Law 421 Week 1 Sports Agency Essay
Chapter 1 Sports Agency
(Tuition & fees, room and board, books) Scholarship covers 2/3
Cost of attendance
Less than 10 school’s athletic program turn a profit
NLI- National letter intent
Who is a sports agent?
Advocate, marketer and negotiator
Not just for athletes- Coaches, Broadcasters, retired athletes, etc. have agents.
Qualifications:
Law Degree? Not necessary. No law or mandate that says an agent needs a law degree. Most do, though. Sometimes the law degree might be a hindrance. If you were an attorney, and also happened to be a sports agent, there are some ethical dilemmas. You can’t go up to someone who’s about to go be a big star and solicit them as a client.
Dictated by Big Four
The Big four leagues- MLB, NFL, NHL, NBA
All have players’ associations which set up the rules for …show more content…
their individual leagues.
They have allowed agents to begin speaking with student-athletes. However, nothing of value can be exchanged and no agreement can come to terms.
Agents make a percentage of the athletic contract.
They use runners to recruit athletes.
Cost of becoming a sports agent have sky-rocketed. Agents don’t get a dime until the player signs the contract.
Very difficult for upstart sports’ agents to compete with the larger firms.
4 year college to degree to be NFL agent, NBA is college degree or negotiating skills (she wasn’t sure how they test for those skills), MLB you have to have one player on an active roster to be an agent for a MLB player.
Agency Law
Principal Agent
Contractor-independent contractor v. employer-employee
Express Agency – 99% of the time
A contract with the athlete expressing “This guy is my agent” in writing.
Implied Agency
Rare. Seen most in boosters or TAF.
Vicarious Liability
The athlete is responsible for the actions of the agent
Agency- a general legal principle that applies everywhere. It is a basic that allows an agent to act on behalf of a principle.
1. Fully Disclosed Agency- the third party knows that you are an agent and knows you represent
2. Partially disclosed Agency- knows agent, but doesn’t know who the party is.
3. Undisclosed Agency- doesn’t know you’re an agent, and doesn’t know who the party is.
a. The employer tells the employee A, B, C (the steps) to accomplish a goal.
1. Independent contractor- told to get to a goal and doesn’t care what the steps taken are
Agency History and Business
History
Red Grange (1925)
Red Grange was persuaded by CC Pile for him to negotiate his professional football contract before his college eligibility had ended.
Flourish in 1960s
Billy Cannon, Vince Lombardi
Billy Cannon signed with the Rams of the NFL, and then 2 weeks later signed with the Oilers (more money) of the AFL. The court said “He was an untutored man.” They did not really enforce anything.
Lombardi hated agents
Mergers in 1990s
Mark McCormeth turned into IMG, one of the biggest ones. He worked with Arnold Palmer first and really changed the game some.
As TV and what not grew, Agency grew with it. Players get more money, Agents become more abundant.
Egregious actions
Egregious Actions by firms, boosters, etc. which resulted in harsh financial penalties and scholarship reductions for college schools.
Business
Big Four Certifications
Non-Big Four Sports
Exclusivity
Most agents require their clients to sign this saying that they are the only agent you have. However, these are cancellable.
Agent Roles
Fiduciary
Duty of good faith- put forth best effort to secure contracts etc. (not just “ah it’s going to take care of itself”)
Duty of loyalty- loyal to your athlete
Duty of accounting- financial, get the numbers right
Duty of care- encompasses all of them; you owe certain care to your clients.
Conflicts of Interest
Dual presentation
Multiple Players
Players and Coaches, each league has own policies.
Policies re: conflicts of interest
Facilitators (Rodney King?)
Sports Agent Regulation
Uniform Athlete Agents Act (UAAA)
Model state regulation (national association model laws)
40 states, D.C. and Virgin Islands; 3 states have non-UAAA laws.
Criticism
Motivation behind enforcement – protect student athletes or colleges and universities from NCAA penalties
Only applies to student-athletes with remaining eligibility
Does not apply to professional athletes, those that don’t play college sports.
Sports Agent Responsibility Trust Act (SPARTA)
Protects against misleading advertising in recruiting student-athlete
Enforced by Federal Trade Commission
2004-Present no known violations
Players Associations Certifications
NFL
Four year degree
Two day negotiation seminar and written exam
Application, background check, dues
Negotiate one contract in each three year period
MLB
Represent one man on a 40-man roster before certification
Minor League – patience
NBA
Four year degree or sufficient negotiating experience
Application
NHL
Application
Who should regulate – state law, federal law, players’ associations? Certification or license?
Sports Agent Fees
Regulated by Players Associations NFL
Capped at 3% by NFLPA
MLB
Player-Agent negotiation, but only a percentage over minimum salary
NHL
Commissions not capped as long as player earns minimum salary after agent fees are paid.
Salary fees v. endorsement fees
Salary: 2-4 % commission
Endorsement: 10-20 % commission
Agent Violations
Violations
Josh Luchs- wrote the “Confessions of an Agent” article in 2010 in Sports Illustrated
Decertified by NFLPA
Told about the depth and breadth of the sports agent business
Ethical improprieties, violations of NICAA rules, violations of State Sports agent laws
Criminal Cases
Walters and Bloom
Charged in federal court in 1980s for inducing student athletes to sign professional contracts before eligibility expired.
Cash, loans, airfare, cars for both the families and athletes
Post-Dated contracts
Charged with mail fraud, extortion, wire fraud, conspiracy, and racketeering.
Walters were overturned, but Bloom was found murdered in his home in 93.
FSU Footlocker
Raul Bey used a runner to finance a 6000$ shopping spree at Footlocker in 1993.
Charged with felony to register as a sports agent (250$ fee)
Reminiscent of the SMU scandals
William Tank Black
Convicted of federal fraud charges for swindling almost 14 million from his clients.
Illegitimate financial investments and a pyramid investment scheme
Fred Taylor, Ike Hilliard, Jevon Kearse, and others
Decertified from NFLPA, released from federal prison in 2007, and wrote a book (Tanked!).
Civil Cases
Steinberg v Dunn
Dunn was sued and initially found to have unfairly competed against Steninberg in violation of a no compete clause when he left the firm.
Initially awarded a 47million prize, but was overturned by the appeals court who said that the no compete clause was invalid under Cali Law
Dunn was suspended by NFLPA and filed chapter 11 bankruptcy
National Collegiate Athletic Association
NCAA Today
1,200 voluntary members (colleges/associations)
Over 400K student athletes
3 divisions (I, II, III)
1,281 member institutions
23 sports
88 national championships
41 men, 44 women’s, 3 coed
49K student athletes who compete yearly
400 full-time employees at national office.
NCAA Divisions
Division I-A (Football Bowl Series)
16 sports
Male/mixed v. female
-At least 7 for men and women (or 6 men 8 women) = 16 sports
2 team sports per gender
5 Home football games and opponents
Neutral site (can count as home game)
Attendance Requirements
129 schools
120 FBS, 118, FCS, 97 without football= 335 total D1 members
If don’t have football, not allowed to vote on football related issues
97 Division I school without football
Marquette, Xavier, Pepperdine
Division I-AA (Football Championship Subdivision)
14 sports Male/mixed v. female teams (1:1 ratio)
118 schools
Division II Male/mixed v. female teams
Division III
Male/mixed v. female teams
Athletes receive no financial aid for athletics
Ivy League
No athletic scholarships, can receive academic or financial scholarship though.
Mission
“To maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body, and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.” Bylaw 1.3.1
Manual (Sanity Code)
Comprehensive statement of principles, policies, and rules for NCAA membership
Changes significantly each year.
Scholarships
NCAA scholarships are only given for 1 year
Renewable on an annual basis
Full and partial depending on sport
Unlikely to lose for athletic performance
Five Year/Ten Semester Rule
Redshirt
Medical Hardship or Injury
Revenue
NCAA Revenue
March Madness and BCS
-More than 95% of the NCAA’s revenues come from the March Madness Tournament
Sponsorships and Licensing
Tickets and Concessions
Revenue v. Non-Revenue Sports
Basketball, Football, Hockey
LSU
BCS Automatic Qualifiers v. Non-Automatic Qualifiers
Violations and Enforcement
Violations
Major v. Secondary (levels 1-4, 1 the worst)
Letter of Inquiry and Notice of Allegations
Letter of Inquiry sent to President or Chancellor to begin investigation
If enough evidence mounts, the investigation turns into a formal Notice of Allegations. The staff believes there is a major violation.
