Following Supreme Court Decision New Jersey Considers Sports Gambling Law

New Jersey is considering a bill that would establish the framework of operation and regulation for wagering at casinos and racetracks on the results of certain professional, collegiate sports, or athletic events. The Garden State has long been at the forefront of advocating for state autonomy and discretion regarding sports wagering. State legislators introduced Assembly Bill No. 3911 on May 7, 2018, in anticipation of  the Supreme Court decision (Murphy v. National Collegiate Athletic Assn., No. 16-476 (May 14, 2018) ending the prohibition against states enacting legislation permitting gambling on sporting events previously contained in the Professional and Amateur Sports Protection Act of 1992 (PASPA).

New Jersey’s bill supplements and amends sections of existing New Jersey casino and gaming law.

Most significantly for the NCAA and its member institutions, however, is the legislation’s general prohibition on wagering on collegiate events that occur within the state of New Jersey or involve any New Jersey college team.

Specifically, the limitations placed on wagering on New Jersey collegiate contests or any contests involving New Jersey schools are contained in the “prohibited sports event” definition. The prohibited sports event is defined as “any single collegiate sport or athletic event that takes place in New Jersey or a single sport or athletic event in which any New Jersey college team participates regardless of where the event takes place.”

However, a “prohibited sports event” does not “include the other games of a collegiate sport or athletic tournament in which a New Jersey college team participates, nor does it include any games of a collegiate tournament that occurs outside New Jersey even though some of the individual games or events are held in New Jersey.”

Therefore, the mere participation of a New Jersey school in the NCAA or NIT tournament will not prevent gamblers from betting on tournament contests held in New Jersey involving non-New Jersey schools. Gamblers will be prevented only from placing wagers on tournament games or events involving any New Jersey-based schools.

For example, if a New Jersey school, such as St. Peter’s, Monmouth, Princeton, Rutgers, or Seton Hall, participates in the NCAA or NIT tournament, any wagers on those schools would be prohibited. However, wagers would be permitted on other tournament games involving non-New Jersey schools, even if those games take place in New Jersey. So, a regular season game involving Duke-North Carolina in the Prudential Center in Newark would always be considered a “prohibited sports event” and not subject to wagering. However, a Duke-North Carolina NCAA tournament game taking place in the same Prudential Center location would be available for wagering in New Jersey.

Practically speaking, except for tournament games, New Jersey gamblers will only be able to place wagers on regular season collegiate sporting events occurring in states other than New Jersey that do not involve New Jersey-based schools.

Regulation of sports wagering is to be overseen by the New Jersey Division of Gaming Enforcement, which will be responsible for taxation and for ensuring the integrity of sports gambling. Gross sports betting revenue will be taxed at 8 percent and online sports betting revenue will be taxed at 12.5 percent. The proposed legislation currently provides that casinos and racetracks operating a sports pool will be charged an annual “integrity fee” equal to the lesser of $7.5 million or 2.5 percent of gross revenue attributable to wagers placed on sporting events.

Under the bill, a casino or racetrack may establish a sports wagering lounge independently at the casino or racetrack, as a partnership between a casino and a racetrack, or it may authorize a casino service industry enterprise to operate a sports pool on its behalf. Wagers may be placed on any sporting event in-person in a sports wagering lounge located at a casino or racetrack, or online. Persons placing wagers must be at least 21 years of age. In order to operate a sports wagering pool, a casino or racetrack must obtain a permit from the Division of Gaming Enforcement. Permits will cost a minimum of $500,000 and will remain valid for one year. The legislation strictly prohibits gambling on all high school sports, but permits wagering on international sports events in which a majority of participants are at least 18 years of age (e.g., many Olympic sports).

It remains to be seen whether other states will follow New Jersey’s lead in creating broad based restrictions on gambling on collegiate events that occur within state borders.

Jackson Lewis will continue to monitor the progress of this New Jersey bill as well as other proposed state and federal gambling legislation. If you have any questions, please contact an attorney in the Jackson Lewis Collegiate and Professional Sports Practice Group.

