Tag: basketball

Dartmouth Basketball Players Vote to Be First College Athletes Represented by a Union

On March 5, 2024, players on the Dartmouth College men’s basketball team voted to unionize, making the group the first college sports team to do so in the United States. Dartmouth College has already filed an appeal with the National Labor Relations Board (NLRB), setting up a legal challenge that will have significant implications for the status of college athletes and the future of college sports in the United States.

Quick Hits

  • The Dartmouth men’s basketball team voted to unionize in what would be the first union to represent college athletes.
  • Dartmouth has filed an appeal with the NLRB that could determine whether college athletes are employees within the meaning of the NLRA.
  • The union vote could have significant implications for the future of college sports in the United States.

In a representation election overseen by the NLRB, the Dartmouth men’s basketball players reportedly voted 13-2 to be represented by the Service Employees International Union Local 560. The Trustees of Dartmouth College immediately filed a request for a review of the regional director’s decision and direction of election that had allowed the unprecedented election to proceed despite serious implications for college sports.

The election comes after an NLRB regional director in Boston, Massachusetts, ruled on February 5, 2024, that the men’s basketball players at Dartmouth—who compete in the National Collegiate Athletic Association (NCAA) Division I, the highest level of college athletics—are “employees” within the meaning of the National Labor Relations Act (NLRA) and have the right to a union election.

Dartmouth argued in its request for review that the players cannot be considered employees under the NLRA because they are amateur students who are provided with financial aid and academic resources, not compensation, and do not provide any service to the school.

Dartmouth, which is a private institution in New Hampshire and part of the all-private Ivy League collegiate athletic conference, called the regional director’s decision an “unprecedented, unwarranted, and unsupported departure” from applicable legal standards that creates a “new definition of ‘employee’” and “promises to have significant negative labor and public policy implications.”

College Athletes’ Employment Status

NLRB Region 1 Director Laura Sacks found that the Dartmouth men’s basketball players were employees in large part because the school “exercises significant control” over their participation on the team, including determining when players practice and play, review film, engage with alumni, and take part in other team-related activities. During travel, the school controls when and where the players travel, eat, and sleep, the regional director found.

Further, the regional director found that despite questions about the revenue generated, the players generate publicity for the school, and do so to receive various economic benefits, including equipment and apparel, tickets to games, lodging, meals, and other specialized academic and career development support.

The Dartmouth appeal tees up for the NLRB the issue of whether college athletes at private schools are employees after the NLRB punted on a similar issue in a 2015 case involving college football players at Northwestern University that left open the issue of whether college athletes at private universities may be considered employees under the NLRA.

In the Northwestern case, the full Board later declined to assert jurisdiction over the case, finding it “would not serve to promote stability in labor relations,” largely because the majority of schools that compete in college football at the highest level are public institutions not subject to the NLRA.

The regional director in Dartmouth reached her conclusion despite the significant differences in the economics of college basketball and football that distinguished the Dartmouth case from the Northwestern case, where the players received athletic scholarships in a sport—football—that generated more revenue. Further, unlike the highest level of college football, which is comprised mostly of public universities, Dartmouth is a member of a collegiate athletic conference made up entirely of private universities that do not provide athletic scholarships.

Looking Ahead

If the Board agrees that the Dartmouth basketball players are employees and allows the union election to stand, it could have a ripple effect, with college athletes at private universities across the country seeking to organize.

Yet the Dartmouth basketball players’ unionization vote is only the latest in a string of legal developments related to whether college athletes may be considered employees or parties entitled to receive compensation under various legal standards, including under the NLRA and Fair Labor Standards Act (FLSA). On February 23, 2023, the U.S. District Court for the Eastern District of Tennessee issued a preliminary injunction blocking the NCAA from enforcing new rules on athletes’ compensation derived from name, image, and likeness (NIL) rights—specifically, rules restricting the ability of so-called school “boosters” to negotiate with NCAA athletes during the recruiting and transfer processes.

