US Sports Law Year in Review (2017/18) – Parts 1&2: agents & agent regulation; and leagues (labor matters)

This article originates from the paper entitled Sports Law Year in Review1, which gives a high level overview of key sports law developments in the United States between 15 May 2017 – 30 April 2018.

For ease, we’ve broken down the paper into its respective chapters, which will be published in turn as follows:

1. Agents and agent regulation

2. Leagues - labor matters

3. Leagues – non-labor matters

4. Contracts

5. Torts

6. Individual sports

7. College, high school and youth sports

8. International and Olympic sports

9. Title IX/Gender equity and civil rights;

10. Intellectual property and broadcasting

11. Personal injury, health and safety

12. Stadiums and venues

13. Sports Betting/Daily Fantasy Sports;

It was drafted under the supervision on Professor Mattew Mitten and Professor Gabriel Feldman, and was presented at the Sports Lawyers Association Conference in Washington DC. The SLA, a non-profit, international, professional organization whose common goal is the understanding, advancement and ethical practice of sports law. Each year in May the SLA hosts an Annual Conference at which the above topics are presented and debated.

LawInSport would like to thank the SLA and in particular Professor Mitten and Professor Feldman for permitting the republication of this work.

Chapter 1: Agents and agent regulation 

Death of Dan Fegan

Longtime National Basketball Association (NBA) agent Dan Fegan, who was entangled in a legal dispute with his former employer, Independent Sports Entertainment, regarding the enforceability of a restrictive covenant in his employment contract under federal labor law and California law, which involved federal and state court litigation as well as an arbitration proceeding, died in an automobile accident on February 25, 2018 – see for example, Independent Sports & Entertainment LLC v. Fegan2 - state-based claims alleging breach of non-competition provisions asserted by sports agency against former agent were not preempted by Section 301 under the Labor Management Relations Act; the claims neither arose from nor were they substantially dependent on an analysis of the collective bargaining agreement)

Joyce Li v. Independent Sports & Entertainment LLC (Equal Employment Rights)

Joyce Li, a former employee at Independent Sports & Entertainment (ISE), filed suit against ISE in Superior Court in California, alleging that the agency discriminated and retaliated against her in terminating her employment. Lee alleged that she performed similar work as her male counterparts, but, unlike her male counterparts, she was denied an opportunity to receive fee splits or bonuses associated with NBA contracts negotiated by the agency. The parties agreed to resolve the dispute through arbitration: Joyce Li v. Independent Sports & Entertainment LLC.3

Jamaal Tinsley, former NBA point guard, filed a lawsuit against his former agent and attorney and financial managers for charging unnecessary expenses and for exceeding the 4% commission cap.

Juan Carlos Nunez v ACES (Termination of Employment)

Juan Carlos Nunez, a former employee of the ACES sports agency whose employment was terminated after he took responsibility for attempting to help client, Melky Cabrera, avoid discipline for a positive Performance Enhancing Drugs (PED) test by creating a fake website and product claimed to have caused his positive result, has sued ACES in New York Supreme Court. Nunez’s lawsuit asserts CES urged him to engage in the misconduct leading to his termination.

Chapter 2: Leagues -Labor Matters

Salary Cap

The National Football League (NFL) team salary cap for the 2017 season was $167M. On March 5, 2018, the League announced that the team salary cap for the 2018 season will increase to $177.2M.

The National Basketball League (NBA) team salary cap in 2017-18 was $99.093M (a 5.3% increase over the previousseason), with the luxury tax trigger at $119.266M. For the 2016-17 season it was $94.1M with the luxury tax trigger at $113.3M.

The NHL salary cap for the 2017-18 season was $75M, which was a $2M increase from the 2016-17 cap of $73M. The payroll floor for 2017-18 was $55.4M, which was a $1.4M increase from the previous season. Last December, the NHL commissioner said that he expects the cap for the 2018-19 season to be between $78M and $82M.

