Dispute Resolution in Sport

Athletes, Law and Arbitration

David McArdle

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781136479410
• Edition: 1
• Topic: Law
• Subtopic: Media & Entertainment Law
• Index: Law

An increasing number of sport disputes are being resolved by way of arbitration. This is the first book to critically examine the processes and benefits of sportspecific arbitration as compared to litigation.

The book explores, in depth, the development of alternative dispute resolutions in sports, paying particular attention to high-profile institutions such as the Court of Arbitration for Sport, the FIFA Football Dispute Resolution Panel and important national-level bodies, and their relationship with national and international-level actors such as the IOC, WADA and the European Union. It also examines in detail the legal frameworks within which sports arbitration systems operate, considers their similarities with other arbitral bodies and considers the extent to which ADR in sport can be seen as a consequence of, and perhaps a solution to, the 'juridification' of sports.

Offering a theoretical basis with which to understand the relationship between arbitration and litigation, as well as providing guidance on key contemporary issues and best practice, this book is important reading for students, researchers and practitioners working in sports law, sports management and administration, sports politics, sports ethics, and international organisation.

1 Whither the NCAA?

In January 2014, student-athlete football players at Northwestern University in Illinois filed union cards with the National Labour Relations Board, in what was hailed as the first move towards the unionisation of college student-athletes. The National Collegiate Athletic Association (NCAA) was quick to condemn the move, castigating it in McCarthyite tones as ‘union-backed’ and “an attempt to turn student-athletes into employees (which) undermines the purpose of college: an education” (Ellis, 2013). The NCAA said it was ‘confident’ that the National Labour Relations Board would reject any attempt to organise student-athletes, and while its confidence may be misplaced (for the legal and factual issues surrounding the matter are complex and varied) the idea that undergraduate students who happen to play sports are ‘employees’ for the purposes of national labour relations law is not one that sits easily.

But the wider social issues of the Northwestern students’ initiative are no less significant than the intricate legal ones. While student-athletes fit no more comfortably into the ‘student’ category than they do into the ‘employee’ one (and establishing employee status remains at the heart of the right to collectively bargain), the move may be better regarded as a bargaining-chip, primarily designed to secure student-athletes enhanced rights in relation to (for example) the revenue from broadcasting and intellectual property rights in the revenue-raising sports (as currently being explored in the class action of O’Bannon v NCAA [2013] ND Cal Lexis 160739), as well as better treatment of those not getting the lucrative scholarships that college sports sometimes – not always – brings. At a time when O’Bannon rather seems to be running out of steam it is difficult to see the Northwestern initiative as one which heralds an unstoppable move towards unionisation, and if either case is pursued to a successful conclusion (from the student-athletes’ perspective) it will be many more years before the benefits accrue. A possible exception may arise in the case of those student-athletes in state universities located in states where local laws make wider provision for them than is the case under the federal legislation, or which is applicable to private institutions.

Perhaps O’Bannon and the Northwestern initiative are better regarded as the latest high-profile dalliances in the perennially difficult relationship between the NCAA and the student-athletes. But the mere fact that unionisation is being attempted and that litigation is being pursued reminds us that, in comparison with the European Union, the United States’ sporting model is characterised by a far more extensive resort to law. This is as much the case with issues that concern these young athletes and elite amateurs as it is with high-earning professionals in the big leagues: disputes over recruitment, remuneration and participation frequently arise at the college level, while wider legal issues such as state actor/due process (Goss v Lopez 419 US 565 (1975)), sexual harassment (Franklin v Gwinnet County Public Schools 911 F.2d 617 (11th Cir, 1990)) and disability discrimination (Pottgen v Montana State High School Activities Association 40 F.3d 926 (8th Cir, 1994)) have arisen in relation to participation within high schools sports. Indeed, high school sport has spawned so many important cases that ‘high school sports law’ merits books and modules of its own, rather than one easily subsumed into ‘sports law’ or ‘education law’ more broadly.

