Five Key Legal Issues in the NFL’s Investigation into Jerry Richardson

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Less than 48 hours after the Carolina Panthers launched an internal investigation into whether their founder and principal owner, Jerry Richardson, engaged in workplace misconduct, the NFL announced that it has taken over the investigation. The Panthers’ decision to investigate was a response to a Sports Illustrated investigative story, published on Sunday, concerning Richardson’s aberrant behavior as an owner and his treatment of employees. As revealed by Jon Wertheim and Viv Bernstein in an exclusive story, Richardson’s alleged misconduct primarily concerns sexual harassment and inappropriate physical contact with women.

Multiple witnesses told Wertheim and Bernstein that Richardson would often objectify the women who worked for him. To illustrate, Richardson allegedly took a peculiar and active interest in female grooming, such as by asking his female employees if he could shave their legs. Richardson, witnesses say, also liked to give female employees invasive back rubs and he insisted on buckling their seatbelts so that he could brush his hand across their breasts. In addition, Richardson reportedly made a racial slur against an African-American man who, until earlier this year, worked for the team as a scout.

In a statement explaining its decision to investigate Richardson, the team expressed a firm commitment to “ensuring a safe, comfortable and diverse work environment where all individuals, regardless of sex, race, color, religion, gender, or sexual identity or orientation, are treated fairly and equally.” Panthers limited owner Erskine Bowles, who served as Chief of Staff to President Bill Clinton, had been tapped to oversee the investigation. Attorneys from the law firm Quinn Emanuel Urquhart and Sullivan were expected to assist Bowles.

It is unclear at this time whether the NFL will retain a law firm to assist in the Richardson investigation. In recent years the league has turned to outside attorneys—most notably Ted Wells of the law firm Paul Weiss—to lead or co-lead investigations into teams. Wells was tapped with investigating bullying allegations connected to the Miami Dolphins and equipment tampering allegations connected to the New England Patriots.

The investigation into Richardson, and the abrupt change in how the investigation will be conducted, raises five key legal issues:

1. The NFL’s investigation could be hindered by a non-disclosure agreement

One critical issue in the investigation is whether the accusers can fully detail their claims while remaining in compliance with contract law. Wertheim and Bernstein note that the accusers signed non-disclosure agreement (NDA) with the Panthers. They did so as part of their employment with, and subsequent severance from, the Panthers. NDAs forbid employees and former employees from disclosing various categories of trade secrets and other proprietary information to persons from outside of the company. NDAs also frequently bar individuals from disparaging the employer and its officers (sometimes called non-disparagement clauses). Current and former employees who violate NDAs can be sued for breach of contract and required to payback employers.

At the moment, it does not appear that the Panthers have waived the accusers’ NDAs. Such waivers would authorize them to speak with NFL investigators and any attorneys retained by the league. Since the accusers were employees of the Panthers, not the NFL, any waiver would likely require assent by the Panthers. In other words, NFL commissioner Roger Goodell likely lacks the legal capacity to unilaterally modify the complainants’ contractual arrangements with the Panthers. However, Goodell might require the Panthers to do so upon threat of punishing the team for failing to cooperate in a league investigation.

So long as the NDAs remain in effect, it is worth discussing how they might impact the Richardson investigation. As a starting point, NDAs are not immune from legal scrutiny. Like other states, North Carolina requires that the scope of NDAs be limited to specific topics and to knowledge reasonably necessary to protect the company. An overly broad NDA can be deemed unenforceable. NDAs can also become unenforceable when confidential information becomes publicly known, such as through whistleblowers or media investigations. Likewise, NDAs can be overcome by a subpoena and other compulsory requests for evidence and witness testimony. In some states, including North Carolina, NDAs also usually require that the employer compensate the employee for signing an NDA.

NDAs have come under scrutiny in recent months for suppressing discussion of harassment and assault of women in the workplace. Victims of such misconduct are often dissuaded from talking about their experiences for fear that doing so would violate an NDA and lead to being sued. NDAs in this context also create something of a feedback loop problem, where each victim of one perpetrator might not know there are other victims. Each of the perpetrator’s victims is thus less inclined to challenge or breach their NDAs, thereby making it less likely the perpetrator is stopped and less likely that potential future victims are sparred.

To that end, NDAs are viewed as an influential reason why numerous sexual assault allegations against film producer Harvey Weinstein remained out of public view for years. Dozens of women who worked for Weinstein at Miramax and The Weinstein Company reportedly signed NDAs. Some of them did so as part of settlements in which they received financial compensation in exchange for relinquishing any potential legal claims they had against Weinstein and his companies. Their motivations to sign NDAs were not exclusively financial. Many wanted to protect their privacy, which would have been compromised if they pursued a lawsuit, and some may have been deterred by the prospect of drawn out and stressful litigation.