© 2024, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more news on College Athletes Unionizing, visit the NLR Labor & Employment section.

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.

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

Name, Image and Likeness: What Higher Education Institutions Need to Know for Legal Compliance

More than a year has passed since the NCAA v. Alston ruling and roll-out of the NCAA Name, Image and Likeness Interim Policy. What processes should institutions have in place, and what situations should they be on the lookout for at this point in the NIL game? While institutions cannot provide compensation to student-athletes or potential student-athletes in exchange for use of a student’s NIL, below are items counsel at higher institutions should have on their radar.

Review and Approval of NIL Agreements

The NCAA Interim Policy does not require student-athletes to disclose NIL agreements and/or opportunities to their institutions. In the State of Michigan, however, pursuant to House Bill 5217, beginning December 31, 2022, student-athletes must disclose proposed NIL opportunities or agreements to the institution at least seven days prior to committing to the opportunity or contract. For the institution, this means there needs to be a process in place by which student-athletes submit opportunities or agreements to the institution and the institution does a timely and thorough review of the submission. The institutional representative reviewing the submissions must be knowledgeable of the institution’s active contractual obligations and only sign off on the student-athlete’s potential NIL opportunity or contract once confident there is no conflict with an existing institutional contract. This is most likely to come up in agreements with exclusivity terms, such as sports apparel and campus-wide pouring rights agreements. If there is a conflict, the institution needs to articulate the specific conflict to the student-athlete so they can negotiate a revision, which is then subject to additional review and potential approval by the institution.

Institutions are the Regulating Bodies

Institutions in states that require submission of NIL opportunities by student-athletes need to pay close attention when reviewing submissions because the NCAA has placed most of the NIL regulatory burden on institutions. Specifically, institutions are obligated to report potential violations of NCAA policy. Among other potential violations, institutions must report possible abuses on the prohibition of pay-for-play and improper inducements of potential student-athletes and current student-athletes. Essentially, in addition to spotting potential conflicts between NIL agreements and current institution agreements, institutions need to review NIL agreements to determine if a student-athlete is being compensated for athletic achievement and/or for their enrollment or continued enrollment at a particular institution. Any indication that the student-athlete’s NIL agreement will be void if they no longer participate on an athletic team requires the institution to complete due diligence and determine the appropriateness of the arrangement in light of the NIL policy. Institutions are ultimately responsible for certifying the eligibility of student-athletes, and the presence of the previously mentioned terms place the agreement in direct violation of the language in the NIL Interim Policy and corresponding NCAA guidance.

Institutional Staff Members

It is in the best interest of institutions to train their staff members on appropriate interactions with boosters because the NCAA holds institutions responsible for the “impermissible recruiting activities engaged in by a representative of athletics interest (i.e., a booster).” Staff members need to understand the actions they are permitted to take and conversations they are permitted to have, as failure to do so could land them deep in the gray area of NIL.

  • An institutional staff member cannot directly or indirectly communicate with a potential student-athlete on behalf of a booster or NIL entity.
  • An institutional staff member cannot enter into agreements with an NIL entity to secure NIL deals between the entity and potential student-athletes.
  • An institutional staff member cannot “organize, facilitate or arrange” a meeting or any conversations between an NIL entity and a potential student-athlete, which includes transfer students coming from other institutions.

Financial Aid

Institutions should ensure they are not influencing how a student-athlete uses their compensation. Specifically, institutions should not direct student-athletes to use their NIL compensation for financial aid. Student-athletes’ financial aid is not impacted by compensation they would receive from NIL agreements. Financial aid limitations exclude compensation which also extends to NIL compensation. However, if a student receives NIL compensation, this may impact need-based financial aid.

FERPA

Many public institutions have made the argument that FERPA precludes them from disclosing NIL agreements without a release executed by the student-athlete. If a copy of an NIL agreement or summary of an NIL opportunity is provided to the institution by the student-athlete, this becomes a record of the university per the definition of FERPA and is likely part of the student-athlete’s educational record. There may be a particular circumstance in which a FERPA exception would apply to a request, but there is no broad FERPA exception that would apply in this situation. Institutions might find it strategic to include their stance on FERPA in an NIL policy to ensure all requests for NIL agreements are handled consistently.

