March Madness and You: Implications

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Brace yourselves, employers: March Madness is upon us. The 2013 NCAA Men’s Basketball Tournament will start with play-in games next week (March 19) and conclude with the Championship Game on April 8 in Atlanta. During the tournament’s three weeks, the US economy will lose an estimated $1.8 billion in productivity as employees watch early round games, participate in office pools, and discuss the outcomes with co-workers.  Make no mistake, March Madness and participation in other work-place “gambling” such as fantasy sports has real world implications on the workplace.

The impact of March Madness is widespread.  By one estimate, 58.3 million people are expected to participate in office pools. Total online viewership of games by workers during working hours could reach at least 8.4 million employees. Many employers have abandoned all attempts to prohibit office pools and allow them to take place in the name of “morale.” While participation in a joint experience such as the March Madness “tourney” may have the effect of bringing employees together, there are still several legal implications that employers should consider:

Illegal Gambling in the Workplace – Office pools for money are technically illegal gambling and may constitute a felony in some states. An employer that permits an office pool to take place on its premises may be found to be advancing gambling activity, which could also be prosecuted as a crime. However, as long as the pool is operated on a fair and reasonable basis, it is unlikely that law enforcement officials will take interest in your office pool. (Basic suggestions for keeping an office pool reasonable are that the organizer not take a cut, all of the money brought in from the pool should be distributed to participants, all participants should be at least 18 years old, every participant should be on equal terms, a special website should not be created to solicit participation and collect money, and the number of participants and the costs should be contained to a reasonable level).

Solicitation – Allowing employees to encourage and solicit participation in office pools can open the door for other workplace solicitation such as union organization. Employers that do not have a no-solicitation policy in effect should consider adopting one. However, once an employer adopts such a policy, it must enforce it consistently, even if it means prohibiting the sale of Girl Scout cookies, Little League candy bars, NCAA Tournament pools, and Super Bowl squares. If an employer elects not to prohibit such solicitations in the workplace, it leaves itself open to workplace solicitation by labor unions.

Use of Employer Equipment – Many employers have rules or policies that limit the use of employer equipment to work-related activities. Allowing the use of employer equipment and systems to run the NCAA pool, such as copy machines, computers, email, and the internet, in violation of office policies limiting the use of these items to business-related activities, may weaken the employer’s ability to enforce those policies in the future. 

In short, heed this warning, employers: maintain clear policies governing workplace conduct, efficiently carry out those policies, and document instances of alleged wrongdoing. The first step in this process is to maintain an up-to-date employee handbook that includes a clause governing workplace gambling.