Employment

Transfers

What is the legal framework for individual transfers? What restrictions can be placed on individuals moving between clubs?

Each of the major sports leagues in the United States functions under a separate collective bargaining agreement (CBA). Each CBA has specific free agency rules that restrict when a player may transfer between teams. The CBAs and player-specific contracts are renegotiated periodically and together govern individual transfers. Additionally, in some leagues, teams themselves are limited as to the number of free agents they can accept. Some leagues also enforce trade deadlines (eg, Major League Baseball (MLB), National Basketball Association (NBA), National Football League (NFL) and NHL). Others, most notably Major League Soccer (MLS), allow transfer during specified windows. For this upcoming season, MLS has announced, as approved by FIFA, changes to the transfer windows in light of covid-19. The new 2020 transfer windows were 1 July and 7 (the primary two-day transfer window to complete transfers that were executed prior to the season's suspension), as well as 12 August through 29 October (the secondary transfer window during which newly initiated transfers may occur). Similarly, as a result of covid-19, the NBA put a sustained moratorium on player transactions and opted for a specified transaction window that occurred from 23 June through 1 July.

Ending contractual obligations

Can individuals buy their way out of their contractual obligations to professional sports clubs?

Yes. The logistics of getting out of a contract vary depending on the league, the governing CBA and the player’s individual contract with a particular team. For example, in the NBA a player may terminate his contract by paying the team a portion of the remaining value of his contract, allowing the team to save a portion of what they would have paid had the contractual arrangement continued. The player will then seek out a different contract with another team. In the MLB, player contracts often include an option after a specified number of years for the team to either keep the player or discuss a buy-out arrangement. The specifics on how the player is released from the contract vary, but such releases are generally possible.

Welfare obligations

What are the key athlete welfare obligations for employers?

As a general rule, participants in professional sports assume the risk of unintentional injuries, but will not assume the risk of injuries intentionally inflicted, or that result from a disregard for safety. Participation in contact sports constitutes implied consent to normal risks that attend with that sport. Negligence is insufficient to establish a cause of action, but wilful or wanton behaviour or reckless disregard for the safety of others will be grounds for a negligence suit.

In light of the covid-19 pandemic, leagues and players associations have negotiated specific health and safety requirements for the upcoming season and, in some cases, have issued handbooks setting forth safety protocols based on public health guidance from federal and state officials. The NBA, for example, has issued a 113-page handbook detailing phased guidelines for the start of the season at ESPN Wide World of Sports Complex. Players who refuse to comply with the protocols can be subject to disciplinary action, including warnings, fines, suspension or dismissal. The NFL cancelled all preseason games and will test players and staff at least twice before they return to facilities. Players and staff will then be tested daily for at least the first two weeks after their return, and in any event until positive test rates fall below 5 per cent, at which point testing will begin to occur every other day. NFL players were also able to opt out of the season and receive a stipend if notice was provided by 3 August 2020. The NFL Players Association is currently reviewing its Infectious Disease Emergency Response Plans. MLB and the MLB Players Association agreed on a 2020 Operations Manual, which is a 101-page document that details health and safety procedures under which MLB will operate. For example, each team must form a COVID-19 Action Plan in partnership with medical and health officials, and high-risk players may opt out of the 2020 season and still receive full pay. Other measures include increased testing (ie, every other day for players and coaches), dedicated testing and isolation areas, monthly antibody tests and other social distancing measures during gameplay such as no high-fiving and social distancing for the national anthem. There will also be a league covid-19 health and safety committee (consisting of both MLB and MLBPA representatives) to oversee strategy and resolve any disputes by majority vote.

Young athletes

Are there restrictions on the employment and transfer of young athletes?

Minors under the age of 16 may not be employed during school hours pursuant to the Fair Labour Standards Act. Minors under the age of 18 may not be employed in occupations the Department of Labour deems particularly hazardous or detrimental to their health or well-being. Additionally, states place further restrictions on child labour that may be more restrictive than the national standards.

The NHL allows a player to be drafted once he is 18 years old, on or before 15 September of each season. The MLB requires a player to have graduated from high school, the NBA requires players to be 19 years old, as well as one year removed from high school, and the NFL requires players to be at least three years removed from high school.

What are the key child protection rules and safeguarding considerations?

The main considerations in employing young people are their safety and education. Specifically in athletics, there is a concern with protecting young athletes by shielding them from physical injury and requiring them to mature emotionally and receive an education before entering the world of professional sports.

Club and country representation

What employment relationship issues arise when athletes represent both club and country?

As mentioned, each of the major sports leagues in the United States are unionised and function under separate CBAs. The players of the major sports leagues are employees of their respective clubs and their employment relationships are governed by the respective CBAs. Additionally, the CBAs or leagues may restrict or limit a player’s ability to represent his or her country in an international event. For example, the NHL did not suspend its normal season in 2018, restricting its players from participating in the 2018 Winter Olympics.

Selection and eligibility

How are selection and eligibility disputes dealt with by national bodies?

The International Olympic Committee grants the United States Olympic Committee (USOC) the right to represent the United States in all matters relating to its participation in the Olympic Games. The USOC, in turn, authorises a National Governing Body (NGB) as the governing body for each Olympic sport within the United States. The USOC and each NGB have their own dispute resolution processes, though the majority of disputes can be handled by the relevant NGB.

In the first instance, an athlete seeking to challenge an NGB’s decision regarding an athlete’s right to participate in competition may seek resolution of their dispute by filing a formal complaint with their sport’s NGB. Subsequent to or concurrently with filing a complaint with the relevant NGB, an athlete may also file a complaint with the USOC under section 9 of the USOC Bylaws (a section 9 complaint), which states that ‘no member of the USOC may deny or threaten to deny an athlete the opportunity to participate in the Olympic Games, Pan American Games, Paralympic Games, a World Championship competition, or other such protected competition, as defined within the USOC Bylaws.' A section 9 complaint must be filed within six months of the alleged denial of the right to participate. Filing a section 9 complaint is purely a notice mechanism that alerts the USOC that an issue exists, and allows the USOC to intervene to attempt to mediate a dispute between the athlete and the NGB. After filing a section 9 complaint, however, an athlete may seek a final resolution of their claim by filing for arbitration with the American Arbitration Association (AAA). Arbitrations are typically held before a single arbitrator selected from a closed pool maintained by the AAA and the Court of Arbitration for Sport. Decisions rendered in these arbitrations are final and binding in accordance with the Commercial Rules of the AAA.

Law stated date

Correct on

Give the date on which the information above is accurate.

11 August 2020.