« Happy Birthday | Main | Which Equal Employment Opportunity Laws Apply to Your Business? »

Week in Review

By Chris Helsel

Brady Loses National Football League Appeal, Both Sides Seek Expedited Ruling from Federal Court

National Football League (NFL, league) commissioner Roger Goodell announced this week that New England Patriots (Patriots) quarterback Tom Brady's four-game suspension for tampering with the air pressure of game balls was upheld following Mr. Brady's appeal. Specifically, Mr. Brady is charged with orchestrating a scheme in which Patriots employees intentionally deflated the footballs to be used by the Patriots' offense below the league-mandated threshold, after the balls had been inspected and approved by NFL referees, prior to the 2014 American Football Conference Championship Game against the Indianapolis Colts. The Patriots ultimately won the game handily before advancing to, and winning, the Super Bowl.

Mr. Brady was initially suspended on May 11, 2015 after independent attorney Ted Wells' league-commissioned investigation (Wells Report) produced evidence that Mr. Brady was "at least generally aware" of, if not directly involved in, the scheme. Compounding Mr. Brady's problem - and adding to his punishment - was the fact that he refused to cooperate fully with NFL investigators; specifically, refusing to turn over his cell phone records. The NFL lacked subpoena power and therefore could not force the issue at that time, but league rules (which are collectively bargained) require players to cooperate with investigations into violations concerning player conduct. In the league's opinion, Mr. Brady failed to do so, and his punishment reflected that fact.

Even in light of the quarterback's failure to divulge his cell phone records, the league's decision to suspend Mr. Brady for four games without pay (25% of the regular season) was seen by many as overly harsh, especially given the Wells Report's use of "indefinite" language. However, as readers are surely aware, internal disciplinary disputes do not carry the same burden of proof as criminal cases (beyond a reasonable doubt), so the league's reliance on Mr. Wells' preponderance of evidence appears to have been justified, given the circumstances.

After his suspension was announced, Mr. Brady announced his intention to appeal. Under NFL rules, appeals of suspensions for "conduct detrimental to the league" are heard by Mr. Goodell himself, or his appointee. The appeal process allows the suspended player to meet with the commissioner and present any additional evidence that weighs in favor of reducing the suspension.

Interestingly, rather than consenting to provide the league office with cell phone records that could potentially exonerate him (if his claims of innocence are true), Mr. Brady chose instead to destroy his phone on the very day that he was interviewed by Mr. Wells. This fact was unknown to NFL officials until they heard Mr. Brady's appeal, and it most certainly did not help the quarterback's case. In his decision, Mr. Goodell wrote that Mr. Brady's actions constituted a "deliberate effort to ensure that the investigators would never have access to information that he had been asked to produce." The decision also noted that despite Mr. Brady's claim that it was his normal practice to destroy old phones, the cell phone that he had used prior to the phone that was destroyed was in fact not destroyed and still in his possession.

Unsurprisingly, given the lack of any new exculpatory information and the revelation that the phone in question had been destroyed, Mr. Goodell upheld the full four-game suspension. Following that announcement, Mr. Brady posted a message on his Facebook account declaring that he "did nothing wrong." Patriots owner Robert Kraft - a close personal friend and ally of Mr. Goodell during labor negotiations - called the commissioner's stance "unfathomable."

Mr. Brady has vowed to see this fight through to the end, and authorized his union, the National Football League Players Association, to file suit on his behalf in federal court seeking an injunction allowing him to play immediately. Anticipating this, the NFL preemptively filed suit in Manhattan federal court, asking the court to certify that the commissioner had the right under the Collective Bargaining Agreement and federal labor law to serve as the arbitrator in Mr. Brady's case.