The use of NDAs to silence victims of workplace sexual offenses may soon encounter legal barriers. This is true in New York, where the NFL is headquartered. New York state senators Martin Malavé Dilan and Brad Hoylman have co-sponsored a bill, Senate Bill S6382A, which targets NDAs that mute victims of workplace sexual violence and harassment. If it became law, the bill would render contract provisions that “have the purpose or effect of concealing details relating to a claim of discrimination . . . harassment or violation of public policy in employment” void and unenforceable.

A potential legal change in New York might prove irrelevant in the Richardson investigation. North Carolina law presumably governs the accusers’ NDAs, meaning any change to New York law would seemingly not impact the investigation. On the other hand, since the NFL has taken over the investigation, New York law may play a more meaningful role.

2. Reasons why the NFL was likely skeptical of the Panthers running the investigation

It’s not at all surprising that the Panthers rushed to launch an investigation before the NFL launched one. For one, the Panthers wanted to get ahead of Sports Illustrated publishing the Wertheim and Bernstein story. The Panthers announced the investigation on a Friday night—a day and time often used to dump unflattering news while the public is preoccupied by the start of the weekend. By the time the Wertheim and Bernstein story ran on Sunday, the Panthers probably hoped the news wouldn’t be as alarming to the public.

Further, by conducting the investigation on their own, the Panthers would have controlled how information is shared both internally and externally. The team would thus not be dependent on the league in how the investigation played out. Along those lines, the Panthers knew the NFL had attracted substantial criticism for how they investigated the Patriots in the Deflategate controversy. Many believe that the NFL’s findings were inaccurate. Unflattering leaks from the NFL’s office about the Patriots and Tom Brady also raised questions of bias and maladministration. By conducting the investigation on their own, the Panthers have excluded the possibility of the NFL mishandling the investigation. 

An internal investigation would have also allowed Richardson’s attorneys to become better prepared for any findings of unlawful or unethical conduct. Obtaining those findings prior to an opposition party—or the NFL—doing so would have allowed the Panthers to strategize how to best mitigate the findings’ impact.

Chances are, the Panthers believed that they had preempted both Sports Illustrated and the NFL by announcing the Richardson on Friday. The plan obviously didn’t work out. And the NFL had good reasons to be skeptical of an internal Panthers investigation into Richardson. For one, the target of the investigation—Richardson—owns the team that would have paid the investigators’ fees and expenses. Such an arrangement is inherently vulnerable to bias and partiality. While internal investigators may be thorough and diligent, they may also be inclined to portray any findings of wrongdoing in the most favorable light possible. Panthers’ investigators would have known that a very negative report on the 81-year-old Richardson could potentially expose him to liability or force him to sell the team. The NFL does not want investigators into team wrongdoing to be influenced by financial interests that discourage deep probing.

The NFL may have also been concerned that the law firm retained by the Panthers—Quinn, Emanuel—had presumably entered into an attorney-client relationship with the Panthers. As part of this relationship, attorneys from Quinn Emanuel would have served as advocates for the team and its owner. Stated differently, by virtue of their occupation, attorneys can’t be neutral referees between Richardson and any possible workplace victims. Attorneys paid by the Panthers to investigate Richardson would have known that if they found and publicly shared evidence of Richardson engaging in unlawful conduct, such a disclosure might have undermined their ability to advocate for Richardson. They may have thus sidestepped providing a complete but damning disclosure and instead offer a more muted depiction of wrongdoing. For the NFL, a credible investigation into an owner may require more distance between the investigators and the owner’s team.

3. The NFL conducting the investigation instead of the Panthers does not guarantee objectivity

While the NFL investigating Richardson creates more distance between the accusers and Richardson, there remains the possibility of a conflict of interest. The NFL knows that if a team owner engaged in some sort of wrongdoing, the owner’s misconduct would reflect poorly on the league. It’s also possible that the league is worried about its own liability exposure for the misdeeds of an owner. Further, the league is no doubt aware of developments in Hollywood and politics during this #MeToo era. Once one victim is willing to share her story, other victims from the same industry are more willing to come forward. Will other team owners be implicated? Therefore, some of the aforementioned concerns of the Panthers investigating Richardson seemingly also apply to the NFL running the Richardson investigation.

There are also structural limitations to an internal investigation. This is true whether the NFL or a team conduct the investigation. Most notably, investigators lack the full scope of investigatory powers enjoyed by law enforcement. Private investigators, be they attorneys or forensic accountants, possess neither the subpoena power nor the capacity to obtain search and arrest warrants. This can frustrate investigators when trying to compel employees to turn over videos, texts, emails and other evidence that might confirm or deny wrongdoing. Along those lines, while investigators likely have access to the Panthers’ email server, their access to employees’ phones and other devices is far less certain.

