Legal implications from SI story

[Mr. Scot]

From SI legal analyst Michael McCann (edited)...

Fallout from latest Richardson allegations
 

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1. Richardson could have violated non-disclosure agreements

It’s unclear if NDAs signed by Richardson’s accusers and the Panthers were “unilateral” or “mutual.” If unilateral, it would mean that while the accusers are contractually barred from revealing information about their experience with Richardson, the team and its officials are not. In contrast, if the NDAs are mutual, both the accuser and team—including Richardson—would be bound to remain silent. If the NDA was mutual, Richardson talking to McNair and other owners about the allegations could, depending on the details he shared, run afoul of the NDA. If Richardson only denied public accounts of his behavior, he might not have violated the NDA since the denials concerned public information. It is worth noting that in her letter to McNair, the alleged victim urges him to let Richardson know that he “broke the NDA signed.” She reaches this conclusion based on Richardson sharing his side of the story with McNair and other owners.

If Richardson breached the NDAs, his accusers could construe those NDAs as invalid and unenforceable (it is also possible Richardson could reach the same determination given that some of his accusers have gone public, albeit anonymously). The accusers could then openly share their views. Richardson’s accusers could also sue both Richardson and the Panthers for breach of their NDAs and seek monetary damages. Such litigation would prolong the controversy for both the Panthers and the NFL long after someone else replaces Richardson as majority owner.

Basically, Richardson may not only have violated the agreements - thus allowing his accusers to speak - but could also potentially have opened up the Panthers to lawsuits, even after he's gone.
 

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2. Richardson placed his team’s top attorney in an awkward, if not conflicted, position to deflect damaging allegations directed at Richardson

Along those lines, Thigpen and other Panthers officials work for the team, not the majority owner or the minority owners. These officials likely realized that if the sexual assault allegations against Richardson ever became public, the NFL could undertake various actions impacting the team and Richardson personally. For instance, the league could have issued fines or suspensions, or pressured Richardson to sell the team—a move that would influence the value of the minority ownership interests. This complicated arrangement placed Panthers officials and Richardson in positions that may not have been entirely congruous.

Richardson using the team’s general counsel to respond to allegations against him also raises questions about the appropriate use of team resources. While the general counsel would need to play a role given the team’s exposure to liability stemming from Richardson’s alleged behavior, it’s not clear if Richardson—whose net worth is reportedly in excess of $1 billion—retained his own private attorney. As noted above, Richardson’s interests are connected to the team but are nonetheless separate and potentially in conflict.

Richard Thigpen is technically the team's attorney, but Jerry Richardson used him for what can be considered a personal matter, possibly creating a conflict of interest.

 

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3. The Panthers appear to have violated the NFL Personal Conduct Policy

Although typically discussed in the context of player conduct, the NFL’s personal conduct policy applies to all NFL personnel. This classification includes players, coaches, other team employees, game officials, league officers and—yes—owners. All of these persons are obligated to refrain from “conduct detrimental to the integrity of, or public confidence in, the game of professional football.” NFL commissioner Roger Goodell can interpret this open-ended language as he sees fit. He has done so to impose punishments for a range of conduct matters, including serious ones involving domestic violence and less troubling ones involving equipment rules. To be sure, the allegations against Richardson—which included that he gave sexually charged back rubs, brushed his hands across women’s breasts and uttered a racial slur against an African-American employee—would warrant the commissioner’s attention and potentially lead to punishment.

However, it does not appear that the NFL was ever made aware of these allegations. As the piece details, the NFL abruptly took over the Panthers’ internal investigation into Richardson within 48 hours of the SI story breaking. The league retained Mary Jo White, a former U.S. attorney and Securities and Exchange Commissioner, to run the investigation, which continues to this day. Had the league known about Richardson’s alleged misconduct, it presumably would have opened up an earlier probe.

