Morgan Lewis Attorney Writes About How the Change in US Administration May Affect the Sports Industry

Elizabeth C. Polido, an associate in the New York office of Morgan Lewis, just published the following timely piece on the firm’s site:

“President-elect Joseph Biden has indicated that he will make significant changes to the policies and practices of the prior administration that will impact the public and employers, including in the sports industry.

COVID-19

As the coronavirus (COVID-19) pandemic continues to worsen, many anticipate that a Democratic administration could take a nationwide approach to handling the pandemic. Federal mandates may include lockdowns, social distancing requirements, and travel restrictions, which would further limit live sports, especially in states that are currently permitting audiences to attend games. Live sporting events are vital revenue generators for the sports industry, including leagues, organizational bodies, broadcasters, sports betting firms, events firms, ticket vendors, retail suppliers, and hospitality providers, among others. If live sports are further limited, sports organizations will likely be faced with a corresponding decrease in employees, games, sponsorship, and overall revenue.

The Biden administration could also impose stricter health and safety requirements, which would need to be implemented by sports organizations with respect to their players and coaches, as well as their corporate, retail, and other employees. Retail, in particular, may continue to be significantly disrupted by stricter health and safety restrictions, as we have seen throughout this pandemic. Sports organizations may need to reevaluate their social distancing plans and screening protocols (both for employees and for members of the public who interact with employees at their workplace) and revise their policies on monitoring COVID-19 tests.

Finally, more stringent COVID-19 protocols may also be problematic for sports-related travel, particularly for attendees, staff, and athletes who normally travel extensively to attend competitions or events. This could be further complicated by potentially stricter quarantine requirements, which may prevent travel on short notice and affect scheduling of games. Organizations and athletes will need to factor in extra time to address these issues, and will need to stay updated on quarantine and travel restrictions.

Immigration

Despite potentially more onerous travel requirements at a national level, President-elect Biden is also expected to roll back some of the Trump administration’s more restrictive policies on immigration. This could increase the number of visas awarded for employment-based immigration and may make it easier for foreign players, coaches, and staff to travel and obtain visas to live and work in the United States.

Workplace Culture

There has been a renewed focus on equality, diversity, and inclusion in the workplace, particularly in light of the Black Lives Matter movement in the United States. Many sports organizations have been front and center in this movement, and have made significant commitments to increase their diverse employee populations and create more inclusive workplaces. On the heels of these efforts, President Trump recently issued an executive order prohibiting “divisive concepts” in workplace diversity trainings. Since the order was issued, the Office of Federal Contract Compliance Programs sent letters to several companies indicating that their commitment to significantly increase the number of Black managers and employees could violate federal affirmative action laws.

By contrast, diversity and inclusion initiatives were integral to several of President-elect Biden’s campaign platforms, and he has indicated that racial justice will be an important part of his agenda in office. According to the Biden campaign website, the Biden administration will reissue and mandate compliance with a 2011 executive order to promote diversity and inclusion in the federal workforce. It is also expected that President-elect Biden will seek to withdraw President Trump’s recent executive order.

This change in leadership may give momentum to the country’s renewed focus on diversity and inclusion. Employers may also expect greater enforcement of laws targeting systemic discrimination and increased workplace discrimination and harassment complaints. Accordingly, sports organizations, like other employers, should consider reviewing their investigation, hiring, retention, and termination policies and practices for implicit bias, and implementing internal programs (e.g., diversity and inclusion councils, affinity groups, training) to create a more diverse, inclusive, and equitable workplace.

Equal Pay

During his campaign, President-elect Biden promised to improve economic security for women by fighting for equal pay, and it is expected that his administration will aim to strengthen federal equal pay laws. This could have a significant impact on the sports industry, which in recent years has seen an increase in litigation and publicity related to equal pay, including with respect to women’s basketball, hockey, and soccer. Sports organizations should therefore evaluate their equal pay practices, including by conducting audits, to ensure that they are compliant with federal and state laws.

We are monitoring developments closely and are happy to discuss our views on what may happen next with respect to the change in leadership and possible next steps for your organization.

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For more on Elizabeth, visit here.