The Major League Soccer (MLS) salary budget for the 2018 season is $4.035M. The senior minimum salary is $67,500, while the maximum salary budget charge for a player is $504,375.

The Canadian Football League salary cap for the 2017 season was $5.150M. The salary cap for the 2018 season is expected to be $5.20M. The CFL CBA is set to expire after the 2018 season on May 15, 2019. On January 16, 2018, the CFL prohibited its teams from paying off-season bonuses to players until the two sides reach a new agreement.

National Football League

After a long appeals process challenging a six-game suspension for allegations of domestic violence, the NFL Player Association (NFLPA) withdrew its lawsuit against the NFL on behalf of Dallas Cowboys running back Ezekiel Elliott. Elliott served the entirety of his six-game suspension.

On September 29, 2017, former New York Jets linebacker Erin Henderson sued the Jets in New Jersey Superior Court for wrongful termination and disability discrimination. Henderson signed a one-year deal with the Jets in 2016 with a team option for 2017. Halfway through the 2016 season, however, the Jets placed Henderson on the nonfootball injury list and ultimately declined to pick up his 2017 option. In his complaint, Henderson alleged that the Jets took these actions because he suffered from bipolar disorder. The Jets removed the case to federal court in October, where Henderson filed an additional Americans with Disabilities Act complaint against the team. United States Magistrate Judge Cathy Waldor recently ordered discovery to remain open through February 28, 2019.

Former Tampa Bay Buccaneers Lazarius Pep Levingston sued the Buccaneers on September 27, 2017 for negligence and fraud, claiming that the team concealed from Levingston the extent of his injuries in order to induce the player to settle. The Buccaneers released Levingston in August 2017 after he suffered a neck injury, and the two sides reached a $30,000 settlement. After a physical with the Detroit Lions in 2016, however, Levingston discovered that he had cervical disc herniations dating back to his time in Tampa Bay. The Buccaneers filed a motion to dismiss on February 10, 2018 arguing that Section 301 of the Labor Management Relations Act prohibits all state law claims arising out of a CBA. Furthermore, the Buccaneers claimed that Article 39 of the CBA states that it is the duty of the team physician, and not the team, to disclose a player’s physical condition.

The Fourth Circuit on June 23, 2017 affirmed a decision from the District Court of Maryland which found that the NFL Player Retirement Plan improperly denied a higher level of disability benefits to ex-NFL linebacker Jesse Solomon. A retired player receives a higher amount of benefits under the plan if a total and permanent disability manifests within 15 years of their retirement from football. The Fourth Circuit held that the Retirement Plan abused its discretion by ignoring “substantial evidence” that Solomon had been rendered totally and permanently disabled as a result of his brain injuries well before the 15-year cut-off date. Accordingly, the Fourth Circuit affirmed the District Court’s award to Solomon of the higher benefit plan.

District Judge William Alsup granted summary judgment for the Chargers, Broncos, and Packers on claims by Reggie Walker and Alphonso Carreker, two former NFL players, that the teams intentionally misrepresented that they cared about the players’ health when the teams’ physicians encouraged the players to take large amounts of painkillers. The lawsuit began in the District of Maryland where 13 former players sued all 32 NFL teams alleging that the teams improperly provided the players with painkillers while playing in the NFL. The case was then transferred to the Northern District of California, where Judge Alsup dismissed 29 teams and 11 players from the lawsuit. Judge Alsup on July 21, 2017 granted summary judgment for the remaining three teams on the ground that Walker’s and Carreker’s misrepresentation claims were barred by state workers compensation law.

Former Saints cheerleader Bailey Davis reportedly filed a complaint with the Equal Employment Opportunity Commission on March 23, 2018 alleging that the team’s different set of rules for players and cheerleaders discriminated against women in violation of the NFL’s Personal Conduct Policy. Davis said she was fired by the Saints after posting a picture to her private Instagram account that violated a team rule prohibiting cheerleaders from appearing nude, semi-nude, or in lingerie in their social media photographs. The Saints also have rules that forbid cheerleaders from having any contact with Saints players either in person or on social media. Players, however, face no such restrictions if they want to interact with the team’s cheerleaders. The NFL’s Personal Conduct Policy prohibits unlawful employment discrimination based on gender. While courts have previously held that cheerleaders are employees of individual teams and not the NFL, Davis asserts that cheerleaders are NFL personnel. If Davis is correct, then rules governing cheerleaders would be subject to the League’s Personal Conduct Policy, and the Saints’ rules might violate the PCP.