Also, the Panthers appear to have had a contractual duty under the personal conduct policy to inform the NFL of Richardson’s misconduct. Per the policy, “clubs must report any potential violation that comes to their attention whether through law enforcement, a witness, a victim or other source. The responsibility to report is required and will be strictly enforced. Failure to report an incident will be grounds for disciplinary action.” Given that the Personal Conduct Policy governed Richardson, the Panthers seemingly had a duty to notify the NFL of allegations of “conduct detrimental” involving Richardson. While it may seem awkward, if not unwise in terms of job security, for employees of a team to tell on their team’s owner, they had a job to do so under NFL rules. And if they failed to do so, their team could be in more trouble as a result. The league could consider punishments in the form of fines and forfeited draft picks.

It’s less clear whether the Panthers had to notify the NFL about NDAs signed by the team and Richardson’s accusers. The Panthers could argue that Panthers employees who are not players have no contractual relationship with the NFL. These employees are not unionized and do not collectively bargain with the league. Further, the NFL plays no role in approving employment contracts and other legal instruments negotiated between teams and its non-player employees. While the league plays a limited role in team hiring through the Rooney Rule, which requires NFL teams interview minority candidates for certain positions, the Rooney Rule is not at issue in this controversy.

In addition, each NFL team has some degree of autonomy in managing its internal team issues. The NFL, however, could insist that such autonomy erodes when those internal team issues become league controversies. Inappropriate conduct accusations against Richardson—particularly in the context of the #MeToo movement—are clearly of interest to the NFL. This was apparent when the NFL pushed the Panthers and its investigators aside to conduct the investigation.

We've discussed this before. The NFL Personal Conduct Policy requires legal matters like this to be reported. Panthers counsel entered into at least four such agreements without reporting them.  The team, not Richardson, could be penalized for this, including the loss of draft picks.

I still don't believe that will happen (especially with a new owner on board) but until final determination is made, it remains a possibility.
 

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4. The NFL has limited authority to force Richardson to cooperate but has leverage over the Panthers

The NFL is not the government or law enforcement. It can’t subpoena records, execute search warrants or force Panthers executives and employees to testify under oath. It can lean on contractual obligations of the Panthers to comply with league investigations but that is a weaker legal authority. While there is no indication that Panthers executives have been unwilling to cooperate with White and the NFL, they would have some reason to adopt such an approach. They know that sharing damaging materials could expose the team to liability since Richardson’s accusers could still sue the team.

In fact, until the relevant statutes of limitations expire, the team could be sued on account of Richardson even after he leaves the team. The team is thus incentivized to object to sharing emails and other electronic records on grounds that it constitutes an invasion of privacy. The league may therefore be limited in trying to obtain any videos, texts, emails and other evidence relevant to accusations against Richardson.

On the other hand, the league has certain leverage over the Panthers by virtue of its power to punish. Under the NFL constitution, which governs the legal relationship between teams and the league, the NFL can levy fines and suspensions against the Panthers and Richardson. The NFL could do so if it finds the Panthers to be uncooperative. Of greater influence, the NFL could strip away draft picks from the Panthers. The NFL suspending or fining Richardson is probably an empty threat at this point since the team will sell in the coming weeks. Conversely, the NFL threatening to take away Panthers draft picks would be anything but an empty threat.

The league could also demand cooperation as a condition of authorizing the forthcoming sale of the Panthers. Three-quarters of owners are required to approve the sale of a team.

The NFL could potentially threaten to punish the team as a way of getting at Richardson, or even punish the Panthers as a way of saying "hey, we did something".  Unfair?  You bet, but yeah...
 

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5. The NFL could indemnify the accuser so she can talk

The accuser who has authored My Truth in Letters asserts that her attorney spoke with White and offered her cooperation in the league investigation. According to the accuser, however, while White “said she would like to hear my truth”, White told her that neither “she nor [the NFL] could protect me from the penalties of breaching my NDA.” The accuser found White’s response to contradict the league’s stated intentions of aggressively investigating what happened. “Let me get this straight,” the accuser writes. “You say you are doing a thorough investigation of ‘workplace misconduct’ of Jerry Richardson  . . . but you cannot protect me. Got it. You have zero power, and that makes your investigation a farce.”

