United States: Will Player And Employee Empowerment Kill Arbitration Agreements?

Whether you follow sports or not, you have likely heard about the current state of professional sports, particularly the NBA, referred to as the era of "player empowerment." And even if you aren't familiar with this specific term, you likely know about the facts behind this trend. For example, last year, then-New Orleans Hornets superstar Anthony Davis, in no uncertain terms, forced the team to trade him to the Los Angeles Lakers, with over a year left on his contract. Then, Paul George, who had just finished completing only the first of his newly minted 4-year contract, requested that his team trade him to the Los Angeles Clippers so he could play with Kawhi Leonard.

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These are just two of the most high-profile examples, but there are certainly many others. And while there have been many past instances of players wanting "out" of their current situation, it certainly seems that this is happening more frequently today and increasingly in instances when a player still has multiple years left on his or her contract. Sports pundits recently had a field day when Jalen Ramsey, a Pro Bowl cornerback for the Jacksonville Jaguars, requested a trade. It was the same when anonymous Miami Dolphins players reportedly requested trades because the team was, frankly, terrible. Player empowerment in the NBA was one thing, but now it was seeping into the NFL, and media members wondered whether this was the new normal. What happens if Patrick Mahomes, last year's MVP and already a generational talent at the age of 24, asks to be traded out of Kansas City, people wondered?

Many of the opinions on this topic were obviously split. Certain people griped about loyalty and wondered whether a contract means anything anymore, particularly where a player with multiple years left on his or her agreement could essentially force a team to trade him or her by exerting the appropriate amount of leverage. Others were on the side of players' being able to have control of their destiny, and their employment options, particularly after years of teams' having all the control. While I don't know how much of a slippery slope this could lead to, one thing is clear: This is a trend that cannot be ignored, and teams and leagues have reportedly (as they should) discussed what changes can be implemented to curb its effect.

The Employee Connection

If you think about it, professional athletes in certain sports are employees of the team. So it's not incorrect to say that the player empowerment era is analogous to the employee empowerment era that is trending currently. While it may not feel like this is the case, particularly at the federal level, the tea leaves are there and can demonstrate where possible trends may be coming.

For example, on September 20, 2019, the House of Representatives passed H.R. 1423, the Forced Arbitration Injunction Repeal Act (FAIR Act). This measure would end the ability to use predispute arbitration agreements involving certain allegations, including employment, civil rights, and consumer claims. It is highly unlikely that this measure will pass the U.S. Senate, so employers need not necessarily worry about this now. However, companies need to be aware that this is on the horizon.

Doubters state that this bill passed the House largely on party lines, with only two Republicans in support of the bill. However, the retort would be that there have been many instances when Democrats held majority power in Congress, but only now was there enough momentum to push such a bill through with the adequate support needed. The bottom line is that the FAIR Act's success in the House potentially lays the groundwork for the entire ban of mandatory arbitration agreements in various areas, including employment, should the balance of power occur in the near future.

Employers need to be ready for this and strategize on how such a large-scale change in the way they do business could impact them and what steps should be taken to minimize risk or exposure. The professional sports leagues that are dealing with player empowerment don't exactly know how far the trend in their industry will go, but they at least know that they have to be ready to address it going forward. Employers should do the same when it comes to the potential ban of arbitration agreements and other employment trends that are evident.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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