Though the NFL’s CBA doesn’t expire until 2021, NFLPA Executive Director DeMarcus Smith is already preparing for a lockout, telling Sports Illustrated’s Albert Breer that “the likelihood of either a strike or a lockout in 2021 is almost a virtual certainty.” In the wake of the Elliott case, Smith says that the NFLPA will focus on limiting the powers of the Commissioner, particularly regarding player discipline, for the new CBA.

National Basketball League

On November 15, 2017, former NBA player Zaid Abdul-Aziz filed a proposed class action lawsuit on behalf of all retired NBA players in the Southern District of New York alleging the NBA Players’ Pension Plan’s “Actuarial Equivalent” plan violated ERISA by failing to correctly account for future cost of living increases. When Abdul-Aziz retired, the Players’ Pension Plan offered both a “Normal Retirement Pension Plan”, which paid lifelong monthly benefits to former players once they turned 50, and an “Actuarial Equivalent plan” that lasted for only 10 years, but paid players a higher monthly benefit. The Actuarial Equivalent plan was supposed to pay the equivalent value of the benefits distributed under the Normal Retirement Pension Plan. While Abdul-Aziz was receiving his payments, however, the NBA and NBPA agreed to a new CBA that incorporated a cost of living adjustment into the plan’s benefit calculations, while keeping the Actuarial Equivalent plan’s 10-year limit. Abdul-Aziz alleged that this meant that the benefits distributed under the two plans were no longer of equivalent value. The NBA filed a motion to dismiss on March 5, 2018 claiming that the pension plan’s cost of living adjustments applied prospectively only and that, in any event, Abdul-Aziz’s payments ceased in 2001 and the statute of limitations on his claim had already run.

The National Labor Relations Board held that the workers who produce Jumbotron content during NBA and WNBA games at the Target Arena in Minneapolis are employees and can unionize under the National Labor Relations Act. The International Alliance of Theatrical Stage Employees filed a representation petition on behalf of the workers with the NLRB. Region 18 Director Marlin Osthus dismissed the petition, however, finding that the workers were independent contractors under the Fed Ex doctrine. A split NLRB reversed, finding that, due to the amount of control exercised over the workers by the Timberwolves, the Fed Ex doctrine weighed in favor of categorizing the Jumbotron crew members as employees.

The NBA and NBPA announced that they are creating an independent mental wellness program that will provide mental health services to players who want to receive mental health treatment from a source other than their team doctors. The program is still in development, and certain aspects of the program, such as the degree of anonymity given to participating players and the power of the program director to hold participating players out of a game due to mental health concerns, remain unclear.

Major League Baseball

The MLB Players Association (MLBPA) filed a grievance against the Miami Marlins, Oakland Athletics, Pittsburgh Pirates, and Tampa Bay Rays on February 27, 2018 alleging that the four teams were not spending their revenue sharing funds to improve on-field performance as is required by the MLB CBA. The grievance comes on the heels of a slow-moving offseason that resulted in only a few big-money deals and saw all four named teams in the grievance trade some of their best players, including Giancarlo Stanton, Gerrit Cole, Evan Longoria, and Andrew McCutchen. Some team owners have attempted to justify the reduction in spending by noting that the Chicago Cubs and Houston Astros employed the same strategy en route to their World Series titles. The MLB Commissioner’s Office is currently reviewing the complaint.

