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Posted 03.02.2010

Fidelity sacks fantasy football players

Not for goofing off -- for gambling. But were they really?

By Todd Fredrickson

Employees may well be a little more circumspect when approaching this year's NCAA Tournament pools. Last month, Fidelity Investments made national headlines when it fired four employees for participating in a fantasy football league.

For the uninitiated, fantasy football participants are organized in a competitive league, earning "fantasy points" by using the statistics of real professional football players. Participants manage their own virtual teams based upon the actual performance and statistics of professional football players. In a head-to-head weekly matchup, the winner is the person with the highest number of fantasy points. In some cases, the participants pool money for a league champion, but in many other cases winning only earns the victor bragging rights.

Surprisingly, Fidelity's rationale for firing was the company's designation of fantasy football as a form of gambling - rather than the assertion that the employees were using company time and resources to participate in the league. Fidelity spokesman Vin Loporchio told the Fort Worth Star-Telegram, "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 . . . ."

Does fantasy football constitute gambling?

Despite Fidelity's assertions, there is some debate as to whether fantasy football constitutes "gambling" and there is some authority that supports the view that it's not. Specifically, the Federal District Court for the District of New Jersey addressed the question of whether participating in a fantasy football league with an entry fee constitutes gambling (although not in the context of group participants privately pooling money to award to the league champion).

It ruled that fantasy league participants do not sustain "gambling losses" within the meaning of the gambling statutes at issue and thus league participants are not engaged in gambling. Humphrey v. Viacom, Inc. The court ruled that fantasy participants pay an entry fee and bargain for and receive a number of services, including, but not limited to, statistical tracking, analysis of team performance, and access to analytical information concerning professional football players.

Finally, the court also concluded that the entrance fee to join a league was not a "wager" or a "bet" because the entrance fees are paid unconditionally, the prizes offered to participants are for guaranteed, set amounts, and the defendant operators did not compete for the prizes.

Regardless of whether participating in a fantasy football league constitutes "gambling" in the legal sense, it is clear that Fidelity was well within its rights to fire employees for using company resources and time to participate in an activity that was not work-related. While Fidelity's decision may seem harsh, employers typically have a great deal of flexibility in setting rules of conduct in the workplace.

Guidelines for Employers

So what is the takeaway for employers? The bottom line is that company policy should be clear and unambiguous:

• First, set up clear rules for your employees. If you wish to disallow fantasy sports leagues or office pools, say so clearly and enforce that rule evenly.
• Second, if these types of activities are not prohibited, make it clear that participation in these activities must not be during work time.
• Make sure that any approach is consistent with your company's solicitation policy or rules.
• Setting up clear expectations for your employees and enforcing those rules evenly will ensure that if problems do develop, they will be handled in a fair and appropriate manner.

Todd Fredrickson is managing partner of the Denver office of Fisher & Phillips LLP, representing employers across the country in labor, employment, civil rights, employee benefits and immigration matters. He can be reached at 303-218-3660 or tfredrickson@laborlawyers.com

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