Now that we’re past the ides and pies of March we can get down to the main attraction: March Madness.

For those outside the states, or who just manage to avoid all sports news, March Madness is the annual collegiate men’s basketball tournament that takes 68 teams and whittles them down to just one victor. The games started last night, but they’ll continue through the first week of April. It can be a lot of fun—but like most things fun when employment law gets involved, it can be a bit complicated. Here’s three employment law considerations to make sure everyone out there is playing safe.

1. Betting Pools

Photo Credit: wasim of nazareth cc
Photo Credit: wasim of nazareth

The biggest part of the madness of March Madness is the bracket. Everyone fills out a bracket hoping to predict the winner (some even try to get a perfect bracket from start to finish, the odds of which are 1 in 9.2 quintillion) which leaves plenty of chances for employees to place bets on the outcome of one game, one bracket, or the entire tournament. Last year it’s estimated that $9 billion was bet across the country on March Madness.

The only problem is, those bets could be read as a flagrant foul with a lot of federal and state laws, Michael Arnold of Employment Matters explains:

…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).

The safest protection, obviously, would be to prohibit gambling—NCAA or otherwise—in the workplace. But if you must, or just decide you want to, make sure your policy is clear. Brian Hall, who writes in for Employer Law Report, has a good write up on how a workplace could go about creating pools for sporting tournaments, but for specifically March Madness he advises:

As a bonus, with respect to NCAA bracket pools, the policy should require employees: (1) complete NCAA brackets on paper, instead of participating through online forums; (2) prohibit employees from participating in offices located across multiple states; (3) prohibit employees from using company equipment, including email or copiers, to operate the pool; (4) limit entry fees, e.g., to $20 or less; and, (5) ensure winnings go to the winner or a charitable organization. Another option is to allow employees to participate in a bracket pool for free, with the winner getting a prize instead of a monetary award.

The odds that you’ll have a problem with your office’s pool may not be as low as getting a perfect bracket, but there’s still a chance that there could be hurt feelings or even whistleblower issues down the line. So it’s best to not take any backdoor cuts and just keep things above board.

2. Productivity Loss

With all that fun though, you’re going to get some productivity loss. One study last year concluded that with an estimated 50 million Americans participating in March Madness, companies stood to lose $1.2 billion for every unproductive work hour during the first week of the tournament—$134 million of which is lost in the first two days alone.

How’d that number get so high, you ask? Well where employers used to just be able to turn off a TV, they’re now combating the Internet, which allows employees to stream games, check scores, and research teams and stats for their bracket from their computer or even just their phone.

Tiffany Schmidt, who writes for the Minnesota Labor & Employment blog, notes that you can make clear to your employees that you have a firm policy regarding how March Madness will be tolerated:

Look at the culture of your Company, and determine ahead of time how you want to address the March Madness tournament. Remind employees of Company policies regarding absenteeism and abuse of sick leave. Supervise the employees and confirm they are getting their work accomplished. If the work is getting done, then maybe it isn’t the end of the world if they check out the scores online. However, if you find employees spending more time following the basketball games, than working, it is important to counsel them, they are there to work, and are being paid for doing a good job. If they continue, then discipline might be necessary. What is important though, is the Company sends a clear message and treats all employees the same.

Others, like Rachelle Hill of Virginia Employment Law Journal, don’t think your approach has to be against the tournament:

Consider embracing March Madness. By addressing it head-on, employers can turn an inevitable drain on productivity into a positive event for company morale and employee engagement. Employers can have events centered on the games, setup game viewing areas, consider providing lunch and have a (free to enter) office pool. Such events encourage interaction among employees that might typically not work together. Having the games on in a break area can also decrease the overall drain on the network from streaming. A company can also consider allowing employees to wear their team’s colors and have contests for the employee with the best team spirit.

Both Hill and Schmidt agree, however, that whatever your policy is it needs to be clear across the board while also making clear that no one will be reprimanded for not participating if they don’t want to.

Photo Credit: acaben cc
Photo Credit: acaben cc

3. The Players’ Employment Laws

This one will be out of your workplace, but it’s worth noting that the employment tide is shifting for the players that everyone is eagerly watching. For now student-athletes are required to be “amateurs” under the NCAA, which prevents them from receiving any money for their participation in school sports.

It’s an issue that’s been hotly debated for years now, and one that John Oliver touched on his HBO Show “Last Week Tonight” this past Sunday given that the ad revenue from the tournament this year will exceed $1 billion.

In that spirit, Tuesday, the day of the return to March Madness, will also represents a return to a different kind of court writes Travis Waldron for Think Progress:

The antitrust lawsuit over athlete compensation brought by former UCLA basketball star Ed O’Bannon returns to court Tuesday, when oral arguments will begin as the NCAA fights to overturn a decision it largely lost in August. Federal judge Claudia Wilken ruled then that the NCAA unlawfully restricts athletes’ rights to revenues from the use of their names, images, and likenesses in video games, television broadcasts, and other forms of publicity and as a result, schools will soon be able to offer future football and basketball players as much as $5,000 per year in additional benefits derived from broadcasting and other publicity revenues.

The O’Bannon case represented a significant, if not sweeping, victory for advocates of allowing college athletes to further share in the growing revenue pie they help create. The NCAA’s appeal, based on the idea that college athletes are “amateurs” who should not share in those revenues, asks the Ninth Circuit Court of Appeals to overturn the decision, and the importance of the case to NCAA officials could soon extend far beyond a single courtroom.

Those ruling won’t come until a while after when the lights are shut off and the net is cut, but will certainly have a more lasting impact. If athletes are given right to compensation, there’s not much restricting other extracurricular activity members like band, drama or orchestra from doing the same—which would dramatically change how next year’s March Madness runs.