National Hockey League

The National Labor Relations Board conducted two investigations into the NHL’s Arizona Coyotes for interfering with the union rights of the team’s administrative staff. According to NLRB records, the team spied on employees, failed to pay proper wages, tried to discourage ticket salespeople from unionizing, and retaliated against an employee for raising issues of her pay by firing her. The team has denied all of the allegations. National Anthem Protests

On October 15, 2017, Kaepernick filed a grievance under the NFL CBA via an independent attorney alleging that the NFL owners colluded to keep Kaepernick out of the league “in retaliation” for Kaepernick’s role in beginning the NFL national anthem protests. Kaepernick began his protest during the 2016 season when he took a knee during the national anthem at a preseason game. He has been a free agent since March 3, 2017 after he opted out of his contract with the 49ers. This past offseason, Kaepernick continued to train and awaited a tryout from a team looking for a quarterback, but no such offers materialized. As other free agent quarterbacks were signed, including Kaepernick’s backup in San Francisco, as well as several players who have never taken an NFL snap, suspicion of league-wide collusion began to mount. Under the CBA, teams are barred from entering into express or implied agreements to deny employment opportunities to players. In his complaint, Kaepernick alleges that multiple general managers expressed interest, only to go silent without a contract offer made to him. As part of discovery, Kaepernick sought to depose commissioner Goodell and a number of owners. Additionally, Kaepernick sought texts and emails from a number of NFL officials. The grievance is still in the deposition phase, and no date for an arbitration hearing has been set.

During the height of the NFL anthem protests, Jerry Jones was the highest profile owner to speak out against the protests, stating that players who do not stand for the anthem will not play. In response to Jones’s comments, Local 100 of the United Labor Unions filed a complaint with the National Labor Relations Board alleging that Jones violated the NLRA by “attempting to threaten, coerce, and intimidate all Dallas Cowboys players…to prevent them from exercising concerted activity protected under the act by saying that he will fire any players involved in” the protests. The union filed the complaint on October 10, 2017, but withdrew its complaint two weeks later.

The NFLPA has continued to support the NFL players’ right to protest, and on March 6, 2018, the NFLPA released a statement that both Roger Goodell and John Mara assured the union that the NFL would continue to protect the players’ right to demonstrate. On September 29, 2017, the NBA sent a memo to all of its teams reminding them that the Official Rules of the NBA require “players, coaches, and trainers…to stand and line up in a dignified posture…during the playing of the national anthem.” Not one NBA player has challenged this rule by taking a knee.

Bruce Maxwell on September 23, 2017 became the first and only MLB player to take a knee during the National Anthem. The League later released a statement saying that MLB respects the “background, perspectives, and opinions” of its players. Maxwell said that he will resume standing for the anthem during the 2018 season.

The NHL does not have a rule governing player conduct during the national anthem, but Commissioner Bettman has said on multiple occasions that players should not bring their politics into the rink. J.T. Brown became the first NHL player to protest the national anthem by raising his fist during the anthem on October 7, 2017. He has since stopped his protest and shifted his focus to community outreach.

The MLS and MLS Players Union released separate statements supporting players’ rights to protest the national anthem. So far, no MLS player has protested.

Though WNBA players began protesting racial injustice by wearing black t-shirts with social messages before Kaepernick began his national anthem protest, the first WNBA anthem protest occurred during a playoff game between the Indiana Fever and Phoenix Mercury in September 2016. The most recent WNBA anthem protest occurred during the 2017 WNBA finals between the Minnesota Lynx and Los Angeles Sparks, where the entire Sparks team remained in the locker room during the anthem before games 1-4 of the finals. Additionally, the entire Lynx team kneeled during the anthem before game 1. WNBA commissioner Lisa Borders has publicly supported WNBA players’ right to protest.

• Agents Anti-Doping Canadian Football League Collective Bargaining Contract Equality Major League Soccer (MLS) MLB Players Association (MLBPA) National Basketball Association (NBA) National Football League (NFL) National Labor Relations Board NCAA NFL Player Association (NFLPA) Olympic Sports Salary Cap Student Athletes Tort United States of America (USA)