Supreme Court Strikes Down Law Banning States from Legalizing Sports Gambling

The U.S. Supreme Court has struck down the federal law known as the Professional and Amateur Sports Protection Act of 1992 (PASPA) that bans states from permitting gambling on sporting events. Murphy v. National Collegiate Athletic Assn., No. 16-476 (May 14, 2018).

This decision effectively ends Nevada’s long-time monopoly in this arena and opens the floodgates for states to pass their own legislation regarding sports wagering.

The original action spent close to eight years winding its way through federal courts before landing before the Court. New Jersey challenged the constitutionality of PASPA, alleging the law violated the Tenth Amendment by “commanding” the states to act (or not act) in a certain way. This, New Jersey argued, violated the Tenth Amendment’s anti-commandeering principle and encroached on the goals of public policy, which have generally favored allowing the states to legislate, free of federal interference and constraint.

Justice Samuel Alito, writing for the Court majority, explained the problem with PASPA is that “state legislatures are put under the direct control of Congress.” He continued, moreover, that “[a] more direct affront to state sovereignty is not easy to imagine.”

States around the country have been hoping to receive a cut of the nearly $150 billion that Americans spend on illegal sports wagering each year. States also stand to gain by taxing sports gambling in a variety of ways. Numerous states have been prepared to launch sports gambling legislation in the event of a favorable decision. Governor Phil Murphy of New Jersey, in particular, stated that New Jersey would be ready to act “sooner than later.”

Still unclear is the effect the decision will have on major sports leagues and organizations such as the NFL, MLB, and NCAA. In the past, the leagues have taken positions opposing legalized sports wagering. However, as of late, many prominent sporting organizations, led by the NBA and Commissioner Adam Silver, have expressed support for sports gambling and the positive effects it might have on professional and amateur sports across the nation.

This support, of course, comes with the caveat that the NBA, NFL, and others want a “seat at the table.” For example, Commissioners Robert Manfred and Roger Goodell of the MLB and NFL (respectively) have indicated that gambling laws should preserve the “integrity” of their sports. When discussing a pro-sports gambling law proposed in West Virginia, Manfred stated, “[The MLB is] not opposed to the idea of West Virginia passing a sports betting bill . . .. We’d just like them to pass one that creates a framework that protects the integrity, recognizes the variety of interests at play here and quite frankly puts the state in a position to maximize the revenue return from it.”

Expect leagues to lobby both the states and Congress to adopt gambling legislation assuring them some form of control over wagering and permitting them a revenue stream from bets placed and payouts awarded.

Jackson Lewis will continue to monitor the progress of state and federal gambling legislation and keep you updated with any and all developments. If you have any questions, please contact a Jackson Lewis attorney.

PAC-12, Big East May Foreshadow Upcoming NCAA Commission on College Basketball’s Report

An overhaul is on the way for men’s college basketball.

The NCAA’s Commission on College Basketball, established in response to a federal investigation into corruption in college basketball, is expected to release proposed changes to the sport on Wednesday, with the goal of final versions of the recommendations voted on by the NCAA executive board in August.

Led by former Secretary of State Condoleeza Rice, the Commission has been tasked by NCAA President Mark Emmert with introducing legislation and methods to protect the integrity of college basketball and the principle of amateurism.

The proposals will focus on:

(1) the NCAA’s relationship with the NBA;

(2) improving the relationship between the NCAA’s national office and the universities to promote accountability and transparency throughout the sport; and,

(3) the relationship between the NCAA national office, member institutions, student-athletes, and coaches with outside entities (including agents and advisors, non-scholastic basketball, and apparel companies).

