Fantasy Football Leagues in the Workplace
The start of a new NFL season brings with it the start of a new fantasy football season. According to the Fantasy Sports Trade Association, approximately 24.3 million people play fantasy football. Many fantasy leagues are employer-sponsored or conducted in the workplace. The 2013 Vault Office Betting Survey estimates that 70% of employees have participated in a betting pool in the workplace. Of that 70%, 35% of employees have participated in fantasy leagues. Some employees play for mere bragging rights, while others play for profit which could implicate a number of legal issues for employers. So before you start evaluating whether you should trade Adrian Peterson for Calvin Johnson (that would be a tough decision), make sure your company is aware of the following legal risks associated with allowing a fantasy football league at the office.
Are Office Fantasy Football Leagues Legal?
The legality of office fantasy football leagues depends on state gambling laws, and each state differs. As a general rule, gambling is illegal in most states. Some states make an exception for “social gambling”—gambling in a strictly social context, where no profit is made and the individuals involved knew each other prior to the gambling activity. Certain social gambling laws may also place limits on how much prize money can be awarded. Office fantasy football leagues may be permitted under the latter circumstances under some state laws. The issue becomes complicated when fantasy football leagues include offices in different states.
As a practical matter, although local law enforcement probably is not concerned with an office fantasy football league, it is important to know the legal risks and laws of your state if sponsoring a pool. For example, in New Jersey, a manager at AT&T was arrested for allegedly taking a 10% cut (about $3,000) from an office football pool. The employee was charged with promoting illegal gambling (the football pool had been advertised in company emails) and he faced a steep penalty—up to five years in prison.
Employment Law Risks
Office managers often conduct office fantasy football leagues or other types of betting pools as a way to increase employee morale. Problems can arise, however, when employees feel ostracized from their co-workers for declining to participate. For example, an employer may be exposed to a potential hostile work environment claim if an employee does not participate in gambling activities due to religious beliefs, but receives pressure to do so from other co-workers.
Further, if an employer prohibits gambling in the workplace, the employer should consistently enforce the policy. Uneven enforcement exposes an organization to potential lawsuits for disparate treatment of its employees. For example, in Dent v. Federal Mogul Corp., 129 F. Supp. 2d 1311 (N.D. Ala. 2001), the employer fired an employee for violating its policy against gambling on company property. Although the employee admitted to operating a weekly football pool at the company’s warehouse, he sued his employer claiming that management was aware of and tolerated the football pools but targeted him for termination because of his race and gender.
In Dent, the court granted summary judgment to the employer because the employee refused to reveal the identity of the other employees who allegedly engaged in the football pools. Specifically, the court held that the employee’s claims failed because he could not identify any specific employee who was similarly situated. The court explained that in order to indicate that other employees outside of a protected classification were similarly situated and treated more favorably, it was not enough to state that other employees engaged in the same or similar misconduct but were never disciplined simply because they were not caught. This case highlights the importance of consistent policy enforcement: had the employee revealed the identity of other employees who were legitimate comparators, the court likely would not have dismissed the claims.
If an employer chooses to permit a fantasy football league in the workplace, the employer should consider implementing a company gambling policy that:
- Describes what type of gambling is allowed in the office. The policy may also require employees to seek approval of human resources prior to engaging in gambling activities at the workplace.
- Defines parameters for using company property (i.e., computers, emails, etc.) to engage in gambling activities.
- Tells employees that the activities cannot interfere with productive work time.
- Outlines a complaint reporting procedure.
- Explains the discipline that applies to violations of the policy.
*The author would like to acknowledge Charles Rush for providing assistance with the research and writing of this article.