This lawsuit was strategically designed to preempt the inevitable suit brought by the NFLPA, which would have claimed that Mr. Goodell, ruling on a penalty handed down by one of his subordinates (NFL Executive Vice President of Football Operations Troy Vincent suspended Mr. Brady initially), constituted an obvious conflict of interest. The league's decision to file suit in Manhattan also accomplished the feat of keeping the dispute of out of Minnesota federal court, where Judge David Doty has sided with players against the NFL in numerous previous labor disputes.

It appears that the NFLPA will have a difficult time overturning Mr. Goodell's decision, as federal courts typically show great deference to the results of internal appellate procedures governed by collective bargained agreements. The judges reviewing the case will not examine physical evidence and attempt to decide for themselves whether Mr. Brady did or did not take part in a scheme to deflate footballs. Rather, the court will be tasked with determining whether the disciplinary and appellate processes violated the terms of the labor agreement.

In a somewhat surprising turn of events, both the NFL and the NFLPA have requested that Judge Richard Berman of the S.D.N.Y. expedite his decision on the proposed injunction so that Mr. Brady and the Patriots will know by September 4th whether the quarterback will be available to suit up for the team's season debut a week later. Prior to this request, the union was expected to ask the judge to delay any suspension until after he had ruled on the merits of the case. While the NFLPA did preserve its legal options by also asking the judge to vacate the suspension in its entirety, the union conceded that resolving the matter prior to the kickoff of the 2015 season "would be in everyone's best interest."

On Friday, the judge ordered that the two sides engage in "comprehensive, good-faith settlement discussions" prior to an August 12th conference.


International Sports Arbitration Panel Suspends "Hyperandrogenism Regulation" in Track and Field

The Court of Arbitration for Sport (CAS, Court), which serves as the global appellate court for international legal disputes related to athletics, ruled this week that track and field's governing body, the International Association of Athletics Federations (IAAF), must suspend its practice of barring athletes from competing as females if the athletes exceeded a specific threshold of natural testosterone.

The appeal was brought by Indian sprinter Dutee Chand, who learned in 2014 that she was hyperandrogenic, meaning that her body naturally produced testosterone above 10 nanomoles per liter, which is toward the lower end of the normal male range. As a result, the IAAF banned her from competing in women's events.

This issue initially came to the forefront in 2009, when South African world champion 800-meter runner Caster Semenya was barred from competition, only to be reinstated a year later after passing a series of "sex tests." In the wake of that controversy, the IAAF instituted the policy of testing female athletes' testosterone levels in 2011. At the 2012 London Olympics, four female athletes - all from rural areas of developing countries - were disqualified for possessing high levels of natural testosterone.

Those four women all subsequently underwent surgery to remedy the "problem" and voluntarily began taking hormone-suppressing drugs. Ms. Chand declined to follow suit, and instead appealed to the CAS. She declared, "I want to remain who I am and compete again," and asked the Court why she should be forced to undergo a medically-unnecessary surgery when her condition was natural and she was not ill.

The Court agreed, and imposed a two-year window for the IAAF to provide more persuasive scientific evidence linking "enhanced testosterone levels and improved athletic performance." Until such evidence is produced, hyperandrogenic athletes must be permitted to compete as females - including at the upcoming 2016 Summer Olympics in Rio de Janeiro.

While the Court acknowledged the difficulty of drawing scientific lines between the sexes and complimented the IAAF for acting with "conspicuous diligence and good faith" in creating and implementing the standards, it ruled that it "was unable to conclude that hyperandrogenic female athletes may benefit from such a significant performance advantage that it is necessary to exclude them from competing in the female category."

The Court continued, "Although athletics events are divided into discrete male and female categories, sex in humans is not simply binary ... As it was put during the hearing: 'Nature is not neat.' There is no single determinant of sex. Nevertheless, since there are separate categories of male and female competition, it is necessary for the IAAF to formulate a basis for the division of athletes into male and female categories for the benefit of the broad class of female athletes. The basis chosen should be necessary, reasonable and proportionate to the legitimate objective being pursued."