Committee on Infractions/Infractions Appeal Committee
Enforcement
Not a state actor; Punishments – vacate wins, reduce scholarships, post-season play, and television appearances
Self-imposed penalties
Penn State penalties
Should they have punished?
Too harsh?
Non-Compliance
Non-Compliance
Monitoring compliance, identifying and reporting violations, cooperating with the NCAA and taking corrective action
Monitoring coaches, players, boosters
Failure to Monitor and Lack of Institutional Control
Failure to Monitor is less severe than Lack of Institutional Control
Show Cause Orders
Why it should not be subject to a penalty for not taking appropriate disciplinary or corrective action.
Amateurism
Core principal of NCAA
“…maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body…”
“clear line of demarcation”
Prohibits student-athletes from using his athletic skills for pay in any form
Ohio State football players
Cost of Attendance
Should student-athletes be paid?
Participation in sports is a hobby, not primary goal of attending the institution.
NCAA and Sports Agents
Prohibits student-athletes from having sports agents
Ineligible if agree orally or in writing to be represented
Sport-specific
Professional Sports Counseling Panels
Guidance on contracts and agreements with agents; draft prospect
Conflict of Interest? Coaches could want the players to stay, creating a conflict of interest to the athletes (who could make a killing at the next level)
No Agent Rule
Oliver v. NCAA
NCAA rule violated the public policy of the state of Ohio and Oliver was allowed to seek legal counsel to make informed decisions about his career.
Issued permanent injunction against NCAA.
Settled before damages phase to avoid establishing legal precedent.
No Endorsement Rule
Bloom v. NCAA
A student-athlete who wishes to maintain their eligibility in any sport cannot accept endorsement income from any product, whether related to the amateur sport or not.
Boosters
Representatives of Athletic Interests
Conflicts of Interest +Money = Power
Who runs the university? President, Director, Booster?
Extra Benefit Rule
From coaches, alumni or others
Ex. Miami
Repeat Violators given severe sanctions or the death penalty
SMU, USC
NCAA Criticism
Non-profit organization
$700M in annual revenue
Unpaid labor force – student athletes
Multi-million salaries of coaches
Inconsistent and Unequal Punishment
Depends on who commits
Suspensions after the season for Ohio State players
Needs more frequent use of show-cause orders
Win at all costs, including cheating and other rules violations, is NOT in line with the educational mission of the non-profit organization.
What is the purpose of the NCAA?
Ch. 2 Sports Contracts
Contract is a legally binding agreement “K” stands for contract
“SPK” or standard player contracts are also known as boilerplate agreements (Mass produced at the same time except for clients name, address, phone, salary, and bonuses).
Offeror- can define the parameters (who, what, when, where, and how) of the proposed contractual relationship.
Contract Elements- All elements must exist in order to have a contract, otherwise no contract exists
1. Offer
2. Acceptance
a. Accept- legally binding contract created
b. Reject- offer automatically terminated
c. Counteroffer- original offeror is now the offeree)
d. Nothing- law will terminate the contract after a reasonable time
3. Consideration
a. Price of the promise
b. Salary in exchange for work
c. Consideration- “Quid Pro Quo.”
4. Legality
a. Illegal = void
b. Illegal per se
i. adhesion, unconscionable, one-sided
5. Capacity
a. Competency, appreciation of entrance into contract
b. Minority
a. Disaffirm before 18
i. Letter of Intent/Scholarship?
b. Restitution
c. Co-signature of parent
d. Coogan’s law
i. 15% of child actor’s money
c. Fraud, duress, mutual (bilateral) mistake
A contract represents the “meeting of the minds” – a phrase used to describe the agreement between offeror and offeree.
a. Contract Drafters must determine the intent of the parties and reduce those intentions to a formal, written agreement.
Restitution is the act of restoring a party to a contract to a position had there been no contract at all or no breach
General Contract Law Principles
1. Valid
a. most contracts
b. All of the 5 required elements of the contract are present.
c. legally binding
2. Void
a. Infrequently occur in sports law.
b. Violating state law, or Big 4 CBA, or anything else are considered void.
3. Voidable
a. Means that the contract WAS valid, but something occurred after forming the agreement that allowed at least one of the parties to exercise the right to terminate or modify.
b. also referred to as option contracts
c. options contracts: one of the parties can exercise a right (say, rework a contract) upon the occurrence of a condition (reaching a performance level) Statute of Fraud
a. Over one year – contract has to be in writing
Implied and Express
a. Implied – quasi
1. Justifiably relied on another's promise
2. Implied Contract
Principle is known as promissory estoppels or detrimental reliance (no written contract, but a promise was made and a party relied on it)
Virtually none of these left in the sports industry
b. Express
1. Formally expressed in writing
Addendum (rider in the entertainment industry)
a. Supplemental agreement to SPK
1. Incentives and bonuses
UCC
a. A model at that all states have adopted in whole or in part. Pro-commerce codification of common law contract principles that courts use for guidance when buyers and sellers of goods have failed to otherwise address potential breach of contract issues and relevant contract remedies on their own.
Contract Categories
5 Categories of Contracts
1. CBA
2. Professional Services Contracts
3. Endorsement Contracts
4. Appearance Contracts
5. Guaranteed Contract
Collective Bargaining Agreement
a. Terms of employment btw union and employer
1. Mandatory topics
Minimum wages, permitted work hours, working conditions
2. Uniform Players Contract
Nearly uniform in Big Four
Standard Player Contract
a. Professional Services
1. Non-assignable
b. Boilerplate as a result of CBA
c. Negotiable Issues
1. Term, salary, bonuses
d. Contract Categories
Endorsement Contracts
a. Increase sales or market share of products by featuring athlete in advertising campaign.
b. Grants sponsor the right of use of athlete's name, image or likeness
1. No formalized parameters
c. No set rules, other than it are for a legal purpose.
d. ESPN established endorsement guidelines for its employees to keep the journalism balanced.
Appearance Contracts
a. Compensate athletes for appearing
Guaranteed Contracts
a. Paid full amount of contract for specified period of time, regardless of whether injured or cut from team
1. MLB and NBA, NFL only occasionally
Special Sports Contracts
NHL
a. Two-way Contract
1. NHL team pays, but less if playing for AHL team (minor league team).
b. One-way Contract
1. Paid same amount regardless if playing for NHL or AHL.
NBA
a. Ten-day contract
1. 10 days or 3 games (whichever comes last)
2. Limit 2 in one season
Must sign for rest of season after undrafted overlooked youngsters
Special Sports Clauses
1. Reserve Clause (outdated)
a. Club retained rights even at the expiration of contract unless traded or released at team’s option.
i. Players signed contracts that bound them to their teams PERMANENTLY
1. Reduced player’s bargaining power
2. Restricted salaries and gave owner’s power ii. In every MLB contract starting in 1880s
b. Reserve clause and system no longer exist in Big Four
2. Special Sports Clauses
3. Termination Clause
a. At-Will v. Term Contract
i. Completion, mutual consent/rescission, breach
b. Cause
i. Employers reserve right to terminate in order to protect image from misconduct by employees ii. Defining “cause” important, but difficult
1. Often receives a settlement
c. Kelvin Sampson
i. Paid $750K to leave Indiana University
1. “Just cause” defined in 14 subsections
a. Significant, intentional or repetitive violation … result in university being placed on probation…occurred in prior employment
2. Improper recruitment at Oklahoma; did same at IU, so asked to leave.
d. Bruce Pearl
i. University of Tennessee b-ball coach lied to NCAA over recruiting violations ii. Terminated contract but did not fire
1. Working out new contract; couldn’t fire until NCAA finding
2. SEC suspended; fired after losing to Michigan in March Madness
e. Jim Tressel
i. Knew players violated NCAA rules
1. Did not investigate or report to compliance department
2. Could have been terminated “for cause”
3. 7% trivial; lengthened suspension; allowed players to play in Sugar bowl ii. NCAA sent Notice of Allegations
1. Repeat offender
2. “Failed to deport him in accordance with honesty and integrity…” iii. Resigned
f.