That is certainly the case with college athletics too, where many of the participants merit the epithet ‘professional’ with regard to playing abilities, dedication and aspirations to a career as a salaried or elite-level participant. Scrutiny by legal and other academic commentators, broadcasters and financially interested parties – to say nothing of the fans and the athletes themselves – has reached unprecedented levels, partly as a consequence of the increased financial stakes while the new and traditional media space devoted to college sporting activities has raised awareness of how much of that money reaches college and NCAA coffers and how little of it is seen by most of the practitioners. But it is also one of the ramifications of high-profile discrediting incidents such as the Penn State child abuse scandal. While analysis of the NCAA provides a fascinating insight into how external legal norms interact with this unique aspect of US sporting culture – one that is not entirely unfettered by those norms but which operates largely unencumbered by them or by the burdens of independent, effective oversight – O’Bannon and the Northwestern football players’ evident discontent with the current model reflects a wider unease with the NCAA and its role. If ‘sports law’ internationally were to be characterised by rules and procedures devised, implemented and scrutinised by the owners and non-playing stakeholders alone, with a ‘Supreme Court’ similar to the Court of Arbitration for Sport (hereafter CAS) and with limited prospect for intervention by the wider juridical field, that model would look very much by the NCAA. For those primarily concerned with the interests of athletes of all ages rather than with further entrenching the status quo, however, O’Bannon, Penn State and the Northwestern initiative show that such a model would have little to commend it.

The NCAA and the Sandusky Scandal

It has responsibility for the sports programmes of more than 1200 US universities and colleges, but it is a truism that the NCAA operates largely unencumbered by effective, independent oversight and still less by the prospect of judicial intervention. While its success in developing college sports and promoting academic opportunities for more women, students of colour and those from economically difficult backgrounds means the NCAA has much to commend it, in the recent past its reputation has been tarnished because of a perception that the inadequacy of its governance structures has rendered it unable, or unwilling, to confront any issues that stray much beyond the basics of who gets to play and under what conditions. Well-founded concerns about its provisions on student-athlete recruitment practices, its approach to criminal conduct or harassment of and by those involved in college sports, its internal investigatory and disciplinary procedures and a host of other issues have led many US commentators to question its fitness for purpose. It is clearly legitimate to ask whether its current regulatory framework (which was developed in part as a response to earlier judicial criticisms) can still be regarded as a desirable model, particularly when the interests of younger athletes are so fundamental to its commercial success.

The risks of allowing sporting achievement to be the fundamental element of a university’s activities became apparent in July 2012, when the National Collegiate Athletic Association released details of a consent decree imposed upon Penn State University in the wake of the University’s handling of child abuse allegations involving one of its football coaches, Jerry Sandusky. A report had been commissioned by the University shortly after criminal charges had been filed against Sandusky (and against the University’s Athletics Director and its senior Vice-President for failing to report allegations of child abuse and for committing perjury in their grand jury testimony), and this had been damning in its criticism of the University hierarchy (Freeh, 2012). The Report spoke of a “total and consistent disregard by the most senior leaders at Penn State for the safety and welfare of Sandusky’s child victims”, with the university’s most seniorranking officials making no attempt to identify child victims or to take steps to prevent a re-occurrence after allegations had first been levelled in the late 1990s. The university was far more concerned with hiding the truth from the university’s Board of Trustees (which had itself failed in its oversight duties) and avoiding bad publicity (Freeh, 2012: p 15, 16).

Freeh also spoke of an institutional lack of awareness of child abuse issues, whistleblower protection and the Clery Act (a federal law dealing with campus security and the public disclosure of campus crime statistics), but all this was underpinned by “a culture of reverence for the football programme that is ingrained at all levels of the campus community” and which in turn had contributed to a climate where staff associated with that programme had effectively opted out of awareness training in child protection and related issues. The university hierarchy’s obsession with protecting the image and success of the football programme, and its veneration of those involved with it, had allowed Sandusky – a longserving and respected coach on a very successful programme – to negotiate unrestricted access to the programme’s facilities. While his access to those facilities was ostensibly for the purpose of his operating a university-sanctioned coaching programme for the benefit of children from the wider community, Sandusky had used sport and his reputation as a means of grooming his targets: several of his victims had been abused either within those facilities or on trips where they had accompanied Sandusky to watch the football team play and, tragically, Sandusky’s grooming strategies were entirely consistent with similar well-documented instances the world over and which have been researched for decades (Brackenridge and Fasting, 2009). Sandusky reinforced the perception that decision-makers in sports often fail to address wider issues such as child protection because their concern rests exclusively with on-field performance and athletic success, and because those issue attract far less attention from alumni, the media and the fans than is the case with, say, gambling or doping which do have a more overt relationship with on-field activities.