International Students

International students can receive NIL compensation but with some caveats. In its documentation, the NCAA directs international student-athletes to their institution’s Designated School Official for “guidance related to maintaining their immigration status and tax implications.” As a result, institutions should make sure the individual(s) is/are well equipped to provide answers regarding NIL from international students.

Five Steps to Become a Well-Organized and Compliant Institution

  1. Have an NIL policy and procedures that are followed consistently and made available to student-athletes for reference and consultation;
  2. Have a process in place to review NIL agreements between the institution’s student-athletes and outside entities or individuals (if located in a state that requires student-athletes to make such disclosures);
  3. Have trained its staff (especially athletics staff) on what actions can and cannot be taken in relation to student-athletes’ NIL opportunities;
  4. Have trained its student-athletes on available resources; and
  5. Have a team of institutional staff members ready to pivot if additional laws are enacted by their state, if additional guidance is provided by the NCAA or if federal legislation is enacted.

Article By Richard T. Hewlett and Jessica E. Visser of Varnum LLP

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

© 2022 Varnum LLP

A Slam-Dunk? Sweeping and Dramatic Changes may be Coming to the NBA

Adrian Wojnarowski and Zach Lowe dropped, what is known as a Woj Bomb, last week as they announced that the NBA is in high level discussions with the NBPA (the National Basketball Players Association) and broadcasting partners concerning “sweeping and dramatic changes to the league calendar that include a reseeding of the four conference finalists, a 30 team in-season tournament, and a postseason play-in”.

Reasons for change

There are a number of reasons why the NBA may consider changing the league format.

A culture of ‘load management’ has emerged in the league, which involves players opting to rest for certain matches, especially where teams play back-to-back games. Players are resting in the regular season so that they are fresh and healthy for the playoffs. The intense regular season takes its toll on players with a commitment of 82 games between October and April coupled with the demands of travel across North America.

TV viewing figures have dropped this season – broadcast audiences have declined by 18% compared to this point last season.

The Western Conference is also “stacked” when compared to the Eastern Conference. Teams in the West are perceived to have a large number of title contenders whereas the East is considered to have very few title contenders. The current format splits the 30 NBA teams into two conferences of 15 teams: East and West. At the end of the regular season, the top eight teams in each Conference qualify for the playoffs, where they compete against other teams within their Conference. The winners of the respective Conference playoffs meet in the NBA Finals. There is growing pressure on the NBA to change this format so the 16 best teams across the NBA compete in the playoffs, potentially skewing the playoffs so that more Western Conference teams qualify.

Proposed changes

 The proposed changes include:

  • shortening the regular season from 82 games to 78 games;

  • an in-season tournament;

  • play-in games for the playoffs; and

  • re-seeding the final four.

basketball hoopIn-season tournament: the NBA is separated into a number of divisions based on location. Teams will play a round-robin schedule against teams within their division and the top three teams from each division will advance to the quarterfinals. Reports indicate this may take place in December, possibly in Las Vegas. The NBA could incentivise teams to compete in this additional tournament by giving better draft odds to the winner or by counting victories in the tournament towards a team’s regular season record. Whilst this may encourage teams to compete seriously in the tournament, it may not encourage the players. James Harden and PJ Tucker, of the Houston Rockets, criticised the tournament with Tucker stating, “you fight for an NBA championship. I don’t want to play for anything else.” Additional financial incentives for players may be required.

Play-in games for the playoffs: this proposal involves two four-team tournaments featuring the seventh, eighth, ninth and 10th seeds in each Conference who would compete for the last two playoff spots available in each Conference.