While the NFL can’t protect the accuser from being sued over a breached NDA, it could offer to indemnify her from the consequences of such a lawsuit. The league could pledge to pay any legal expenses she incurs if the Panthers or Richardson sues her for breach of an NDA. If the NFL, which generates about $14 billion a year in revenue, wants to hear from the accusers, it clearly has the financial wherewithal to make that happen.

Indemnity agreements are hardly unprecedented in sports. During the Donald Sterling saga in 2014, the NBA demanded and received from Sterling’s wife, Shelly Sterling, indemnification from any litigation costs associated with her husband suing the league and NBA commissioner Adam Silver. This arrangement facilitated the sale of the Los Angeles Clippers from the Sterling Family Trust to Steve Ballmer. It also ensured that if Donald Sterling prevailed in his lawsuits against the NBA and Silver—he didn’t—his own family trust would ultimately be on the hook to pay him. The NFL might want to borrow a play from the NBA’s legal playbook.

This would be the most ideal outcome.  It would allow Richardson's accusers to speak out without fear and would, as a lesser benefit, give the NFL some better optics.

Sadly, the most ideal outcome also appears to be the least likely.

Bottom Line: This story may not get much play while the draft is still going on, but shortly thereafter the team sale is going to be news again and it's inevitable that this will be connected.

The NFL's biggest fear is likely that a major news media (rather than sports media) outlet grabs this story and runs with it.  If that happens, Jerry Richardson probably gets thrown under the bus.

But then, maybe he should be...

[raleigh-panther]

Richardson needs to be told to get that sale done or else

what a total absolute embarrassment 

Rae Carruth. Greg Hardy.  Richardson 

i still remember his tears about abuse of women in relationship to the Greg Hardy

franchise seems to ‘go big’ in all the wrong directions 

[t96]

It’s really sad how desperate that failing publication is to turn this into a huge mega scandal for the NFL. Not really working out for them. Pitiful.

[Mr. Scot]

8 minutes ago, t96 said:

It’s really sad how desperate that failing publication is to turn this into a huge mega scandal for the NFL. Not really working out for them. Pitiful.

Would you rather somebody else speak for the victims?

The NFL certainly isn't doing it, and likely wouldn't absent the threat of negative press.

[PanthersATL]

54 minutes ago, raleigh-panther said:

Richardson needs to be told to get that sale done or else

what a total absolute embarrassment 

Rae Carruth. Greg Hardy.  Richardson 

i still remember his tears about abuse of women in relationship to the Greg Hardy

franchise seems to ‘go big’ in all the wrong directions 

I've jokingly said this before, but it still holds true:  if you do something that Panthers management doesn't approve of, you're off the team, whether it be having sex with another cheerleader in a bathroom stall in Miami ( http://www.espn.com/nfl/news/story?id=2216124 ) all the way up to the Rae Carruth situation, etc.  Just add Jerry selling to the list as the ultimate way to be "off the team"  

Ugh, all those excerpt details in this thread are just... ugh.  

 

[Mr. Scot]

Now this from Gantt...

Panthers front office working to clean up Richardson's mess

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The Panthers found what could be a perfect fit in wide receiver D.J. Moore last night with their first-round pick, and it was about the fifth-most interesting thing that happened at Bank of America Stadium yesterday.

Any excitement over the addition of Moore was overshadowed by the looming sale of the team, and how that process is being complicated by yet another embarrassing round of reports about the bad behavior of owner Jerry Richardson. In the aftermath, the front office he left behind is trying to mop up as much as they are being allowed to.

That's not true among fans, but yeah, I could see it casting a pall over the offices.
 

