California Bill Would Allow College Athletes to Keep Amateur Status While Securing Marketing Opportunities

By Gregg E. Clifton and Iciss R. Tillis on

The opportunity for college level student-athletes in California to take advantage of potential marketing opportunities while still maintaining their amateur status could soon become a reality.

A report from the National College Players Association and Drexel University Sports Management Program concluded that 82 percent of full-scholarship athletes who live on campus and 90 percent of full-scholarship athletes who live off campus live at or below the federal poverty level. Members of the California legislature reacted by introducing SB 206, which would allow student-athletes at all 24 public and private colleges and universities that participate in Division I to secure financial remuneration by being paid directly from private or commercial sources for the unique value of their name, image, or likeness while still performing as a student-athlete.

The proposed legislation expressly restricts the NCAA’s ability to prevent student-athletes from participating in any such marketing opportunities.

The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics from preventing student-athletes from earning compensation in connection with the use of the student-athlete’s name, image, or likeness. Specifically, any such compensation would not affect a student-athlete’s scholarship eligibility. “Public postsecondary educational institution” means any campus of the University of California, the California State University, or the California Community Colleges.

Commenting on SB 206, Senator Skinner stated, “For too long, college athletes have been exploited by a deeply unfair system. Universities and the NCAA make huge amounts of money from TV deals and corporate sponsorships of their teams.” She continued,

“Athletic talent has value, and college athletes deserve to share in that value. The Fair Pay to Play Act allows athletes to finally be compensated for their hard work — work that generates billions of dollars for their schools, corporate sponsors and media networks.”

The Act would not add any specific costs to university athletic budgets. In fact,

the proposed legislation is completely cost neutral to the higher education institutions.

Student-athletes would be able to use their unique position to secure financial rewards while still performing at an amateur level and assuming all of the risk of season-long or career ending injury. The bill’s co-sponsor, Sen. Steven Bradford added, “This is more than a sports issue. This is a civil rights issue about basic fairness. For decades, young athletes have been generating billions of dollars for their colleges, universities, and corporate sponsors, but many are not only enduring the daily challenges as collegiate athletes, they are also struggling just to get by financially. It is time to right this historic wrong.”

Jackson Lewis’ Collegiate and Professional Sports Practice Group is prepared to counsel teams and leagues on any of these issues. The Practice Group will continue to monitor this proposed legislation and similar legislation that has been introduced around the country. Please feel free to reach out to any member of the Practice Group with questions.

The ESports Industry-The Top Ten Labor and Employment Law Issues

By Gregg E. Clifton and Khuong B. Nguyen on

While Major League Baseball and the NFL often speak of growing revenue, Esports has enjoyed a meteoric rise in popularity and an accompanying increase in revenue streams of its own. Buoyed by investments into Esports organizations from international stars like Michael Jordan and Drake, and the increasing popularity of Esports stars like Tyler “Ninja” Blevins and his gaming streams to millions of fans on Twitch, 2018 was a record-breaking year for the Esports industry. As revenue grew an estimated $900 million, estimates show that the industry that got its start in a dimly lit home basement could grow to a whopping $1.7 billion by 2021.

However, as with any industry that is experiencing unprecedented growth, numerous legal issues and concerns accompany that growth. As an emerging sport, Esports lacks formal organization amongst the many games within which players compete. Only recently have leagues developed, such as the Overwatch League and even then, teams are unaware or unsure of the many developing legal issues. Specifically, labor and employment issues are plentiful when it comes to players, their teams, the team owners, and the multitude of other parties that are involved. The following list is just a snapshot of the legal issues that the Esports industry faces in the coming years.