The Pac-12 and Big East conferences have proposed legislative changes that may offer a preview and foreshadow modifications that may be adopted by the Commission. Both conference proposals advocate eliminating the one-and-done rule prohibiting NBA teams from drafting players until they are a year removed from high school or until they are at least 19 years old. (While the NCAA and its member institutions can call for a change to this prohibition, it is an NBA rule that can only be changed at the professional level.) Professional-bound athletes forced to spend a season in college are considered more likely to accept money and benefits from boosters and agents, who have a financial interest in funneling these athletes to their institutions of choice, contributing to the corruption and lack of integrity necessitating the Commission’s formation.

Further, and in conjunction with the proposed rescission of the NBA’s one-and-done rule, the Big East proposes a “two or none” rule: players that choose to attend college must commit to their institution for at least two years, while high-school players who declare for the NBA draft would forfeit any future college eligibility. The Pac-12 recommends allowing an athlete who enters the NBA draft to retain college eligibility as long as he does not sign a professional contract.

Additionally, the conferences have suggested modifying current NCAA rules on to the use of agents and advisers, proposing that college basketball players be granted similar access to agents and advisers permitted for hockey and baseball players.

In those sports, student-athletes may seek advice from agents and advisers before declaring for their respective professional leagues. In basketball, any contact with an agent jeopardizes the player’s future college eligibility. The Pac-12 proposal would allow high-school athletes from sophomore class onward to seek professional guidance from agents.

The Big East and Pac-12 have suggested the assembly of an independent enforcement unit paid for by corporate sponsorships, television contracts, and other sources.

The Big East proposal includes an elite-player unit (EPU) to focus on the dealings and outside relationships of “players with realistic aspirations of playing in the NBA.” This unit would focus on:

  • Oversight of the relationship between apparel companies, coaches, schools, and the NCAA;
  • Agent regulation, including a tougher certification process than the current NBA and NBPA process;
  • Managing recruiting events;
  • Precollegiate advice for players in grades 8 through 12; and
  • Improved ethical conduct for coaches in recruiting.

Similarly, the Pac-12 investigative body would focus on the large issues facing college basketball, while rules involving minor infractions, such as institutions occasionally paying for family travel or meal expense, would be relaxed. It also includes significant disclosure obligations regarding college basketball’s relationship with apparel and shoe companies. Under the proposal, coaches and schools would be required to disclose the terms of all contracts with these companies.

Finally, both propose that the NCAA and USA Basketball take on a bigger role in non-scholastic basketball, referring to summer recruiting events sponsored by shoe and apparel companies with no connection to the NCAA. These events would transition from tournaments run by shoe and apparel companies to events co-sponsored by the NCAA. It is anticipated, that uch a change should foster better supervision over the conduct and potential impropriety of apparel companies seeking to establish relationships with student-athletes.

We will keep you apprised of the Rice Commission’s proposed changes and their potential impact on college basketball.

 

NCAA In Tune with Dancing With the Stars

The National Collegiate Athletic Association is in step with the television program Dancing With the Stars, and it has decided that the hero of the University of Notre Dame’s NCAA Championship-winning Women’s Basketball Team, Arike Ogunbowale, can compete in the dance competition without violating NCAA amateurism rules.

The NCAA has determined that any prize she receives will be due to her dancing performance, rather than her athletic prowess.

NCAA By-law 12.4.1.1 permits student-athletes to work, but it also provides that “compensation may not include any remuneration for value or utility that the student-athlete may have for the employer because of the publicity, reputation, fame or personal following that he or she has obtained because of athletics ability.”

Few people outside the world of women’s collegiate basketball may have heard of Ogunbowale before she hit two last-second three-point shots to help win both the 2018 NCAA Women’s National Championship semi-final and championship games for Notre Dame.

While Ogunbowale cannot engage in promotional activities for the show (as that according to the NCAA would leverage her athletic achievements), she can keep any prize money she may earn and that so-useful mirrored disco-ball because those benefits would be due to her dancing abilities.

The NCAA has threaded the needle as carefully as a seamstress on set and reached a practical decision that appears to benefit all concerned, without any detriment to the NCAA’s amateurism rules. Ogunbowale now can show off her dance moves as the only college athlete in the all-athletes season. So it’s “On with the show.”

