Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

The big news this week on all the blogs has been about the Supreme Court's acceptance of a case that will potentially look at employee privacy rights in text messages for public employers.  I believe it's impact is going to be quite limited to public employers with little or no impact on private employers so I'll write about that another day.

Frankly, there's a more fascinating story that's out there and combines to current interests -- Fantasy Football and employment law. 

And this is definitely not a fantasy story.

Fantasy Football, for those unfamiliar with it, is a game in which participants (called "owners") are arranged into a competitive league, earning “fantasy points” by using the statistics of real football players. 

In some cases, the players pool money for a winner, but in many many other cases, it is done for glory and pride.  Over recent years, it has grown exponentially in popularity -- so much so that magazines like Sports Illustrated run columns on the subject. 

(In the interests of full disclosure, I joined a fantasy football league this year for free and, ahem, am doing pretty well in it so far.)

This week, it was reported that Fidelity Investments fired four employees (including relationship managers to various clients) who were running various fantasy football leagues. 

What was curious about the company's statement for the rationale for the firing was not so much using company time and resources for the league but rather it's designation of fantasy football as a form of "gambling".

Said Fidelity spokesman Vin Loporchio: "We have clear policies that relate to gambling. Participation in any form of gambling through the use of Fidelity time or equipment or any other company resource is prohibited. … We want our employees to be focused on our customers and clients."

That seems to be a slippery slope for the company to go down.  To be clear, the company is well within its rights to fire employees for using company resources and time to run an activity that is not work-related. 

Fantasy football owners may complain about the decision or deem it to be overly harsh, but employers typically have a great deal of flexibility in setting rules of behavior in the workplace.

Where the company may have missed the boat is its designation of fantasy football as "gambling" in its purest form.  It's not really betting or wagering -- its mainly just a game. While the "owners" who were fired put up $20 each, it was part of a social relationship as well, which is typically another exception to the no gambling rule.

And so, to come down on the employees here, opens the company up to criticism around Super Bowl time or March Madness.  Are they so restrictive that they prohibit anyone from participating in simple office pools (which, as I've discussed before, are fairly innocuous under Connecticut state law). I'm going to guess that the answer is "probably not". Does that mean its decision here is wrong? No. But it does open the employer up to criticisms that it is being unfair and arbitrary.

So what's the takeaway for employers?

• Set up clear rules for your employees; if participation in fantasy leagues or office pools is prohibited, say so. And then enforce that rule evenly.
• If those types of activities aren't prohibited, make it clear that participation in those activities during work time is not allowed.  Restricting off duty conduct is -- for the most part -- well outside the bounds for an employer to consider.
• Consider "blessing" such activities in a non-monetary fashion. Some employers have small office gatherings around some sports event to build morale and teamwork. 

Again, I'm not advocating turning a blind eye towards employees who are misusing company resources. But setting up clear expectations to your employees and enforcing those rules evenly, will ensure that if problems do develop, they'll be handled in a fair and appropriate manner. 

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Last year, Connecticut football fans were in nirvana. Giants versus Patriots. In a state where loyalties are divided among those two teams, you couldn't ask for a better match-up.

This year? Well, let's just say that many people will need to find some alternative reason to get excited about the matchup.

Which is where office pools come in. 

At many employers, either formally or informally, employees can contribute a small sum (a few bucks up or perhaps $20) to get a box on a 10x10 grid, which corresponds with the last digit of the football score for each team (0-9). Get a box that matches the score at the end of a quarter or game, and you might will a few hundred bucks. 

(And office pool "experts" will tell you that numbers like 0, 3 and 7 are decent draws, while 2, 5 and 9 are remote possibilities). 

But for employers, this raises an interesting question -- are office pools legal?

Well, last year, Connecticut Attorney General Richard Blumenthal chimed in near game time to say, in essence, yes office pools are legal, so long as the "house" (or the employer sponsoring it) doesn't take a portion of the money.  An article in the Norwich Bulletin, quotes Blumenthal as saying: “Office pools are generally legal unless they’re done for a profit by the person organizing it.  In other words, if there’s a house, so to speak, or an organizer takes a cut (then it’s illegal).”