  1. FLSA
    • Are a team’s players independent contractors or employees covered by the FLSA? Team owners must be aware that the potential relationship with players must be analyzed pursuant to current legal tests such as the “economic realities” test to make such a determination.
  2. Child Labor
    • It is not uncommon for top-tier competitors to be below the age of 18 in the Esports industry. Federal and state child labor laws must be considered as they govern the employment of minors.
  3. Title VII
    • Employment anti-discrimination laws, such as Title VII and its state counterparts, bar discrimination based on race, color, religion, sex, national origin, and other characteristics.
  4. NLRA
    • The NLRA guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Recently, Riot Games launched a League of Legends North American League Championship Series players association to give its professional players a voice in negotiations between players, teams, and Riot Games. While the association is not yet a union under the NLRA, the NLRA will govern should real talks of unionization continue to grow. All Esports team owners must become familiar with the legal rights that they possess as well as the legal rights of the professional players.
  5. Gambling
    • By 2020, the total value of money/items wagered around major Esports titles is projected to be valued at $12.9 billion. While there is currently a lack of regulation with respect to Esports match fixing, some Esports stakeholders have come together to deal with issues of common interest such as match fixing and to protect the integrity of the sport.
  6. Player Contracts
    • As with all major professional sports, increased revenue generation will lead to increased focus on contract negotiations and the potential terms contained on those agreements. Players and team owners should be aware of and take into account federal and state employment law issues when drafting player contracts.
  7. Team Handbooks and Policies
    • Policies, procedures, and standards for the team workplace should set expectations and comply with appropriate league codes of conduct and competition.
  8. Immigration Issues
    • Many Esports professionals are not based in the US. Team owners recruiting foreign players onto their teams must comply with all U.S. immigration laws, such as securing the appropriate visa for each foreign player.
  9. Athlete-Agent Laws and Regulations 
    • Agents and organizations representing athletic talent must navigate a broad array of federal and state laws and regulations governing the sports industry and team owners will need to be able to navigate the multi-tiered regulatory environment.
  10. Team Doping
    • While Esports players aren’t injecting themselves with steroids, players have admitted to abusing amphetamines such as Adderall when competing in tournaments in order to improve their reflexes and concentration. The Electronic Sports League currently conducts random drug-testing at their events. Teams that want to enforce a drug testing policy for their players need to be cautious of the Americans with Disabilities Act, which has recognized Attention Deficit Disorder under the act.

Jackson Lewis’ Collegiate and Professional Sports Practice Group is prepared to counsel teams and leagues on any of these issues. The Practice Group will continue to monitor the rapidly developing Esports industry and any regulations that may be implemented. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

State Legislators React to Proposed Federal Title IX Regulations with State Law Proposals

By Gregg E. Clifton, John G. Long, Susan D. Friedfel and Monica H. Kheterpal on

While colleges, universities and educational professionals await the Department of Education’s (DOE) proposed new Title IX regulations, which will dictate a revised process by which allegations of sexual misconduct must be handled, the state legislatures in Missouri and Arizona are currently considering legislation that would adopt many of Secretary DeVos’s anticipated regulatory modifications.

Click here to access the full article on this Title IX development.

Super Bowl Sunday Considerations Following the Murphy Decision?

By Gregg E. Clifton and Thomas Petriccione on

Millions of Americans will tune in on Sunday, February 3rd to the Super Bowl to watch one of the biggest sporting events of the year. This year’s game will again feature the New England Patriots, but it will be the first Super Bowl since the Supreme Court’s landmark case Murphy v. National Collegiate Athletic Assn., No. 16-476 (May 14, 2018), which struck down the federal ban on state-regulated sports wagering.

In that decision, the Supreme Court ruled that the Professional and Amateur Sports Protection Act (PASPA) (28 U.S.C. §3701 et seq.), which made it illegal for states to “authorize” a “lottery, sweepstakes, or other betting, gambling, or wagering scheme based … on one or more competitive games in which amateur or professional athletes participate” was illegal. The Court concluded that PASPA violated the 10th Amendment of the U.S. Constitution and formally removed the federal ban on sports betting.

The decision returned the power of individual states to legalize and regulate sports betting at the state level. The Court’s decision allowed states to enact their own gambling laws. Currently, eight states (Delaware, Mississippi, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia) have specific legislation authorizing some form of licensed and regulated sports gambling. In addition, New York and Arkansas have passed some form of gambling legislation. However, Murphy and the various state statutes passed have not given private citizens the right to begin conducting wagering pools.

While office camaraderie and positive working relationships may result from coworkers socializing over the game, employers may suffer lost productivity in the days leading up to and following the event. Employees may spend work time discussing the upcoming game and earlier playoff match-ups, as well as related statistics and player injuries. They may coordinate social events and discuss the game itself at work. Betting on the outcome (such as through workplace pools) also may occur in the office or plant.