New Law Exempts Minor League Baseball Players from Certain Federal Minimum Wage, Overtime Pay Laws

As part of $1.3 trillion omnibus spending bill signed by President Donald Trump in March, section 13(a) of the Fair Labor Standards Act is amended to exempt minor league baseball players from a class of workers entitled to certain minimum wages and overtime pay under the FLSA.

The amendment, known as the Save America’s Pastime Act, which appears on Page 1967 of the 2,232 page bill, specifically exempts:

[a]ny employee employed to play baseball who is compensated pursuant to a contract that provides for a weekly salary for services performed during the league’s championship season (but not on spring training or the off season) at a rate that is not less than a weekly salary equal to the minimum wage under section 6(a) for a workweek of 40 hours, irrespective of the number of hours the employee devotes to baseball related activities.

As “exempt” workers, minor league baseball players are not entitled to greater wages, even after spending more than 40 hours a week on baseball-related activities. As of last season, there were about 6,500 minor league players across all MLB systems with salaries ranging from $1,100 per month in rookie and low-A ball to $2,150 per month in triple-A. The Act continues the MLB’s discretion in setting these salaries, provided they are at least equal to the minimum wage under FLSA section 6(a) for a 40-hour workweek (about $290 per week).

This settles a long-running dispute as to whether minor leaguers could command additional wages for hours spent honing their craft outside of official game and practice time.

The Act effectively quashes a class-action lawsuit partially certified in the 9th Circuit in 2017.

The original action, which was filed against the Office of the Commissioner of Baseball in 2014, alleged that the League violated federal minimum wage and overtime standards because some players earn as little as $1,100 per month and no minor leaguers receive overtime pay despite spending, on average, around 50 hours per week on baseball activities.

Placing minor leaguers among the 13(a) exemptions appears to endorse the MLB’s view that a baseball player’s minimum wage and overtime pay are “incalculable.” Unlike other jobs that track hours through formal time recording, a player’s employer cannot monitor, much less project the number of hours he might “work.” It would be unrealistic and detrimental to organizations if, for example, minor league teams had to deny players extra batting practice or time in the weight room in order to afford to be able to afford to pay them.

Interestingly, the Act does not expressly mention its impact to the unaffiliated teams of independent professional leagues, where the average player is paid below federal minimum wage standards and salary caps per team fall well short of $100,000 and whether these leagues falling within the Act’s definition of baseball. Prior to the passing of this legislation, independent leagues operated under the assumption that its players were seasonal employees and not subject to overtime or minimum wage laws. If the Act is applied to independent leagues, players who have earned any average salary of $750-$800 per month would now be entitled to federal minimum wage (about $1,100 per month).

Many argue that this would put many of these leagues out of business. As Mike Shapiro, President of the Independent League Pacific Association’s San Rafael Pacifics stated, “If that is the case, it puts us out of business.” It is possible that independent leagues could still try to argue that they fall within the FLSA’s “seasonal exception” and exempt them from the minimum wage requirement contained in Save America’s Pastime because of their short season and teams’ lack of control over players in the off-season. However, this issue has yet to be addressed by Congress or the courts.

 

NCAA Extends Permissible Agent Use To Draft-Eligible High School Hockey Players

As high school students end their winter sports schedules and spring sports participants begin play across the country, the role and significance of agents and their use by amateur athletes as they prepare for possible selection in the upcoming Major League Baseball (MLB) amateur draft and the NHL Entry Draft is once again front and center. The NCAA’s Division I autonomy council has voted to permit men’s hockey prospects to be represented by an agent in the NHL Entry Draft without jeopardizing their college eligibility should they fail to successfully negotiate a professional team contract.

This was a benefit under NCAA rules previously enjoyed only by high school baseball players drafted in the Major League Baseball (MLB) amateur draft.

The authorized use of an agent will not affect the player’s college eligibility.