That said, and while there is still a dispute about whether the College President was authorised to sign the consent decree under the terms of the university statutes (Pennsylvania State University (n.d.)), Penn State accepted the findings of the Freeh Report and the many recommendations it contained for changing the university’s governance structure and administration, and for protecting minors who accessed the university’s facilities and programmes. On that basis, the NCAA and Penn State accepted that using the NCAA’s “traditional and investigative proceedings would be duplicative and unnecessary. Rather, the existing record permits fashioning an appropriate remedy for the violations on an appropriate timetable, which benefits current and future university students, faculty and staff” (NCAA, 2012: 1). That ‘remedy’ included a $60 million fine (equivalent to one year’s gross revenue from the football programme), to be paid over five years and used to fund programmes preventing child abuse and exploitation; a four-year postseason ban for the university’s football team and a four-year reduction in the number of grants that the university could offer to football players. The Decree further provided for the vacating of all the football team’s wins from 1998 to 2011, the waiver of the existing rules which would otherwise restrict the ability of existing or returning student-athletes on the football programme to transfer to another Division One school and the appointment of an athletics integrity monitor for a five-year period to ensure compliance with the Freeh Report’s recommendations on how to change the university “culture” (Freeh: 6, 7). The Decree further states that the university “expressly agrees not to challenge the Consent Decree and waives any right to further process, including, without limitation, any right to a determination of violations by an NCAA Committee on Infractions, any appeal under NCAA rules, and any judicial process related to the subject-matter of this Consent Decree” (2).

The difficulty is that the sanctions imposed by the NCAA – fashioned by it and with no external oversight – impact most directly on wholly innocent past, present and future student-athletes of the university. Their impact upon those who were truly culpable is negligible and it smacks of a situation in which the NCAA quite properly felt compelled to act but its infrastructure and disciplinary powers were entirely unsuited to the challenge it faced. There has been precious little acknowledgment that the NCAA itself has presided over, and fostered, this culture of veneration for successful athletics coaches, programmes and athletes. The sanctions will doubtless impact on Penn State’s other sports and on the wider university notwithstanding the NCAA’s commitment in its regulations to securing “fairness to uninvolved student-athletes, coaches, coaches, administrators, competitors and other institutions” (NCAA Regulations (n.d.), Article 19.01.1), but the NCAA’s assertion that Penn State’s failure to provide oversight of its staff breached the over-arching NCAA principles of institutional control and accountability ring rather hollow. It noted that the colleges are responsible for the activities of outside entities which promote the university’s athletics programme without acknowledging how the NCAA itself has allowed institutional failures to fester. It further found that Penn State employees and athletics personnel had failed to maintain minimum standards of appropriate and responsible conduct “associated with wholesome competitive sports” and failed to comply with the NCAA’s ambitious demands that employees associated with intercollegiate athletics serve as ‘positive moral models’ for students. But the NCAA’s stated aim is to use college athletics as a vehicle to “promote the character development of participants, to enhance the integrity of higher education and to promote civility in society” in accordance with Article 2.4 – its first response to the Northwestern initiative was to stress how unionisation would undermine those lofty principles – and there was a clear lack of leadership in this regard. The NCAA’s governance structures facilitated this lack of leadership and absence of accountability at Penn State, but short of Congressional action there seems to be no means of exploring its own shortcomings. It is this failure of independent, effective oversight which most undermines the NCAA’s potential as a global model for sports governance.

Governance by Consensus or a Failure of Leadership?

As with so many sporting organisations the world over, the fundamental difficulty with the NCAA lies in the way it has developed over the years, incrementally and reactively so that its structures and daily practices are now far removed from its original purposes and the ethos which underpinned them. Discussion of ‘the NCAA’ as if it were a coherent, single undertaking is no longer appropriate: although its Constitution vests ultimate authority over all aspects of its highest levels of competition – ‘Division I’ athletics – in a Board of Directors which comprises university presidents and chancellors, there are myriad departments and offices which exercise authority over its disparate activities across the three Divisions of competition. Oversight of the various championships and the maintenance of NCAA standards on such matters as amateurism and academic attainment is vested in various NCAA enclaves and conclaves, while others take day-to-day responsibility for the administration of individual sports, ranging from the hugely commercialised ones such as football and basketball where ‘free ride’ full scholarships are available to the comparatively smaller disciplines such as fencing and water polo, which attract only partial scholarships and little media attention. The latter are the last bastions of the NCAA ethos, in clear distinction to the revenue-raising sports where “the problems … whether widespread or sporadic, real, exaggerated or simply perceived constitute a familiar list: bloated coaches’ salaries, undue donor influence, acceleration of commercialisation, criticism that student-athletes are not really students and/or that they are exploited, and overall perceptions that college athletics is corrupting the academic missions and integrity of colleges and universities” (Potuto, 2009: 261).