While employers can maximize the game’s positive effects on workplace morale, they should think about the following:

Is Gambling Permitted at Work; Applicable Limitations?

Before deciding whether to sponsor or permit office pools, employers should examine their state law.

Even in the post-Murphy era, sports betting is still currently considered to be illegal in 42 states. With an increase to nearly $6 billion in wagers expected to be made on this year’s Super Bowl, only about 10% is expected to be made through the legal gambling options now available.

It is important for all employers to remember that gambling, including intra-office gambling, is generally illegal.

Some states, including Florida, have a statutory prohibition against gambling activities when “real money” changes hands. The Florida law specifically provides, “whoever sets up, promotes or plays at any game of chance … for the disposal of money or other thing of value … shall be guilty of a misdemeanor of the second degree,” Fla. Stat. Section 849.11. If employers conduct business in a state in which workplace gambling is potentially illegal, such as Florida, they should notify their employees that the gambling activity is expressly prohibited and that employees will be disciplined if they engage in such prohibited conduct on the job.

Despite this general restriction, some states make an exception for “informal” or “social gambling.”

While the definition varies, social gambling usually occurs in a strictly social context, where the persons involved know each other beforehand and no profit is made. (The NFL’s copyright of the Super Bowl game prohibits third parties from charging admission to view the contest.) In most states that recognize this, betting among friends and colleagues would fall within the social-gambling exception. While office pools may be permitted in certain states under these circumstances, some state laws may limit how much prize money, if any, can be awarded. Gift certificates to restaurants and gym memberships may be safer prizes rather than the employer condoning the exchange of money in the workplace. Further, if there is a pool in the workplace, employers should ensure everyone understands that participation is completely voluntary, and that no negative action will be taken if an employee chooses not to participate. Once again, it is imperative that you check your state or local laws before authorizing any type of office gambling activity.

* * *

With thought and planning, the Super Bowl may be a way to creatively build morale and camaraderie in the workplace. However, as with any other part of employment relations, employers must keep legal considerations in mind. The Collegiate and Professional Sports Practice Group is available to discuss the potential effect of the game on your workplace.

 

New Legislation Proposed In The State of Washington Pushes For Student-Athlete Compensation In Defiance of NCAA Bylaws

By Gregg E. Clifton on

As colleges and universities and student athletes await the long anticipated decision from U.S. District Court Judge Claudia Wilken in Alston v. NCAA regarding whether scholarship limits imposed by the NCAA violate anti-trust laws, a bill introduced in the State of Washington could provide student athletes in the state with the opportunity to be paid by sponsors or companies seeking their endorsement while they are playing for a university or college in the state.

Washington State Representative Drew Stokesbary of Auburn, Washington has introduced House Bill 1084. The bill provides that every student enrolled at an institution of higher education within the State of Washington should have “an equal right” to earn compensation for services provided; to be paid for the use of his or her name, image and likeness, and to hire agents to represent the student’s interests.

The language contained in Representative Stokesbary’s proposed legislation continues that:

“students should not be compelled to choose between forfeiting these rights and participating in intercollegiate competitions”.

The bill would not authorize a state institution of higher education to make direct financial payments to student athletes. However, it would allow a current student athlete to receive financial payment for his appearance and the use of his name, image or likeness on behalf of a commercial enterprise or for the student athlete’s endorsement of a specific company, such as a clothing or shoe manufacturer. The only proposed restriction is that the compensation received by the student athlete must be in a manner consistent with the fair market value for their services, similar to how professional athletes are currently compensated.

Current NCAA bylaws prevent college student-athletes from receiving payments for such endorsements or hiring agents to negotiate those potential endorsement agreements. The proposed legislation would make it a violation of Washington state’s consumer protection laws to enforce any such NCAA rules against college athletes in Washington or to prohibit or suspend any athletic team from competing in an intercollegiate competition or otherwise penalizing a university because a student-athlete has received financial remuneration for their services.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the proposed legislation and provide updates on developments in this area. Please feel free to reach out to any member with questions.

