Category: Sports

Love and Basketball … and Romantic Workplace Relationships? Key Takeaways for Employers from the Boston Celtics’ Recent Suspension of its Head Coach

The Boston Celtics recently suspended its head coach Ime Udoka for the entire 2022-2023 season and although the team did not disclose whether the suspension will be paid or unpaid, it noted that he will be subject to a “significant financial penalty” as a result of multiple unspecified violations of the organization’s policies stemming from Udoka’s conduct towards a female member of the organization.

Originally believed to have been a consensual relationship, it was subsequently reported that the female staff member accused Udoka of making unwanted advances, including inappropriate comments towards the staff member.  In response, the Celtics organization acted quickly and launched an internal investigation, which found “a volume of violations” of various policies.  Please note, it is unknown as to whether the Celtics had a consensual relationship policy in place for employees.

The Celtics scandal comes at a time when workplace harassment claims (as reported by the EEOC) are on the rise, yet consensual office romantic relationships remain fairly common.  While most employees do not want their employers placing limits on whom they may seek as a romantic partner, from an employer’s viewpoint, the risks of such romances are clear, as they can easily cause real issues in the workplace: interoffice gossip, lack of productivity, reduced moral, allegations of favoritism, or worse, claims of sexual harassment.

Fortunately, employers have several options available to minimize risk. Employers can rely on various types of anti-fraternization policies (also known as workplace romance or consensual relationship policies) and/or love contracts.  Separate, but related, employers should also implement robust anti-harassment policies and training for all employees (including management).

Relationship Policies

Some employers choose to implement a policy banning all romantic relationships between employees regardless of position or authority.  These policies discourage personal and romantic workplace relationships and threaten discipline against employees who violate the policy. Other employers opt for a more flexible policy, which only prohibits romantic relationships where one individual has the ability to affect the terms and conditions of the other’s employment, including but not limited to, compensation, assignments, and promotions. This latter policy is more common as it is often less intrusive and aimed at preventing favoritism or claims of sexual harassment or retaliation.

Regardless of the policy used, most employers also include a disclosure requirement, which then allows the employer to determine the best course of action forward (e.g. eliminating the reporting relationship)..

Further still, some employers, in addition to their relationship policy, have used “love contracts” that couples sign to confirm their consensual relationship status, affirm their awareness of the company’s sexual-harassment and workplace conduct policies and other expectations related to conducting themselves in the workplace, indicate that they understand the consequences if they fall short of the company’s expectations.

Employer Actions After A Relationship Disclosure

Such policies and related documents allow employees to come forward as early as possible so employers can proactively address a situation.  For example, it allows employers to remove any supervisory oversight or doubt that such a relationship is consensual, while also setting expectations with both employees about their conduct in the workplace during the relationship, and if and after the relationship ends.  As part of this expectation setting discussion, even in the absence of a reporting relationship, employers should make sure to provide a copy of its anti-harassment policy to the dating employees and have them reaffirm they will comply with its terms and conditions.  Employers should also confirm with each employee that they will immediately disclose when the relationship ends or is otherwise no longer consensual.

Anti-Harassment Policies & Training

Ultimately, and regardless of what policy an employer adopts, all employers should have a clear anti-harassment policy that, among other things, defines and clearly prohibits sexual harassment and requires all employees to report sexual harassment, including any unwanted advances or comments.

Such policies should include a complaint procedure that is readily accessible to employees and provides multiple avenues for raising complaints.  It should confirm that the company will promptly and thoroughly investigate all complaints and will not retaliate against any individual who reports or participates in an investigation of harassment (including sexual harassment).

It is crucial that employers think about responding in a fashion similar to the Celtics’ in promptly investigating and addressing alleged misconduct.  For example, the Celtics quickly engaged independent outside counsel to conduct a thorough investigation, which positioned the Celtics well to determine its appropriate next steps.  Critically, the Celtics did not appear to allow the employee’s status within the organization to interfere or impact its decision to enforce its policies and impose serious penalties.  By following the Celtics’ lead, employers can, among other things, create an environment where employees feel safe to complain and further eliminate the possibility of misconduct in the workplace, while also enhancing any legal defense in the event a lawsuit follows.