While this decision has been celebrated by many as a victory for women's equality in sports, not everyone in the track and field community agrees that it is proper. Among those who testified in support of the IAAF policy was British runner Paula Radcliffe, who holds the women's world record in the marathon. Ms. Radcliffe told the Court that elevated testosterone levels "make the competition unequal in a way greater than simple natural talent and dedication ... The concern remains that (hyperandrogenic athletes') bodies respond in different, stronger ways to training and racing than women with normal testosterone levels, and that this renders the competition fundamentally unfair."

Following the Court's ruling, Ms. Chand expressed her pleasure with the outcome in a statement released by her attorneys. "What I had to face last year was not fair," she said. "I have a right to run and compete. But that right was taken away from me. I was humiliated for something that I can't be blamed for. I am glad that no other female athlete will have to face what I have faced, thanks to this verdict."


Italian-Argentine Business Extradited to U.S., Pleads Not Guilty in FIFA Corruption Case

Former sports marketing executive Alejandro Burzaco appeared in Brooklyn federal court this week, pleading not guilty to numerous charges stemming from his connection to the recent FIFA corruption scandal. Mr. Burzaco, who is a citizen of Italy and Argentina, was indicted by the Department of Justice in May and turned himself in to Italian authorities in June. Italian authorities extradited him to the United States this week, where he faces charges of racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy.

American officials contend that Mr. Burzaco colluded with a handful of other marketing executives to pay $110 million in bribes to secure lucrative rights to the 2015, 2019 and 2023 Copa America soccer tournaments, as well as a special centennial edition of the tournament set to be staged in the U.S. next year.


FCC Approves AT&T/DirecTV Merger, With Conditions

The Federal Communications Commission (FCC, Commission) has approved telephone and Internet giant AT&T's $48.5 billion takeover of the satellite market leader DirecTV - subject to a number of conditions. Last week, as federal regulators were reviewing the deal to determine whether the merger would serve the public interest or stifle competition, the U.S. Department of Justice announced that it would not challenge the acquisition.

Following the merger, AT&T/DirecTV will surpass Comcast as the nation's largest television distributor, with approximately 26 million subscribers.

The FCC's approval came with some important conditions, some of which are aimed at ensuring robust competition in the broadband Internet market. Under the terms of the agreement, AT&T must expand its high-speed Internet service to 12.5 million locations - an increase of about 1,000%. This Commission says that this condition addresses the concern that the merger would squash competition in the television provider market in areas where AT&T and DirecTV previously competed. Requiring the company to expand its broadband service, says the FCC, will provide a great number of consumers with additional avenues to consume video entertainment via services requiring broadband connections, such as Netflix, Hulu and Amazon.

Another condition for the FCC's approval of the deal is that AT&T must now provide broadband Internet service to low-income consumers at a reduced cost.

Prior to approving the deal, regulators expressed concern that AT&T would exploit its increased television market share by expanding its practice of employing usage-based pricing models ("data caps") in order to steer customers away from online video platforms and towards its own traditional television service. To combat this, as a condition of the merger, the FCC forbade the company from engaging in discriminatory practices that would disadvantage online video services. How exactly this will be policed is unclear.

The Commission also mandated that AT&T submit its "interconnection agreements," through which online platforms such as Netflix pay a fee for premium service in exchange for generating increased traffic, for review prior to their enactment. The FCC says that it will monitor these agreements to ensure that AT&T does not skew the market by denying access to its networks in anticompetitive ways.

The final condition requires AT&T to retain an internal compliance officer as well as an independent, external compliance officer to ensure that the company faithfully follows each of the other conditions. The conditions remain in effect for four years after the merger officially closes.


Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


This page contains a single entry from the blog posted on August 4, 2015 11:34 AM.

The previous post in this blog was Happy Birthday.

The next post in this blog is Which Equal Employment Opportunity Laws Apply to Your Business?.

Many more can be found on the main index page or by looking through the archives.