A Revised Updated Employer’s Guide to March Madness

By Fiona Ong and Evan Conder - Shawe Rosental LLP

March 15, 2023

In repurposing an always-popular topic (and, as we have done with last year’s March Madness tournament) we offer employers some guidance on March Madness at work, this time with some improvements and updates on gambling and productivity, and a brand new drug and alcohol section.

With the play-in games underway, March Madness has officially descended upon employers everywhere. An estimated 40 million Americans will fill out tournament brackets, and chances are all of them will be imperfect (1 in 120.2 billion to be exact, and that’s only if you know a little bit about basketball).  During this time of the year, employers should keep in mind legal implications of any office bracket pools, and should plan to keep a closer eye on productivity given how much is typically lost in March.  Whether employees are working from home or from the office, chances are they may use their work time to make picks. And when the tournament begins, you can be sure that many employees will be checking scores during their work time, if not actually watching the game. This post will serve as a helpful guide to employers on March Madness issues in the workplace, including gambling and lost productivity, and will provide helpful recommendations on how employers should navigate them.

Gambling in the Workplace. Since we last wrote about March Madness in 2022, sports betting has continued to grow as more states’ wagering programs become operational. According to a survey from the American Gaming Association, an estimated 68 million Americans are expected to place wagers on the March Madness tournament, betting an estimated $15.5 billion worth of wagers in the next few weeks.  For perspective, roughly 18 million more people will place wagers on March Madness compared to the recent Super Bowl.  Due to its gain in popularity, your company may have more employees interested in gambling with others in the workplace. Further, due to increased state regulation, chances are even higher that an office bracket pool is illegal if the pool is not crafted carefully (although realistically, the chances of enforcement are pretty low). Generally, in order to keep the workplace’s bracket pool from the reach of state gambling laws, commentators recommend that all money that comes in as a part of the pool goes to the winner, so the pool is more of a “contest” of skill in analyzing and predicting winners, rather than a form of gambling, where the bettor bets against the house.  Moreover, multi-state employers should know that certain federal laws prohibit betting across state lines (you can thank Bobby Kennedy). This prohibition can potentially create issues if gambling information and instructions are passed across state lines.

Legality aside, such pools can be a source of tension in the office. Be mindful that many employees might not wish to participate in a pool–they may have a religious objection to gambling, have a gambling addiction, lack the money to participate, or just don’t like to gamble. Those employees may feel either excluded or pressured to join in. Employees may also be poor losers or winners, fostering ill feelings. Finally, having large amounts of cash floating around the workplace is certainly cause for concern.

None of this should be taken to mean that your office cannot have fun during March Madness. On the contrary, employers can take specific steps to ensure the office has safe, legal, and fun activities. The simplest solution is to sponsor a voluntary “no-cash” pool open to all, with a small-stakes reward, such as a gift card or a free lunch. Employees would enjoy these benefits too, and not to mention bragging rights are worth their weight in gold (an office trophy goes a long way too). Frankly, given the trials of the last two years, employees would likely be happy just to have some semblance of normalcy back in the office, and such a pool would be a morale booster for the workforce.

Productivity.  As mentioned, gambling shouldn’t be an employer’s only concern. Unlike anything else, March Madness is a three-week sports extravaganza with wall-to-wall coverage. Many of the games are played in the early afternoon, and during the early weeks, intrigue is high. So, naturally employees will want to watch all of it. The assortment of streaming services makes facilitating this challenge even easier (I have too many to count). Indeed, Wallethub estimates that all of this will culminate in an astonishing $16.3 billion in lost productivity during March Madness this year!  Employees are able to run this number up using a number of creative ways to slide under the radar. For example, NCAA Digital offers the Boss Button, which allows users to quickly hide the game they are streaming on their screen with the click of a button.

The increase in the number of remote employees will only exacerbate these concerns. To help mitigate the drop-off, employers should continue to enforce productivity standards and relevant policies, such as those regarding the use of personal devices during working time. Employers have a number of tools to address productivity issues. There are aggressive options like monitoring and surveillance technologies. If employers choose to utilize these technologies, they need to ensure that they are in compliance with state laws regarding electronic monitoring. For example, Connecticut and Delaware require employers to provide notice of the use of electronic surveillance technologies. New York not only requires notice, but also written receipts from employees acknowledging such notice. Thus it is important for employers to confirm whether there are any applicable state laws. And frankly, giving written notice of monitoring, such as through a policy, is a good idea, regardless of whether or not it is required by law. Of particular importance, such policies should be clear employees should have no expectation of privacy in their use of the employer’s computer systems and equipment.

But many employers feel electronic surveillance creates the wrong environment. So, another option for employers is to implement and enforce productivity standards and relevant policies, like limitations on the use of personal devices during working time.

In addition, such policies should be applied consistently across all levels of the workforce in order to avoid any discrimination claims. Finally, we recommend having facetime (whether in-person or virtual) with your employees to check-in. With the added benefit of facetime, regular communication enables employers to ensure their employees are on top of their assignments, especially those not within the office’s physical orbit.

Computer Use and Cybersecurity. As we previously discussed, some employees may access (illegal) sports-betting sites through the employer’s computer systems, and potentially expose the systems to malware. Thus, employers may wish to consider implementing a policy that prohibits the use of company computer systems and equipment for illegal activity, such as gambling. Again, the policy should also state that the employer may monitor employees’ computer usage, and that employees should have no expectation of privacy in their use of the company’s computer systems and equipment. In addition, employers may block gambling (and other inappropriate) websites so that employees cannot access them on company systems. If such a policy already exists, a reminder to employees might be useful.

Dress Code and Civility Policies. If your employees are in-person at the workplace, there may be dress code and social interaction concerns. Employees often wish to wear team jerseys, t-shirts or hats to show their support for their teams. Such clothing may or may not be appropriate for a particular workplace’s work environment (although the pandemic seems to have increased the acceptability of casual wear in an office environment). In addition, there may be safety or health issues involving the use of machinery (manufacturing) or hygiene (like healthcare or food service). Employers should consider and then clearly communicate what is considered acceptable for the workplace.

In addition, people may feel passionately about their teams. Really passionately. Really, really passionately. This level of passion can be problematic in the workplace. Employers can certainly ensure that employees do not engage in disruptive conduct or speech, and that they treat co-workers and visitors with respect and courtesy. Again, such requirements must be applied consistently.

Attendance Policies. Unsurprisingly, there is a spike in attendance issues in connection with major sporting events. Employees may miss work during March Madness to watch (or even attend) games (now that in-person attendance is again permitted!) during the workday. They may also call out or arrive late after a late-night game. A complicating factor is the proliferation of sick leave laws in various states and cities – laws that prohibit employers from seeking verification for the use of sick leave if an employee calls out sick for fewer than two or three days. Sadly, the reality is that many employees may abuse these leave laws by calling out sick because of March Madness. Employers should continue to enforce their attendance and call-in policies consistently. If an employer discovers that an employee has lied about the need for sick leave, it may discipline the employee for the dishonesty.

Drugs and Alcohol. Some people really like to party, which could involve illicit substances or massive amounts of alcohol, and if they perform safety sensitive functions at work, employers will want to make sure that they are not impaired. One option is drug and alcohol testing – but any such testing should be based on observable indicia of impairment, and must be done in compliance with any applicable state drug testing laws – including recently -enacted laws that may restrict employers from testing for recreational use of marijuana (although many of these laws have exceptions for safety-sensitive positions).

And let us march towards the madness!

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