Re-seeding the final four: this would involve re-seeding the top four teams left in the playoffs at the point they reach the Conference finals. The top seeded team would play against the lowest seeded team of the final four, regardless of Conference, whilst the teams with the second and third best records in the regular season would compete against one another. So the NBA Finals could include two teams from one Conference. This would appear to be an avenue to ensure the two best teams compete in the NBA Finals.

Implementing the changes

The NBA intends to implement these changes for the 2021-22 season, which will mark the NBA’s 75th anniversary. These changes will require approval from the Board of Governors and amendments to the current Collective Bargaining Agreement (CBA) between the league and the players. The CBA is due to run until the 2023-24 season, with an opt-out provision in its final year. Amending the CBA will pose a difficult challenge for the NBA, requiring significant negotiation with the NBPA (which represents the players’ interests). The CBA sets out numerous rules that govern the format and mechanics of the regular season and the revenue split between the league and its players, amongst other things. Its renegotiation is crucial in order to process and validate the proposed changes.

However, amending the existing CBA will present a number of challenges. The CBA is a mutual agreement, which requires compromise from both sides of the table. The NBPA will ensure that any changes to the league format confer certain rights and benefits on its players and that such changes are not detrimental to the interests of NBA athletes.

The NBA will also need to negotiate existing arrangements it has with sponsors and broadcasting partners. The changes present sponsorship and revenue-generating opportunities for the league. Although regular season games are likely to decrease in number (which will need to be reflected in existing agreements with broadcasters and partners), the introduction of an in-season tournament will likely generate interest from current and new fans. Similarly, the play-in games to secure the seventh and eighth playoff spots in each Conference should create an extra buzz at the end of the regular season.

Comment

Under Adam Silver’s stewardship, the NBA has progressed year on year financially and in terms of popularity across the world. Silver is certainly not resting on his laurels and the proposed innovations should be welcomed but there are significant logistical hurdles to overcome before they are implemented.

© Copyright 2019 Squire Patton Boggs (US) LLP

For more in NBA and other sports league news, check out the National Law Review Entertainment, Art & Sports Law page.

Celebrity Entertainer Sues Over Video Game Avatar

As real-world celebrities continue to expand the reach of their persona into the digital realm, the potential benefit for advertisers, game developers and esports event promoters is exceedingly high. But with increased opportunity comes increased risk.

A New York Supreme Court recently addressed this risk when it construed the State’s right of publicity statute[1] in a dispute over an NBA 2K18 video game avatar. In Champion v. Take Two Interactive Software, Inc., celebrity basketball entertainer Phillip “Hot Sauce” Champion sued the video game developer, alleging violation of his right to privacy for Take-Two’s use of his name and likeness. The Court ultimately dismissed the lawsuit, but not before it provided a helpful discussion of New York’s publicity statute and its modern application to the esports industry.

A Primer on New York’s Publicity Statute

New York publicity law allows both criminal charges and civil liability for use of a person’s “name, portrait or picture” for advertising or trade purposes without prior written permission. This right to publicity extends to any recognizable likeness that has a “close and purposeful resemblance to reality.” Courts have already held that video game avatars are within the scope of the statute’s reach.

However, while seemingly broad at first pass, this statutory right is actually more narrow than similar rights in other states where the right to publicity is recognized only at common law (i.e., in states that have no black-letter publicity statute). For example, in New York, neither “incidental” use of a person’s name or likeness, nor use that is protected under the First Amendment, are violations.

Further, unlike the words “portrait” and “picture,” the word “name” in the statute is construed literally. In fact, New York courts find liability only for uses involving an individual’s full name, and not just a surname, nickname, or business name. The statute does, however, protect certain “stage names” in limited situations, such as when the individual has become known by a stage name virtually to the exclusion of his or her real name.

The Plaintiff and the Video Game

Phillip Champion is a prominent street basketball entertainer known professionally as “Hot Sauce.” Champion claims that he is widely recognized as both “Hot Sauce” and “Hot Sizzle” in social media, and is regularly depicted on television and in blogs, movies, YouTube videos, sports magazines and live halftime shows. As a result, Champion is able to license his celebrity persona through sponsorships and endorsement deals with prominent consumer brands like AND1.