 

 

 

New Proposed Title IX Regulations Raise Unique Institutional Concerns For Rights Of Accused

By Gregg E. Clifton and John G. Long on

As colleges and universities review the Department of Education’s proposed new Title IX regulations revising process by which allegations of sexual misconduct must be handled, they must consider the potential impact of what appears to be clearly greater protections for those accused of sexual misconduct, including student-athletes.

The proposed regulations will formally replace guidance and interpretation of Title IX from the Obama Administration, which had called for strict enforcement and interpretation of the law and recommended specific procedural actions for colleges and universities (including use of the minimal “preponderance of evidence” standard of proof when assessing sexual assault claims).

Unlike other students, a sexual assault allegation against a student-athlete often results in immediate suspension from the team. Beyond the impact that a suspension has on the student-athlete’s eligibility and the competitiveness of the institution’s sports program, such suspensions attract negative publicity for both the student-athlete and institution. Student-athletes, like other students accused of sexual misconduct, have experienced due process limitations under the current process, particularly with respect to evidentiary restrictions. The proposed Title IX regulations would appear to improve due process conditions for all students who have been accused of violations under their institution’s sexual misconduct policies.

After rescinding the Obama Administration’s Title IX guidance in 2017, Department of Education Secretary Betsy DeVos said of the 149-page document containing the long-awaited new regulations,

“We can, and must, condemn sexual violence and punish those who perpetrate it, while ensuring a fair grievance process. Those are not mutually exclusive ideas.” Devos continued, “… [E]very student accused of sexual misconduct must know that guilt is not predetermined.”

ESPN’s recent review of information received from 32 of the 65 schools that make up the Power 5 conferences concluded that student-athletes are three times more likely than other students to be accused of sexual misconduct. Student-athletes represented 6.3% of the accused in Title IX complaints, while athletes make up only 1.7% of total student undergraduate enrollment.

In response to discipline imposed against them, many accused student-athletes have filed lawsuits against their universities and individual administrators in the sexual misconduct process.

Since 2011, more than 200 lawsuits have been filed by accused students against colleges and universities claiming due process violations during the course of Title IX investigations and disciplinary proceedings.

For many, access to the civil courts offers a last chance for justice and a legal option to help clear their names. Lawsuits brought by the accused have utilized numerous legal theories to challenge disciplinary actions, including breach of contract, violations of Title IX, gender discrimination, defamation, negligent infliction of emotional distress, and other relevant state law claims.

The DOE’s proposed regulations will create a more legalized sexual misconduct process on campus. The DOE hopes to reduce the propensity for litigation following the institution’s hearing process. Decreasing governmental investigatory resource burden and saving institutions money also may result. According to the DOE, the new regulations will decrease substantially the number of investigations into complaints of sexual misconduct and save institutions millions over the next decade.

Moreover, the proposed regulations would provide institutions the autonomy to decide how sexual misconduct cases are adjudicated. To this end, the proposed changes include:

  • The ability for universities to chose the applicable evidentiary standard (either “preponderance of the evidence” or “clear and convincing evidence”) in determining responsibility for the misconduct.
  • The ability for institutions to utilize an informal resolution process to resolve sexual misconduct allegations, if the parties agree.
  • The requirement that schools hold live hearings.
  • Institutions are not permitted to use any individual who was involved in the investigation of an alleged sexual assault to subsequently serve as a fact-finder in any sexual assault hearing that follows the investigation. All hearings must be conducted by a neutral trier of fact and conducted with an initial presumption of innocence.
  • Accusers and students accused of committing sexual assault must be given the opportunity to cross-examine each other and other potential witnesses through an adviser or attorney, and universities would not be able to limit this right. If a party or witness refuses to submit to cross-examination, that person’s testimony could not be relied on by the fact-finder.

Both parties must have equal access to all evidence the school’s designated investigator has gathered, and both parties retain the ability to appeal decisions.

Proponents and critics of the regulations have 60 days (until January 15, 2019) to submit comments before the regulations go into effect.

It is anticipated at this time that the final regulations will mirror the proposed regulations. While the 60-day period is ongoing, colleges and universities are afforded the opportunity to carefully review their current sexual misconduct policies and practices to determine what changes they will implement to comply with the anticipated regulations.

