In the span of one weekend in December, accusations of workplace impropriety against Carolina Panthers principal owner Jerry Richardson led to an internal and National Football League investigation and ultimately resulted in Richardson putting the team up for sale.
On the same day that a media story revealed that Richardson allegedly engaged in sexual harassment and inappropriate physical contact with several female Panther employees, Richardson announced his intention to sell the team.
Richardson said in a written statement that he will seek a buyer for the team following this season. “I believe that it is time to turn the franchise over to new ownership,” Richardson said.
The end of 2017 brought scandals across the country from Washington, D.C., to Hollywood. Though seemingly inevitable that similar allegations would make their way into the sports world, Richardson’s rapid fall sets up a rare occasion where an NFL team is put up for sale, likely at or above $2 billion, even among rumors that the Panthers may move from Charlotte following the expiration of the team’s lease on the stadium in 2019.
The accusations and investigation present several legal issues and obstacles, not only for Jerry Richardson himself, but also for the league, the Panthers and the persons accusing him.
Multiple witnesses, most of whom were Panther employees, stated that Richardson would often objectify the women who worked for him. Accusations included his grazing women’s chests as he buckled their car seatbelts, asking women if he could personally shave their legs and on casual Fridays asking women to spin around so he could observe their backside in jeans.
Additionally, Richardson allegedly made a racial slur against an African-American man that previously worked for the Panthers as a scout.
Richardson’s various accusers, speaking independently, described a pattern of behavior that, they say, created a hostile work environment. Rather than making isolated inappropriate comments or committing sudden lapses in decorum, Richardson would allegedly start with kind gestures and pleasant interactions before transitioning to inappropriately intimate behavior.
While the Panthers initially launched an internal investigation into the claims against Richardson, the NFL quickly took over. The Panthers likely hoped to conduct the investigation on their own so they could control the information shared both internally and externally.
An internal investigation would have also allowed Richardson’s attorneys to become better prepared for any findings of unlawful or unethical conduct. Obtaining those findings prior to an opposing party or the league would have allowed them to strategize on how best to handle the findings’ impact.
While the league investigating has the facade of objectivity, there is still the possibility of a conflict of interest. Richardson’s misconduct is likely to reflect poorly on the NFL as a whole and with the increasing amount of victims coming forward, it is always possible more team owners could be implicated.
Additionally, the league lacks the full scope of investigatory powers enjoyed by law enforcement. NFL investigators likely have access to the Panthers’ e-mail server, but any access to employees’ phones, laptops or other devices is far less certain.
Further, witnesses, like employees, who speak to investigators are not under oath and may or may not find it advantageous to be truthful.
It was revealed that the Panthers extended at least four settlements to former employees following allegations of sexual misconduct and racial discrimination. All of the settlements were subject to confidentiality agreements and nondisparagement clauses.
As such, one critical issue in the investigation is whether the accusers will be able to fully detail Richardson’s alleged actions while complying with their settlement contracts. Nondisclosure agreements were signed as part of the former employees’ employment with the Panthers as well as their severance from the team.
These, and most, nondisclosure agreements prohibit employees and former employees from disclosing trade secrets and other proprietary information to third parties outside of the organization. The agreements also frequently bar individuals from disparaging the employer and its officers. Current and former employees who violate the terms of the agreement can be sued for breach of contract.
Often, nondisclosure agreements have carve-outs to the extent legally necessary for lawsuits, but it may depend on the scope of the agreement and the consideration of the contract.
There is no evidence thus far that the Panthers have waived the protection that the agreements provide. However, nondisclosure agreements are not immune to judicial scrutiny. Like most states, North Carolina requires that nondisclosure agreements be limited in scope and to knowledge reasonably necessary to protect the organization. Amerigas Propane L.P. v. Coffey, 2015 WL 6093207 (N.C. Super 2015).
An overly broad provision can be deemed unenforceable. The agreements can also be deemed unenforceable when confidential information becomes publicly available, including if released through a media investigation. Likewise, the agreements can be overcome by a subpoena and other compulsory requests for evidence.
Nondisclosure agreements and other restrictive covenants in contracts are typically disfavored by courts, and they have come under scrutiny in recent months for suppressing victims of sexual assault in the workplace from telling their stories for fear of violating their agreements. However, if the nondisclosure provision and contract itself is deemed valid by a court, Richardson’s accusers could be subject to a breach of contract suit if they choose to speak about their claims.
Richardson himself could also face a legal battle. He is accused of harassment, which could give rise to a number of civil claims including sexual harassment, racial discrimination and even battery if he ever made any physical contact with his accusers.
As discussed above, the potential for success of these claims is largely dependent on the validity of the nondisclosure agreements and whether or not there is a carve-out for civil lawsuits. It is possible that the accusers effectively waived their right to sue.
It is also possible that Richardson would continue to try to reach a financial settlement outside of court with the accusers. The settlements would likely require Richardson to pay the accusers a substantial amount of money in exchange for them agreeing to drop any possible claims against him and to refrain from speaking about him or the incidents.
Though Richardson has neither admitted nor denied the allegations, the fact that Richardson decided to sell the team so quickly could infer that the extent and severity of the allegations is not yet fully known.
Richardson, like many others recently accused of similar acts, may be trying to exit before more controversial accusations emerge.