Having written policies is key, but it is equally important that employees, particularly supervisors or managers, are thoroughly trained on how to recognize potentially problematic situations, including when employees are dating, and how to respond to and further report potential policy violations.  Some jurisdictions even make training a statutory requirement.

Key Takeaways for Employers

The reality is that romantic relationships in the workplace occur and those employers that are proactive in anticipating such relationships and responding to them when they occur will be best positioned to limit potential liability.  Employers should consider taking the following actions:

  • Adopting a consensual relationship policy that is best suited for the company;
  • Ensure the use of a robust anti-harassment policy;
  • Periodically conduct anti-harassment training; and
  • Be prepared to monitor and respond upon learning of a relationship between your employees.

Article By Delaney M. Busch of Mintz

For more labor and employment legal news, click here to visit the National Law Review.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Proposed Senate Bill Would Deny Deductions for NIL Contributions

On September 28, 2022, U.S. Senators Ben Cardin (D-Md.), a member of the Senate Finance Subcommittee on Taxation and Internal Revenue Service (IRS) Oversight, and John Thune (R-S.D.), ranking member of the Subcommittee on Taxation and IRS Oversight, introduced the Athlete Opportunity and Taxpayer Integrity Act, which seeks to deny charitable deductions for any contribution used by the donee to compensate college athletes for the use of their name, image, or likeness (“NIL”) by reason of their status as athletes.

One entity type that is impacted by the Athlete Opportunity and Taxpayer Integrity Act are “NIL collectives” that have been established as 501(c)(3) organizations.  These types of NIL collectives have been used to allow donors to make tax deductible contributions that are then used to fund NIL opportunities for college athletes, for example, by having a college athlete provide services to a separate charity in exchange for payment from the NIL collective.  A press release from Senator Cardin noted that “[s]uch activity is inconsistent with the intended purpose of the charitable tax deduction, and it forces taxpayers to subsidize the potential recruitment of – or payment to – college athletes based on their NIL status.”

Notably, the Opportunity and Taxpayer Integrity Act would only apply to charitable deductions.  A person engaged in a trade or business would still be able to deduct payments to college athletes for the use of their name, image, or likeness if such payments qualify as ordinary and necessary business expenses.

Although it is not clear at this time whether the Opportunity and Taxpayer Integrity Act will pass, it does indicate increased scrutiny over nonprofit NIL collectives and possibly other NIL arrangements.

Article By Richard T. Hewlett, Shawn A. Strand, and Jessica E. Visser of Varnum LLP

For more election law and legislative news, click here to visit the National Law Review.

© 2022 Varnum LLP

Names and Brand Names

A key aspect of trademarks has been at the forefront of both fiction and real-life sports news over the past few weeks: what makes a name a name and who can use a name as a trademark? While trademarks are commercial rights, trademark law also protects a person’s right to control their own identity, including well-known pseudonyms and nicknames.

Marvel’s She-Hulk: Attorney-at-Law is, like most TV shows about lawyers, often cavalier with how it represents the law, but when the question of the protagonist’s rights in her nom de guerre came up, it was more accurate than most courtroom dramas. Jen Walters (the civilian identity of the titular She-Hulk) discovers a “super-influencer” has launched a line of cosmetics under the SHE-HULK brand and based on that use, is claiming trademark rights in SHE-HULK, going so far as to sue Jen Walters for her use of the name She-Hulk. While much of the terminology is mangled, the show’s hearing on the issue reaches points that are relevant in the real world. First, does “She-Hulk” identify a living person? And second, would another’s use of SHE-HULK be “likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association” (as set forth in 15 U.S. Code § 1125) of that user and the person known to the public as SHE-HULK? It being a superhero show, Jen Walters ultimately vindicates her rights to the She-Hulk name and SHE-HULK Mark.