Ron Prince
i. Secret Agreement with former AD
1. $3.2M if terminated prior to end of 2008
g. Jim O’Brien
i. Loaned Serbian recruit $6K ii. Could be fired for “material breach” – not defined iii. Debate on whether or not Serbian was eligible and whether O’Brien knew/actively recruiting iv. Court ruled the violation of NCAA rules was not a material breach
1. Could not terminate for cause
2. Obligated to pay liquidated damages
v. Special Sports Clauses
4. Hazardous Activity Clause
a. Meant to serve as a deterrent to players from partaking in activities that could injure them, resulting in playing time being missed.
b. Mitigate changes of injury outside of scope of gameo
c. Modify financial obligations if player injured as a result of involvement in hazardous activity
1. NBA SPK – “substantial risk of bodily injury…riding a motorcycle or moped”
d. What is a hazardous activity?
1. Celebration? Practical joke? Video games?
e. What would you prohibit?
5. Morals Clause
a. Also known as: “moral turpitude” or “morality” clause
b. Roots in the entertainment industry
c. Serves as a deterrent to misconduct
d. SPK and contracts with individual
teams
e. “Conduct that does not conform to standards of morality and fair play…laws or that is prejudicial or detrimental to the Association.”
f. Very subjective
g. Lost jobs and/or lost endorsements
i. Pitino, Patrino / Tiger Wood, Vick, Phelps
h. Reverse Morals Clause
i. Reverse Morals Clause- if the employer or sponsor does something immoral, an employee should be able to terminate to save their reputation ii. Enron
6. Loyalty Clause
a. Employee or endorsee fails to keep his promise to remain loyal to the employer or endorser. (newer)
b. Use or wear particular brand of product
i. Ex:
1. DeAngelo Hall wore Nike when endorsed by Reebok, was terminated
2. Jordan Draped an American Flag over the Reebok logo on his uniform at the Olympics to avoid an issue
c. Not bad-mouth league or team
i. Carl Pickens Clauses – bad mouth Bengals
7. Force Majeure Clause
a. Addresses contractual obligations when a triggering event inhibits the fulfillment of duties of one or both parties
b. Unexpected events
i. Weather, work stoppages, bee swarms, other acts of God
1. Ex. Katrina, NHL transportation company
8. Best Efforts Clause
a. Mandates general good faith
i. Depends on the nature of the facts, sports, or industry
1. Ex. Nevada’s statutes for MMA, boxing, etc.
9. No-Trade Clause
a. Player has right to reject a trade under certain conditions
i. MLB veterans with 10 years of service w/ 5 with current team ii. Also found in NHL as no-trade or no-move clauses iii. NFL and NBA rarely use No-Trade clauses, mostly in MLB and NHL
b. Time or geographical restrictions
i. Usually waive if championship contending team.
c. No-Move Clause
i. Approve or disapprove of a demotion to a minor league prior the transfer
10. “Best Interests of Baseball”
a. Commissioner can “investigate…any act, transaction or practice charges, alleged or suspected to be not in the best interests of the national game of baseball.”
i. Ex. Bought Montreal Expos, trustee for LA Dodgers ii. Perfect Game for Detroit Tigers’ Armando Galarraga?
b. First Commissioner took the job as commissioner on the condition that he is given broad powers to discipline players in the best interests of the game.
11. Other Clauses:
a. Attendance, Charity, Escalator, Freedom, Longevity, Official, ROFR, Reduction, Weight, & Most Favored Nation
Drafting the Sports Contract
The 3 P’s
i. Predict
1. What might happen to the parties and their relationship
a. Pessimistic ii. Provide
1. Establish rules for dealing with termination, etc. iii. Protect
1. Specific provisions to protect client in worst case scenario
Drafting a Sports Contract
1. Title- the name of the agreement (Sponsorship Agreement, Sports Contract, etc)
2. Describe the parties- other important info such as Date of birth, Phone number, SSN, might be included as well
3. Term – how long
4. Purpose – intent of the parties, why or how the athlete will endorse the company’s products or services
5. Duties and Obligations – right/duties/responsibilities
6. Compensation - $$$ (aka legal consideration)
7. Exclusivity
8. Confidentiality – mostly in smaller sports now since larger sports unions have made salaries public info.
9. Termination – how, when and why
10. Covenant Not To Compete- mostly in smaller sports now since larger sports unions have made salaries public info.
11. Waivers – limit liability in the event of an accident
12. Modification – both parties agree to change
13. Governing Law
14. Merger – final and complete agreement, all prior oral or verbal agreements are now null and void, this contract is the law.
15. Non-assignment – meaning non-assignable and non-delegable because it’s a personal services contract (meaning you can’t get someone else to do your duty, it is your duty).
16. Alternative Dispute Resolution – mediation/arbitration
17. Signature Line
18. Exhibits and Other Addenda – bonuses, schedules
Damages for Breach of Contract
Liquidated damages
Are damages specified in the contract? They are a sum of money agreed upon by both parties to the contract prior to signing as a substitute for actual damages.
Agreed upon in contract
Measure of financial stability
Louisville v. Duke – mitigate damages when games cancelled
Compensatory damages
Money necessary to make up for the economic loss caused by the breach
General – pain, suffering, mental anguish, disability
Special – medical expenses, loss of income
Consequential damages
Economic loss caused indirectly by the breach usually contractually excluded
Specific Performance
Order to perform the obligation
Unusual in performance of services; ok for sale of goods illegal modern-day slavery
Injunction
prohibits certain acts of performances
Mitigation of Damages
Cannot let losses accumulate
Attempt to reduce amount of economic loss if it occurs, can hurt the non-breaching party’s case
Additional Damages
i. Nominal
1. Very small
2. Demonstrates wronged, but little financial loss ii. Treble
1. Three times the amount awarded
a. Must have statutory authorization iii. Punitive
1. Exemplary; not based on economic loss
2. Make an example and punish for wrongdoing
NCAA Contract Issues
National Letter of Intent
Binding agreement between student-athletes and institution
Play sports – receive tuition, room and board, books
Criticism
Contract of adhesion?
Unfairly limit student-athletes despite changes in circumstances – i.e. coach leaving
Sign, but want to transfer, must wait a year
Use name, image and likeness without limits
Minors – can they agree; settlement outside of court.
Breach of Athletic Scholarship Contract
Claims have consistently failed
Not being able to play
Ineligible due to not meeting education requirements
Not an interest or property right; NCAA not a state actor
Educational Malpractice
Ross v. Creighton –educational malpractice not a valid cause of action
Hart v. NCAA – no constitutional right to participate in athletics
Hendericks v. Clemson – no fiduciary relationship between athlete and academic advisor
Waivers
General
Relinquishment of privilege or right
Protect a party from legal liability for others’ injuries
Accidents, inherent risks, ordinary negligence
Must be conspicuous
Louisiana
Tickets and Waivers
Waivers printed on tickets
Courts generally do no uphold ticket stub waivers not clear of conspicuous, no signature
Serve as a deterrent
Chapter 3: Sports Torts
Tort Law Generally
Tort
Injuries involving person or property resulting from an act or omission of the tortfeasor (Individual who commits the tort)
Goal
Compensate for injuries
Purpose of tort law is to compensate the plaintiff monetarily for the tortfeasor’s misdeeds, whereas the purpose of criminal law is to punish the perp.
Preponderance of Evidence
“More likely than not” that the defendant was responsible for the injury to the plaintiff. only needed to prove
Risk Management
Preventative precautions, maintenance. And damage control.
Tort Law Basics
4 Major Tort Theories (not mutually exclusive):
1. Negligence
a. Acted as a reasonable person under the circumstances
b. Negligence is common in sports law.
2. Intentional Torts
a. Voluntary act intended to cause injury
b. Intentional Torts are often rewarded with punitive damages. Can involve claims of defamation and fraud, also assault and battery.
3. Products Liability
a. Manufacturers are liable for proper functioning of products
4. Strict (Absolute) Liability
a. Legal responsibility without finding fault
i. Extremely hazardous activity
Consent
Negligence
Failure to act as the reasonable person
What is the reasonable person?
