Weekly Column: Privacy & Contract Law defining Sports & Entertainment

In his capacity as a Columnist for California Sports Lawyer®, Founder and Managing Attorney Jeremy Evans has written a column about privacy and contract laws helping to define the next era in the entertainment, media, and sports business.

You can read the full column below.

One of the beauties of the American legal system is that where one law is passed it will inadvertently or purposefully be drafted and extended to other parts of business and coalesce with the other. For example, when the prohibition against sports betting was removed by the Supreme Court of the United States deciding 7-2 that the Professional and Amateur Sports Protection Act of 1992 (PASPA) was unconstitutional for commandeering, it led to states by the dozens introducing licensing mechanisms to introduce state gambling and betting (see Murphy v. NCAA, 584 U.S. 453 (2018)). Those decisions then led to further rules and regulations surrounding impropriety among athletes and sports betting.

When law enforcement begins its investigations, it does so under the law, by enforcing prohibitions against sports betting by athletes. However, the way evidence is collected is always subject to the proper and legal collection of evidence. Evidence collected illegally is generally inadmissible with some exceptions, particularly in criminal cases, but also in civil cases. Illegally collected evidence is considered “fruit of the poisonous tree” and is inadmissible.

Therefore, when several athletes at Iowa, Iowa State, and Ellsworth Community College did not plead guilty in the illegal gambling case against them, they did so on the argument that the law enforcement officials violated their privacy and Fourth Amendment rights (e.g., Miranda rights) against illegal searches and seizures by using a digital tracking device without obtaining a warrant or approval. The criminal charges were dropped and now some of the athletes are suing for damages in a civil lawsuit for reason that law enforcement used illegal means and caused harm to their reputations. The matter will likely settle outside of court, but a favorable result for the plaintiffs’ sends a clear message to NCAA, university, and law enforcement officials to utilize proper means in collecting evidence and building cases for any illegal activity being alleged.

Similarly, the Federal Trade Commission (FTC) issued a decision on April 26, 2024, outlawing all non-competes in the United States and its territories except for senior executives. The decision is a huge win for capitalism in encouraging free trade and supporting employee rights. The question will be whether coaches, athletic directors, and others in entertainment, media, and sports are or will be considered senior executives. In other words, the definition and case law surrounding senior executives will be front and center in disputes and litigation for years to come. Furthermore, the FTC’s decision is surely to be challenged and litigated. In California, however, non-competes in contracts are void and employers as of January 1, 2024, have the obligation to inform employees that non-compete clauses in their agreements are void.

The prohibition against non-competes could open up a further coaching carousel across the United States. It also means that the NCAA and universities will have decreased authority in enforcing rules and contracts related to the existing wild west created by college athlete NIL, the transfer portal, conference realignment, and coaches leaving contracts early for more money and opportunity. In Hollywood and in the front offices, there is surely to be dealmaking around definitions and classifications of “senior executives” to enforce non-compete provisions by businesses, which can be a useful tool for a business when enforcing intellectual property, retaining talent, and trade secrets, which is generally balanced by the coalescence of other laws and strategy.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.