Circumstances in the real world are rarely as cut-and-dried. In a proceeding before the Trademark Trial and Appeal Board, NBA player Luka Doncic is attempting to reclaim the trademark rights in his own name from his ex-manager, his mother. Doncic, born in 1999, was a basketball star from his early teens. During his meteoric rise in European basketball, his mother, with his consent at the time, registered a design trademark (consisting mainly of his name) for goods and services including soaps, recorded basketball games, apparel, sports equipment, and promotional and educational services, starting with an application in the European Union in 2015 (when Doncic was 16) and filing in the U.S. in 2018 (when he was 19).

Doncic, as stated in his petition to cancel that U.S. Registration, has since withdrawn his consent to his mother’s use and registration of his name as a trademark. Instead, he has, through his own company, Luka99, Inc., applied to register a few marks including his own name, which have been refused registration because of the existing registration owned by his mother. To clear the way for his own registrations, he is seeking to cancel hers on the basis that (as in the fictional example above) her use or registration is likely to make consumers believe the goods and services offered with her authorization are associated with or endorsed by him, and because he has withdrawn his consent, her registrations are no longer permitted to remain on the register.

As Doncic was a minor when he gave consent, he has a good chance of regaining control of his name. Not everyone is so lucky, so you should be especially careful when entering any agreement that allows someone to use your name as a trademark.

Article By David H. Siegel of Norris McLaughlin P.A.

For more intellectual property legal news, click here to visit the National Law Review.

©2022 Norris McLaughlin P.A., All Rights Reserved

The Cost of Bicycle Accidents: Why Bike Safety Pays Off

Along with the COVID-19 pandemic’s stay-at-home orders and a worldwide pause on travel plans, 2020 marked the onset of another phenomenon: a boom in bicycle riding. Bicycles gave people a sense of exploration and adventure during this difficult time.

This rise in cyclists comes with some sobering statistics, including a 16% rise in preventable deaths and a 5% increase in non-fatal injuries. Of the 1,260 bicyclist deaths reported in 2020, 806 of those directly involved motor vehicles. These injuries come at a significant expense: the over 13,000 bicycle injuries each year cost more than $23 billion in the United States.

But no one wants to experience a bicycle accident or the long-term consequences of one. Here’s what you need to know about bicycle safety to protect you or your loved ones while exploring the world on two wheels.

Bike accident risk factors

While the rise in bike accidents and their associated medical costs is primarily due to the increased numbers of bicyclists, there are risk factors that can affect specific individuals more than others. Common bike accident risk factors include:

Age

While adolescents, teens, and young adults make up nearly one-third of all cycling injuries treated in emergency departments, bicycle death rates are highest in adults between the ages of 55-69.

Sex

Compared to female cyclists, the death and injury rates of males are 6 and 5 times higher, respectively.

Traffic

Most cycling accidents occur in urban areas, with 64% of deaths occurring away from intersections and 27% occurring at intersections.

Alcohol

Nearly one-third of bicycling fatalities involved alcohol, either from the motor vehicle driver or the cyclist.

Bike accident cost breakdown

Fatal and non-fatal alike, cycling accidents cost the US billions each year. In addition to the injuries and fatalities which occur as a result of road accidents, there are personal costs to account for as well:

  • Medical bills

  • Recovery/rehabilitation costs

  • Loss of wages due to missing work

  • Possible changes to earning potential

  • Possible funeral and burial expenses

In terms of costs, the individual cost of a serious adult bicycle accident has grown from $52,495—medical bills, missed work, loss of quality of life—to $77,308. Today, the number would be even higher.

Of course, that’s not to mention the emotional burden of a cycling accident—especially if a cycling accident results in a long-term injury or the loss of a loved one.

That’s why prioritizing bike safety is so important. To reduce these costs, communities need to create better conditions for cycling, including safer cycling infrastructure (cycling tracks, improved street lighting) and widespread education about safe cycling practices.