Reasonable person might refer to an individual such as a parent, fan, trainer, coach or player, or it might refer to a corporation or other type of business organization. It is up to the jury to decide exactly who the reasonable person is.
Elements to prove
Duty of Care
Breach of Duty
Causation
Evidence of Damages
If the plaintiff fails in proving any of these requisite elements, the plaintiffs claim will not succeed.
Contributory v. Comparative Negligence
Contributory
claim fails if plaintiff contributed to negligence; outdated
Contributory Negligence is outdated. If the plaintiff is found to have contributed to his or own injuries in any way, the plaintiffs legal claim will fail.
Comparative
Still recover damage minus % of own fault.
Comparative Negligence is now what most states start.
Plaintiffs may be partially to blame for their own injuries, but as long as they are not more at fault than the defendant, they can still recover damages, minus their percentage of fault.
Some states subscribe to the 49% rule, and some jurisdictions use the 50% rule.
Assumption of the Risk
Strongest defense to negligence
Express – signed waiver or release
Implied – knew danger and voluntarily proceeded
Gross Negligence/Recklessness:
So lacking in care that one can construe the conduct as being intentional
Punitive damages possible
See in sports when sole purpose of the play is to injure player
Bountygate
This would be difficult to prove successfully.
Requires subjective analysis.
Many negligence claims are settled out of court.
Contact Sports Exception
Nature of sport
Contact inherent part of games
No duty of care of for ordinary negligence
No liability to another participant unless the injury occurred due to a grossly negligence, reckless or intentional act.
Cases
Nabozny v. Barnhill - soccer
Reckless disregard for safety of others rationale
Bourque v. Duplechin - softball
Hackbart v. Cincinnati Bengals, Inc. – football
Gauvin v. Clark – hockey
Pfister v. Shusta – Kick the can
Spectator Injuries
Injuries caused by the open and obvious rules of the game
Caveat emptor- let the buyer beware
Caveat venditor- let the seller beware
Generally disallowed
Flying objects
Limited Duty Rule
Universal Rule/Baseball Rule
Assume certain knowledge of potential dangers of being hit.
Benejam v. Detroit Tigers
Sufficient to meet ordinary demand for protective seating
Plaintiffs must show defect in design of stadium, netting or construction of facility to prevail.
Just Negligence Rules
Tort analysis should be no different than other negligence claims – premises liability
No Duty Rule
Spectators assume all risks that are common, expected and frequent risks of the game.
Essentially bar negligence claim for flying objects at a baseball game.
No exceptions except for willful misconduct.
Loughran v. Phillies
Outfielder tosses ball into stands between innings.
Recovery is not granted to those who voluntarily expose themselves to risks by participating in or viewing activity.
Non-Spectating Spectators
Maisonave v. Newark Bears
Stands – limited duty
Concourse, playgrounds, etc. – ordinary negligence
Baseball Spectator Safety Act of 2006
Response to Maisonave
Immunity if warning signs, etc.
Pre-Game Spectator Injuries
Batting practice injuries
Courts have refused to apply baseball rule. Why?
Golf
Anand v. Kapoor
Didn’t yell “fore!” after shanked shot.
Consent to certain risks that are inherent in and arise out of the nature of the sports generally and flow from such participation.
Hockey
Now have netting behind Plexiglas because of 13 year old death
Pre- and Post-Game Celebrations
Vicarious liability for university and security
A&M Bonfire
Wisconsin stampede
SEC “storm the field” rule.
Negligent Supervision or Operation
Potential liabilities in facilities management or operations, improper security measures, or improper maintenance
Negligent Hiring or Training
Unqualified Employee – Negligent Hiring
Negligent hiring- example would be hiring a coach with a past of hitting players, and he does it at your university, could be a case for negligence.
Lead to outsourcing employment searches
Personality tests, drug tests, background checks
Care of a reasonable employer
Mascot
Mascots and other entertainers during a sports contest are generically referred to as components of game presentation.
The mascot act distracted and created an increased inherent risk of Lowe being struck by a foul ball.
Live animal mascot are a huge liability
Costumed mascots also create distraction possibility
Part of the game? Separate and distinct?
Sports Officials
Sports officials can sue fans, participants, and others for torts suffered by them. But the opposite is more difficult because other rules that protect the officials for the calls they make.
Targets of hostile emotions
Laws enacted to provide officials immunity from lawsuits for unintentional, negligent acts by officials
Laws specifically increase penalties for injuring sports official
La. Rev. Stat. 14:34.4
Wrongful Death
General
Someone dies as a result of negligence
During participation
More foreseeable the injury, greater potential for liability
Ex. Helmets for baseline coaches, design of luge at Vancouver Olympics
During Transportation
University or organization could be liable for negligence
Ex. Marshall football team
During Training Camps
Usually involve whether or not medical staff was available.
Can lead to criminal charges – wanton endangerment for lack of water.
As Spectators
In addition to flying object, danger of standing too close, ignoring signs
Malpractice
Malpractice is a broad category that could involve anything from an improper diagnosis to the prescription of an inappropriate medication.
Malpractice is a claim of negligence involving a medical professional.
Negligence on behalf of a sports medical practitioner.
Present? Inability to deal with injury properly?
Was the practitioner there available to treat the injured?
Some states require licensed or certified athletic trainers on site, including first responders, to deal with potential injuries during athletic competition.
Duty to player or team?
NFL trainers
Locality Rule
Compare to others in same geographical area or specialty.
Medical Review Panel
Concussions
Suicides related to brain trauma
Junior Seau
Leagues
MLB – 7 day disabled list
NFL – cleared by doctors not associated with team.
Troy Polamalu
Lawsuit justified? Consented?
Infectious Disease
May be liable for failure to maintain proper hygiene in the locker or during sports contests.
Magic Johnson
Workers’ Compensation
Insurance required by the state to provide benefits to employees who are injured on the job
Arise out of and in the course of employment
Prime subject of collective bargaining
Insurance is indemnity not liability relief
Student-Athletes
Not employees, so not entitled to WC benefits
Not a payment for sport services
NCAA
NCAA established fund for every student who participates in college sports – trainers, managers, cheerleaders
Exceptional Student Athlete Disability Insurance (ESDI) – potential first round draft picks
Insurance
Indemnity not liability relief
Intentional Torts
Key element
Motivation - intent to bring about injury to another person.
Statute of limitation- plaintiff only has a particular time frame to sue.
Assault and Battery
Assault – causing the apprehension of imminent harmful or offensive contact
Battery – unwelcome physical contact
Reluctant to bring suit; tort and crime
Hitting batter with pitch part of game – not battery
Charging with bat?
Bounty Gate?
Tyson biting Holyfield ear?
David Shultz
Fraud/Misrepresentation
Scienter v. Negligent Misrepresentation
Academic Fraud - No show, cheating
Recruiting Fraud – Promises that can’t be kept
Participation Fraud – Age, gender, weight falsification
Resume Fraud – Coaches background check
Identity Fraud – Mask real identities to participate in sports despite ineligibility.
Other Torts
Intentional Infliction of Emotional Distress
Shocks the conscious
Mental and emotional injuries for egregious conduct
Disappointment Lawsuits
Didn’t play; courts say no
Intentional Interference with Contract
Elements, Tampering
Commercial Misappropriation/Right of Publicity
Prohibit from using another’s name, voice, signature, photo or likeness in products or advertisements without permission
News exception
Defamation
Slander – spoken, libel – written
Standards
Public Official – ran for office and elected
Public Figure – Coaches and players even if no intent
Private Figure – John Doe; greatest expectation of privacy
Must be a statement of fact, not opinion by constitutionally protected
Successful if prove knowingly false of made with reckless disregard for the truth/actual malice
Defense: Truth, protected speech (parody), retraction statutes
Products Liability
Focus on “defect”
Defect in design
Defect in manufacturing process
Defect in warning – failure to properly warn of potential dangers
How and when might this relate to sports?