Photographs of Champion filed with the Court.

Take-Two created the NBA 2K18 basketball simulation video game, which realistically depicts the on-court competition and off-court management of the National Basketball Association. Users can create a custom player avatar, or select from existing player avatars modeled after real-life professional athletes. The game’s “MyCareer” mode allows the user to create a custom basketball player, and then design and play through the character’s entire career, competing in games and participating in off-court activities. The “Neighborhoods” option, which ties to the off-court activities in the MyCareer mode, lets users explore an off-court urban world while interacting with other basketball players—most of which are non-playable characters controlled by the computer—in scenarios like exercising in public gyms and playing casual basketball games on city courts.

Champion’s Claims

Champion’s lawsuit stems from one of the non-playable characters in the game’s Neighborhood mode, who is depicted as a young, African-American male with a mohawk, wearing all-white hi-top sneakers, a tank-top, and black shorts with white piping. On the front and back of the tank-top is the numeral “1,” and on the back are the words “Hot Sizzles.”

Images of the “Hot Sizzles” avatar filed with the Court.

Champion alleged that the look of the “Hot Sizzles” avatar incorporated numerous personal aspects of his life and identity in violation of the New York publicity statute, and further that the avatar’s “Hot Sizzles” name was itself a violation because Champion is “ubiquitously” known as “Hot Sizzle.”  Take-Two responded that its “Hot Sizzles” avatar does not sufficiently resemble Champion, whether in name or image, under New York law.

On Champion’s claims to his likeness, the Court found no physical resemblance between Champion and the “Hot Sizzle” avatar, and determined that the only reasonable commonalities are that “both are male, African-American in appearance, and play basketball.” The Court compared this case to two similar cases (Lohan v. Take-Two Interactive Software, Inc.  and Gravano v. Take-Two Interactive Software, Inc. ), both involving Take-Two’s Grand Theft Auto video game, in which the avatars exhibited many closer similarities to the plaintiffs in clothes, hair, poses, voice, and life stories. Finding no similar likenesses in this case, the Court ruled that, at least from a visual perspective, the Hot Sizzles avatar in NBA 2K18 is not recognizable as Champion as a matter of law.

On Champion’s claim to the name “Hot Sizzles,” the Court recognized that the use of a person’s celebrity or “stage” name with a video game avatar could aid in recognition of the avatar as that person’s likeness. However, the Court determined that Champion’s “primary performance persona” is actually “Hot Sauce,” which is entirely distinct from the NBA 2K18 avatar’s name, “Hot Sizzles.” Champion was not able to show that he is widely known as “Hot Sizzle” to the public at large—as opposed to just in the sporting or gaming circles—so the Court ruled that, without this level of connection between Champion and the name “Hot Sizzle,” Take-Two’s use of “Hot Sizzles” does not aid in the visual recognition of the NBA 2K18 avatar as Champion.[2]

Incidental Use and the First Amendment

Take-Two also defended against Champion’s claims by alleging that the “Hot Sizzles” character falls within the “incidental use” exception to liability under New York’s statute. After reviewing the NBA 2K18 game content and related advertising, the Court seemed to agree that the avatar “is a peripheral non-controllable character” that “adds nothing of true substance to a user’s experience in the game.” However, the Court declined to make an affirmative ruling on this component of the lawsuit.

Finally, Take-Two argued that its NBA 2K18 game is protected speech under the First Amendment, and as such, it does not constitute “advertising or trade” under New York’s law. In response, the Court declared that, while video games may conceptually qualify for free speech protection, not every video game constitutes “free speech” fiction or satire. In comparing NBA 2K18 to games that contain a detailed story with pre-defined characters, dialogue and unique environments created entirely by the game designers, the Court determined that here, the users create their own basketball career and completely define their character. Accordingly, the Court found that categorizing NBA 2K18 as “protected fiction or satire” under the First Amendment is “untenable.”

