If you’ve spent any time working in California tax law, you already know the Golden State has a, shall we say, enthusiastic approach to claiming jurisdiction over people, income, and apparently, football players who briefly passed through the state three decades ago.
But even California has limits. A court recently had to remind the state of this after Wayne Gandy — a first-round NFL draft pick in 1994 who played his rookie season with the Los Angeles Rams — filed a workers’ compensation claim in California six years after retiring, alleging cumulative injuries from his NFL career. Gandy signed his initial contract in California with the Los Angeles Rams. The catch? Gandy spent the next 14 years of his career playing for teams in Missouri, Pennsylvania, and Georgia. He played a grand total of eight games in California over his final decade in the league and practiced there occasionally.
California’s workers’ compensation law extends coverage to any employee who either signed their employment contract in California or regularly works in California, even for injuries occurring elsewhere. California’s Workers’ Compensation Appeals Board determined it had jurisdiction over Gandy’s claim against the Atlanta Falcons. One could almost hear Sacramento rubbing its hands together.
However, the Fourth District Court of Appeal determined that an out-of-state employer is exempt from California workers’ compensation under the law in cases where:
- The athlete performed fewer than 20% of their duty days in California during the year preceding their last California game; and
- The athlete worked more than seven seasons for non-California teams.
Gandy and the Falcons easily met both requirements.1
So there you have it. You can leave California, build an entire career somewhere else, and still briefly wonder if California is going to send you a bill. For tax professionals, this will come as absolutely no surprise whatsoever.
