For the past several weeks, our colleagues at Technology Law Source have been working hard to keep readers apprised of developments related to The Internet Corporation for Assigned Names and Numbers’ new generic top-level domain (gTLD) program. This program, which is essentially redefining the face of the Internet, is likely to impact any business —
The NCAA men’s basketball tournament, a/k/a March Madness, kicks off Sunday, March 15 with Selection Sunday, then rolls on Tuesday, March 18 with a couple of play-in games and then on to the actual tournament, which begins Thursday, March 20. The brackets, the gambling, the office conference rooms dedicated to the games, the continual online streaming of games, the excitement…it’s all here! And with Warren Buffet recently announcing he will give $1 billion to anyone who can pick a perfect bracket, the stakes just got higher! While the Billion-Dollar Bracket may be new this year, March Madness, Super Bowl betting and Fantasy Football pools have long been ingrained in the American workplace, and with managers, supervisors and human resources professionals alike participating in the action, the slew of workplace issues associated with these events keeps increasing.
There is no question these events cause major distractions in many workplaces and gambling pools associated with these events create a wide range of risks for employers, like productivity loss, discrimination, whistleblower issues, disability issues and even criminal penalties. These risks are often overlooked because no one wants to be Debby Downer, but before burying their heads in the sand, employers should be familiar with some of the risks and some helpful solutions:
Is Workplace Gambling Legal?
The most obvious issue: Workplace gambling. But the real question: Is it even legal? On a federal level, probably not. If an office NCAA bracket pool crosses state lines or is conducted online (as many of them now are), it may violate the Interstate Wire Act of 1961. This act prohibits those “engaged in the business of betting or wagering [who] knowingly use a wire communication facility for the transmission in interstate or foreign commerce” to place bets on sporting events or contest. Because the Internet is a “wire communication facility”, an online pool seemingly violates this Act if its participants pay entry fees as a wager to win a bigger prize – yet we all know that such pools are readily available from mainstream internet sites, e.g. ESPN. There is a fantasy sports exception, but bracket pools do not seem to fit within this exemption because they require individuals to bet on the outcomes of the games.
The next federal law is the Professional and Amateur Sports Protection Act, which makes it illegal for anyone to operate “a lottery, sweepstakes, or other betting, gambling, or wagering scheme…in which amateur or professional athletes participate.” The Act grandfathered in previously authorized sports gambling in four states (Nevada, Delaware, Oregon, and Montana), but March Madness bracket pools were not included in the grandfathering.
Lastly, the Uniform Internet Gambling Enforcement Act (“UIGEA”) provides, “no person engaged in the business of betting or wagering may knowingly accept” funds “in connection with the participation of another person in unlawful Internet gambling.” The UIGEA has an exception that permit fantasy sports if: (1) the value of the prizes is not determined by the number of participants or the amount of fees paid and the prize is made known to participants before the contest begins; (2) all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individual athletes in multiple real-world sporting or other events; and, (3) the fantasy game’s result is not based on the final scores or point-spread of any single real-world game and not solely on any single athletes’ performance in a single event. March Madness bracket pools fail the second and third prongs.
On a state level, whether the tournament is illegal or not depends on the state. Although most states ban gambling, state gaming laws typically provide exceptions for “social” or “recreational” gambling, but to qualify for these exceptions (in most instances) the following must occur: (1) all of the money in a pool must go to a winner or a charitable organization, i.e. the “house” cannot receive any of the proceeds; (2) there must be a maximum amount a person can wager (like a $20 entry fee); and, (3) the pool must be limited to a certain number of people with pre-existing relationships (like co-workers). So, in some states, NCAA bracket pools that meet these requirements may be permissible. Ohio’s Constitution bans gambling, except lotteries, charitable bingo, casinos and racinos.
While law enforcement is probably not concerned with workplace bracket tournaments, employers should be aware that if they choose to sponsor a pool, theoretically at least, they risk fines and criminal penalties.
Controlling Gambling in the Workplace
Based on the information above, there are sound arguments that March Madness bracket gambling is likely prohibited by law, including in Ohio; however, this legal/illegal minor detail has never seemed to stop the gambling tradition. As such, employers need to figure out how to deal with these issues as they creep into their workplaces over the next few weeks and when fantasy football season comes around in the fall.
The safest and easiest approach for employers is to prohibit gambling, including NCAA bracket pools, in the workplace and describe acceptable and prohibited behaviors, e.g., using company-owned computers and servers for gambling purposes and identify work areas (e.g., offices, cafeterias and parking lots) where gambling is prohibited.
Recognizing that many, if not most, employers will not want to interfere, employers who choose to allow workplace gambling should consider implementing a workplace gambling policy, or update their current one, to include the following:
- The policy should describe the type of gambling that is allowed. If gambling is limited to March Madness brackets, the policy should expressly say so. If, however, an employer wishes to allow for fantasy leagues, OSCAR polls, Super Bowl polls, etc., the employer should take the time to make sure all allowed workplace gambling is included in the policy;
- The policy should require that the specific type of gambling being done in the workplace be approved by human resources to ensure it fits within the legal requirements set forth above;
- The policy should define if and how the employer’s property can be used to engage in the workplace gambling. For example, if workplace televisions, copiers, computers, email, etc. are not allowed to be used for such activities, the policy should expressly say so. If they are, the policy should clearly communicate policies regarding employee breaks, email and Internet use so employees know what is acceptable;
- The policy should inform employees that the gambling activities cannot interfere with production or work;
- The policy should outline the employer’s complaint procedure in the event there is an issue; and
- The policy should outline the discipline that may be lodged against an employee in the event of a policy violation.
