The NFL scored a significant legal victory Tuesday when the Supreme Court of Nevada reversed a 2022 ruling by Clark County (Nev.) District Court Judge Nancy Allf to deny the NFL’s motion to compel arbitration for Jon Gruden’s lawsuit against commissioner Roger Goodell and the league.
Allf is now directed to grant that motion, meaning Gruden’s lawsuit will effectively disappear into arbitration and to a process in which Goodell can serve as the arbitrator.
Gruden, 60, sued in 2021, claiming that Goodell or someone on his behalf tortiously interfered with his Las Vegas Raiders employment contract by leaking emails Gruden wrote as an ESPN employee a decade earlier. In those emails, Gruden used racist, misogynistic and homophobic language and ridiculed Goodell as a “clueless anti football pussy.”
The New York Times and Wall Street Journal published damning stories about the emails, and Gruden resigned from the Raiders head coaching job in disgrace. In doing so he walked away from an employment contract worth around $60 million and forfeited additional millions in forgone endorsement and other professional opportunities. Gruden now wants the NFL to pay for what he lost.
The NFL has argued the lawsuit is substantively meritless and even ludicrous given that it was Gruden who wrote the bigoted emails. The league insists Gruden’s claims are subject to mandatory arbitration provisions Gruden accepted in his Raiders contract. In other words, as the NFL sees it, Gruden contractually relinquished the right to sue until he first exhausts the league’s arbitration process.
Chief Justice Elissa Cadish and Justice Kristina Pickering agreed with the NFL that Gruden’s case must be dismissed to arbitration.
The two justices reasoned that Allf “committed clear error” when she placed high value in Gruden’s argument that the arbitration clause is not enforceable since he wasn’t provided a copy of the league’s constitution, arbitration terms for which his contract incorporated by reference. Cadish and Pickering found this reasoning problematic since Gruden contractually assented to a statement saying he acknowledged having “read the NFL Constitution and By-Laws and applicable NFL rules and regulations, and understands their meaning.” The two justices wrote that “Gruden cannot now disavow that assent.”
Cadish and Pickering also concluded Allf erred when she found the arbitration provision in the league constitution did not apply because Gruden is no longer an employee and because the clause doesn’t capture this type of dispute. The two justices stressed that “arbitration clauses are presumed to survive contract termination” when the dispute concerns “facts and occurrences” that occurred before termination. Gruden’s factual claims concern alleged actions by Goodell and other league officials while he was employed by the Raiders.
Cadish and Pickering also underscored that “by its plain terms” the league constitution applies to “any dispute” that “involves teams or team employees” whenever the dispute concerns conduct detrimental to the NFL. That far-reaching language is sufficient to cover the matter at hand, the two justices found.
In a spirited dissent, Justice Linda Marie Bell wrote it is “outrageous” and “substantively unconscionable” that Goodell can serve as the arbitrator for a dispute when he is accused of wrongdoing. She also opined there is an “extreme level of substantive unconscionability” for the NFL to be able to unilaterally amend the constitution and its arbitration clause “at any time without notice.”
Bell’s dissent essentially portrayed the NFL’s arbitration process as rigged. But as Cadish and Pickering wrote, this is the system that Gruden contractually accepted.
This tension of an arguably unfair dispute resolution system that NFL personnel willingly accept via contract is not new. It is at issue in Brian Flores’ lawsuit against the league and several teams for racial discrimination and retaliation. It was at issue in Tom Brady’s Deflategate case. Thus far, the league has largely prevailed in this legal debate.
In March, the Milano Seamen of European League Football announced that it had hired Gruden as advisor.