The NCAA’s governance structure is based upon its status as “a multi-subject contract entered into by more than a thousand members” (267). As a private association, its members collectively and contractually agree upon the rules of membership and determine the range of sanctions applicable to those member institutions in the event of a violation. The foundation of the NCAA’s powers lies in those same institutions – the NCAA can do nothing without the authority of the universities it oversees – and in turn this has historically given it some protection from judicial oversight. This contractual foundation does not mean it is immune from litigation, however: in Law v NCAA 134 F. 3d 1010 (10th Cir, 1998) it was held that NCAA rules limiting the salaries that assistant coaches could earn violated antitrust laws because those rules amounted to a horizontal agreement to fix prices but served no legitimate sporting interest such as reducing costs or making sports more competitive. That said, in Bloom v NCAA 93 P 3d 621 (Col App 2004) its restrictions on students’ endorsement and media activities were upheld. The particular issue of whether student-athletes should be able to profit financially from their activities will continue to be a source of disagreement long after O’Bannon has played itself out.

The NCAA’s voluminous rules make incredibly detailed provision with regard to issues that are perceived to have relevance to the NCAA’s amateur ethos and the safeguarding thereof. While these might not include adequate safeguards in relation to ‘hazing’, child protection or instances of sexual harassment which seem to arise all too frequently, they do cover academic standards, recruitment procedures, the value of scholarships and the amount of time that student-athletes can spend practising rather than in the classroom. It is argued that universities which make unauthorised payments to student-athletes or provide other benefits to them or their families, enable students to participate in gambling, allow recruiting violations by coaches or agents, or facilitate academic fraud so that an athlete can simultaneously pretend to be a student helps that institution obtain a competitive advantage on the field of play, and that these are issues of legitimate sporting interest (to adopt the European sports law parlance). Consequently (it is argued) they properly fall within its remit of a private sporting body.

The difficulty is that, as a private association it is entitled not only to draft those rules but to exclusively control their enforcement and interpretation, and its “authoritative voice also necessarily includes the shared understanding of members and what is discerned from the everyday implementation of policy by those charged with implementation” (Potuto, 2009: 272). The members contractually agree those rules of membership and the sanctions to be imposed for violations of those rules, and while an agreement being rooted in a contract certainly does not mean the contracting parties’ relationships is immune from judicial oversight, the NCAA’s status as a multi-state association means that enforcing state laws against it has proved impossible. An exception to that rule arises if a law is generally applicable and not specifically targeted at the bylaws or policies of the NCAA, imposes no extra-territorial effects and is consistent with the Dormant Commerce Clause (269). This protects the NCAA’s power to draft and implement its own rules, its susceptibility to judicial review being “limited to assuring that bylaws and policies are duly adopted and that ‘conduct’ bylaws are enforced” in a manner that is consistent with the expectations of the parties and the relevant laws (271) and is consistent with the duties of good faith and fair dealing (see Finley v Kuhn 569 F 2d 527 (7th cir, 1978). This places the NCAA on the same footing as other private associations (see for example National Association for the Advancement of Colored People v Golding 679 A 2d 554 (Md, 1996)) notwithstanding the control it has over hundreds of institutions and thousands of student-athletes at any one time, and the millions in its coffers.

Self-reporting and private actors: self-regulation or no regulation?

Insulating rules which advance its putative amateur ethos from legal scrutiny is therefore a relatively straightforward proposition for the NCAA, and ensuring compliance by the constituent colleges is achieved through mechanisms of self-reporting whereby each member institution is responsible for adhering to the rules and for reporting its own violations, with investigation being the work of the NCAA enforcement staff and sanctions determined by the Committee of Infractions (and its Appeals Committee). That power of sanction pertains only to institutions who must have either known, or should have known, about the infractions, however, and the NCAA does not have the authority to impose sanctions upon coaching staff or employees of those institutions, or upon the student-athletes themselves, because they are not in contractual relations with the NCAA. But Tarkanian v NCAA 488 US 179 (1988) and other cases illustrate how sanctions can be indirectly imposed by the NCAA upon non-contracting parties. This is achieved by means of the ‘show cause’ provision, where universities can offer staff and students as sacrificial lambs, securing a reduction in the sanctions imposed upon them by taking disciplinary action against those individuals in accordance with the Committee’s recommendations. Put another way, the contractual relationship between the university and the individual allows the NCAA to overcome the absence of a contractual relationship between it and the student-athlete or coach who is the target of its ire.

With those powers in mind, the NCAA’s status as a private body is immensely significant because the US Constitution’s Fourteenth Amendment obligation to observe procedural due process is triggered only where there is state action (or a comparable federal government action which serves to invoke the Fifth Amendment) so that it can be said that the alleged violation has been perpetrated by ‘the state’. Neither the caselaw directly relating to the NCAA nor wider judicial deliberation on the matter provides definitive assistance as to where the distinction between state actors and private actors lie, or where the difference between state action and private action lie. Some of an entity’s activities may b...