In a 6-3 decision, the U.S. Supreme Court decided last week that whistleblower protection under the Sarbanes-Oxley Act of 2002 includes employees of a public company’s private contractors and subcontractors. In Lawson v. FMR LLC, the court, in a majority opinion written by Justice Ginsburg, concluded that extending protection to employees of a contractor was consistent with the purpose and intent of Sarbanes-Oxley: to protect investors and restore trust in financial markets.
Continue Reading U.S. Supreme Court extends whistleblower protection to employees of a public company’s private contractors
As we reported was likely to occur, President Obama signed an Executive Order yesterday requiring federal contractors to pay their employees at least $10.10 per hour beginning January 1, 2015. The minimum wage only applies to new federal contracts and contracts renewed by the federal government after January 1, 2015. However, the Executive Order states that “for all new contracts . . . negotiated between the date of this order and the effective date . . . , agencies are strongly encouraged to take all steps that are reasonable and legally permissible to ensure that individuals working pursuant to those contracts . . . are paid an hourly wage of at least $10.10.”…
Continue Reading President Obama Signs Executive Order Requiring $10.10 Minimum Wage for Federal Contractors
Valentine’s Day is drawing near. You know, that magical time of the year when bad tasting, heart-shaped confections and red roses are everywhere you look, including the workplace. Of course, an employer’s non-fraternization policy will do little to stop two adults from taking their relationship to the next level. Though office relationships on occasion may lead to good things for the employees involved like diamond ring purchases, white weddings, and gender-neutral nursery décor, more frequently they lead to problems for employers such as claims of favoritism, reduced productivity, ethical problems, and sexual harassment claims, just to name a few. …
Continue Reading Avoid Picking Up the Pieces of a Broken Heart with a Love Contract
With Valentine’s Day approaching, it is a good time to remind employers that dear old Cupid is alive and well, and strutting his stuff in the workplace. I won’t bore you with the statistics about how many romantic relationships blossom in the workplace, and how many of those end up in marriage or crash and burn like the Hindenburg. As many employers already know, it is not just the parties actually involved that can get burned when it comes to workplace romances. Most often, it is the employer that feels most the heartburn when workplace romances turn sour. Because romantic workplace relationships will develop, regardless of what an employer does to try to stop them, here are some thoughts about how to protect your workplace and avoid the inevitable sexual harassment lawsuit.
Continue Reading Hunka Hunka Burning Love. How Employers Stop the Heartburn of Workplace Romances and Avoid Litigation
Those of you who watched President Obama’s State of the Union Address know he announced that he will establish by Executive Order a minimum wage of $10.10 for all federal contractors and subcontractors. A proposal backed by the White House is currently pending in Congress to raise the federal minimum wage for all employers from $7.25 to $10.10. There is strong opposition to the proposed law. The President’s anticipated Executive Order does not need Congressional approval because it will not impact all employers, just those who have federal contracts or subcontracts. …
Continue Reading Updates for Federal Contractors: New Minimum Wage Coming Soon; New Required Form for Self-Identification of Disability Published by OFCCP.
Editor’s Note: Often there are important lessons learned for employers that come from seemingly unrelated cases. This post from our sister blog – Technology Law Source – highlights important e-discovery tips from Peggy Koesel and Tracey Turnbull. Even though this case is a products liability case, as Peggy and Tracey explain, the takeaways as they relate to e-discovery are universal and are very much worth sharing here.
Many people use the start of a new year to resolve to improve their diet, get more sleep and exercise more. Professional resolutions for attorneys often focus on improving efficiency, expanding networks and areas of expertise or simply submitting their time entries properly. A decision late last year in the In re Pradaxa Products Liability Litigation suggests some potential professional resolutions for litigators and in-house litigation counsel to consider when litigation arises or is reasonably anticipated.
Continue Reading Three Additions to Your New Year’s Resolutions from Pradaxa
In Deleon v. Kalamazoo Cnty. Road Comm’n, a split Sixth Circuit panel concluded that the district court improperly granted the employer summary judgment on the plaintiff’s discrimination claims despite the fact that the alleged adverse employment action was a transfer that the plaintiff had actively sought only nine months earlier.
Continue Reading Sometimes An Employer Just Can’t Win
For some, snowflakes bring thoughts of snowmen and sleigh rides. For others, they signal the beginning of closed business days, employees arriving late to work, and all sorts of other issues—all the result of inclement weather! Since many parts of the United States are currently dealing with the effects of, what-is-being-called, the “Polar Vortex,” we decided to take a look at some common headaches for employers caused by bad weather and provide you with some helpful guidance.
Continue Reading Oh the Weather Outside is Frightful! How Employers Can Handle the Impact of Inclement Weather (Polar Vortex Anyone?) and What NIOSH, OSHA, the NLRA and the FLSA Have to Say About It