Bicycle safety measures at the state level

Personal safety while cycling is critical, but state legislators in New Jersey have been working to improve safety measures for cyclists as well.

The Safe Passing Law, which was put on the books in August of 2021, requires drivers to leave at least four feet of space between vehicles and anyone sharing the road, whether on foot or by bicycle. A violation of these rules can result in a $500 fine and two motor vehicle points if bodily harm is caused.

The Division of Highway Safety and the Department of Transportation has been running a social media campaign to spread awareness about the law, an effort that included a $78,342 grant to the New Jersey Bike & Walk Coalition to educate the public on the law and the community impacts of bicycle and pedestrian safety.

Improving your bicycling safety

It’s essential to take the necessary steps to promote safety—for yourself and for others who share the road. While bicycle safety courses and education are essential, having safe bicycles and gear should also be part of the equation.

Make sure to budget for safety

Appropriate bicycling kits, from bare necessities to high-end gear, can cost anywhere from $150 to $1,000; costs can vary depending on the type of riding you do, the features you prioritize, and your budget.

Helmets, for example, may cost as little as $25 or as much as $500. Active lighting—white front lights, red rear lights, reflective tape, gear, and accessories—will typically cost a minimum of $45. Pumps, multi-tools, and patch kits can cost between $10-30 or more. Of course, investing in bright, visible clothing to wear while riding is also a good idea.

Cyclists should also regularly maintain their bicycles to keep them in good order. Many cyclists perform routine maintenance on their bikes themselves, seeking assistance from bike shops for parts and guidance. This can run between $300-500 a year in expenses.

While the costs of your bike’s features and accessories can add up, keep in mind that the investment is well worth it, as the cost of getting into an accident can be much higher.

Article By Domenic B. Sanginiti, Jr. of Stark & Stark

For more personal injury legal news, click here to visit the National Law Review.

COPYRIGHT © 2022, STARK & STARK

Could Leagues and Teams be Joint Employers Before the NLRB?

The National Labor Relations Board (NLRB) has released a Notice of Proposed Rulemaking to change the standard for determining if two employers may be joint employers under the National Labor Relations Act (NLRA). The proposed rule, expected to become effective sometime in 2023, could make it more likely that professional and collegiate leagues would be found to be joint employers of any unionized professional players or collegiate student-athletes who play for teams that are members of those leagues.

As a joint employer of unionized players of member teams, a league could be jointly responsible for unfair labor practices committed by the teams or the team’s supervisors or managers (i.e., coaches and administrators), be required to participate in collective bargaining negotiations with the teams concerning the wages and other terms and conditions of employment of the players, and picketing directed at the league would be considered primary and therefore permissible (rather than secondary and subject to injunction).

Currently, the NLRB will find two or more employers to be joint employers if there is evidence that one employer has actually exercised direct and regular control over essential employment terms of another employer’s employees. An employer that merely reserves the right to exercise control or that has exercised control only indirectly will not be found to be a joint employer. The NLRB has proposed that the Browning Ferris standard be restored. Under the proposed rule, two or more employers will be found to be joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” Importantly – and the critical import of the proposed rule – the NLRB will consider both evidence that direct control has been exercised and that the right to control has been reserved (or exercised indirectly) over these essential terms and conditions of employment when reviewing two or more employers for status as joint employers.

Professional athletes are employees under Sec. 2(3) of the NLRA, of course. As for collegiate student-athletes, NLRB General Counsel Jennifer Abruzzo issued a memorandum, GC 21-08, announcing the intention to consider scholarship athletes at private colleges and universities to be employees because, as she wrote, they “perform services for their colleges and the NCAA, in return for compensation, and subject to their control.” Stating in summation “that this memo will notify the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, that [she] will be taking that legal position in future investigations and litigation” under the NLRA, Abruzzo signaled that conferences, leagues, and the NCAA will face joint-employer analysis in an appropriate case.

