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Does March Madness = Workplace Madness? Some Thoughts on the Legality of NCAA Bracket Pools, the Tournament’s Effect on the Workplace, and of course, a Rendition of One Shining Moment (UPDATED)

This time of year usually marks the sports netherworld between the Super Bowl and the NCAA Men’s Division I Basketball Tournament, which is better known as March Madness. This lull provides employers with an excellent opportunity to contemplate the issues that March Madness creates in their workplace. We explore some of those issues below.

Participating in a NCAA Bracket Pool: Everyone Else Does It, So Why Can’t We?

Nothing presages the coming of spring like the NCAA Tournament, and concurrently, perhaps nothing is as ubiquitous in the American workplace during this time period as NCAA bracket pools. Estimates of participating Americans are in the 50-60 million range and we can totally understand why. Even presidents have completed brackets (President Obama actually picked 2013’s winner correctly), although President Trump has apparently declined to participate. And we expect those numbers to go up because of contests like these: Warren Buffet is offering $1 million a year for life to any Berkshire Hathaway employee who correctly picks all of the teams to make it to the sweet sixteen. The chances of doing that are about 1 in 282 trillion (or about the same as the odds that Stephen Curry will never make another three point shot in a professional basketball game).

The typical workplace bracket pool scenario involves an email attaching a bracket or an embedded link to a website that requires you to sign up for and complete an online bracket; think: ESPN.com or cbssports.com. Sometimes these e-mails are sent office-wide, other times they are limited to a select group of employees. The typical entry fee can range from $5 to $20 per bracket, with the winner collecting the biggest payout and the second and third place finishers collecting more moderate sums. Some brackets also return the last place “winner” his or her entry fee (see: probably you at least once in the last 10 years). The pool “manager” may also take a cut for dealing with the administrative burden (including having to stop by your cubicle at least twice a day for your entry fee). Of course, all this varies from pool to pool. We’ve heard of pools where the winner gets to donate the collected entry fees to the charity of his or her choice (awwww). We’ve heard of pools going in the opposing direction: $1,000 per entry, winner takes all (grrrrrr). According to some sources, $9.2 billion was wagered on the tournament last year.

But is any of this legal? The results are mixed. On the federal level, probably not; on the state level, it depends on the state. Participation in a bracket pool may violate at least two federal laws. NCAA bracket pools that are conducted across state lines (i.e. a company pool involving offices from several states) or which are managed online (the vast majority), could violate the Interstate Wire Act of 1961. There is a “fantasy sports” exception to that law, but bracket pools don’t seem to fit within that exception since they require the individual to bet on the outcomes of the games. Participation in these bracket pools may also violate the Professional and Amateur Sports Protection Act, which prohibits wagers on sports anywhere, except in certain grandfathered states (Nevada, Delaware, Oregon and Montana).

On the state level, while most states ban gambling, their gaming laws provide exceptions for so-called “social” or “recreational” gambling. While the particulars vary, to qualify for these exceptions: (1) all of the money in a pool must go to a winner or a charitable organization (i.e. the “house” does not receive any of the proceeds); (2) there must be a maximum amount a person can wager (like a $20 entry fee), and (3) the pool must be limited to a certain number of people with pre-existing relationships (like co-workers). Thus, in certain states, NCAA bracket pools that meet these requirements may be permissible. In Wisconsin, by contrast, NCAA bracket pools are illegal without exception. Sad, considering the Badgers relatively high standing in ESPN’s Basketball Power Index.

Based on the above, especially because of the Professional and Amateur Sports Protection Act, the simplest and safest approach for (non-Nevada, Delaware, Oregon and Montana) employers would be to prohibit NCAA bracket pools in the office. But realizing that this will likely not be the majority approach, if you are an employer comfortable enough to allow your employees to run an NCAA bracket pool, we would recommend setting certain parameters, including: (1) requiring employees to complete paper brackets instead of participating online, (2) prohibiting bracket pools that will result in employees participating in offices located across multiple states; (3) prohibiting employees from using company e-mail or printers to administer the pool; (4) limiting the entry fees (i.e. $20 or less), (5) ensuring that the collected entry fees are distributed to the winner(s) (or a charitable organization) and no portion goes to the house; and (6) threatening discipline if any employee pressures any other employee to participate in a bracket pool. Another option altogether is to allow your workers to participate in a bracket pool for free, with the winner collecting a prize.

Watching the Games: Everybody Else is Watching, So Why Can’t We?