What it Means

As novel sponsorship and endorsement opportunities are created through the advent of esports, advertisers, game developers, and event promoters must be certain they have the appropriate content and publicity licenses in place. However, because publicity laws, in particular, are enforced at the state level, doing this without expert guidance can be daunting. Using the right tools and a proactive licensing and review strategy, brands and marketing agencies can capture (and keep) a broader share of the esports industry’s revenues, and keep the competition on the court, not in it.

[1] New York Civil Rights Law, §§ 50-51.

[2] The Court determined that “Hot Sizzle” is, at best, Champion’s secondary “nickname.”

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

Jury Rules for NCAA in First Sports Concussion Case Tried to Verdict

In a landmark decision, a Pennsylvania jury ruled in favor of the defendant National Collegiate Athletic Association (NCAA) in the first sports concussion case tried to verdict. In a 10−2 decision, the jury in Onyshko v. NCAA, No. C-63-CV-201403620 (Wash. Cty. Ct. Comm. Pleas, PA) (filed 6/27/14, originally filed in federal court on 12/17/13) found that the NCAA was not negligent in its dealings with plaintiff Matthew Onyshko when he was a student at California University of Pennsylvania.

In 2008, five years after his college football career ended, Onyshko was diagnosed with amyotrophic lateral sclerosis (ALS), a progressive neurodegenerative disease usually diagnosed between age 40 and 70. Onyshko and his wife sued NCAA for claims of negligence and loss of consortium. The complaint stated that, during his college football career, Onyshko experienced numerous, repeated blows to the head, lost consciousness for at least 30 seconds on three separate occasions, and that repeated blows to the head caused him to develop ALS.

The NCAA is the main regulatory body for college sports to promote safe participation. According to Onyshko, the NCAA knew from at least the 1980s that football-induced brain injuries cause long-term damage, but it failed to adequately supervise, regulate, and minimize the risk of long-term brain injury resulting from repeated head impacts.

NCAA’s pre-trial motion to dismiss, which argued that the complaint failed to adequately plead the existence of the legal duty, was denied by the court on December 3, 2014. Subsequently, NCAA moved for summary judgment, arguing that (1) the action was barred by the statute of limitations, (2) NCAA did not have a duty to plaintiff, (3) NCAA did not breach a duty to protect against the long-term risks of concussion and (4) plaintiff’s alleged head injuries incurred while playing college football did not cause his later development of ALS. In denying the motion, the court found that plaintiffs’ expert opinions created a genuine issue of material fact about whether concussive and sub-concussive blows to the head while playing collegiate football could cause ALS.

After years of litigation and substantial discovery, the case went to trial, with jury selection beginning on April 29, 2019. During the trial, which lasted almost a month, Onyshko, now 38 years old, used a computerized device controlled by eye movement to give testimony. According to Onyshko, he sustained at least 20 concussions as a college football player during which he blacked out, but was never taken off the field in a stretcher. He further testified that he did not report the episodes to a trainer because he did not know that these were an issue. He said that the diagnosis of ALS in 2008 was a shock because it did not run in his family.

During cross-examination, the NCAA’s attorney brought up Onyshko’s deposition testimony that Onyshko first experienced headaches, dizziness, and memory problems in 1999, before he played any collegiate games. Video recordings of games in which plaintiff played were shown to refute plaintiff’s claims of the multiple head injuries he allegedly sustained.

In his closing statement, plaintiffs’ attorney requested compensatory damages of $9.6 million. Deliberation began the afternoon of June 5, 2019. After seven and a half hours, the jury found in favor of NCAA on liability. The plaintiffs announced plans to appeal and re-file the matter as a wrongful death case under Pennsylvania law when Onyshko dies.

© 2019 Wilson Elser

Another Tool for NBA Coaches

The NBA has announced that it will introduce a new rule in the upcoming NBA summer leagues. If successful, the rule could be implemented next season in the NBA. The NBA anticipates “the rule will be in effect in the NBA next season as a one-year pilot program”.