The “essential terms and conditions of employment” will translate to the sports workplace in the nature of game, practice and meeting times, travel and accommodation standards, equipment and safety standards, conduct rules and disciplinary proceedings, the length of a season, the number of games and playoff terms, and numerous other areas. Professional leagues may already coordinate with their member teams on a number of employment terms for players. For collegiate conferences and leagues, this may be new. Under the current standard, a league could better insulate itself from the decisions made by its members’ coaches and administrators by not exercising direct involvement in those matters. Under the proposed rule, a league or conference that merely has the power (even if reserved and unexercised) to make decisions affecting the “work” conditions for student-athletes could be jointly liable along with the institution for decisions made solely by the institution’s agents.

Consequently, conferences and leagues should consider training managers on their responsibility under the NLRA to private sector employees. They should also consider the role they want to play in collective bargaining should any of the student-athletes at their member institutions unionize.

Article By Patrick L. Egan of Jackson Lewis P.C.

For more labor and employment legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Update Alert on Mickelson v. PGA Tour, Inc.

On August 16, 2022, we prepared an alert discussing Mickelson v. PGA Tour, Inc. and the claims made by suspended PGA Tour players (“Player Plaintiffs”) against PGA Tour, Inc. (“Tour.”) Quite a bit has transpired in the past three weeks both in and out of the courtroom. This alert highlights new developments that stem from an amended complaint that was filed in the US District Court, Northern District of California on August 26, 2022 (the “Amended Complaint.”)

The Amended Complaint can be found here and the original alert can be found here.

The Amended Complaint removes several Player-Plaintiffs listed as plaintiffs in the original complaint. Originally, the Player Plaintiffs were comprised of the following eleven golfers: Abraham Ancer, Bryson DeChambeau, Taylor Gooch, Matt Jones, Jason Kokrak, Phil Mickelson, Carlos Ortiz, Pat Perez, Ian Poulter, Hudson Swafford, and Peter Uihlein. Per the Amended Complaint, four of the original Plaintiff Players have been removed as plaintiffs, namely: Abraham Ancer, Jason Kokrak, Carlos Ortiz, and Pat Perez.[1] As a result, only seven of the eleven original Player Plaintiffs remain as Player Plaintiffs.

Perhaps the most significant development in the case is that LIV Golf has been added as a Plaintiff in the Amended Complaint. The Amended Complaint generally reiterates allegations made by the Player Plaintiffs (together with LIV Golf, collectively, the “Plaintiffs”) in the original complaint and incorporates LIV Golf’s alleged harm, mainly, that the Tour’s efforts made to prevent LIV Golf’s entry into the elite professional golf market forced LIV Golf to delay and restructure its 2022 launch plans and required LIV Golf “to pay excessively higher guaranteed payments to recruit a number of marquee players than would be required in a competitive market.”

Three more claims were added to the Amended Complaint, for a total of eight claims brought by the Plaintiffs. The first new claim alleges that Tour has violated Section 2 of the Sherman Antitrust Act by monopolizing the market for promotion of elite professional golf events (which is in addition to the Section 2 claim in the original complaint that alleges that the Tour maintains a monopoly on elite event services.) In addition to the now three antitrust claims brought in the Amended Complaint, LIV Golf also brought separate tortious interference claims of contractual relationships and prospective business relationships. The antitrust claims and the tortious interference claims are based on the premise that the Tour’s exclusionary actions: (i) prevent competition for the promotion of golf entertainment among stakeholders, such as broadcasters, players (via the Media Rights Regulation), vendors, sponsors, advertisers, partners, and agencies, and (ii) interfere with LIV Golf’s ability to negotiate and enter into contracts with those stakeholders.

