34 [192 P. 1021, 12 A. L. R. 1190].) The facts already recited in this opinion tend to indicate that respondent Knouse was in fact a resident of California at the time of his injury. He testified that from 1931–1933 he resided in Nevada City; that he registered and voted there; that he preferred to live there. After his injury, and after securing medical attention in the east and visiting his family in North Carolina, he returned to Nevada City, the place he preferred to live.

However, even if this evidence does not support the inference that Knouse was in fact a resident [**10] of California at the time of his injury, that would not be a bar to the jurisdiction of the commission. By various decisions it has been established that the provision purporting to limit this provision of the act to residents of California is an unconstitutional discrimination, and that the effect of such unconstitutionality [***164] is to extend the benefits of the act to nonresidents, if the contract of hire was entered into in this state. This point was first directly presented in Quong Ham Wah Co. v. Industrial Acc. Com., 184 Cal. 26 [192 P. 1021, 12 A. L. R. 1190] (writ of error dismissed 255 U.S. 445 [41 S. Ct. 373, 65 L. Ed. 723]). In that case the majority of the court expressly held that the effect of the unconstitutionality of the clause in question was to extend its benefits to nonresident citizens of other states. Justice Wilbur, in a concurring opinion, interpreted the majority opinion as follows (p. 49): "I agree with the majority of the court in holding that, notwithstanding the language of the statute with reference to residents, [*260] by virtue of [**11] the federal constitution a nonresident of California, if a citizen of the United States, is entitled to the same remedies as a resident, and for that reason the Industrial Accident Commission had jurisdiction of the complaint of a resident of California, and would also have jurisdiction of a similar complaint by a nonresident, and that there is, therefore, no such discrimination as is prohibited by the federal constitution." (Italics ours.)

Whatever doubt may exist as to this phase of the problem was set at rest by the case of Alaska Packers Assn. v. Industrial Acc. Com., 1 Cal. 2d 250 [34 P.2d 716]; Id., 294 U.S. 532 [55 S. Ct. 518, 79 L. Ed. 1044]. In that case, as both opinions state, the employee was a nonresident alien. Both courts held that, because the contract of hire was entered into in this state, the benefits of the California act were extended to such nonresident alien. In the decision of the Supreme Court of California it was held that the requirement that the employee must be a resident of California "has been nullified by the decision in Quong Ham Wah Co. v. Industrial Acc. Com., 184 Cal. 26 [192 P. 1021, 12 A. L. R. 1190] [**12] . . . which held that the Federal Constitution extended the benefits of the act to nonresidents also". (1 Cal. 2d at 255.) The United States Supreme Court, in its opinion (294 U.S., at p. 538), pointed out that, under the California decisions, it had been held that the "privileges and immunities clause of the Federal Constitution prevented giving any effect to the requirement that the employee be a resident", and that the benefits of the act were available to a nonresident alien.

[***165] [****271] From these cases it follows that, under section 5305 of the Labor Code, if the contract of employment in existence at the time of the injuries was in fact entered into in California, Knouse, having initiated proceedings in this state, is entitled to the benefits of the California act.

In Bowen v. Workers' Comp. Appeals Bd., 73 Cal.App.4th 15, 86 Cal.Rptr.2d 95 (Cal. Ct. App. 1999), the California Court of Appeal for the Second District explained that California workers' compensation law affords compensation to employees who were hired in California and injured out-of-state during the course of their employment (at 98):

California workers' compensation law affords compensation to employees hired in California and injured out of state. Section 3600.5, subdivision (a) provides that "If an employee who has been hired or is regularly employed in the state receives personal injury by accident arising out of and in the course of such employment outside of this state, he, or his dependents, in the case of his death, shall be entitled to compensation according to the law of this state." Section 5305 provides that "The Division of Workers' Compensation, including the administrative director and the appeals board has jurisdiction over all controversies arising out of injuries suffered outside the territorial limits of this state in those cases where the injured employee is a resident of this state at the time of the injury and the contract of hire was made in this state. Any employee described by this section, or his or her dependents, shall be entitled to the compensation or death benefits provided by this division."