Aluminum bats
Helmets
Exercise/Weight Equipment
Strict Liability
Absolute liability or liability without fault
Liable for any injury that is caused due to an ultra-hazardous or unreasonably dangerous activity
Live animal mascot
Fireworks display, canons
(Tuition & fees, room and board, books) Scholarship covers 2/3
Cost of attendance
Less than 10 school’s athletic program turn a profit
NLI- National letter intent
Who is a sports agent?
Advocate, marketer and negotiator
Not just for athletes- Coaches, Broadcasters, retired athletes, etc. have agents.
Qualifications:
Law Degree? Not necessary. No law or mandate that says an agent needs a law degree. Most do, though. Sometimes the law degree might be a hindrance. If you were an attorney, and also happened to be a sports agent, there are some ethical dilemmas. You can’t go up to someone who’s about to go be a big star and solicit them as a client.
Dictated by Big Four
The Big four leagues- MLB, NFL, NHL, NBA
All have players’ associations which set up the rules for …show more content…
their individual leagues.
They have allowed agents to begin speaking with student-athletes. However, nothing of value can be exchanged and no agreement can come to terms.
Agents make a percentage of the athletic contract.
They use runners to recruit athletes.
Cost of becoming a sports agent have sky-rocketed. Agents don’t get a dime until the player signs the contract.
Very difficult for upstart sports’ agents to compete with the larger firms.
4 year college to degree to be NFL agent, NBA is college degree or negotiating skills (she wasn’t sure how they test for those skills), MLB you have to have one player on an active roster to be an agent for a MLB player.
Agency Law
Principal Agent
Contractor-independent contractor v. employer-employee
Express Agency – 99% of the time
A contract with the athlete expressing “This guy is my agent” in writing.
Implied Agency
Rare. Seen most in boosters or TAF.
Vicarious Liability
The athlete is responsible for the actions of the agent
Agency- a general legal principle that applies everywhere. It is a basic that allows an agent to act on behalf of a principle.
1. Fully Disclosed Agency- the third party knows that you are an agent and knows you represent
2. Partially disclosed Agency- knows agent, but doesn’t know who the party is.
3. Undisclosed Agency- doesn’t know you’re an agent, and doesn’t know who the party is.
a. The employer tells the employee A, B, C (the steps) to accomplish a goal.
1. Independent contractor- told to get to a goal and doesn’t care what the steps taken are
Agency History and Business
History
Red Grange (1925)
Red Grange was persuaded by CC Pile for him to negotiate his professional football contract before his college eligibility had ended.
Flourish in 1960s
Billy Cannon, Vince Lombardi
Billy Cannon signed with the Rams of the NFL, and then 2 weeks later signed with the Oilers (more money) of the AFL. The court said “He was an untutored man.” They did not really enforce anything.
Lombardi hated agents
Mergers in 1990s
Mark McCormeth turned into IMG, one of the biggest ones. He worked with Arnold Palmer first and really changed the game some.
As TV and what not grew, Agency grew with it. Players get more money, Agents become more abundant.
Egregious actions
Egregious Actions by firms, boosters, etc. which resulted in harsh financial penalties and scholarship reductions for college schools.
Business
Big Four Certifications
Non-Big Four Sports
Exclusivity
Most agents require their clients to sign this saying that they are the only agent you have. However, these are cancellable.
Agent Roles
Fiduciary
Duty of good faith- put forth best effort to secure contracts etc. (not just “ah it’s going to take care of itself”)
Duty of loyalty- loyal to your athlete
Duty of accounting- financial, get the numbers right
Duty of care- encompasses all of them; you owe certain care to your clients.
Conflicts of Interest
Dual presentation
Multiple Players
Players and Coaches, each league has own policies.
Policies re: conflicts of interest
Facilitators (Rodney King?)
Sports Agent Regulation
Uniform Athlete Agents Act (UAAA)
Model state regulation (national association model laws)
40 states, D.C. and Virgin Islands; 3 states have non-UAAA laws.
Criticism
Motivation behind enforcement – protect student athletes or colleges and universities from NCAA penalties
Only applies to student-athletes with remaining eligibility
Does not apply to professional athletes, those that don’t play college sports.
Sports Agent Responsibility Trust Act (SPARTA)
Protects against misleading advertising in recruiting student-athlete
Enforced by Federal Trade Commission
2004-Present no known violations
Players Associations Certifications
NFL
Four year degree
Two day negotiation seminar and written exam
Application, background check, dues
Negotiate one contract in each three year period
MLB
Represent one man on a 40-man roster before certification
Minor League – patience
NBA
Four year degree or sufficient negotiating experience
Application
NHL
Application
Who should regulate – state law, federal law, players’ associations? Certification or license?
Sports Agent Fees
Regulated by Players Associations NFL
Capped at 3% by NFLPA
MLB
Player-Agent negotiation, but only a percentage over minimum salary
NHL
Commissions not capped as long as player earns minimum salary after agent fees are paid.
Salary fees v. endorsement fees
Salary: 2-4 % commission
Endorsement: 10-20 % commission
Agent Violations
Violations
Josh Luchs- wrote the “Confessions of an Agent” article in 2010 in Sports Illustrated
Decertified by NFLPA
Told about the depth and breadth of the sports agent business
Ethical improprieties, violations of NICAA rules, violations of State Sports agent laws
Criminal Cases
Walters and Bloom
Charged in federal court in 1980s for inducing student athletes to sign professional contracts before eligibility expired.
Cash, loans, airfare, cars for both the families and athletes
Post-Dated contracts
Charged with mail fraud, extortion, wire fraud, conspiracy, and racketeering.
Walters were overturned, but Bloom was found murdered in his home in 93.
FSU Footlocker
Raul Bey used a runner to finance a 6000$ shopping spree at Footlocker in 1993.
Charged with felony to register as a sports agent (250$ fee)
Reminiscent of the SMU scandals
William Tank Black
Convicted of federal fraud charges for swindling almost 14 million from his clients.
Illegitimate financial investments and a pyramid investment scheme
Fred Taylor, Ike Hilliard, Jevon Kearse, and others
Decertified from NFLPA, released from federal prison in 2007, and wrote a book (Tanked!).
Civil Cases
Steinberg v Dunn
Dunn was sued and initially found to have unfairly competed against Steninberg in violation of a no compete clause when he left the firm.
Initially awarded a 47million prize, but was overturned by the appeals court who said that the no compete clause was invalid under Cali Law
Dunn was suspended by NFLPA and filed chapter 11 bankruptcy
National Collegiate Athletic Association
NCAA Today
1,200 voluntary members (colleges/associations)
Over 400K student athletes
3 divisions (I, II, III)
1,281 member institutions
23 sports
88 national championships
41 men, 44 women’s, 3 coed
49K student athletes who compete yearly
400 full-time employees at national office.
NCAA Divisions
Division I-A (Football Bowl Series)
16 sports
Male/mixed v. female
-At least 7 for men and women (or 6 men 8 women) = 16 sports
2 team sports per gender
5 Home football games and opponents
Neutral site (can count as home game)
Attendance Requirements
129 schools
120 FBS, 118, FCS, 97 without football= 335 total D1 members
If don’t have football, not allowed to vote on football related issues
97 Division I school without football
Marquette, Xavier, Pepperdine
Division I-AA (Football Championship Subdivision)
14 sports Male/mixed v. female teams (1:1 ratio)
118 schools
Division II Male/mixed v. female teams
Division III
Male/mixed v. female teams
Athletes receive no financial aid for athletics
Ivy League
No athletic scholarships, can receive academic or financial scholarship though.
Mission
“To maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body, and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.” Bylaw 1.3.1
Manual (Sanity Code)
Comprehensive statement of principles, policies, and rules for NCAA membership
Changes significantly each year.
Scholarships
NCAA scholarships are only given for 1 year
Renewable on an annual basis
Full and partial depending on sport
Unlikely to lose for athletic performance
Five Year/Ten Semester Rule
Redshirt
Medical Hardship or Injury
Revenue
NCAA Revenue
March Madness and BCS
-More than 95% of the NCAA’s revenues come from the March Madness Tournament
Sponsorships and Licensing
Tickets and Concessions
Revenue v. Non-Revenue Sports
Basketball, Football, Hockey
LSU
BCS Automatic Qualifiers v. Non-Automatic Qualifiers
Violations and Enforcement
Violations
Major v. Secondary (levels 1-4, 1 the worst)
Letter of Inquiry and Notice of Allegations
Letter of Inquiry sent to President or Chancellor to begin investigation
If enough evidence mounts, the investigation turns into a formal Notice of Allegations. The staff believes there is a major violation.