The rule provides for a new “coach’s challenge” during a game. Coaches will be entitled to one challenge per game. Once used, even if successful, the coach has used their challenge for the entire game. The challenge may be used for called fouls, goal-tending, basket interference and instances where the ball is out of bounds. The challenge cannot be used where referees have missed calls.

To use a challenge, coaches must have a timeout remaining. This means that coaches may start to retain a timeout tactically in particularly important games in order to be able to use their challenge, especially in the dying seconds of a close contest. However, only challenges for personal fouls are permitted in the last two minutes of the fourth quarter or the last two minutes of overtime. To use the challenge, the head coach will call a timeout and indicate they are challenging the call. If successful, the team retains their timeout. If not, the timeout is used.

The NBA’s sister league, the G League, has implemented this rule for the past two seasons. In its first season, there were 232 challenges of which 75 original calls were overturned, representing a 32.3% success rate. The following season saw 81 successful challenges from 249 challenges, representing a similar success rate of 32.5%.

The League anticipates that the challenge rule will be rolled out next season on a trial basis and reviewed at the end of the season. For the rule to be implemented, two-thirds of the League’s teams must vote in its favour during a formal vote expected to take place this summer. If the vote goes ahead, it is likely to succeed. Coaches are generally in favour of the rule as it provides another tool for them to use in-game. Coaches gain greater powers of intervention whilst more decisions are ultimately correct due to incorrect calls being overturned. It could also ease tensions between referees and players. Sports Shorts recently addressed the heightening tensions between NBA players and match officials during the Playoffs this season.

 

© Copyright 2019 Squire Patton Boggs (US) LLP
For more NBA & other sports developments see the National Law Review Entertainment, Art & Sports page.

UPDATE: NCAA Flexes Its Muscle in Response to California Fair Pay To Play Act

NCAA President Mark Emmert has predicted that it would become “impossible” for the NCAA to consider California colleges eligible to participate in national championship competitions should California pass the Fair Pay To Play Act (SB 206) and allow college athletes to maintain their amateur status while accepting pay for marketing their name, image and likeness (as discussed in our recent blog posts on March 4, 2019, and May 23, 2019).

Emmert stated this in a letter to Senator Nancy Skinner, the sponsor of the proposed legislation, and the Chairpersons of two California State Assembly Committees (the Arts Entertainment, Sports, Tourism and Internet Committee and the Higher Education Committee).

Emmert has requested the two committees postpone consideration of the proposed legislation while the NCAA convenes an investigatory working group of school presidents and athletics administrators who will be reviewing the current prohibition on NCAA athletes earning income from the use of their names, images, and likenesses. The working group, led by Big East Commissioner Val Ackerman and Ohio State University Athletic Director Gene Smith, is authorized to propose specific recommendations to potentially reform and modify current NCAA Bylaws.

In his letter, Emmert recognized the California legislature’s efforts in developing the bill, but noted, “when contrasted with current NCAA rules,

the bill threatens to alter materially the principles of intercollegiate athletics and create local differences that would make it impossible to host fair national championships.”

Emmert continued, “… it likely would have a negative impact on the exact students athletes it intends to assist.”

The timing of President Emmert’s request presents a dilemma for the California state legislature as the Ackerman and Smith-led NCAA group is not scheduled to update the NCAA Board of Governors until August and will not issue a final report until late-October, more than a month after the end of the current California legislative session considering SB 206.

SB 206 was just approved by the Committee on Arts without any formal opposition. The bill is now headed to the 12-member Committee on Higher Education, which must express its approval before July 11 and before the 61 Democratic members of the full 80-member California assembly will have an opportunity to consider the bill.

In its current form, the legislation would prohibit a California 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. This would result in colleges, such as perennial sports powers like UCLA, USC, the University of California, and Stanford from being unable to stop their male and female student-athletes from signing endorsement deals or licensing contracts under the NCAA prohibition, circumventing the power and authority of the NCAA.

Senator Skinner responded to Emmert’s letter, saying, “It’s definitely a threat to colleges.”