Key Observations

Although more than one-third of the original Player Plaintiffs have withdrawn from Mickelson v. PGA Tour, Inc., the addition of LIV Golf as a plaintiff elevates the lawsuit because it brings the very public rivalry between the Tour and LIV Golf to the courtroom. The circumstances surrounding the case are also rapidly evolving. Since the order denying Player Plaintiffs Talor Gooch, Hudson Swafford, and Matt Jones’s motion for temporary restraining order (“TRO”) issued on August 9, 2022, six Tour members (most notably world number 2 Cameron Smith) have joined LIV Golf, which amounts to nearly half of the major winners since 2016 and 26 of the world’s top 100 golfers that have now signed with LIV Golf. In addition, the Tour announced various rule changes for the 2023 PGA Tour season, including increased purse winnings, bonus pools, and elevated events. It remains to be seen whether these circumstances will materially alter the arguments made throughout the TRO proceedings.

The tentative date to hear dispositive motions (such as summary judgment) has been scheduled for July 23, 2023, and the jury trial date is expected to begin on January 8, 2024.

FOOTNOTES

[1] Pat Perez was the only player who directly provided the reason for his withdrawal: “I didn’t really think it through… I did it to back our guys,” he reportedly said. He also said that he does not have “ill will” towards the Tour and emphasized his content of playing for LIV Golf.

Article By Richard L. Brand, Thomas R. Castiello, Brian D. Schneider, and Anjelica L. Fuccillo of ArentFox Schiff LLP

For more entertainment, art, and sports legal news, click here to visit the National Law Review.

© 2022 ArentFox Schiff LLP

Your Horse May Be Subject to IRS Seizure

The Internal Revenue Service (IRS) has broad powers to seize assets in payment of outstanding taxes including income tax, excise tax, employment tax, and estate and gift tax. Assets the IRS can seize in exercise of its levy power are those that constitute “property or rights to property” of the taxpayer as defined under local law. Equine industry assets that could be subject to seizure include real estate, equipment, and the horses themselves, although horses valued below $10,090 are exempt from levy. For example, in 2012 the IRS seized hundreds of horses to collect a tax debt from a defendant convicted of stealing millions of dollars in city funds. The defendant used the funds to finance the breeding and showing of American quarter horses. The government auctioned off more than 400 of the seized horses to pay the defendant’s outstanding federal tax obligation.

But because animals require food and veterinary care and could die, the IRS has specific procedures relating to the seizure of livestock, such as horses. If the horses are considered “perishable goods,” section 6336 of the Internal Revenue Code (the Code), which provides the statutory requirements for disposing of perishable goods, will apply. Under section 6336, if it is determined that the seized property is liable to perish, the IRS must appraise the value of the property and either return it to the owner or put it up for immediate sale. The Internal Revenue Manual (IRM) provides further guidance on what constitutes perishable property. IRM 5.10.1.7 (12-20-2019) says that the property must be tangible personal property and have a short life expectancy or limited shelf life.

Prior to July 1, 2019, the definition of perishable goods included property that may “become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense.” Horses would seem to fit within either or both of these categories. Now, under the revised definition of perishable goods, a collection officer would have to show that the horse had a short life expectancy.

A revenue officer seeking to seize perishable property must determine that the property cannot be kept and sold at a public sale under normal sale time frames set forth in section 6335 of the Code. Despite the change in the definition of perishable goods in 2019, the IRM suggests that examples of property likely to perish “may be food, flowers, plants or livestock [emphasis added].” Once the revenue officer determines that the property is perishable, he must secure approval of this finding. The determination is subject to high-level IRS review and planning, including an estimate of the expected net sale proceeds to be received from a forced sale. If the revenue officer concludes that the property is not perishable, sale of the seized property must proceed under normal procedures and within the time frames set forth in the Code.

A recent Bloomberg news article reported that the U.S. government had seized a 15-year-old Holsteiner that had been purchased for $750,000. The horse was a champion show jumper. As might be expected, the cost of maintaining the horse was high. IRS agents determined it would cost $45,000-$50,000 a year to feed the horse, not including the medical costs it might incur. The IRS also learned the value of the horse had dropped sharply from its $750,000 purchase price. Thus, in an unusual deal, the government sold the horse to the taxpayer’s daughter (for whom it had been purchased originally) for $25,000.

