Many organizations have voted upon and implemented Union Contracts and/or Memorandums of Understanding affecting employment benefits paid to injured workers. These agreements often provide a higher rate of “injury pay” based on the applicant’s salary at the time of contract implementation. The issue often arises when a Union Employee’s benefits are covered by such agreements and are also entitled to Temporary Disability or 4850 time benefits. How then is a claim to be administered when the statutory temporary disability rate is higher than the injury pay as outlined in the union contract?

Labor Code section 5000 is very clear: No contract, rule or regulation shall exempt the employer from liability for the compensation fixed by the California workers’ compensation statutes. Labor Code section 5001 allows for compromise of such benefits but only upon approval of the workers’ compensation appeals board or referee.

Most supporting cases follow the logic in Bowen v. Workers’ Comp. Appeals Bd., 73 Cal. App. 4th 15, 86 Cal. Rptr. 2d 95 (Cal. Ct. App. 1999). The Bowen court held that “an employer . . . cannot, simply by adding a contract clause . . . , deny an employee . . . California workers’ compensation benefits where the employee accepts an offer of employment in California…Such a contract clause . . . 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.”

There is one narrow exception which was recently decided in NFL Players Ass’n v. NFl Mgmt. Council, 2011 U.S. Dist. LEXIS 865, 1-2 (S.D. Cal. Jan. 5, 2011). On August 5, 2010, an arbitrator ruled that Bruce Matthews could pursue a workers’ compensation claim in California but that the claim must proceed under Tennessee law, if at all. In response, the National Football League Players Association (NFLPA or Plaintiff) brought suit on behalf of itself and Matthews to vacate the arbitration award. Before the Court was Defendants National Football League Management Council (NLFMC) and Tennessee Titans’ (collectively Defendants) motion to confirm arbitration award and Plaintiff’s motion to vacate arbitration award.

After consideration, the Court found that the arbitrator did not manifestly disregard the law and the award is not contrary to public policy. In other words it found that Mr. Mathews could pursue his workers’ compensation case in California but that he had contracted his right to apply California law away in exchange for applying Tennessee law.

I do not see that this is a case that would apply to a union contract situation. Unless the employee was hired outside of California (as was Mr. Matthews by the Tennessee Titans) California law in my opinion can, will and does apply. I think clearly an employee hired and injured in California is afforded the protection of Labor Code section 5000.

There is one more exception which does not appear applicable to this situation: if the employer has implemented a “carve-out” system with the union. In plain language it is a statutorily created private system for resolving workers’ compensation cases.

Labor Code section 4453 and payments required thereby prevail over the union contracts and MOU provisions. Applicant is owed temporary total and or partial temporary disability up to the maximum statutory rates, unless that payment would be exceeded by the union contract injury pay. If the temporary disability rate exceeds the injury pay rate applicant would be entitled to that TD payment in spite of the injury pay provisions.