The player will be able to continue his career as a collegiate athlete should the agent fail to negotiate an agreement with the professional team on the player’s behalf. According to the new rules, the drafted player must pay the agent his or her standard fee for services. However, a student-athlete may not receive any other benefits from the agent beyond negotiation services. In addition, if the student-athlete decides to forego a professional hockey career and retain his college eligibility, he must sever all ties with the agent before commencing full-time enrollment and beginning his college academic and athletic experience.

The new measure formally amends Bylaw 12.3. The general no-agent rule on intercollegiate sports (12.3.1) remains unchanged.

Amended Bylaw 12.3.1.1 provides the exception and extends the authorized use of an agent for men’s hockey as follows:

12.3.1.1 Exception — Baseball and Men’s Ice Hockey — Prior to Full-Time Collegiate Enrollment.

In baseball and men’s ice hockey, prior to full-time collegiate enrollment, an individual who is drafted by a professional baseball or men’s ice hockey team may be represented by an agent or attorney during contract negotiations. The individual may not receive benefits (other than representation) from the agent or attorney and must pay the going rate for the representation. If the individual does not sign a contract with the professional team, the agreement for representation with the agent or attorney must be terminated prior to full-time collegiate enrollment.

Despite this small step, the NCAA still fails to address how similarly situated college baseball players and hockey players can receive advice from an agent on a possible professional contract while retaining their college eligibility.

The NCAA bars any college baseball or men’s hockey player with remaining eligibility from having the benefit of an agent; instead, it requires them to rely upon the current “advisor” system.

Such student-athletes may hire an “advisor” to receive the advice and counsel of a lawyer concerning a professional sports contract. The NCAA has said receiving such advice is not considered to be entering into an agent contract. Unfortunately, the effectiveness of the “advisor” has been curtailed by NCAA Bylaw 12.3.2.1, which states, “[A] lawyer may not be present during discussions of a contract offer with a professional organization or have direct contact (i.e., in person, by telephone or by mail) with a professional sports organization on behalf of the individual. A lawyer’s presence during such discussions is considered representation by an agent.

These confusing and inconsistent rules have been challenged repeatedly. For example, Oklahoma State University (OSU) pitcher Andy Oliver decided to attend OSU after he was drafted by the Minnesota Twins after his senior year in high school. Near the end of his sophomore season, the NCAA ruled Oliver to be ineligible indefinitely to participate as a college athlete based upon his violation of the NCAA’s no-agent rule because of assistance he received from his representatives while considering the Twins offer.

Oliver sued the NCAA, seeking restoration of his collegiate eligibility and compensatory and punitive damages. The court granted Oliver a temporary restraining order and immediately reinstated his eligibility. In addition, the court held the NCAA was prohibited from dictating to an attorney where, what, how, or when he or she can and should represent his or her client. The ruling essentially abolished Bylaw 12.3.2.1. However, the court’s order was vacated when the NCAA paid Oliver $750,000 to settle his claims to preserve its limitation on an athlete’s ability to secure proper and adequate counsel.

The NCAA’s continued failure to address the no-agent rule at the collegiate level has created an unwarranted and uneven playing field placing draft eligible collegiate baseball and hockey players at a clear disadvantage as they address the decision of their potential professional futures.

NCAA Head Coaches Beware: You are ‘Presumptively’ Responsible for Acts of Assistant Coaches, Administrators

A recent news report detailed alleged large-scale corruption throughout men’s college basketball. In the report, dozens of student-athletes allegedly received impermissible payments for their commitments to enroll at various Division I universities or payments while they were attending those universities. Last October, 10 individuals, including four NCAA Division I men’s basketball coaches, were charged for their role in an alleged bribery scheme by the U.S. District Attorney for the Southern District of New York. What do these all of these developments mean for the head coaches under NCAA rules?

NCAA Bylaw 11.1.1, “Head Coach Responsibility,” imposes a presumption of head coach accountability for impermissible acts committed by assistant coaches and administrators within their program.

NCAA enforcement’s emphasis in charging Head Coach Responsibility violations is evident, as 13 violations were alleged against coaches in 2017.

