Can an NFL Lawsuit Tackle Down Mandatory Arbitration?

In November 2021, Jon Gruden sued the NFL and Commissioner Roger Goodell over leaked emails that allegedly led to his resignation from his position as coach of the Las Vegas Raiders. The email leak emerged during the NFL’s investigation into the Washington Commanders’ alleged toxic workplace environment.

The Wall Street Journal published an email from 2011 in which Gruden used a racist trope when discussing former NFLPA president DeMauric Smith, who is black. Gruden was not an NFL employee when he sent the email. The New York Times reported more emails from 2010 to 2018 when Gruden became the Raiders’ head coach. In these emails, Gruden used “misogynistic and homophobic language” to describe others. Gruden resigned from the Raiders in October 2021 after the report came out.

The Nevada Supreme Court ruled 5-2 for Gruden that the NFL Constitution and Bylaws’ arbitration clause does not apply to Gruden as a former employee and is unconscionable. As a result, Gruden’s case can proceed to a regular trial in court instead of going to arbitration. The Court determined that the arbitration clause does not apply to Gruden because it only applies to current NFL employees, which Gruden had already resigned from.

Moreover, the NFL Constitution would allow Goodell, as Commissioner, to arbitrate disputes about his own conduct. The Court ruled that the ability of a stronger party to select a biased arbitrator is unconscionable, even if the party ultimately chooses a different arbitrator. The NFL also had the ability to amend its constitution anytime without notice.

What Is Arbitration?

In summary, arbitration is trial by private judge. Arbitration is often favored by businesses since it is expedient, binding, and often final. An arbitrator is empowered to make all the decisions that a judge may ordinarily make during a lawsuit. An arbitrator’s ruling is binding; parties generally cannot appeal the arbitrator’s decisions.

Arbitration is at its best as an alternative dispute resolution instead of a public trial. Large companies like Microsoft involved in complex lawsuits against one another may prefer to use an arbitrator who is knowledgeable about their technology over jurors who know nothing about how their tech works. In those kinds of cases, the companies understand what arbitration is and have explicitly agreed to it because each party believes it is beneficial to have a judge who is knowledgeable about their industry.

How Can Arbitration Be Bad?

Arbitration between individual persons and corporations is far more controversial. The average consumer may not even know what arbitration is, let alone that they are agreeing to it. However, arbitration set up by a “repeat” party is likely to select an arbitrator whom they believe would be biased in their favor. In the worst case situations, large companies like the NFL would appoint their own commissioners as arbitrators – in other words, the company would essentially appoint its own “judges” and the rulings of those “judges” would be final. Needless to say, such biased arbitrators would likely render one-sided decisions with little to no recourse for the other party.

Nevertheless, the Federal Arbitration Act (FAA) compels most states to enforce mandatory arbitration clauses with few exceptions. States like California have attempted to find loopholes around the FAA, but the United States Supreme Court has often overturned many such attempts. The Nevada Supreme Court may be closer to doing so since Commissioner Goodell is himself one of the named defendants. The conflict of interest in this situation raises serious concerns that an unjust outcome could result, potentially undermining faith in the arbitration system.

Do I Need an Employment Lawyer?

If you believe that your employer has violated your legal rights as a worker, you should hire a local employment lawyer for further assistance. A skilled employment law attorney can help protect your interests and defend your rights under the law. Your attorney can also assist you in filing a lawsuit against an employer and/or colleague and in recovering damages for any losses that you suffered.