A Limiting Principle for the Donald Sterling Case

Posted in: Employment Law

According to an old adage, hard cases make bad law. Perhaps they do, but sometimes easy cases make bad law too. The National Basketball Association’s treatment of Los Angeles Clippers owner Donald Sterling illustrates the point. If ever there was an unsympathetic character who richly deserved his punishment, it is the racist and sexist Sterling. But unless a principle can be found that explains why Sterling can be disciplined for his racist speech whereas private speech cannot generally be the basis for employment decisions, Sterling’s example could do a great deal of damage.

In this column, I propose a limiting principle: Sterling should be roughly understood as having created a “hostile environment” under Title VII of the federal Civil Rights Act, whereas in general private speech does not have that effect.

Sterling’s Offenses

By now most readers are probably aware of at least the basic outline of the Sterling case. Sterling is a billionaire real estate developer and the owner of the Los Angeles Clippers. Prior to the most recent controversy, Sterling paid millions of dollars to settle lawsuits alleging race discrimination in housing and was also accused of race discrimination in employment by former Clippers General Manager (and NBA Hall of Famer) Elgin Baylor. The occasion for Sterling’s recent banishment was a recording of a conversation between him and a young woman, in which Sterling is heard chastising her for her association with African Americans and expressing other racist (and sexist) views.

Sterling was widely condemned by NBA players, fans, and commentators, and NBA Commissioner Adam Silver quickly responded by fining Sterling $2.5 million, banning him from any further association with the NBA, and seeking authority from the owners of the other NBA teams to force a sale of the Clippers. With the exceptions of Dallas Mavericks owner Mark Cuban initially expressing concern about the precedent that would be set by punishing Sterling for private offensive speech, and some commentators suggesting that the NBA’s action came too late given Sterling’s past record, the general reaction to Silver’s strong response was positive.

Why Sterling’s Case is (Mostly) Easy

News reports indicate that Sterling does not intend to give up without a legal fight. But does he have sound objections? The answer is mostly no.

Sterling cannot complain that the NBA has infringed his First Amendment right to freedom of speech because the First Amendment, like nearly all constitutional rights, protects people only against censorship by the government, and the NBA is not the government. It is a private organization.

Nor can Sterling complain about the NBA’s reliance on a recording that was apparently made surreptitiously. That recording did not violate the Fourth Amendment for the same reason that there was no First Amendment violation: there was no government involvement.

To be sure, a federal statute forbids the private interception of electronic communications, and bars the introduction of evidence obtained illegally from being used in court, but Sterling appears to have been recorded directly by someone in his presence, not by having his electronic communications intercepted.

A somewhat better privacy argument would build on California law, which forbids recording a conversation without all participants’ consent and also contains a rule forbidding the use of illicit recordings “in any judicial, administrative, legislative, or other proceeding.” Might the NBA’s investigation count as such an “other proceeding”? It seems doubtful, but even if it did so qualify, the investigation does not appear to be governed by California law.

Does the proposed forced sale of the Clippers violate Sterling’s rights? That is a more difficult question. Sterling would be paid the fair market value of the team, so one might think that he could not complain. However, in general people do not have to part with their property, even if they are offered generous terms. The government has the power of eminent domain, but just as the NBA is not the government for purposes of the First and Fourth Amendments, so it is not the government for purposes of eminent domain.

The NBA’s constitution does vest a supermajority of owners with the power to force a sale, and so it appears that Sterling agreed (when he purchased the Clippers) to be forced to sell in the discretion of his fellow owners. But it can be argued that the relevant provision applies only to financially distressed teams, and not as a punishment for bad conduct. If the NBA constitution does not itself authorize a forced sale in Sterling’s case, then the other owners, in taking that action on their own authority, could be liable for violating federal antitrust law.

It remains to be seen whether Sterling will invoke antitrust law in order to retain the Clippers. He stands to make a great deal of money if he agrees to sell, whereas his continued ownership of the team would likely erode its value. Thus, Sterling has a financial incentive to sell quickly.

However, if Sterling wins an antitrust action, he could obtain treble damages, and so he may conclude that he has a chance of winning even more money in court than he would obtain in a sale. And Sterling, a former trial lawyer, has a well-deserved reputation for litigiousness, so he might simply prefer suing to selling.