The considerations, planning, coordination, documentation, and approval of these types of sales may discourage a revenue officer from seizing perishable property like horses where other assets may be levied more easily. Nonetheless, sometimes the IRS will take action to seize a horse perceived to be valuable, like with the Holsteiner, even if it is not deemed perishable under the Code definition.

Article By Barbara T. Kaplan and Scott E. Fink of Greenberg Traurig, LLP

For more tax law legal news, click here to visit the National Law Review.

©2022 Greenberg Traurig, LLP. All rights reserved.

MLB To Allow CBD Sponsorships

Recently, Major League Baseball (MLB) informed teams that cannabidiol (CBD) sponsorships were no longer off limits and that they were free to pursue sponsorships in the CBD category under certain conditions. CBD companies will also no longer be prohibited from airing commercials during MLB game telecasts.

According to MLB’s Chief Revenue Officer Noah Garden, to be permitted, CBD sponsorships must promote products that are certified as not containing psychoactive levels of THC, the main active ingredient of cannabis. Any CBD product with concentrations of THC above 0.3% would not be permitted, as it is classified as marijuana, which is a Schedule I illicit substance. All CBD sponsorships will also require signoff by the MLB Commissioner’s Office.

MLB is the first of the four major US sports leagues to permit CBD sponsorships. Previously, only UFC and NASCAR had opened up the CBD sponsorship category for sale. And while MLB has opened the door to certain CBD sponsorships, for now, neither MLB nor any of the other major US sports leagues permit sponsorships in the broader cannabis category.

This change follows the new MLB collective bargaining agreement freeing up MLB teams to sell advertising positions on team jerseys and player batting helmets beginning with the 2023 season. MLB has confirmed that these lucrative jersey and batting helmet positions will not be off-limits to CBD companies. Garden noted specifically that “[MLB is] open-minded to doing a patch deal [in the CBD category], depending on the brand and what that brand represents. It has to [be] a brand that represents sports.”

Time will tell if MLB, its teams, and its fans embrace CBD sponsorships, but with cannabis industry valuations exceeding $13 billion in 2021, the rule change opens the door to a potentially lucrative sponsorship category.

Article By Richard L. Brand, Shahiedah Shabazz, and Zak Welsh of ArentFox Schiff LLP

For more entertainment and sports legal news, click here to visit the National Law Review.

© 2022 ArentFox Schiff LLP

U.S. Supreme Court Sides with Public High School Coach in Free Speech/Freedom of Religion Case

The U.S. Supreme Court issued a ruling which will have wide-ranging effects on the ability of governmental entities to react to religious and other speech of public employees. In Kennedy v. Bremerton Schools, the Court ruled that a public high school could not discipline or disfavor a football coach for his practice of kneeling on the 50-yard line and praying at the conclusion of each game, eventually growing to include most of the football team and opposing players as well. The school district had attempted to accommodate the coach’s desire for prayer, but concerns mounted when one parent complained that her son felt compelled to participate despite being an atheist. The coach was eventually placed on administrative leave and not extended an offer to return to coaching the next school year. Both the district court and the U.S. Court of Appeals for the Ninth Circuit rejected the coach’s First Amendment challenges.

With a 6-3 majority, the Supreme Court reversed. In doing so, the Court first found a violation of the Free Exercise Clause.  The Court discounted the school district’s stated concerns that the coach’s practice could violate the Establishment Clause or interfere with students’ right of free exercise. The Court held that absent evidence of “direct” coercion the Establishment Clause was not implicated and then concluded that the coach’s position of authority over the players was insufficient to constitute direct coercion.  The Court distinguished earlier cases involving prayers at football games and civic meetings, by emphasizing that the speech for which the coach was disciplined was not publicly broadcast or recited to a captive audience. Additionally, students were not required or formally expected to participate.