Committee on Infractions/Infractions Appeal Committee
Enforcement
Not a state actor; Punishments – vacate wins, reduce scholarships, post-season play, and television appearances
Self-imposed penalties
Penn State penalties
Should they have punished?
Too harsh?
Non-Compliance
Non-Compliance
Monitoring compliance, identifying and reporting violations, cooperating with the NCAA and taking corrective action
Monitoring coaches, players, boosters
Failure to Monitor and Lack of Institutional Control
Failure to Monitor is less severe than Lack of Institutional Control
Show Cause Orders
Why it should not be subject to a penalty for not taking appropriate disciplinary or corrective action.
Amateurism
Core principal of NCAA
“…maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body…”
“clear line of demarcation”
Prohibits student-athletes from using his athletic skills for pay in any form
Ohio State football players
Cost of Attendance
Should student-athletes be paid?
Participation in sports is a hobby, not primary goal of attending the institution.
NCAA and Sports Agents
Prohibits student-athletes from having sports agents
Ineligible if agree orally or in writing to be represented
Sport-specific
Professional Sports Counseling Panels
Guidance on contracts and agreements with agents; draft prospect
Conflict of Interest? Coaches could want the players to stay, creating a conflict of interest to the athletes (who could make a killing at the next level)
No Agent Rule
Oliver v. NCAA
NCAA rule violated the public policy of the state of Ohio and Oliver was allowed to seek legal counsel to make informed decisions about his career.
Issued permanent injunction against NCAA.
Settled before damages phase to avoid establishing legal precedent.
No Endorsement Rule
Bloom v. NCAA
A student-athlete who wishes to maintain their eligibility in any sport cannot accept endorsement income from any product, whether related to the amateur sport or not.
Boosters
Representatives of Athletic Interests
Conflicts of Interest +Money = Power
Who runs the university? President, Director, Booster?
Extra Benefit Rule
From coaches, alumni or others
Ex. Miami
Repeat Violators given severe sanctions or the death penalty
SMU, USC
NCAA Criticism
Non-profit organization
$700M in annual revenue
Unpaid labor force – student athletes
Multi-million salaries of coaches
Inconsistent and Unequal Punishment
Depends on who commits
Suspensions after the season for Ohio State players
Needs more frequent use of show-cause orders
Win at all costs, including cheating and other rules violations, is NOT in line with the educational mission of the non-profit organization.
What is the purpose of the NCAA?
Ch. 2 Sports Contracts
Contract is a legally binding agreement “K” stands for contract
“SPK” or standard player contracts are also known as boilerplate agreements (Mass produced at the same time except for clients name, address, phone, salary, and bonuses).
Offeror- can define the parameters (who, what, when, where, and how) of the proposed contractual relationship.
Contract Elements- All elements must exist in order to have a contract, otherwise no contract exists
1. Offer
2. Acceptance
a. Accept- legally binding contract created
b. Reject- offer automatically terminated
c. Counteroffer- original offeror is now the offeree)
d. Nothing- law will terminate the contract after a reasonable time
3. Consideration
a. Price of the promise
b. Salary in exchange for work
c. Consideration- “Quid Pro Quo.”
4. Legality
a. Illegal = void
b. Illegal per se
i. adhesion, unconscionable, one-sided
5. Capacity
a. Competency, appreciation of entrance into contract
b. Minority
a. Disaffirm before 18
i. Letter of Intent/Scholarship?
b. Restitution
c. Co-signature of parent
d. Coogan’s law
i. 15% of child actor’s money
c. Fraud, duress, mutual (bilateral) mistake
A contract represents the “meeting of the minds” – a phrase used to describe the agreement between offeror and offeree.
a. Contract Drafters must determine the intent of the parties and reduce those intentions to a formal, written agreement.
Restitution is the act of restoring a party to a contract to a position had there been no contract at all or no breach
General Contract Law Principles
1. Valid
a. most contracts
b. All of the 5 required elements of the contract are present.
c. legally binding
2. Void
a. Infrequently occur in sports law.
b. Violating state law, or Big 4 CBA, or anything else are considered void.
3. Voidable
a. Means that the contract WAS valid, but something occurred after forming the agreement that allowed at least one of the parties to exercise the right to terminate or modify.
b. also referred to as option contracts
c. options contracts: one of the parties can exercise a right (say, rework a contract) upon the occurrence of a condition (reaching a performance level) Statute of Fraud
a. Over one year – contract has to be in writing
Implied and Express
a. Implied – quasi
1. Justifiably relied on another's promise
2. Implied Contract
Principle is known as promissory estoppels or detrimental reliance (no written contract, but a promise was made and a party relied on it)
Virtually none of these left in the sports industry
b. Express
1. Formally expressed in writing
Addendum (rider in the entertainment industry)
a. Supplemental agreement to SPK
1. Incentives and bonuses
UCC
a. A model at that all states have adopted in whole or in part. Pro-commerce codification of common law contract principles that courts use for guidance when buyers and sellers of goods have failed to otherwise address potential breach of contract issues and relevant contract remedies on their own.
Contract Categories
5 Categories of Contracts
1. CBA
2. Professional Services Contracts
3. Endorsement Contracts
4. Appearance Contracts
5. Guaranteed Contract
Collective Bargaining Agreement
a. Terms of employment btw union and employer
1. Mandatory topics
Minimum wages, permitted work hours, working conditions
2. Uniform Players Contract
Nearly uniform in Big Four
Standard Player Contract
a. Professional Services
1. Non-assignable
b. Boilerplate as a result of CBA
c. Negotiable Issues
1. Term, salary, bonuses
d. Contract Categories
Endorsement Contracts
a. Increase sales or market share of products by featuring athlete in advertising campaign.
b. Grants sponsor the right of use of athlete's name, image or likeness
1. No formalized parameters
c. No set rules, other than it are for a legal purpose.
d. ESPN established endorsement guidelines for its employees to keep the journalism balanced.
Appearance Contracts
a. Compensate athletes for appearing
Guaranteed Contracts
a. Paid full amount of contract for specified period of time, regardless of whether injured or cut from team
1. MLB and NBA, NFL only occasionally
Special Sports Contracts
NHL
a. Two-way Contract
1. NHL team pays, but less if playing for AHL team (minor league team).
b. One-way Contract
1. Paid same amount regardless if playing for NHL or AHL.
NBA
a. Ten-day contract
1. 10 days or 3 games (whichever comes last)
2. Limit 2 in one season
Must sign for rest of season after undrafted overlooked youngsters
Special Sports Clauses
1. Reserve Clause (outdated)
a. Club retained rights even at the expiration of contract unless traded or released at team’s option.
i. Players signed contracts that bound them to their teams PERMANENTLY
1. Reduced player’s bargaining power
2. Restricted salaries and gave owner’s power ii. In every MLB contract starting in 1880s
b. Reserve clause and system no longer exist in Big Four
2. Special Sports Clauses
3. Termination Clause
a. At-Will v. Term Contract
i. Completion, mutual consent/rescission, breach
b. Cause
i. Employers reserve right to terminate in order to protect image from misconduct by employees ii. Defining “cause” important, but difficult
1. Often receives a settlement
c. Kelvin Sampson
i. Paid $750K to leave Indiana University
1. “Just cause” defined in 14 subsections
a. Significant, intentional or repetitive violation … result in university being placed on probation…occurred in prior employment
2. Improper recruitment at Oklahoma; did same at IU, so asked to leave.
d. Bruce Pearl
i. University of Tennessee b-ball coach lied to NCAA over recruiting violations ii. Terminated contract but did not fire
1. Working out new contract; couldn’t fire until NCAA finding
2. SEC suspended; fired after losing to Michigan in March Madness
e. Jim Tressel
i. Knew players violated NCAA rules
1. Did not investigate or report to compliance department
2. Could have been terminated “for cause”
3. 7% trivial; lengthened suspension; allowed players to play in Sugar bowl ii. NCAA sent Notice of Allegations
1. Repeat offender
2. “Failed to deport him in accordance with honesty and integrity…” iii. Resigned
f.