Witnesses who speak with investigators are also not under oath. Some of those witnesses will undoubtedly include Panthers employees, whose employment duties likely require them to adopt a forthcoming and truthful approach when dealing with investigators. Others, however, may not perceive an advantage to be cooperative or candid with the investigators. In fact, some may have incentives to direct blame onto others. NDAs, as discussed above, can also impede disclosure of information. Collectively, these dynamics might limit the completeness and accuracy of the Richardson investigation.

4. Potential legal fallout for Richardson

Richardson is accused of harassment, which, if they occurred within the relevant statutes of limitation, can give rise to several kinds of civil claims. Sexual harassment, racial discrimination and hostile work environment are among them. They center on a contention that an employee was subjected to offensive and harmful behavior because of gender or race. Such an uncomfortable workplace culture also made the job more difficult. Typically, a plaintiff who alleges such misconduct recalls how complaining about the situation to her superiors or to human resources led to no improvement. Sometimes raising the issue can also lead retribution in the form of a de facto demotion or firing.

If Richardson made any physical contact with the accusers, they could sue him for battery, which refers to non-consensual and offensive contact. Further, if Richardson caused the complaints mental distress, they could include claims for intentional infliction of emotional distress. Also, if Richardson ever made it difficult for the complaints to a leave a room—or the backseat of a car—they could also add claims for false imprisonment.

Whether the accusers can sue and win is partly dependent on the enforceability of the NDAs. If the NDAs are considered effective, then those who may have been victimized by Richardson may have contractually waived the opportunity to take him to court.

It is extremely unlikely that Richardson, a billionaire, would go to court against his accusers or hope that the NDAs save him from liability. Defending against a lawsuit would risk the dangers of pretrial discovery. Along those lines, Richardson and Panthers employees would have to testify about sensitive topics. They would also be required to share potentially unflattering texts and emails with attorneys who represent the accusers. Richardson’s long history of handwritten notes would also be relevant in pretrial discovery. Such notes would be of great interest to plaintiffs’ attorneys.

To avoid such an aftermath, Richardson would probably try to reach financial settlements with the accusers long before they sue. Such settlements would entail Richardson agreeing to pay the accusers a significant amount of money in exchange for them agreeing to drop any possible claims against him and to refrain from speaking about him. Mindful of its own potential exposure, the NFL would likely encourage Richardson to reach an out-of-court resolution with his accusers.

5. Potential NFL fallout for Richardson: will he become the NFL’s Donald Sterling?

While Richardson has the financial wherewithal to avoid a lengthy legal process, he has much less suasion over how the NFL and its fellow billionaire owners treat any findings of wrongful conduct. Under the league constitution, Goodell could fine or suspend Richardson. Goodell has punished an owner before: in 2014, Goodell suspended Indianapolis Colts owner Jim Irsay six games after Irsay pleaded guilty to a misdemeanor count of operating a vehicle while intoxicated.

Richardson is not the only person associated with the Panthers who could face discipline. If team officials are implicated as facilitating or failing to stop Richardson’s alleged misconduct, Goodell could punish those officials. He could also conclude that the Panthers as a franchise warrant discipline in the form of a fine or forfeited draft picks.

In an extreme case of misconduct, the NFL could move to suspend or terminate Richardson’s ownership in the Panthers. Under Article VIII of the NFL constitution, Goodell can issue charges against an owner on grounds that the owner is guilty of conduct detrimental to the league. Owners would discuss those charges and their accompanying evidence in a trial-like hearing. A minimum of 23 of the remaining 31 NFL ownership groups would need to sustain the charges and accompanying punishment in order for Richardson’s ownership of the Panthers to be suspended or terminated.

Given that the league has previously refrained from stripping a team from an owner—and given that owners may worry about the precedential effect of imposing such a punishment—it seems unlikely that a super-majority of Richardson’s fellow owners would vote to remove him.

That said, even talk of being kicked out of the league could motivate Richardson to leave on his own accord. Richardson certainly does not want to be remembered as the NFL’s version of Donald Sterling, the disgraced former Los Angeles Clippers owner whom NBA commissioner Adam Silver took steps to remove in response to Sterling’s racist comments. Although Sterling’s fellow owners never voted since Shelly Sterling wrestled control of the team away from her husband, many believe Silver had the votes.

SI.com will keep you posted on any developments in the Richardson investigation.

Michael McCann is SI’s legal analyst. He is also an attorney and the Associate Dean for Academic Affairs at the University of New Hampshire School of Law, and co-author with Ed O’Bannon of the forthcoming book Court Justice: The Inside Story of My Battle Against the NCAA.

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