Completing a bracket is one thing, but watching the games is where the fun really begins. You wake up Thursday morning annoyed that there’s still five hours before the first game tips off. Wait, this is 2017, not 2000; the tournament now boasts of 68 teams and starts on Tuesday with the “First Four” play-in games. But in reality, the tournament “starts” on Thursday, and in anticipation, your employees (and maybe even you) have probably done the following:

  1. downloaded the CBS Sports app onto their computer, tablet or mobile device that will allow them to stream the games into their workspaces

  2. arranged to watch some games at an “extended” lunch with some co-workers

  3. called in “sick” (or did the honorable thing and took a preapproved vacation/PTO day) so they can watch games

  4. All of the Above

  5. None of the Above (because, instead, they are secretly binge-watching This Is Us)

Regardless of how your employees (or you) would answer that question, the point is that come Thursday (and Friday) they will probably be focused on something unrelated to their job. And when their focus is elsewhere, job productivity suffers. And boy does it suffer. According to Challenger Gray & Christmas, an outplacement firm, lost productivity due to March Madness could cost employers $2.1 billion this year. We wouldn’t be surprised if this number climbs again this year as CBS continues to make it easier to stream games live. (And if it really wants that number to climb, it needs to update the “boss button” from a few years ago. And on that front, when are we going to see a lawyer-friendly boss button – maybe one that clicks away to a draft brief or a redlined employment agreement? C’mon already. But we digress.)

So we know that lost productivity is an issue. But what about the related issue of employee morale? A survey conducted a few years ago by OfficeTeam found that 20% of managers believe that the NCAA tournament has a positive effect on employee morale. Only 4% believed it had a negative effect and 1% didn’t know what effect it had. Perhaps the most shocking statistic is that 75% of the managers surveyed believed that it had no effect whatsoever.

To us, the result of the productivity-morale equation is employer-specific and depends on the nature of your workplace and your business goals. For example, we can certainly see how management at an accounting firm may grow uneasy at a lack of focus from its employees as their clients’ tax filing deadline nears. At the same time, we can also see how management at this same firm (perhaps if it’s located by Durham or Spokane) may want to convert this into an employee appreciation moment, gather its employees in a conference room for an extended lunch and game-viewing session and take a breather from their overwhelming workloads (and maybe be lucky enough to catch a top 5 finish of all time).

Only you can best gauge what will motivate your workforce against how it will affect your bottom line. If you could care less about employee morale or don’t think it’s a factor, then consider blocking access to the streaming site or mobile app, remind employees of your acceptable computer use policy, and threaten disciplinary action as necessary. If you are concerned about lost productivity, but want to maintain or enhance employee morale, consider allowing employees to wear or display items related to their favorite college teams that day (whether it is North Carolina, Villanova, or “Anyone but Duke”). Consider designating certain times where employees are “free” to check scores, or consider going further and allowing employees a time and place to watch games. By tuning break-room television sets to the NCAA tournament and possibly adding pizza or popcorn to the mix, it represents a cheap investment that may boost employee morale and reduce some of the short-term productivity losses while producing long-term productivity gains.

All right, that is all. We hope this helps you prepare your workplace for the upcoming NCAA tournament so that when it’s over you can proudly belt out One Shining Moment, including…

And when it’s done
win or lose
you always did your best
cuz inside you knew…
(that) ONE SHINING MOMENT, YOU REACHED FOR THE SKY
ONE SHINING MOMENT, YOU KNEW
ONE SHINING MOMENT, YOU WERE WILLING TO TRY
ONE SHINING MOMENT…
.

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About this Author

Michael S. Arnold, Mintz Levin Law Firm, Labor Law Attorney
Member

Michael represents clients in connection with a variety of complex employment litigation matters, including pretrial, trial, and appellate work; administrative proceedings; and arbitrations and mediations relating to wage and hour, discrimination, noncompete, trade secret, general contract disputes, and other employee-related disputes. 

He regularly advises clients regarding employee performance, retention and separation issues, and compliance with discrimination, wage and hour, family and medical leave, workers’ compensation, disability, and other employment laws and regulations....

212-692-6866
George M. Patterson, Mintz Levin, Employment Counsel, FLSA Attorney, Labor
Staff Attorney

George’s practice is focused on all aspects of employment law, including discrimination, harassment, wage and hour issues, and other employment-related litigation and counseling. He also represents clients on labor and executive compensation matters.

Prior to joining Mintz Levin, George practiced as an associate with other large firms, handling large-scale employment and commercial litigation matters, including WARN Act and FLSA class actions, employment discrimination and harassment matters, commercial breach of contract actions, corporate dissolution proceedings and actions to enforce restrictive covenants. He has also drafted executive compensation agreements and advised on compliance of nonqualified deferred compensation plans and stock option plans under section 409A. George also spent several years as a legal analyst for Bloomberg L.P., where he was integral in building the labor and employment platform of the company’s online legal research product, including managing an extensive database of labor and employment-related statutes, regulations, and decisions, as well as researching, editing and publishing scholarly articles and other advisory materials.

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