Ron Prince
i. Secret Agreement with former AD
1. $3.2M if terminated prior to end of 2008
g. Jim O’Brien
i. Loaned Serbian recruit $6K ii. Could be fired for “material breach” – not defined iii. Debate on whether or not Serbian was eligible and whether O’Brien knew/actively recruiting iv. Court ruled the violation of NCAA rules was not a material breach
1. Could not terminate for cause
2. Obligated to pay liquidated damages
v. Special Sports Clauses
4. Hazardous Activity Clause
a. Meant to serve as a deterrent to players from partaking in activities that could injure them, resulting in playing time being missed.
b. Mitigate changes of injury outside of scope of gameo
c. Modify financial obligations if player injured as a result of involvement in hazardous activity
1. NBA SPK – “substantial risk of bodily injury…riding a motorcycle or moped”
d. What is a hazardous activity?
1. Celebration? Practical joke? Video games?
e. What would you prohibit?
5. Morals Clause
a. Also known as: “moral turpitude” or “morality” clause
b. Roots in the entertainment industry
c. Serves as a deterrent to misconduct
d. SPK and contracts with individual
teams
e. “Conduct that does not conform to standards of morality and fair play…laws or that is prejudicial or detrimental to the Association.”
f. Very subjective
g. Lost jobs and/or lost endorsements
i. Pitino, Patrino / Tiger Wood, Vick, Phelps
h. Reverse Morals Clause
i. Reverse Morals Clause- if the employer or sponsor does something immoral, an employee should be able to terminate to save their reputation ii. Enron
6. Loyalty Clause
a. Employee or endorsee fails to keep his promise to remain loyal to the employer or endorser. (newer)
b. Use or wear particular brand of product
i. Ex:
1. DeAngelo Hall wore Nike when endorsed by Reebok, was terminated
2. Jordan Draped an American Flag over the Reebok logo on his uniform at the Olympics to avoid an issue
c. Not bad-mouth league or team
i. Carl Pickens Clauses – bad mouth Bengals
7. Force Majeure Clause
a. Addresses contractual obligations when a triggering event inhibits the fulfillment of duties of one or both parties
b. Unexpected events
i. Weather, work stoppages, bee swarms, other acts of God
1. Ex. Katrina, NHL transportation company
8. Best Efforts Clause
a. Mandates general good faith
i. Depends on the nature of the facts, sports, or industry
1. Ex. Nevada’s statutes for MMA, boxing, etc.
9. No-Trade Clause
a. Player has right to reject a trade under certain conditions
i. MLB veterans with 10 years of service w/ 5 with current team ii. Also found in NHL as no-trade or no-move clauses iii. NFL and NBA rarely use No-Trade clauses, mostly in MLB and NHL
b. Time or geographical restrictions
i. Usually waive if championship contending team.
c. No-Move Clause
i. Approve or disapprove of a demotion to a minor league prior the transfer
10. “Best Interests of Baseball”
a. Commissioner can “investigate…any act, transaction or practice charges, alleged or suspected to be not in the best interests of the national game of baseball.”
i. Ex. Bought Montreal Expos, trustee for LA Dodgers ii. Perfect Game for Detroit Tigers’ Armando Galarraga?
b. First Commissioner took the job as commissioner on the condition that he is given broad powers to discipline players in the best interests of the game.
11. Other Clauses:
a. Attendance, Charity, Escalator, Freedom, Longevity, Official, ROFR, Reduction, Weight, & Most Favored Nation
Drafting the Sports Contract
The 3 P’s
i. Predict
1. What might happen to the parties and their relationship
a. Pessimistic ii. Provide
1. Establish rules for dealing with termination, etc. iii. Protect
1. Specific provisions to protect client in worst case scenario
Drafting a Sports Contract
1. Title- the name of the agreement (Sponsorship Agreement, Sports Contract, etc)
2. Describe the parties- other important info such as Date of birth, Phone number, SSN, might be included as well
3. Term – how long
4. Purpose – intent of the parties, why or how the athlete will endorse the company’s products or services
5. Duties and Obligations – right/duties/responsibilities
6. Compensation - $$$ (aka legal consideration)
7. Exclusivity
8. Confidentiality – mostly in smaller sports now since larger sports unions have made salaries public info.
9. Termination – how, when and why
10. Covenant Not To Compete- mostly in smaller sports now since larger sports unions have made salaries public info.
11. Waivers – limit liability in the event of an accident
12. Modification – both parties agree to change
13. Governing Law
14. Merger – final and complete agreement, all prior oral or verbal agreements are now null and void, this contract is the law.
15. Non-assignment – meaning non-assignable and non-delegable because it’s a personal services contract (meaning you can’t get someone else to do your duty, it is your duty).
16. Alternative Dispute Resolution – mediation/arbitration
17. Signature Line
18. Exhibits and Other Addenda – bonuses, schedules
Damages for Breach of Contract
Liquidated damages
Are damages specified in the contract? They are a sum of money agreed upon by both parties to the contract prior to signing as a substitute for actual damages.
Agreed upon in contract
Measure of financial stability
Louisville v. Duke – mitigate damages when games cancelled
Compensatory damages
Money necessary to make up for the economic loss caused by the breach
General – pain, suffering, mental anguish, disability
Special – medical expenses, loss of income
Consequential damages
Economic loss caused indirectly by the breach usually contractually excluded
Specific Performance
Order to perform the obligation
Unusual in performance of services; ok for sale of goods illegal modern-day slavery
Injunction
prohibits certain acts of performances
Mitigation of Damages
Cannot let losses accumulate
Attempt to reduce amount of economic loss if it occurs, can hurt the non-breaching party’s case
Additional Damages
i. Nominal
1. Very small
2. Demonstrates wronged, but little financial loss ii. Treble
1. Three times the amount awarded
a. Must have statutory authorization iii. Punitive
1. Exemplary; not based on economic loss
2. Make an example and punish for wrongdoing
NCAA Contract Issues
National Letter of Intent
Binding agreement between student-athletes and institution
Play sports – receive tuition, room and board, books
Criticism
Contract of adhesion?
Unfairly limit student-athletes despite changes in circumstances – i.e. coach leaving
Sign, but want to transfer, must wait a year
Use name, image and likeness without limits
Minors – can they agree; settlement outside of court.
Breach of Athletic Scholarship Contract
Claims have consistently failed
Not being able to play
Ineligible due to not meeting education requirements
Not an interest or property right; NCAA not a state actor
Educational Malpractice
Ross v. Creighton –educational malpractice not a valid cause of action
Hart v. NCAA – no constitutional right to participate in athletics
Hendericks v. Clemson – no fiduciary relationship between athlete and academic advisor
Waivers
General
Relinquishment of privilege or right
Protect a party from legal liability for others’ injuries
Accidents, inherent risks, ordinary negligence
Must be conspicuous
Louisiana
Tickets and Waivers
Waivers printed on tickets
Courts generally do no uphold ticket stub waivers not clear of conspicuous, no signature
Serve as a deterrent
Chapter 3: Sports Torts
Tort Law Generally
Tort
Injuries involving person or property resulting from an act or omission of the tortfeasor (Individual who commits the tort)
Goal
Compensate for injuries
Purpose of tort law is to compensate the plaintiff monetarily for the tortfeasor’s misdeeds, whereas the purpose of criminal law is to punish the perp.
Preponderance of Evidence
“More likely than not” that the defendant was responsible for the injury to the plaintiff. only needed to prove
Risk Management
Preventative precautions, maintenance. And damage control.
Tort Law Basics
4 Major Tort Theories (not mutually exclusive):
1. Negligence
a. Acted as a reasonable person under the circumstances
b. Negligence is common in sports law.
2. Intentional Torts
a. Voluntary act intended to cause injury
b. Intentional Torts are often rewarded with punitive damages. Can involve claims of defamation and fraud, also assault and battery.
3. Products Liability
a. Manufacturers are liable for proper functioning of products
4. Strict (Absolute) Liability
a. Legal responsibility without finding fault
i. Extremely hazardous activity
Consent
Negligence
Failure to act as the reasonable person
What is the reasonable person?
