11 Chapter 11: LEGAL ISSUES AND RISK MANAGEMENT

Objectives

*Understand the role of various legal issues play in the management of employee services programs

*Understand negligent conduct and its defense

*Understand the legal duties and responsibilities of an employee services personnel

*Outline inherent danger of different users and activities

*Understand the use of contract and insurance

*Describe the impact of Americans with Disabilities Act (ADA)

Introduction

The threat of malpractice, violation of workplace regulations, and negligence suits against employee services professional and the organizations are pervasive. In this chapter, the readers will not only be familiarized with the common legal issues in corporate setting, but also revolving in the sport industries as well. The occurrences of physical activity-related accidents and deaths in the sports fields are highly recognized and inevitable. Since late 1980s, verdicts rendered by judges and juries in lawsuits against physicians, attorneys, and other professionals have increased drastically (Anderson & Kumpf, 1990). Legal risk to the professional are genuine and ever-changing. As more aging population become involved in active physical activity programs offered by employee services, legal risks will likely to increase exponentially. Legal system must be included to resolve the problems that arise due to the increase of numbers of participation and accidents. This also means that working professionals will need to be more legally sophisticated and knowledgeable about the legal process. In the following sections, the authors will discuss the major legal issues associated with employee management and risk management concerns in minimizing the potential litigation in the sport business environment.

General Issues Related to Human Resources Management

For corporate organizations (companies), protecting themselves from legislative compliance risks should be a high priority. More and more often, state and federal courts rule in favor of employees who feel wronged by their employers (Yost, 2007; Weiss, 2000). Thus, legislative compliance poses a greater risk than ever. Ignorance and violation of workplace regulations can cost organizations millions of dollars each year (The Ultimate Software Group, 2011). Three out of five companies are sued by former employees every year—and more than 450 companies are hit with employment lawsuits every day (The Ultimate Software Group, 2011). The common violations and failure of maintaining the standards include discrimination in the workplace, failure to offer minimum wages and overtime pay, breaching the confidentiality agreement, wrongful firing, and concealing sexual harassment complaints (Ellis, 2016, Equal Employment Opportunity Commission, 2011a and 2011b; Green, 2015; Vogel, 2007; Woska, 2013; Yost, 2007). Recently, more rapes and sexual related crimes have surfaced from the intercollegiate athletics and sport federations (Sturtz, 2014; Ellis, 2016; Park 2017). Readers may be familiar with the Title IX Amendment for its impact on increasing the educational opportunities and athletic participation for females. In fact, it is also the key legislation that requires any federal funded agencies and institutions to take initiative in investigating sexual assaults, rapes, and harassment, protecting the victims (mostly females), and documented the cases (Ellis, 2016). The rationale of this philosophical change was based on the court decision of a gang-raped case against University of Colorado football players in 2005. The U.S. Court of Appeals for the 10th Circuit ruled university’s indifferent reaction as guilty for not protecting the female victims under the gender-quality essence (Schmidt, 2007).

The Americans with Disabilities Act (ADA) of 1990 protects the civil rights of individuals of disabilities (i.e., free from discrimination) like anyone else. In addition to its impact on hiring practices, the ADA also address the regulations and requirement that must be accommodated for employees with disabilities. Here are some lgal implications that employee service mangers must consider regarding the ADA legislation.

• The organization must not treat any disabled individuals based upon some general stereotype or concept concerning type of apparent disability
• An employer cannot avoid responsibility when contracting with a third party to provide a service as well.
• An employer cannot conduct pre-employment medical examinations or ask questions about one’s disabilities.

In addition to the aforementioned issues related to HR compliance and regulations, here are some of potential topics and issues that may cause legal disputes. Sometimes, the lack of actions may cause the organization that deals of trouble. In some cases, involving too much in these issues can also create controversies, complaints and potential violation of one’s due process. These issues simply reflect the difficulties for monitoring a safe and friendly work environment in the modern age (Green, 2015; Holmes, 2014). The HR manager and employee service manager must be aware of these issues and take the proper preventive measures to ensure the troubles will not escalate (Dockterman, 2016; Green, 2015; Orey, 2007; Weiss, 2000).

• Requiring thorough background checks to screen child pedophiles while providing services to youth population;
• Monitoring employees’ activities during the workhours (i.e., no browsing pornographies or non-work related contents, restriction on the use of company e-mails and electronic equipment, and avoiding embezzlement, etc.);
• Offering legal assistance on topics such as divorce, substance abuse, & grievance;
• Preventing physical altercation among employees, cyberbullies;
• Preventing the illegal downloads of intellectual property and violation of those rights;
• Suspending or terminating individuals with multiple DUI charges and drinking problem;
• Avoiding unfair hiring practices and wrongful firing (i.e., showing nepotism and discrimination); and
• Stopping hazing and drinking culture (especially in the higher education environment).