The Court found that the applicant was entitled to benefits under California workers' compensation law because he entered into an employment contract with the employer when he signed the contract in California, accepting the employer's offer of employment. The Court noted that even if the applicant's acceptance of the employment offer did not form a contract because the contract required the approval of another party, the Court would still find that the applicant was entitled to California workers' compensation benefits because employers are statutorily precluded from including a contract clause that exempts them from liability under the California Workers' Compensation Act, thereby frustrating California's interests in protecting employees hired in California and injured elsewhere (at 103):

Based on the foregoing authorities, we conclude that a contract was formed in California under sections 3600.5 and 5305 when Bowen signed it, accepting the Marlins offer, and that the approval of the Commissioner was a condition subsequent to employment. Even if, for the sake of discussion, Bowen's acceptance of the Marlin's offer did not form a contract under common law in California by reason of the contract clause requiring the Commissioner's approval, we would still conclude that Bowen is entitled to benefits under California workers' compensation law. Section 5000 provides that "No contract ... shall exempt the employer from liability for the compensation fixed by this division...." In a landmark case applying section 27(a) of the Workmen's Compensation, Insurance and Safety Act of 1917 (section 27(a); Stats.1917, ch. 586, § 27(a), p. 855), the predecessor statute of section 5000 containing similar language, Alaska Packers Assn. v. Indus. Acc. Com., supra, 1 Cal.2d 250, 34 P.2d 716, affirmed (1935) 294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044, the California Supreme Court held that an employee hired in California to work in Alaska where he was injured came within the jurisdiction of California workers' compensation law despite a contract clause providing that Alaska's Workers' Compensation Act would apply. The court ruled: "The attempted selection of the Alaska act as the governing law in ... the contract is not available to the [employer]. A contract attempting to avoid the liability imposed by the California act is invalid." (1 Cal.2d at p. 260, 34 P.2d 716, citing section 27(a).) The United States Supreme Court, in affirming against an attack that the award of compensation to the employee offended the United States Constitution by a denial of due process and full faith and credit, stated: "California ... had a legitimate public interest in controlling and regulating this employer-employee relationship in such fashion as to impose a liability upon the employer for an injury suffered by the employee, and in providing a remedy available to him in California.... [California] has as great an interest in affording adequate protection to this class of its population [California employees injured outside of California] as to employees injured within the state." (294 U.S. at pp. 542-543, 55 S.Ct. 518.) Accordingly, an employer, such as the Marlins, cannot, simply by adding a contract clause requiring the approval of a third party, such as a commissioner, located out of state, deny an employee, such as Bowen, California workers' compensation benefits where the employee accepts an offer of employment in California. To permit the use of such a contract clause to defeat an employee's claim for benefits would violate section 5000 prohibiting contracts exempting employers from liability under the California Workers' Compensation Act and frustrate California's interests in protecting employees hired in California and injured elsewhere.

In Sustarich v. Workers' Compensation Appeals Bd., United Airlines, PSI, RSKCO Claims Servs., United Airlines, PSI, RSKCO Claims Servs., 66 Cal. Comp. Cases 967, 2001 Cal. Wrk. Comp. LEXIS 5130 (Cal. App. 1st Dist. July 03, 2001), the Board explained that it has jurisdiction over cases arising out of employee injuries sustained outside of California when the contract for hire was made in California. A contract is considered to have been made in California if the acceptance takes place in California. If an employee has been hired or regularly employed in the state of California and is personally injured by an accident arising out of and in the course of employment outside the state of California, the employee is entitled to compensation according to California law (at 3-6):

The WCAB has jurisdiction over controversies arising out of employee injuries sustained outside California when "the contract of hire was made in this state." (Lab. Code § 5305.) In addition, Labor Code section 3600.5(a) provides that "if an employee who has [**4] been hired or is regularly employed in this state receives personal injury by accident arising out of and in the course of such employment outside of this state, he, or his dependents, in the case of his death, shall be entitled to compensation according to the law of this state."

