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CCH® HR MANAGEMENT - 4/2/08

Employers turn a blind eye to workplace betting pools

In the midst of March Madness, employees may be paying more attention to their basketball brackets than they are to their jobs. In an interview conducted by CCH, a Wolters Kluwer company, Steve Miller, a partner in the Chicago office of Fisher & Phillips, a national labor and employment law firm, says that management turns a blind eye to the betting pools that events such as the NCAA Tournament bring about as long as the pot of money doesn’t get too large and the managers of the office pool are discreet.

“Managers may not be too concerned with office pools, such as NCAA bracket tournaments, as they are typically once a year events and do not involve ‘high stakes’ gambling,” said Miller. He also pointed out that office pools can serve to improve employee morale and better employee relationships in the office. “I have heard some employees comment that they find the NCAA office pool to be more enjoyable and more of a team building experience than such events as holiday parties,” Miller explained.

Define your corporate philosophy. Whether or not to allow gambling in the form of basketball pools, for example, is a question each particular organization must answer for itself. Each must look to its own particular corporation’s corporate philosophy.

“If a company wants to protect itself from any legal risks associated with office gambling and pools, no matter how minimal the risk, then it should implement a policy banning office gambling,” said Miller. “If the company believes that the camaraderie and benefits from the pool outweigh the legal risks, then that’s the company’s choice.”

Understand the legal risks. An employee who brings a lawsuit against his or her employer on a claim having to do with workplace gambling may find legal support under the following laws, according to Miller:

• State criminal/anti-gambling laws;
• Title VII; and
• State tort theories such as negligent hiring, retention, supervision and intentional infliction of emotional distress.

There is no magic number or definition that defines the type of workplace betting pool that will most likely get an employer in trouble. However, according to Miller, you may want to pay attention not so much to the number of individuals participating in the pool as its monetary value.

“I have heard of pool values ranging from $100 to $50,000,” he said. “Some law enforcement officers have indicated that office pools are not worth the time and that they are unlikely to get involved unless the pool is being managed by a criminal organization or involves a significant pot.”

What about employer involvement? “An employer should not organize a gambling operation for its employees,” said Miller. “However, some employers have organized office pools, for such things as the NCAA tournament, and awarded non-cash prizes to the winner.”

Prohibit gambling with a policy. An organization that chooses to ban workplace gambling entirely should have a policy clearly defining their stance. “If an employer believes that office pools should be prohibited in the workplace, it should implement a policy prohibiting all forms of gambling and office pools in the workplace including, NCAA pools, Super Bowl pools, baby pools, etc.,” said Miller. “In addition, the policy should prohibit using office equipment for such purposes.”

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