Bylaw 11.1.1 states:

“[A]n institution’s head coach is presumed to be responsible for the actions of all assistant coaches and administrators who report, directly or indirectly, to the head coach. An institution’s head coach shall promote an atmosphere of compliance within his or her program and shall monitor the activities of all institutional staff members involved with the program who report, directly or indirectly, to the coach.”

The penalties associated with Head Coach Responsibility violations are severe.

Under Bylaw 11.1.1.1, a head coach can be suspended for up to an entire season for Level I violations and up to half a season for Level II violations. The length of the suspension depends on “the severity of the violation(s) committed by his or her staff and/or the coach himself/herself.”

Plausible deniability is a poor strategy to rebut Head Coach Responsibility allegations. The “I didn’t know it was going on” excuse will do little to rebut the presumption of accountability. Instead, head coaches must rely upon a three-prong strategy: A demonstration that the coach adequately monitored the activities of employees under their supervision, actively engaged in rules education activities with employees under their supervision, and actively communicated compliance concerns and reported information that could constitute a NCAA compliance issue.

The NCAA Appeals Committee has  identified specific factors that, if shown by the head coach as part of his efforts to rebut the presumption, can provide an effective defense, and insulation from discipline, to the coach’s alleged failure to create an atmosphere of compliance.

Examples of these factors include:

  • Shared responsibility of compliance with the program and compliance staff, establishment of clear expectations for reporting actual and potential violations, and independent inquiry by compliance staff into issues or potential issues;
  • Evidence of understanding within the program that ultimate responsibility rests with the head coach and violations by staff will result in punishment for the head coach;
  • Written policies for issues involving elite athletes;
  • Active participation by the head coach in uncovering compliance problems and evaluating evidence of potential violations;
  • Actively soliciting feedback to determine if compliance systems are functioning properly;
  • Avoiding conflicts between program success and compliance efforts;
  • Timely personal initiative by the head coach for any violations or potential violations, including staff conversations about future and current student-athletes;
  • Whistleblower protection for staffers who report violations or potential violations;
  • Written evidence of consistent continuing education of all persons in the program as to compliance rules; and
  • Regular consultation with compliance staff, and asking before acting in ambiguous situations. The guidelines set out the following steps: First, enforcement will consider factors related to the coaches’ education, monitoring, and communication efforts in deciding whether an 11.1.1 violation exists, and the severity of the violation. Second, the head coach will have the opportunity to present information to the Committee on Infractions panel demonstrating that the coach satisfied these three areas of obligations. Finally, the Committee on Infractions Hearing Panel will consider NCAA enforcement’s allegation and the coach’s rebuttal in making its determination as to whether Bylaw 11.1.1 was violated and what the appropriate classification of the penalty should be.

On February 13, NCAA enforcement released guidelines clarifying that enforcement’s decision calculus to alleged Head Coach Responsibility violations is made on a “case-by-case” basis.

The guidelines set out the following steps:

First, enforcement will consider factors related to the coaches’ education, monitoring, and communication efforts in deciding whether an 11.1.1 violation exists, and the severity of the violation.

Second, the head coach will have the opportunity to present information to the Committee on Infractions panel demonstrating that the coach satisfied these three areas of obligations.

Finally, the Committee on Infractions Hearing Panel will consider NCAA enforcement’s allegation and the coach’s rebuttal in making its determination as to whether Bylaw 11.1.1 was violated and what the appropriate classification of the penalty should be.

Takeaway: Head coaches will need to commit significant time to not only engaging in the three areas of presumption rebuttal, but also documenting and filing those efforts. It is strongly encouraged that all Division I Head Coaches begin to coordinate the creation of a filing system documenting their efforts, if they have not already

New Labor Board General Counsel Rescinds Guidance Declaring Student-Athletes ‘Employees’

One of the first actions of new National Labor Relations Board General Counsel Peter Robb was to rescind guidance that college football players at private universities are employees under the National Labor Relations Act.