FYI: More Numbers on Hazing

• % of fraternity or Sorority members who have experienced hazing in 2008: 73%
• Number of hazing deaths involving fraternities across the country: 33
• http://www.cbsnews.com/news/baylor-regents-women-reported-assaults-players/

Video Clip: About sexual harassment

http://www.youtube.com/watch?v=nGh0FKw27gE (by Trust Factor)

Sports-Activity and Sport-Business Specific Legal Concepts and Cases

Law of Torts and Negligence

The legal principles of torts law focus on wrongs being done by one individual to another Tort is an act or omission that produces injury to another. In general, tortious acts can be categorized into three aspects: (1) intentionally hurting other such as assault and battery, (2) showing negligent behaviors (or omission of acts) that causes injury or malpractice, and (3) failing to uphold standards of strict liability (Miller & Moorman, 2007). Physical education teachers, sport coaches, fitness trainers, camp directors and many other professionals whose tasks may involve in supervision of physical activities are all vulnerable to negligence lawsuits. Liability in negligence means an individual fail to do what a reasonable prudent person may do under the same circumstances (Sawyer, 2001). Negligent behaviors come in various levels (i.e., malfeasance, reckless misconduct, wonton conduct, gross negligence, etc.) and causes. There are four components constituting the liability of negligence: (1) establishment of duty of care, (2) causes of the injuries, (3) actual injuries done due to the breach (linking proximate causal to breach of duty) (Horine& Stotlar, 2004; Miller & Moorman, 2007). While facing a negligence litigation, sport professionals usually use the common defensive strategies to alleviate their liability (see Table 1).

Table 1. Legal Defenses for Negligence

Professional’s Duties and Risk Management Measures

The bottom line of eliminating the negligence lawsuits is establishing a standard of care and try to prevent injuries from happening due to the human mistakes. Proper supervision is viewed as an important and essential legal duty for the sport management professional. When physical activities and sport competitions are conducted an offered to the employees, the employee service manager and activity planner should actively take in charge of the role of supervision. The association (or the organization) must hire or assign competent and quailed supervisor to oversee the activities or events. There should be a written procedure for supervision prepared for all personnel. All supervisor will also go through a series of training. Various plans cover safety procedure, exercise prescription, and facility maintenance must be available all time. All employee participants must sign an exculpatory agreement (including a wavier and an informed consent) prior to engaging in an activity. They should agree not to hold the people in charge of activity responsible for any injury resulted from participation. Proper warning should be covered in the informed consent or the usage of signs to remind the inherent risk while an individual participating in an activity or exercise program. Signs for warning should be visible and specific that address various types of dangers concerning one’s physiological condition, mental stage, physical environment, and other potential risks.

Many lawsuits in the fields of recreation and sport management sprung from the hazardous facilities and inadequate accommodation of equipment. Injuries can easily occur when equipment and facilities are not properly designed or well maintained. The use of defective products and exercise machines increases the risk of liability lawsuits. The facility managers and activity operators should be aware of the standard of care they owe to the participants. Participants should be given both the actual and constructive notices about the proper instructions for the equipment and facility use.  In order to ensure facilities and equipment are safe, the owner or operator of an employee service facility must perform the following duties in a regular basis.

• Conduct regular and thorough facility and equipment inspections;
• Develop maintenance schedules and maintain current standards for the appropriateness of equipment and facility;
• Purchase affordable high-quality equipment;
• Present warning for broken equipment;
• Teach participants the proper technique for using the equipment;
• Properly update the newest standards and conduct testing;
• Purchase proper insurance;
• Keep the equipment inaccessible, when it is not used;
• Develop a system of identification and follow-up for equipment under repair;
• Provide emergency care with well-educated, competent personnel; and
• Execute elements displayed on the safety checklist and properly document the caring process.

Purchasing proper insurance is a critical safeguard for the employee service program. Recommended insurances include property, business expense, commercial liability (i.e., professional liability, medical liability, fire and other legal liability), machinery and equipment, and employment practices liability.