With regard to formation of an employment contract, the general rule is that an employment contract is deemed to have been made in California if the act of acceptance takes place in California. (See Reynolds Elec. Co. v. Workmen's Comp. App. Bd. [Egan] (1966) 65 Cal. 2d 429 [55 Cal. Rptr. 248, 421 P.2d 96] [31 Cal. Comp. Cases 415]: Jurisdiction found where California resident, injured in Nevada, had been dispatched from a California union hall that had a contract to provide workers to Nevada job site; Travelers Ins. Co. v. Workers' Comp. Appeals Bd. (Coakley) (1967) 68 Cal. 2d 7 [64 Cal. Rptr. 440, 434 P.2d 992] [32 Cal. Comp. Cases 527]: Jurisdiction found where California resident was hired by telephone in California to work in Utah, the site of injury; Ledbetter Erection Corp. v. Workers' Comp. Appeals Bd. (Salvaggio) (1984) 156 Cal. App. 3d 1097 [203 Cal. Rptr. 396] [49 Cal. Comp. Cases 447]: No [**5] [*969] jurisdiction where the employee accepted offer of employment while in Nevada; Janzen v. Workers' Comp. Appeals Bd. (1997) 61 Cal. App. 4th 109 [71 Cal. Rptr. 2d 260] [63 Cal. Comp. Cases 9]: Jurisdiction found where California resident contacted Wyoming employer by telephone in Wyoming, the parties agreed that the employer would employ the applicant if he performed satisfactorily on a crop-dusting test run, applicant went to Wyoming, passed the test and was hired, but died in a crash a few days into the job; Penn General v. Workers' Comp. Appeals Bd. (Myers) (1997) 62 Cal. Comp. Cases 1128 [writ denied]: Jurisdiction found where applicant flight attendant received and accepted in California a written offer to begin training in Texas, the injury occurred in California, and applicant resided in California during the period of employment and at the time of injury; Bowen vs. Workers' Comp. Appeals Bd. (1999) 73 Cal. App. 4th 15 [86 Cal. Rptr. 2d 95] [64 Cal. Comp. Cases 745]: Jurisdiction found where applicant professional baseball player was injured in Florida; but resided in California and signed a player's contract (i.e. accepted the offer of employment) in California, furnished [**6] by the Florida team and subsequently signed outside of California by the team and approved by the baseball commissioner, as required by the contract.)

In Travelers Ins. Co. v. Workmen's Compensation Appeals Bd., 68 Cal.2d 7, 64 Cal.Rptr. 440, 434 P.2d 992 (Cal. 1967), disapproved on other grounds, LeVesque v. Workmen's Comp. App. Bd., 1 Cal.3d 627, 83 Cal.Rptr. 208, 463 P.2d 432 (Cal. 1970), the Supreme Court of California explained why California law applies to determine the issue of whether at the time the applicant was injured the applicant was working under an employment contract made in California. The Court explained that California has a strong interest in applying its law to an issue involving the right of an injured Californian to benefits under California's Workers' Compensation Act. California's interest in applying its law stems from the possibility of economic burden upon the state resulting from noncoverage of the injured worker, and from the risk that the family of the worker might require relief if the worker does not receive compensation for their injury. The Court noted that the California Workers' Compensation Act was structured to avoid these risks and thus, even if the employee may be able to obtain benefits under another state's compensation laws, California retains its interest in ensuring the maximum application of this protection afforded by the California Legislature (at 11-13):

Section 5305 of the Labor Code provides that the appeals board exercise jurisdiction over all controversies arising out of injuries suffered outside the state if the injured employee is a California resident at the time of the injury and the contract of employment is entered into in California. Section 3600.5 provides that if an employee is hired in California but injured outside California he shall receive compensation according to the laws of California. The only issue here turns on whether, within the meaning of sections 5305 and 3600.5 of the Labor Code, applicant, at the time of his injuries in Utah, was working pursuant to an employment contract made in California.

At the threshold we explain why we have concluded that California law, rather than that of any involved foreign state, governs the issues of whether (1) the parties consummated the contract of employment in California, (2) the Colorado employment agency served as the agent of the employer for the limited purpose of transmitting the offer of employment to applicant, and (3) when applicant reported to the Wyoming jobsite, the parties rescinded the prior California oral employment contract and formed a new contract.