Reasonable person might refer to an individual such as a parent, fan, trainer, coach or player, or it might refer to a corporation or other type of business organization. It is up to the jury to decide exactly who the reasonable person is.
Elements to prove
Duty of Care
Breach of Duty
Causation
Evidence of Damages
If the plaintiff fails in proving any of these requisite elements, the plaintiffs claim will not succeed.
Contributory v. Comparative Negligence
Contributory
claim fails if plaintiff contributed to negligence; outdated
Contributory Negligence is outdated. If the plaintiff is found to have contributed to his or own injuries in any way, the plaintiffs legal claim will fail.
Comparative
Still recover damage minus % of own fault.
Comparative Negligence is now what most states start.
Plaintiffs may be partially to blame for their own injuries, but as long as they are not more at fault than the defendant, they can still recover damages, minus their percentage of fault.
Some states subscribe to the 49% rule, and some jurisdictions use the 50% rule.
Assumption of the Risk
Strongest defense to negligence
Express – signed waiver or release
Implied – knew danger and voluntarily proceeded
Gross Negligence/Recklessness:
So lacking in care that one can construe the conduct as being intentional
Punitive damages possible
See in sports when sole purpose of the play is to injure player
Bountygate
This would be difficult to prove successfully.
Requires subjective analysis.
Many negligence claims are settled out of court.
Contact Sports Exception
Nature of sport
Contact inherent part of games
No duty of care of for ordinary negligence
No liability to another participant unless the injury occurred due to a grossly negligence, reckless or intentional act.
Cases
Nabozny v. Barnhill - soccer
Reckless disregard for safety of others rationale
Bourque v. Duplechin - softball
Hackbart v. Cincinnati Bengals, Inc. – football
Gauvin v. Clark – hockey
Pfister v. Shusta – Kick the can
Spectator Injuries
Injuries caused by the open and obvious rules of the game
Caveat emptor- let the buyer beware
Caveat venditor- let the seller beware
Generally disallowed
Flying objects
Limited Duty Rule
Universal Rule/Baseball Rule
Assume certain knowledge of potential dangers of being hit.
Benejam v. Detroit Tigers
Sufficient to meet ordinary demand for protective seating
Plaintiffs must show defect in design of stadium, netting or construction of facility to prevail.
Just Negligence Rules
Tort analysis should be no different than other negligence claims – premises liability
No Duty Rule
Spectators assume all risks that are common, expected and frequent risks of the game.
Essentially bar negligence claim for flying objects at a baseball game.
No exceptions except for willful misconduct.
Loughran v. Phillies
Outfielder tosses ball into stands between innings.
Recovery is not granted to those who voluntarily expose themselves to risks by participating in or viewing activity.
Non-Spectating Spectators
Maisonave v. Newark Bears
Stands – limited duty
Concourse, playgrounds, etc. – ordinary negligence
Baseball Spectator Safety Act of 2006
Response to Maisonave
Immunity if warning signs, etc.
Pre-Game Spectator Injuries
Batting practice injuries
Courts have refused to apply baseball rule. Why?
Golf
Anand v. Kapoor
Didn’t yell “fore!” after shanked shot.
Consent to certain risks that are inherent in and arise out of the nature of the sports generally and flow from such participation.
Hockey
Now have netting behind Plexiglas because of 13 year old death
Pre- and Post-Game Celebrations
Vicarious liability for university and security
A&M Bonfire
Wisconsin stampede
SEC “storm the field” rule.
Negligent Supervision or Operation
Potential liabilities in facilities management or operations, improper security measures, or improper maintenance
Negligent Hiring or Training
Unqualified Employee – Negligent Hiring
Negligent hiring- example would be hiring a coach with a past of hitting players, and he does it at your university, could be a case for negligence.
Lead to outsourcing employment searches
Personality tests, drug tests, background checks
Care of a reasonable employer
Mascot
Mascots and other entertainers during a sports contest are generically referred to as components of game presentation.
The mascot act distracted and created an increased inherent risk of Lowe being struck by a foul ball.
Live animal mascot are a huge liability
Costumed mascots also create distraction possibility
Part of the game? Separate and distinct?
Sports Officials
Sports officials can sue fans, participants, and others for torts suffered by them. But the opposite is more difficult because other rules that protect the officials for the calls they make.
Targets of hostile emotions
Laws enacted to provide officials immunity from lawsuits for unintentional, negligent acts by officials
Laws specifically increase penalties for injuring sports official
La. Rev. Stat. 14:34.4
Wrongful Death
General
Someone dies as a result of negligence
During participation
More foreseeable the injury, greater potential for liability
Ex. Helmets for baseline coaches, design of luge at Vancouver Olympics
During Transportation
University or organization could be liable for negligence
Ex. Marshall football team
During Training Camps
Usually involve whether or not medical staff was available.
Can lead to criminal charges – wanton endangerment for lack of water.
As Spectators
In addition to flying object, danger of standing too close, ignoring signs
Malpractice
Malpractice is a broad category that could involve anything from an improper diagnosis to the prescription of an inappropriate medication.
Malpractice is a claim of negligence involving a medical professional.
Negligence on behalf of a sports medical practitioner.
Present? Inability to deal with injury properly?
Was the practitioner there available to treat the injured?
Some states require licensed or certified athletic trainers on site, including first responders, to deal with potential injuries during athletic competition.
Duty to player or team?
NFL trainers
Locality Rule
Compare to others in same geographical area or specialty.
Medical Review Panel
Concussions
Suicides related to brain trauma
Junior Seau
Leagues
MLB – 7 day disabled list
NFL – cleared by doctors not associated with team.
Troy Polamalu
Lawsuit justified? Consented?
Infectious Disease
May be liable for failure to maintain proper hygiene in the locker or during sports contests.
Magic Johnson
Workers’ Compensation
Insurance required by the state to provide benefits to employees who are injured on the job
Arise out of and in the course of employment
Prime subject of collective bargaining
Insurance is indemnity not liability relief
Student-Athletes
Not employees, so not entitled to WC benefits
Not a payment for sport services
NCAA
NCAA established fund for every student who participates in college sports – trainers, managers, cheerleaders
Exceptional Student Athlete Disability Insurance (ESDI) – potential first round draft picks
Insurance
Indemnity not liability relief
Intentional Torts
Key element
Motivation - intent to bring about injury to another person.
Statute of limitation- plaintiff only has a particular time frame to sue.
Assault and Battery
Assault – causing the apprehension of imminent harmful or offensive contact
Battery – unwelcome physical contact
Reluctant to bring suit; tort and crime
Hitting batter with pitch part of game – not battery
Charging with bat?
Bounty Gate?
Tyson biting Holyfield ear?
David Shultz
Fraud/Misrepresentation
Scienter v. Negligent Misrepresentation
Academic Fraud - No show, cheating
Recruiting Fraud – Promises that can’t be kept
Participation Fraud – Age, gender, weight falsification
Resume Fraud – Coaches background check
Identity Fraud – Mask real identities to participate in sports despite ineligibility.
Other Torts
Intentional Infliction of Emotional Distress
Shocks the conscious
Mental and emotional injuries for egregious conduct
Disappointment Lawsuits
Didn’t play; courts say no
Intentional Interference with Contract
Elements, Tampering
Commercial Misappropriation/Right of Publicity
Prohibit from using another’s name, voice, signature, photo or likeness in products or advertisements without permission
News exception
Defamation
Slander – spoken, libel – written
Standards
Public Official – ran for office and elected
Public Figure – Coaches and players even if no intent
Private Figure – John Doe; greatest expectation of privacy
Must be a statement of fact, not opinion by constitutionally protected
Successful if prove knowingly false of made with reckless disregard for the truth/actual malice
Defense: Truth, protected speech (parody), retraction statutes
Products Liability
Focus on “defect”
Defect in design
Defect in manufacturing process
Defect in warning – failure to properly warn of potential dangers
How and when might this relate to sports?
Aluminum bats
Helmets
Exercise/Weight Equipment
Strict Liability
Absolute liability or liability without fault
Liable for any injury that is caused due to an ultra-hazardous or unreasonably dangerous activity
Live animal mascot
Fireworks display, canons