While the regulations’ goal is to equalize accusers and the accused by providing additional rights to benefit accused individuals,

many critics have expressed concern that the regulations go too far, and that institutional sexual misconduct processes may harm accusers’ rights.

For example, critics say the new cross-examination requirement will force accusers to face questioning that could influence the victims’ willingness to report sexual assault. They also say the proposed regulations provide the accused with more power to intimidate and hurt victims.

Jackson Lewis’ Collegiate and Professional Sports Practice Group and its Higher Education Industry Group are well-versed in Title IX issues and will continue to monitor and provide updates on developments in this area. Please feel free to reach out to any member with questions.

 

NLRB Avoids Question Of Whether UFC Fighters Are Union Eligible Employees…For Now!!!!

By Gregg E. Clifton on

National Labor Relations Board (“NLRB”) Region 4 Regional Director Dennis Walsh recently dismissed Section 8(a)(1) and 8(a)(3) unfair labor practice charges filed by mixed martial arts (MMA) fighter Leslie Smith against ZUFFA, LLC d/b/a Ultimate Fighting Championship (‘UFC”) alleging that her contract to fight was not renewed in retaliation for her union organizing efforts and participation in Section 7 protected concerted activities. Mr. Walsh’s decision to dismiss Ms. Smith’s unfair labor practice allegations allowed the NLRB to successfully avoid addressing the issue of whether UFC fighters are employees eligible for potential unionization.

Relying upon the NLRB’s established legal precedent, Mr. Walsh concluded that Ms. Smith was not the victim of unlawful discrimination in violation of the National Labor Relations Act.

The Regional Director concluded that the evidence provided to him could not establish that her union or protected activity was the “motivating factor” in the UFC’s failure to renew her contract as required by Wright Line, 251 NLRB 1083, 1089 (1980).

In fact, Mr. Walsh concluded that since Ms. Smith’s contract with the UFC had expired by its terms, the parties failure to reach an understanding on a new agreement was not an adverse employment action.

Mr. Walsh formally rejected Ms. Smith contention that the UFC had failed to renew her contract because she publically engaged in efforts to unionize MMA fighters since 2016 and he asserted that the NLRB’s proper role is not to second guess a business decision not to continue an agreement in the absence of union animus.

As a result of the Regional Director’s rejection of Ms. Smith allegations and conclusion that she had not been the victim of unlawful discrimination, he decided that it was unnecessary to offer an opinion on whether Ms. Smith was actually a statutory employee eligible to unionize or an independent contractor.

Despite the dismissal of her unfair labor practice charges, Ms. Smith intends to continue her fight challenging the decision and prove that she was not rehired because of her union activity and that all MMA fighters should be properly classified as employees and eligible to unionize. Ms. Smith has filed a formal appeal of the Regional Director’s dismissal of her charges with the NLRB’s Office of Appeals.

In her appeal, Ms. Smith has requested that Region 4 reconsider the dismissal of the unfair labor practice charges and/or conduct a further investigation based upon the facts and evidence set forth in Ms. Smith’s declaration accompanying her appeal filing.

Specifically, Ms. Smith claims that Mr. Walsh’s decision to dismiss her charge was based on “numerous factual misstatements and discrepancies”,

including that she would not fight unless the UFC paid her additional money and extended her contract for two additional fights. In addition, Ms. Smith’s declaration in support of the appeal alleges that the NLRB failed to consider that the UFC had a bias and hostility against unions based upon a former UFC commentator’s express statement to her to “avoid” talking about unionization “if I wanted to continue fighting in the UFC”.

The question of whether UFC fighters are employees eligible for unionization remains an open question for now….will Ms. Smith’s appeal force the NLRB to reach a determination on this issue. Stay tuned…we may soon have a decision.

‘One and Done’ May Soon Be DONE!

By Gregg E. Clifton on

The controversial NBA rule that keeps basketball players from beginning their professional careers until they’ve completed one year of college play may soon be history.

The NBA has formally announced that “elite” 18-year-old basketball players will be able to move forward with their professional careers beginning with the 2019-20 season, skipping the current mandate that they play one year of college basketball before being eligible to be selected in the NBA draft.