The Harassment Analogy

Whether or not the legal arguments end up in court, the NBA’s sanctioning of Sterling raises important policy questions. Although private corporations, associations, and joint ventures have considerable latitude under the law to impose contractual restrictions on speech for the collective benefit of the organization, it does not follow that they ought to impose such restrictions. Americans treasure freedom of speech not simply because it is enshrined in the First Amendment as a limit on the government; most of us believe that the freedom to speak one’s mind is a fundamental right that private entities also ought to respect. Thus, organizations (like private universities) that are not legally bound by the First Amendment sometimes voluntarily commit to respecting its spirit.

If the NBA can banish an owner for making racist statements, will it also discipline owners for making sexist or homophobic comments? What about players and coaches?

Basketball great Michael Jordan once explained his refusal to endorse a Democratic candidate for the Senate in this way: “Republicans buy sneakers too.” Suppose that the NBA were to act on that sentiment by demanding that owners, players, and coaches refrain from taking political stances on controversial issues. If a surreptitious recording of a player endorsing (or condemning) abortion rights, the death penalty, or voter ID laws were to surface, would the NBA discipline the player for that? If not, what principle distinguishes Donald Sterling?

The best answer is that the NBA is not disciplining Sterling because he holds racist views, but because, as the white owner of a team with an African American coach and a majority of players who are African American, Sterling’s clear disdain for—indeed, apparent disgust with—African Americans had the effect of creating what amounts to a hostile work environment.

No federal statute expressly forbids racial or sexual harassment. However, case law interpreting Title VII has long treated the general prohibition on race and sex discrimination as encompassing a prohibition on harassment on these grounds. And one form of forbidden harassment is the creation of a hostile work environment.

We thus have a serviceable ground for distinguishing between Sterling and my hypothetical politically outspoken players, coaches, or owners: Although the immediate predicate for disciplining Sterling was the recording of his racist comments, he was not—or should not have been—disciplined merely because he held racist views. He was disciplined because once those views were made public, his status within the Clippers organization created a kind of hostile environment.

My use of the fuzzy term “kind of” in the previous sentence is deliberate. I am not saying that Sterling’s racist comments and actions—either in the recently released recording or in the past—created a hostile environment in the strictly legal sense. Whether or not they did is a complex fact-sensitive question.

But organizations can and often do adopt anti-harassment policies that go beyond what the law requires. For example, some firms forbid all dating between supervisors and subordinates to limit the likelihood of quid pro quo sexual harassment.

Likewise here, the NBA could, and in my view should, defend its disciplining of Sterling on the ground that it has a zero tolerance policy for racial harassment. By taking a broad view of what counts as harassment, the NBA would thus limit the mischief that might otherwise be done by a power to punish offensive speech merely because it is offensive.

Posted in: Employment Law

4 responses to “A Limiting Principle for the Donald Sterling Case”

  1. Reid Neureiter says:

    I disagree. I think you view this as a private club of NBA owners. You have to be invited in to join. If you misbehave significantly enough to bring disrepute to the Club, you get punished, and if the conduct is bad enough they kick you out of the Club–vote you off the island. Simple enough.

  2. wheasonjr says:

    very balanced article liked it

  3. Flyman says:

    I think this is much ado about nothing, and I would like to know if the conversation was recorded Legally. Being the Jerk I am I would sell the team to someone that would move it from LA. I am not an NBA fan and never have been and after this certainly never will be. To me this is wahhh, wahhh, boo hoo, the poor millionaire BB players are offended by mean millionaire owner, both sides of this are overpaid idiots.

  4. harv555 says:

    Here you have an 81 year old codger talking to a woman almost 50 years younger, and trying to be the macho man he maybe once was. He sees this young vixen going out with much younger and more masculine men. The guy gets insanely jealous and says really stupid things. So… when was the last time you said a stupid thing when arguing or dealing with an estranged lover or wife.. What if your telephone conversation or other conversation – or argument – with your ex wife or lover were to be recorded. How many stupid things did you say in the heat of such arguments. Those who live in glass houses should be reluctant to throw stones. The guy was clearly set up by this money hungry vixen. How responsible is he for such comments under these circumstances? How responsible would you be?