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Two team sources told PFT that a number of behind-the-scenes changes have taken place to try fix the mess left by Richardson’s workplace misconduct, though they were prevented from cleaning house to the degree they wanted to.

Chief operating officer Tina Becker reportedly wanted to fire longtime team general counsel Richard Thigpen, who presided over the NDAs between Richardson and his accusers. However, the sources said she was discouraged from getting rid of Thigpen over concerns that it would impact the value of the team during the sale process. That direction reportedly came from the firm overseeing the sale, apparently concerned that the appearance of instability was worse than the reality of Richardson’s own actions and Thigpen’s involvement in them.

Really?

 

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The sale process is ongoing, and nothing that happened yesterday is causing the value of the team to do anything but drop. Steelers minority owner David Tepper and South Carolina financier Ben Navarro are viewed as the favorites among the bidders, with Navarro offering what’s reported to be the highest bid and Tepper having the greater personal wealth and the support of a number of current NFL owners.

But Becker has also restructured the front office in other ways, putting the human resources department under the control of deputy general counsel and director of compliance Steve Argeris. HR had previously reported to the team’s chief financial officer, but they’re trying to implement some new programs and create something resembling an actual business operation in anticipation of problems which could arise in the future and under new ownership.

Richardson's not gonna wanna hear that.  Honestly, neither is the NFL. David Tepper, on the other hand...
 

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Of course, a new owner could come in and make most of the work done moot, by cleaning out the business side of the organization and bringing in his own directors. But there is some degree of effort being made to clean things up, and to create a workplace that is both functional and not threatening to women and minorities (to say the Panthers organization has been largely white and male over the years is an extreme understatement).

It will be a long process, and the steps taken now are the small, necessary ones, being implemented by people with no guarantees of employment beyond the next month or so.

As we discussed yesterday, housecleaning seems a lot more likely now.

Most interesting tidbit there for me: That Tina Becker wanted to fire the team counsel but was talked out of it.

Kinda doubt there's any chance he survives the ownership change though.

[PanthersBigD]

We're not the only team to have scandals. While I have sympathy for the victims and want Richardson and those culpable to see justice, the pearl clutching and woe is us attitude around here is silly. 

This is an embarrassment for Richardson, not the players, coaches or fans. If Rivera knew something and doubled down on backing Richardson then that's disgraceful and he should answer for it. Otherwise, I think he's guilty of being too much of a company man, and not asking enough questions. Rich, powerful people are often scumbags. It's Pollyanna-ish to assume otherwise. You don't get to the top without climbing over other people and being okay with it. I've always thought Richardson was a scumbag, I just didn't know he had so many layers of scum to him.  

 

[ecu88]

For the love of God can this end so we can finally fuging move on.

[t96]

1 hour ago, Mr. Scot said:

Would you rather somebody else speak for the victims?

The NFL certainly isn't doing it, and likely wouldn't absent the threat of negative press.

I haven’t seen any evidence to suggest that there are any “victims.” JR is a total creep, yes. But not really a big deal at all.

[Mr. Scot]

2 minutes ago, ecu88 said:

For the love of God can this end so we can finally fuging move on.

I don't think this is what's holding up the sale. 

I've begun to buy the theory that Richardson is being a difficult a--hole.

 

1 minute ago, t96 said:

I haven’t seen any evidence to suggest that there are any “victims.” JR is a total creep, yes. But not really a big deal at all.

If this happened to someone you care about, would you still feel that way?

[mc52beast]

I’m wondering if all this crap could effect how much JR gets for the team. Any potential owner could use this as leverage and lowball the bid. 

JR holding out for more money is laughable after reading this post.

[Cary Kollins]

Ah finally the huddle mouth breathers show up

[Mr. Scot]

 

[t96]

2 minutes ago, Mr. Scot said:

If this happened to someone you care about, would you still feel that way?

not going to waste my time getting into this with a long answer here