Robb’s Memorandum GC 18-02, which created a mandatory Division of Advice review of many Board decisions from the Obama Administration (and rescinded many previous NLRB General Counsel memorandums), rescinded Memorandum GC 17-01, “General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context”.

GC 17-01 stated that college football players at private universities are employees under the Act, and, therefore, they are entitled to seek pay for their contributions and to request improved working conditions.

In GC 17-01, former NLRB General Counsel Robert F. Griffin determined that scholarship football players at private colleges, such as Stanford, Notre Dame, University of Southern California, and Northwestern, have employment rights and are protected by the law should they seek protection against unfair labor practices, seek to bargain for a safer work environment, or request pay. Scholarship FBS athletes at private institutions, Griffin wrote, “clearly satisfy the broad definition of employee and the common-law test.” Griffin explained that the athletes, like employees, work full-time hours during the regular season, receive “significant compensation” in exchange for their work, and can be “fired” from the team for poor performance or other reasons. GC 17-01 did not carry the force of law or give players at private colleges the right to unionize or collectively bargain. Therefore, its impact was minimal. However, it provided positive legal substance to the belief that student-athletes are university employees under the labor laws, and it could have lent support to an NLRB determination that student-athletes, in fact, were employees.

Robb’s reversal halts administrative momentum toward the declaration of student-athletes as employees of the universities they attend.

Further, the rescission should quell any remaining notion that the NLRB, as currently composed, will grant student-athletes the right to collectively bargain or the right to file unfair labor practice charges, effectively intercepting the legal Hail Mary thrown by student-athletes in their attempts to organize.

 

 

Can NFL Players be Fired, Disciplined for Protesting During National Anthem?

President Donald Trump has suggested that the National Football League’s television ratings decline was caused by “fans seeing those people (players) taking the knee when they’re playing our great national anthem.” Trump has urged fans to “leave the stadium” when players kneel during the national anthem and suggested that NFL team owners fire players who kneel.

What, if any, discipline can NFL owners hand out to their players for kneeling during the national anthem?

Currently, the possibility of potential terminations or discipline seems remote. Owners, players, and coaches have responded uniformly to Trump’s comments: More than 150 players, coaches, and owners participated in a showing of defiance to protest against the President’s comments. The protesters either locked arms, knelt, or raised fists in silent protest and a rare showing of unity between labor and management.

Despite a long history of public, verbal sparring over numerous labor issues, even NFLPA Executive Director DeMaurice Smith and NFL Commissioner Roger Goodell gave separate, but similar, statements condemning the President’s comments. Smith tweeted that the NFLPA will “never back down when it comes to protecting the constitutional rights of our players as citizens…” and Goodell called the comments “divisive” and “demonstrating an unfortunate lack of respect for the NFL, our great game and all of our players….”

Nonetheless, many wonder what a team can do to discipline a player and what is the likelihood that such discipline would be upheld.

The relationship between NFL players and their respective owners and team are governed by an individual player contract and a collective bargaining agreement between the NFL and the NFLPA. These contracts contain numerous provisions concerning the rights of the League and its owners and the rights of the players.

The standard NFL player contract contains specific language that could empower an owner to act.

For example, paragraph 2, covering employment and services, states that the player agrees to “conduct himself on and off the field with appropriate recognition of the fact that the success of professional football depends largely on public respect for and approval of those associated with the game.” Paragraph 11, on player “skill, performance and conduct” also could be the basis for termination. It states that a team can terminate a player’s contract if the player “has engaged in personal conduct reasonably judged by the Club to adversely affect or reflect on the Club.”

Should a team fire a player for expressing his opinion and engaging in the protest, the player likely would file a grievance pursuant to Article 43 of the collective bargaining agreement. Article 43 allows players to file grievances for any dispute arising from their contract that does not involve an injury. Moreover, it allows players to avoid the commissioner’s serving as the arbitrator and to have their grievance heard before a neutral arbitrator chosen by agreement of the NFL and the NFLPA.