Contract Issues

A contact is an agreement between two or more individuals which creates an obligation for performing or not performing an action (Sawyer, 2001). A legally formed contact typically involve five aspects: (1) offer–an offer (promise) is made by a party (offeror); (2) acceptance–there is an acceptance (by the offeree) to the offer; (3) consideration–there is a chance that allows both parties to consider the agreements and bargain for changes; (4) legality–the contents of agreement must be legal based on the laws; and (5)  capacity—both parties must have the ability to comprehend the nature and effects of one’s act (i.e, having the mental intelligence to understand the contents and reach the legal age to perform the duty) (Miller & Moorman, 2007). Sawyer, 2001). Contacts can be formally done under a seal and or a record who one acknowledges the obligations before the court. However, simple contacts can also be informally expressed by oral or written declaration or implied. The employee service managers may have to deal with certain contract issues while dealing with following business tasks: (1) signing contracts with service personnel for new hiring, (2) signing contract for certain types of memberships with employees, (3) inking services with independent contractors, and (4) purchasing products, equipment, and services with a variety of vendors (i.e., the use of lease) (see Table 2 for more details).

Table 2. Common Types of Business Transaction That Require Contracts

Finally, contract laws provide remedies for broken promises. When damages have been proven with reasonable certainty, the court usually order monetary awards for damages, request breaching party to perform specific services, or allow rescission and restitution (i.e., canceling the contract and restore the parties to the pre-contracted status) and restoration (i.e., rewriting agreements for the contract). A contract can be discharged due to the following conditions: (1) the contract reaches the expiration of its term (termination), (2) request tasks and payment have been fulfilled, and (3) a party requests to void a contract.

Quiz Questions

Q1. Verdicts rendered by judges and juries in lawsuits against various professional have increased drastically after 1980s. True/False

Q2. Title IX Amendment is the key legislation that requires any federal funded agencies and institutions to take initiative in investigating sexual assaults, rapes, and harassment in higher education institution. True/False

Q3. The common violations of federal workplace regulations include discrimination in the workplace, failure to offer minimum wages and overtime pay, and breaching the confidentiality agreement. True/False

Q4. Which of the following is not one of the defenses for the negligence?

1. An act of God
2. Contributory negligence
3. Signing an exculpatory wavier
4. Governmental immunity

Q5. Which of the following is not one of the major legal component involved in the formation       of a contract?

1. Offer
2. Capacity
3. Consideration
4. Premises

Brainstorming Activity

The number of reported cases of rapes and sexual assaults on college campuses is alarming. As the Vice President or Dean of Student Life of a higher education institution, who actions would you like to minimize the problems? Is there any educational program that you would intend to implement?

Here are some useful sources

https://www.insidehighered.com/news/2021/10/27/aau-adopts-principles-prevent-sexual-harassment

https://files.eric.ed.gov/fulltext/ED537696.pdf

https://www.apa.org/monitor/2018/10/campuses-safer

https://www.diverseeducation.com/opinion/article/15115016/when-it-comes-to-sexual-assault-colleges-should-educate-not-adjudicate

References

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Department of Labor (2008). U.S. Department of Labor in the 21st century, enforcement under    the Fair Labor Standards Act. http://www.dol.gov/elaws/esa/flsa/screen74.asp

Dias, E., & Dockterman, E. (2016, October 31). The itsy-bitsy, teensy-weensy, tine fine print that can allow sexual harassment to go unheard. Time, https://time.com/4540111/arbitration-clauses-sexual-harassment/

Dockterman, E. (2016). The view: On campus, “party culture” no longer excuses rape. Time,     187(24), 21-22.

Donovan, L., & Nkune, R. M. (2021, June 21-28). As employees at the factory that makes Kate Hudson’s activewear line allege rampant sexual abuse, a workers’-rights movement takes hold. Time, 197(23-24), 50-55.

Ellis, Z. (2016). A timeline of the Baylor sexual assault scandal. Sports Illustrated. https://www.si.com/college-football/2016/05/26/baylor-art-briles-sexual-assault-ken-starr

Equal Employment Opportunity Commission (2011a). EEOC reports job bias charges hit record high of nearly 100,000 in fiscal year 2010. http://www.eeoc.gov/eeoc/newsroom/release/1-11-11.cfm

Equal Employment Opportunity Commission. (2011b). Sexual harassment charges

EEOC & FEPAs combined: FY 1997 – FY 2011. http://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment.cfm

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Green, L. (2015). Top ten sports law issues impacting school athletics programs. https://www.nfhs.org/articles/top-ten-sports-law-issues-impacting-school-athletics-programs/

Holmes, M. (2014). Legal and ethical issues in the workplace. https://prezi.com/lnmtdedmh2zf/legal-and-ethical-issues-in-the-workplace/

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Schmidt, P (2007). U. of Colorado ruling may alter enforcement of Title IX. The Chronicle of Higher Education. http://chronicle.com/weekly/v54/i04/04a02901.htm

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