Beginning 2019, selected “elite” players who turn 18 by September 15th prior to the start of the season would become eligible to sign a “select contract” with the G League, the NBA’s player development league. They would play for a year and earn $125,000 before entering the NBA draft, in lieu of playing at the collegiate level for one year without earning any income.

Future NBA Hall of Famer Moses Malone was the first to go directly from high school to play in the professional ranks. In 1974, Malone become a star in the American Basketball Association. Two years later, Darryl Dawkins and Bill Willoughby went straight from high school courts to the NBA. Then, after a 20-year hiatus, the NBA experienced a resurgence of high school players going directly to the NBA with such future stars as Kevin Garnett, Kobe Bryant, and LeBron James.

In 2005, after much criticism over the players’ physical and mental preparedness and many failed efforts by high school players in the NBA, the league and the players association instituted a minimum age of 19 for eligibility to play in the league. David Stern, the commissioner at the time, had proposed a league entry age limit of 20, but agreed to 19 during collective bargaining negotiations.

The most recent collective bargaining agreement, covering the 2017-18 season through the 2023-24 season, states:

-All drafted players must be at least 19 years old during the calendar year of the draft. TO determine whether a player is eligible for a given year’s draft, subtract 19 from the year of the draft. If the player was born during or before that year, he is eligible.

-In addition, any player who is not an “international player” as defined in the collective bargaining agreement, must be at least one year removed from the graduation of his high school class. The one year out of high school requirement is in addition to the age requirement.

The “one and done” rule has created a group of athletes who essentially are forced to delay their professional careers while electing to attend one year of college. In fact, eight of the top nine picks in the latest summer’s draft spent only one year in college.

The league has promised that players would receive training in basketball as well as in “life skills” as part of the G League program. It didn’t disclose how many players would be invited into the program, but the G League said it would be “a very specific group of elite players.”

In addition to receiving compensation for their basketball skills and performance,

these “elite” players would be able to hire agents and accept sponsorship money for shoe and apparel endorsements, which they are currently barred from receiving as amateurs playing in college.

Commenting on the announcement, NCAA president Mark Emmert stated, “We appreciate the NBA’s decision to provide additional opportunities for those who would like to pursue their dream of playing professionally …. Obtaining a college education continues to provide unmatched preparation for success in life for the majority of student-athletes and remains an excellent path to professional sports for many. However, this change provides another option for those who would prefer not to attend college but want to directly pursue professional basketball.”

The formal end to the one and done rule appears imminent. NBA Commissioner Adam Silver is behind the move and current negotiations between the NBA and its players association anticipate elimination during the current collective bargaining agreement and before the 2022 draft.

NCAA Show-Cause Penalties Violate State Law and Are Illegal, California Judge Rules

By Gregg E. Clifton on

One of the NCAA’s strongest penalties has been declared illegal in California.

California Superior Court Judge Frederick Shaller issued a final decision finding NCAA “show-cause” penalties to be a violation of California state law.

Arising from a lawsuit filed more than seven years ago by former USC assistant football coach Todd McNair, Judge Shaller, confirming a tentative decision he had reached in August,

concluded the show-cause penalty provision of the NCAA bylaws is illegal because it constitutes an “unlawful restraint” on McNair’s ability to pursue a lawful profession.

In his eight-page opinion, Judge Shaller explained, “McNair’s ability to practice his profession as a college football coach has been restricted, if not preempted, not only in Los Angeles, but in every state in the country.”

McNair had filed a state court action against the NCAA following the NCAA’s extra-benefit investigation focused on former USC star running back, and Heisman Trophy winner, Reggie Bush. At the conclusion of its 2010 investigation, the NCAA concluded McNair “knew or should have known” that Bush was engaged in violations with a potential agent while still playing at USC, and McNair had “provided false and misleading information to the enforcement staff.” The NCAA then issued McNair a one-year show-cause penalty and a one-year ban preventing McNair from recruiting student-athletes to USC or any other school. As a result of the NCAA penalty, McNair’s contract at USC was not renewed and he has not coached at the college level since the penalty was levied against him.

McNair had the defamation count of his lawsuit against the NCAA rejected in May after a jury voted 9-3 in favor of the NCAA following a three-week trial.