The player’s legal right to challenge team or League discipline for engaging in a protest would not be limited to their collectively bargained rights.

They can pursue state or federal law remedies as well. For example, a player could pursue relief before federal agencies such as the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC).

Section 7 of the National Labor Relations Act (Act) protects the rights of non-union and union employees. It guarantees the rights of employees to act together and engage in other concerted activities for the purposes of collective bargaining or other mutual aid and protection. If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, Section 8(a)(1) of the Act makes it an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of these rights. The NLRB may process a charge filed by the NFLPA or an individual player against the employer and seek redress to address any act taken against the employee in violation of their rights, including reinstatement to their former position.

Similarly, the EEOC could offer protection against the termination or discipline of players for engaging in protests. The law protects employees against discrimination. Any player who is a member of a class of employees that the law protects (e.g., African American players) could argue that the discipline he received for protesting the national anthem was related to his race. In addition, state laws may protect employee rights to express their first amendment rights without potential reprisal from their employers.

Ultimately, owners and players must listen to and respect the fans. As players express their views and opinions and owners decide if and how they should react, the voice of the fan and their reaction to these protests ultimately will determine the next steps in this very visible and polarizing reaction to the President’s comments.

 

 

NLRB Finds Sports Team’s Electronic-Content Workers As Employees Eligible To Unionize

The National Labor Relations Board has found the individuals who produce electronic content for viewing during professional basketball games are employees, rather than independent contractors. Minnesota Timberwolves Basketball, LP, 365 NLRB No. 124 (2017). The Board reversed the decision of an NLRB regional director and reinstated a representation petition filed by the International Alliance of Theatrical Stage Employees.

The 2-1 Board majority held the employer failed in its burden of proving independent contractor status. The Board pointed out that “the crewmembers work for the Employer at times and locations determined and provided by the Employer, using tools, equipment, and supplies that, almost with exception, the Employer provides.” NLRB Chairman Philip Miscimarra dissented. As Miscimarra soon will be in the majority with two new NLRB members holding a pro-employer view, replacing the 2-1 pro-union bent of the current NLRB, the possibility that a similar case may be decided differently cannot be dismissed.

In this case, the crewmembers included camera operators, replay operators, engineers, computer operators, audio/tape operators, and other technical and utility workers. Sixteen crewmembers work each game. Crewmembers volunteer for a “roster” (51 names on the most current roster) and identify the games they are available to work. The employer assigns the roster crewmembers for each game and decides what position each will fill. The employer sets the start time of work, requires crewmembers to find a replacement if they cannot work as assigned, determines compensation, provides nearly all equipment, and scripts production work before the game. “Live calls” regarding specific assignments during games are made by a crewmember. Many of the crewmembers work season after season.

Under the National Labor Relations Act, independent contractor status is determined by common law agency criteria, with no one factor controlling. The NLRB also will consider whether the entrepreneurial endeavor of the putative independent contractor is real or theoretical.

The common law agency criteria include:

  • the extent of control by the employer over the individual’s work;
  • whether the individual is engaged in a business;
  • the degree of supervision by the employer over the work performed;
  • the skills required;
  • who provides necessary tools, equipment, and place of work;
  • duration of employment;
  • method of payment;
  • whether the work is part of the employer’s regular business;
  • whether the parties believe an independent contractor relationship exists; and
  • whether the individual operates an separate business.

The Board found that some factors favored employee status, while others were inconclusive; none were found to support independent contractor status. It explained, however, that “the Employer … exerts much more significant control than the Regional Director acknowledged over … [the crewmembers’] work and the circumstances under which it is performed.” It also noted that “the crewmembers enjoy neither a proprietary interest in their work nor a voice in any important business decisions.”

Since independent contractor cases are inherently fact-specific, employers who pay non-employees to perform services for the business should review the relationship against the common law agency standards to assess compliance with several employment law standards (beyond labor law).

Please contact a Jackson Lewis attorney with any questions.

LexBlog