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Are March Madness Office Pools Legal?




by:
Goldberg Segalla LLP - Buffalo Office

 
March 21, 2014

Previously published on March 20, 2014

Brace yourselves, employers: March Madness is upon us. Thursday, March 20, is the first full day of the 2014 National Collegiate Athletic Association (NCAA) Men’s Division I Basketball Championship Tournament games, and the tourney does not conclude until the Championship Game on Monday, April 7, in Arlington, Texas. During the tournament’s three weeks, the United States economy will lose an estimated $1.2 billion in productivity as employees watch early round games, participate in office pools, and discuss the outcomes with co-workers. (Fantasy sports activity in the work place has become an even more widespread issue, as Goldberg Segalla’s Seth L. Laver and Michael P. Luongo explained in an article titled “Fantasy Sports: A Real Game-Changer for Employers.”)

The impact of March Madness is widespread. Challenger, Gray & Christmas estimate that 50 million Americans are expected to participate in office pools. During the first week of last year’s tournament alone, 6.8 million unique visitors watched online streams, and similar figures in 2014 could amount to more than $660 million in lost wages.

Many employers have abandoned all attempts to prohibit office pools and allow them to take place in the name of “morale.” While participation in a joint experience such as the NCAA Division I Men’s Basketball Tournament may have the effect of bringing employees together, there are still several legal implications that employers should consider:

  • Office pools for money are technically illegal gambling and may constitute a felony in New York. An employer that permits an office pool to take place on its premises may be found to be advancing gambling activity, which could also be prosecuted as a crime. However, as long as the pool is operated on a fair and reasonable basis, it is extremely unlikely that law enforcement officials will take interest in your office pool. Basic suggestions for keeping an office pool reasonable are that the organizer not take a cut, all of the money brought in from the pool should be distributed to participants, all participants should be at least 18 years old, every participant should be on equal terms, a special website should not be created to solicit participation and collect money, and the number of participants and the costs should be contained to a reasonable level (e.g., less than $500).
  • Allowing employees to encourage and solicit participation in office pools can open the door for other workplace solicitation such as union organization. Employers that do not have a no-solicitation policy in effect should consider adopting one. However, once an employer adopts such a policy, it must enforce it consistently, even if it means prohibiting the sale of Boy Scout popcorn, Girl Scout cookies, Little League candy bars, NCAA Tournament pools, and Super Bowl squares. If an employer elects not to prohibit such solicitations in the workplace, it leaves itself open to workplace solicitation by labor unions.
  • Many employers have rules or policies that limit the use of employer equipment to work-related activities. Allowing the use of employer equipment and systems to run the NCAA pool, such as copy machines, computers, email, and the internet, in violation of office policies limiting the use of these items to business-related activities, may weaken the employer’s ability to enforce those policies in the future.
  • There is a statistically significant difference in gender participation in March Madness pools: Approximately 24 percent of male employees in surveys have indicated that they are likely to participate in an office pool, compared to just 11 percent of female employees. An employer that sanctions an activity that is clearly preferential to male employees increases the risk of a sex discrimination charge. While the existence of an office pool alone may not be the basis for a charge, it may be additional evidence of alleged gender preference.


 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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