By Christopher R. Deubert, Senior Writer
In a May 14, 2024 Order, the Supreme Court of the State of Nevada ordered former Las Vegas Raiders head coach Jon Gruden to arbitrate his claims against the NFL and Commissioner Roger Goodell arising out of his October 2021 forced resignation. The decision is yet another in a long line of cases in which courts defer to the authority of sports league Commissioners.
The Gruden Case
Gruden was forced to resign after the revelation of emails in which he engaged in what the NFL described in a legal brief as “racist tropes and misogynistic and homophobic slurs.” At the time, Gruden was in the fourth year of a 10-year, $100 million contract, the largest contract ever for an NFL coach.
Notwithstanding the fact Gruden and the Raiders quickly reached a confidential settlement concerning Gruden’s departure, in November 2021, Gruden sued the NFL and Goodell (but not the Raiders) in the Eighth Judicial District Court in Clark County, Nevada, alleging principally that the defendants had intentionally and tortiously interfered with Gruden’s contract with the Raiders by allegedly leaking the problematic emails.
The NFL moved to dismiss the case, arguing that Gruden was bound to arbitrate the dispute according to the terms of his employment agreement with the Raiders. On May 26, 2022, the District Court denied the NFL’s motion.
The Nevada Supreme Court reversed, finding that Gruden was bound by his agreement to arbitrate any disputes concerning his employment before the Commissioner in accordance with the NFL Constitution. In so doing, the Court expressed some concern that Goodell, a defendant in the case, could theoretically also serve as the arbitrator. But the Court noted that it was not clear that Goodell would do so and, in the event he did, issues of bias could be raised as a ground for seeking to vacate any arbitration decision he might make. Consequently, Goodell is likely to appoint someone else as arbitrator should the case proceed.
Commissioner Authority
The Nevada Supreme Court’s decision is just another example of the difficulties players, coaches, and others have experienced in challenging a Commissioner’s authority.
The genesis of the modern-day Commissioner and the role’s authority was MLB’s appointment of Judge Kennesaw Mountain Landis as the sport’s first Commissioner in 1921 after the “Black Sox” scandal in which several members of the Chicago White Sox were accused of intentionally losing the 1919 World Series in exchange for bribes from mobsters. Landis banned eight players for life.
For many years thereafter, the broad scope of a league’s Commissioner authority was most frequently challenged – and upheld – in the context of MLB. In 1931, the Northern District of Illinois dismissed a suit from the then-minor league Milwaukee Brewers challenging Landis’ rejection of an optional player contract between the St. Louis Browns and the Brewers, holding that “the commissioner acted clearly within his authority.” In 1977, the Northern District of Georgia held that Commissioner Bowie Kuhn had the authority to discipline the Atlanta Braves for violations of a recently-imposed no-tampering policy under the Commissioner’s broad authority to act “in the best interests of baseball.” The next year, the Seventh Circuit Court of Appeals affirmed a decision upholding Kuhn’s authority on the same ground to disallow the Oakland Athletics’ sale of left fielder Joe Rudi and pitcher Rollie Fingers to the Boston Red Sox for $2 million and pitcher Vida Blue to the New York Yankees for $1.5 million. Finally, in 1989, the Southern District of Ohio recognized the broad authority of the Commissioner as the real party-in-interest in denying Pete Rose’s motion to remand his lawsuit back to Ohio state court.
The more recent challenges to Commissioner authority have come in the NFL. In 2016, the Second Circuit Court of Appeals reversed a district court decision and affirmed Goodell’s authority to impose a four-game suspension on Patriots’ quarterback Tom Brady for his alleged involvement in a scheme to deflate footballs to his liking. The Second Circuit recognized the Commissioner’s “broad authority to deal with conduct he believes might undermine the integrity of the game.” A few months later, the Eighth Circuit Court of Appeals ruled similarly in upholding Goodell’s authority to punish running back Adrian Peterson for alleged domestic violence. The next year, the Southern District of New York rejected the NFLPA’s efforts to vacate an arbitration decision in which Goodell imposed a six-game suspension on running back Ezekiel Elliott for domestic abuse. Finally, most recently, the Southern District of New York held that most of the claims asserted by three Black coaches, notably Brian Flores, against the NFL and various clubs had to be arbitrated in front of Goodell.
Importantly, in several of these cases, courts rejected arguments that the Commissioner could not fairly adjudicate the dispute because of his involvement in the decision or discipline being challenged. The courts have consistently rejected these arguments, holding that sophisticated parties – such as the NFLPA or highly-paid coaches – are bound by the agreements they sign to bring their claims before the Commissioner. If the Commissioner presides over the arbitration in a biased manner, that is an issue to be dealt with after the arbitration – not before.
Despite the well-recognized authority of Commissioners, the New York Knicks are currently challenging NBA Commissioner Adam Silver’s authority to hear a dispute between the Knicks and the Toronto Raptors. The Knicks allege that a basketball operations employee took secret scouting information with him when he switched teams. The Raptors have moved to have the case shifted to arbitration, while the Knicks are arguing that Silver does not have the authority to hear the dispute.
The Commissioner’s broad authority has been a cornerstone for the operations of professional sports leagues for over a century. Central to that proposition is that the Commissioner will handle league matters internally, with minimal scrutiny from the public and courts. Gruden is only the latest to discover that reality.
Deubert is Senior Counsel at Constangy, Brooks, Smith & Prophete LLP.