California has rejected the traditional mechanical solutions to choice-of-law problems and adopted foreign law only when it is appropriate in light of the significant interests in the particular case. The significance of extra-state elements [68 Cal.2d 12] varies directly with the nature of the forum's

Page 443

[434 P.2d 995] interest in a given case. Thus, California maintains a stronger interest in applying its own law to an issue involving the right of an injured Californian to benefits under California's compulsory workmen's compensation act than to an issue involving torts or contracts in which the parties' rights and liabilities are not governed by a protective legislative scheme that imposes obligations on the basis of a statutorily defined status. Its interest devolves both from the possibility of economic burden upon the state resulting from noncoverage of the workman during the period of incapacitation, as well as from the contingency that the family of the workman might require relief in the absence of compensation. The California statute, fashioned by the Legislature in its knowledge of the needs of its constituency, structures the appropriate [68 Cal.2d 13] measures to avoid these possibilities. Even if the employee may be able to obtain benefits under another state's compensation laws, California retains its interest in insuring the maximum application of this protection afforded by the California Legislature. (Reynolds Elec. etc. Co. v. Workmen's Comp. App. Bd. (1966) 65 Cal.2d 429, 437--438, 55 Cal.Rptr. 248, 421 P.2d 96.)

In State Compensation Ins. v. Workers' Comp. App. Bd., 69 Cal.App.3d 884, 138 Cal.Rptr. 509 (Cal. Ct. App. 1977), the California Court of Appeal for the Fourth District considered whether the obligation of the employer to furnish medical treatment to cure and relieve an injured worker from the effects of an industrial accident was restricted to medical care rendered within the State of California. The injured employee argued that the Labor Code supported a finding that covered medical care was not limited to medical care rendered in the state because the Labor Code requires compensation to be paid to covered workers who suffer injury outside of the state. The employee also argued that the definition of physician within Cal. Lab. Code § 3209.3 in the California Labor Code does not exclude physicians who are licensed outside of California (at 888):

Arroyo responds: 'The obligation of the employer to furnish medical treatment to cure and relieve from the effects of an industrial accident is not restricted to medical care rendered within the territorial limits of the State of California.' First, he points to Labor Code section 5305, which requires that compensation be paid to covered workers who suffer injury 'without the territorial limits of this State.' Second, he notes the report of an examining physician licensed to practice in another country has been held to be competent evidence in compensation proceedings, providing other parties are afforded adequate opportunity to cross-examine the physician (Union Lbr. Co. v. Industrial Acc. Com., 124 Cal.App. 584, 12 P.2d 1047). Third, he argues the definition of physician in section 3209.3 is nonexclusive; i.e., 'The section does not purport to state that it is the only definition of a physician, but merely that the word physician 'includes' physicians who are licensed to practice in the State of California. . . .' Finally, he urges '(t)he interpretation of (section 3209.3) contended for by petitioner would not be liberal construction of the words as required by Labor Code section 3202 'with (the) purpose of extending their benefits for the protection of persons injured in the course of their employment.''

The Court held that the definition of "physician" in Cal. Lab. Code § 3209.3 does not exclude physicians licensed to practice in another country or state and that where medical treatment and reports are procured from such a physician per Cal. Lab. Code § 4600, which sets forth the treatment reasonably required to cure or relieve an injured worker that shall be provided by the employer, the employer is responsible for the reasonable expense of such treatment and medical-legal costs (at 893):

While . . . an administrative construction of a statute, does not acquire legal sanction merely by reason of long usage, it will be accorded great respect by the courts, and will be upheld, if not clearly erroneous.' (Los Angeles v. Superior Court, 17 Cal.2d 707, 712, 112 P.2d 10, 13.) This case cries out for application of this principle, since the Board, employers, and carriers have clearly assumed medical treatment by out-of-state physicians, when reasonably procured by the employee under section 4600, must be paid for by the employer or its carrier, notwithstanding section 3209.3. The interpretation of the latter section proposed by Fund is unreasonable in light of the clear jurisdiction of the Board over extraterritorial injuries where the contract of hire was made in California (Lab.Code § 5305).

We therefore hold the definition of physician in Labor Code section 3209.3 does not exclude a physician licensed to practice in another country, and where medical treatment and reports are procured from such a physician in accordance with Labor Code section 4600, the employer is responsible for the reasonable expense of such treatment and medical-legal costs. In this case, the physicians provided by Arroyo's employer were unable to help

Alexsei publishing date:
2021-12-20 18:51:24.992050
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