The actual law is a bit hazier as I explained in a fairly detailed post last year (available here). But since it is pretty clear that the state's top enforcement official has no interest in prosecuting office pools, there doesn't seem to be much harm in jumping in.

Just hope you don't get the dreaded 5-5 combination. 

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For football fans in Connecticut, it doesn't get any better than this -- Patriots and Giants in the Super Bowl. With loyalties evenly divided in this state between the Giants and Patriots, interest in the Super Bowl will be at an all-time high. (My allegiance has always been with the Giants, particularly since Robert Kraft's tease of moving the Patriots to Connecticut in the late 1990s). 

And with such interest and enthusiasm, friendly wagering among friends will no doubt follow.  But what happens when those people want to bring such wagering into the workplace in Connecticut? The short answer is "Player Beware". 

In Connecticut, gambling and wagering is prohibited by various state laws, including Conn. Gen. Stat. Sec. 52-553 and 52-554.  There is no clear exception for "workplace" bets, or small bets. According to the statutes, a bet is a bet, regardless of where it is placed. (The obvious exceptions to this general rule are the Indian casinos in the state -- Foxwoods and Mohegan Sun.)

However, there is one well-worn exception to the "no gambling" rule.  Specifically, Conn. Gen. Stat. Sec. 53-278b states that people (not companies) are:

exempt from prosecution and punishment under this subsection for any game, wager or transaction which is incidental to a bona fide social relationship, is participated in by natural persons only and in which no person is participating, directly or indirectly, in professional gambling. 

Thus, the language appears to create an exception to the idea of professional gambling -- if there is a "bona fide social relationship."  Would workplace relationships qualify for this exemption? That's obviously an open question.  Some might quality; others clearly won't.  As the Office of Legal Research for Connecticut's General Assembly stated in August 2007:

The law does not define “incidental to a bona fide social relationship”; the legislative history of the law does not indicate the legislature's intent in enacting the exemption (see House and Senate debate attached); and we found no controlling Connecticut court ruling on the meaning of the term as it pertains to gambling.

For employers, this exception does not apply however.  Clearly, by referencing only "natural persons" (meaning people, not "corporations"), the law is intended to only protect individuals, not employers, from prosecution.  Thus, company-sponsored Super Bowl office pools would appear to be out. (That goes for Oscar Award wagering too.)

But what about the smaller, employee initiated ones? Again, the statute's language focuses on "social relationships".  A few people wagering may appear to be better than a 100-person office pool.  However, there is no "sure bet" that a small office pool among peers will pass muster under review.  And thus, "Player Beware" is the surest answer to this.

Is there any real likelihood of prosecution? Probably not. It does not appear to be a priority for enforcement. But for employers in the state, that doesn't mean it should promote such pools either.  Having a clear and established policy on gambling (that would include, for example, a prohibition of company computers to help run such a pool) may be a good start to avoiding further issues down the road.

For background on office pools in general, some posts have already gotten a jump start on the topic.  John Husband, of the Colorado Employment Law Letter, has a fun article on the subject here.  Despite lawyers' tendency to be cautious on the subject, Husband reminds us that office pools can be more than simply money:

As with many aspects of employment law, there is no clear-cut rule regarding workplace gambling that will fit every company and every situation. Office pools, Oscar pools, and group lottery tickets often constitute significant ways that managers build camaraderie and teamwork and relieve employee stress.

Perhaps, over the next two weeks leading up to the Super Bowl, instead of worrying about office pools, employers in Connecticut can have fun with the topic.  Nothing in the law prohibits Super Bowl parties, and displays of team spirit in the workplace.  Imagine a workplace "rally" where employees can cheer on their favorite sport with the employer giving away football-related gifts. That certainly would build workplace morale.  Enjoying the time leading up to the Super Bowl is something that I think all football fans in the state can agree on. 

UPDATE 1/30: Attorney General Richard Blumenthal recently chimed in that he viewed office pools as okay, so long as the house did not profit from it.  “Office pools are generally legal unless they’re done for a profit by the person organizing it,” Blumenthal said. “In other words, if there’s a house, so to speak, or an organizer takes a cut (then it’s illegal).”

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