## Facts

- Alaska Packers Association operated seasonal salmon canneries in Alaska and did business in California.
- Palma, a nonresident alien employee, signed a written employment contract with Alaska Packers in San Francisco, California, to work in Alaska for the canning season.
- The contract provided transportation to Alaska and return to San Francisco, where Palma would be paid wages (minus advances).
- The contract recited that the employer had elected coverage under Alaska’s workers’ compensation law and stipulated that the parties would be bound by that statute.
- California law provided that the state compensation authority could hear claims for out-of-state injuries when the contract of hire was made in California; California law also barred contracts that exempt employers from liability for California compensation.
- Palma was injured in Alaska during employment, returned to California at season’s end, and sought compensation before the California Industrial Accident Commission.
- The Commission awarded benefits under California law, not Alaska law, and the California Supreme Court upheld the award.

## Issues

1. Whether applying California’s workers’ compensation statute to an injury in Alaska, despite a contract selecting Alaska compensation law, violated the Due Process Clause by impairing freedom of contract.
2. Whether the Full Faith and Credit Clause required California to apply Alaska’s workers’ compensation statute (and the parties’ contractual election of it) rather than California’s statute.

## Decision

- The U.S. Supreme Court affirmed the judgment upholding the California award.
- California’s application of its compensation statute to a contract made in California did not violate due process, even though performance and injury occurred elsewhere.
- Full faith and credit did not require California to give controlling effect to Alaska’s compensation statute or the contractual stipulation selecting Alaska law.
- California could treat the contractual choice of Alaska compensation law as ineffective under California’s nonwaiver policy for compensation liability.
- California had a legitimate interest in providing an accessible remedy for workers hired in California for distant seasonal work and in avoiding the risk that injured workers would be left without a practical forum and become public charges.

## Legal Principles

- A state may regulate the obligations and incidents of employment contracts made within its borders, including through labor-protection statutes, even when the work is performed in another jurisdiction.
- Freedom of contract is subject to reasonable legislative regulation of the employer–employee relationship.
- Statutory provisions barring contractual exemptions from workers’ compensation liability may invalidate private agreements that attempt to displace the forum’s compensation scheme.
- Full faith and credit does not impose an automatic rule that the forum must apply another state’s workers’ compensation law; the constitutional question turns on the relative governmental interests and whether the forum has a substantial connection supporting application of its own law.

## Conclusion

The Court held that California could apply its workers’ compensation statute to an Alaska injury arising from a California-made employment contract notwithstanding a contractual stipulation selecting Alaska compensation law, because California’s regulatory interest and remedial policy justified applying its own law and neither due process nor full faith and credit compelled deference to Alaska’s statute.


Alaska Packers Ass'n v. Indus. Accident Comm'n, 294 U.S. 532 (1935)