Judge Schaller’s final decision concluding the NCAA’s show-cause penalty is unlawful was issued after objections were offered by the NCAA in response to the judge’s tentative decision in August.

The NCAA offered written declarations from Pac-12 Commissioner Larry Scott and Big West Conference Commissioner Dennis Farrell in support of its opposition.

Farrell’s declaration expressed concern that his conference schools would be unable to rely on the NCAA’s disciplinary mechanisms if the show-cause penalty was not legal.

Scott asserted, “If California law prevents institutions in that state from honoring such commitments, it is hard to see how the Pac-12’s Member Universities in California could continue to meet the requirements of NCAA membership.” He continued, “[T]he Court’s tentative ruling would place at risk the competitive and scholarship opportunities that flow from NCAA participation for the Pac-12 California Member Universities.”

Judge Schaller rejected the opinions expressed in both declarations, stating that they are “completely speculative and irrelevant to the issue….[T}he proposed testimony of Scott and Farrell is deemed inadmissible and is not considered.”

Following issuance of the court’s opinion, the NCAA stated, “The NCAA disagrees with the court’s ruling, which is wrong as a matter of law….We will explore all avenues for relief to ensure that NCAA member schools in California can continue to abide by the same rules as the rest of the NCAA’s membership.”

While the Commission on College Basketball recently recommended that the NCAA consider potential “lifetime” bans as part of the show-cause penalty process, Judge Shaller’s ruling means that the NCAA has lost the benefit of their disciplinary muscle to deter bylaw violations in California. Will other states follow and conclude similarly?

 

Dallas Mavericks Investigation Report Recommends Women in Leadership and Anonymous Workplace Climate Surveys to Combat Sexual Harassment

By David R. Jimenez and Alyssa M. Toft on

Following a February 2018 Sports Illustrated article regarding alleged sexual harassment and misconduct within Dallas Basketball Limited, the Dallas Mavericks basketball organization (“Mavericks”), the Mavericks commissioned an independent investigation into the claims.  The investigators, comprised of two outside law firms, interviewed 215 witnesses and analyzed 1.6 million documents.  The investigation report was publicly released on September 19, 2018.

The lengthy report details a number of allegations regarding sexual harassment or other misconduct by the former CEO, the former Human Resources Director, and other employees.  Allegations ranged from inappropriate touching and sexual advances, to watching pornography at work, to domestic violence.  The report also highlights concerns regarding management’s failure to appropriately address employee complaints and stated that “there were no internal controls or governance structures in place[.]”

One of the most interesting components of the report is the remedial recommendations made by the investigators.

The investigators’ very first recommendation was to increase the number of female employees, including those in leadership positions, within the company.  The report observed that “Research has shown that the single most important thing that companies can do to reduce sexual harassment and gender discrimination in the workplace is to employ, and promote, more women.  Having women in executive leadership positions is particularly critical.”  The report noted that when the investigation began, there were no female executives.  Shortly thereafter, Cynthia Marshall was hired as President and CEO, and there are now eight women in executive positions (out of eighteen total).

The investigators also recommended that the Mavericks “[c]onduct anonymous workplace culture and sexual harassment climate surveys on a regular basis” to identify problems.  Further, the report illustrated instances where management failed to make important personnel decisions, and indicated the company’s culture “lacked any hierarchy and consisted of blurred lines of decision-making on some issues.”  The report stated that “Numerous studies have concluded that unstructured decision-making leads to increased risk and a higher prevalence of sexual harassment in the workplace, as policies are less likely to be enforced strongly and promptly, and disciplinary consequences become less clear and uniformly applied.”  Thus, the investigators recommended the Mavericks establish clearly-defined decision-making roles.

The report further recommended that the Mavericks expand its Human Resources department and hire a full-time General Counsel – both of which have now been done.  Of course, the investigators also recommended robust sexual harassment training and emphasized the importance of including leadership in these trainings.

The investigators’ recommendations demonstrate that traditional remedies, such as conducting trainings and redefining policies, may be insufficient, particularly when actions of the organization belie those policies and training efforts.  Instead, employers should address sexual harassment through more nuanced approaches aimed at creating a culture of inclusivity and trust in organizational leadership.

 

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