She continued, “And this is what I think is so ironic: They are colleges. The NCAA is an association of colleges, and yet they’re threatening California colleges and saying that they would not allow them to participate in championships if my bill passes.”

Skinner reminded the public that if her bill were signed into law, it would not go into effect for another three years. She said the NCAA would have ample time to assess its own rules regarding student-athlete compensation. “Both the colleges and the NCAA have plenty of time to do the right thing,” she said.

Jackson Lewis P.C. © 2019
For more on NCAA and other sports news see the National Law Review page on Entertainment, Art & Sports.

Agents Beware: Representation Agreement May Not Be Enforceable If It Violates State Sports Agent Laws

A North Carolina law designed to protect student-athletes may determine the enforceability of Prime Sports Marketing’s contract with former Duke University star Zion Williamson. While Williamson is preparing to become a member of the New Orleans Pelicans after his name is announced as the No. 1 selection in the 2019 NBA Draft, he is also preparing for a legal battle in a different court…the U.S. District Court for the Middle District of North Carolina.

Williamson has filed suit against the Florida-based company and its president, Gina Ford, to have the marketing contract he signed with Prime Sports declared null and void. After signing a five-year agreement with Prime Sports and an accompanying letter of authorization reaffirming his desire to have Gina Ford begin representing him as his Global Marketing Agent, Williamson changed his mind.

Williamson alleges the agreement was entered into in violation of North Carolina’s Uniform Athlete Agent Act (UAAA) and should be declared void.

In his complaint, Williamson alleges that Prime Sports and Gina Ford violated the specific provisions of the North Carolina law that forbids a person from acting as an agent in the state unless that person has previously registered with the North Carolina Secretary of State’s office. The law applies to any agency contract, including employment agreements and marketing agreements.

In addition, the law mandates any agent to follow a series of procedural requirements to protect student-athletes from unknowingly forfeiting their remaining NCAA eligibility. Any contract between a registered agent and a student-athlete must contain a specific, capitalized notice in boldface print cautioning the athlete of the rights he will be giving up by entering into the contract. Among the many required notices, the contract must state the following:

WARNING TO THE STUDENT-ATHLETE IF YOU SIGN THIS CONTRACT

  • YOU SHALL LOSE YOUR ELIGIBILITY TO COMPETE AS A STUDENT-ATHLETE IN YOUR SPORT;
  • YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING IT. CANCELLATION OF THIS CONTRACT SHALL NOT REINSTATE YOUR ELIGIBILITY.

The agreement Williamson signed with Prime Sports did not contain any of these required notices mandated by the North Carolina law.

Of particular significance will be a judicial determination as to whether Williamson remained a student-athlete when he signed the agreement with Prime Sports and still protected by the North Carolina law. Williamson declared himself eligible to be drafted by an NBA team on April 15, arguably ending his status as an NCAA-eligible athlete. He signed the agreement with Prime Sports on April 20, when he had arguably given up his amateur status and was no longer protected by the state law. While a student-athlete’s declaration for the draft was irreversible at one time, current NCAA bylaws allow a student-athlete to “test the waters” regarding potentially becoming draft-eligible and withdraw his name from consideration as late as May 29 without risking the loss of any remaining eligibility. Here, Williamson lost the option to exercise his rights pursuant to NCAA bylaws and return to Duke University when he signed the contract with Prime Sports.

As the federal court considers Williamson’s complaint and the anticipated defenses and potential counterclaims to be asserted by Prime Sports (which has alleged the potential for $100 million in damages in a pre-complaint letter to Williamson’s attorney), the significance of Gina Ford’s failure to register as an agent with the State of North Carolina before her initial meeting with Williamson could be of crucial importance in determining the enforceability of the agreement between Williamson and Prime Sports.

Jackson Lewis P.C. © 2019
This post was written by Gregg E. Clifton at Jackson Lewis P.C.
Read more on Sports Law on the National Law Review Entertainment, Art & Sports page.