With respect to the Free Speech issue, the Court concluded that the coach’s prayers were not unprotected “government speech,” and in doing so applied a restrictive view of what could be considered “government speech.”  The Court held that because the coach’s job duties did not include leading prayers, the fact that the speech occurred on the field immediately after the game was insufficient to transform it from private speech to government speech.  “To hold differently,” the Court stated, “would be to treat religious expression as second-class speech and eviscerate this Court’s repeated promise that teachers do not ‘shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.’”

The decision, together with Shurtleff v. Boston decided earlier this Term, suggests a sharp break with past Court jurisprudence on the balance between the dictates of the Establishment and Free Exercise Clauses.  Government entities should review their policies on religious activity on government property or by employees in connection with their positions in light of these two decisions.

Article By Ahmad Chehab, Scott R. Eldridge, and Robert T. Zielinski of Miller Canfield

For more civil rights legal news, click here to visit the National Law Review.

© 2022 Miller, Canfield, Paddock and Stone PLC

Not So Fast—NCAA Issues NIL Guidance Targeting Booster Activity

Recently, the NCAA Division I Board of Directors issued guidance to schools concerning the intersection between recruiting activities and the rapidly evolving name, image, and likeness legal environment (see Bracewell’s earlier reporting here). The immediately effective guidance was in response to “NIL collectives” created by boosters to solicit potential student-athletes with lucrative name, image, and likeness deals.

In the short time since the NCAA adopted its interim NIL policy, collectives have purportedly attempted to walk the murky line between permissible NIL activity and violating the NCAA’s longstanding policy forbidding boosters from recruiting and/or providing benefits to prospective student-athletes. Already, numerous deals have been reported that implicate a number of wealthy boosters that support heavyweight Division I programs.

One booster, through two of his affiliated companies, reportedly spent $550,000 this year on deals with Miami football players.1 Another report claims that a charity started in Texas—Horns with Heart—provided at least $50,000 to every scholarship offensive lineman on the roster.2 As the competition for talent grows, the scrutiny on these blockbuster deals is intensifying.

Under the previous interim rules, the NCAA allowed athletes to pursue NIL opportunities while explicitly disallowing boosters from providing direct inducements to recruits and transfer candidates. Recently, coaches of powerhouse programs have publicly expressed their concern that the interim NIL rules have allowed boosters to offer direct inducements to athletes under the pretense of NIL collectives.3

The new NCAA guidance defines a booster as “any third-party entity that promotes an athletics program, assists with recruiting or assists with providing benefits to recruits, enrolled student-athletes or their family members.”4 This definition could now include NIL collectives created by boosters to funnel name, image and likeness deals to prospective student-athletes or enrolled student-athletes who are eligible to transfer. However, it may be difficult for the NCAA to enforce its new policy given the rapid proliferation of NIL collectives and the sometimes contradictory policies intended to govern quid pro quo NIL deals between athletes and businesses.

Carefully interpreting current NCAA guidance will be central to navigating the new legal landscape. Businesses and students alike should seek legal advice in negotiating and drafting agreements that protect the interests of both parties while carefully considering the frequently conflicting state laws and NCAA policies that govern the student’s right to publicity.

ENDNOTES

1. Jeyarajah, Shehan, NCAA Board of Directors Issues NIL Guidance to Schools Aimed at Removing Boosters from Recruiting Process, CBS Sports (May 9, 2022, 6:00 PM).

2. Dodd, Denis, Boosters, Collectives in NCAA’s Crosshairs, But Will New NIL Policy Be Able To Navigate Choppy Waters?, CBS Sports (May 10, 2022, 12:00 PM).

3. Wilson, Dave, Texas A&M Football Coach Jimbo Fisher Rips Alabama Coach Nick Saban’s NIL Accusations: ‘Some People Think They’re God,’ ESPN (May 19, 2022).

4. DI Board of Directors Issues Name, Image and Likeness Guidance to Schools, NCAA (May 9, 2022, 5:21 PM).

Article By Jonathon K. Hance, Joshua H. Gold-Quirós, and Drew Taggart of Bracewell LLP

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