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Watson Disciplinary Hearing to Begin

The sorry spectacle of Deshaun Watson continues to haunt the National Football League (NFL). Today a disciplinary hearing starts with US District Court Judge Sue L. Robinson, as the disciplinary officer appointed by the NFL and players association. The outcome of this hearing will be a recommendation of discipline for Watson from his misconduct. Watson has been accused by 24 women of sexual harassment for a variety of sex acts he allegedly performed on them, with them or to them. No doubt anticipating this hearing, Watson settled 20 of these cases last week.

According to SI.com, the lawsuits “detailed graphic accounts of sexual harassment and sexual assault that occurred during massage therapy sessions. The accounts range from Watson allegedly refusing to cover his genitals to the quarterback “touching [a plaintiff] with his penis and trying to force her to perform oral sex on him…The latest suit detailed that Watson masturbated and ejaculated on the plaintiff without her consent. It was expected that more lawsuits could be on the horizon.”

The discipline levied against Watson will be a critical factor in the NFL regaining any credibility in this matter. SI.com reported the NFL will ask for an ‘indefinite suspension’ so that the league can protect itself if more negative information comes out in the upcoming civil trials. Settlement negotiations for a one year agreed suspension broke down as Watson still believes he did nothing wrong. The NFL Players Association (NFLPA) also points to the essential meaningless disciple given the teams owners who allegedly engaged in some form of untoward sexual conduct, with SI.com reporting “The NFLPA argued for a lighter punishment, pointing to a precedent set in cases involving three of the league’s owners—the Commanders’ Daniel Snyder, Patriots’ Robert Kraft and Cowboys’ Jerry Jones.” Unfortunately for Watson, players are always given much more severe discipline than owners (See Brady, Tom re: Deflategate).

According to the New York Times (NYT), “the first public allegation against Watson of sexual misconduct during a massage appointment was made in March 2021, resulting in an avalanche of lawsuits filed by additional women. The claims against Watson involved massage appointments he had in 2020 and early 2021, when he played for the Houston Texans. He was traded to Cleveland in March after a grand jury in Harris County, Texas, declined to indict him on criminal charges. The Browns gave Watson an unprecedented, fully guaranteed five-year, $230 million contract.

What about the Cleveland Browns and their signing of Deshaun Watson? How much due diligence did Cleveland do before it signed Watson to a fully guaranteed $231 million contract. After signing the contract, the NYT broke the story that Watson had used “at least 66 different women in just the 17 months from fall 2019 through spring 2021” rather than the 40 in five seasons he had previously claimed. Conor Orr, writing in SI.com, reported that the Browns had engaged in due diligence the team described as an “odyssey” to become “comfortable” with Watson. He went on to add, “If nothing in the Times report was new information to the Browns, they should come out and admit as much. If much of what surfaced in the Times report is new information to the Browns, they should come out and admit as much.” What do you think Watson told the Browns when they asked, “Is there anything else we need to know about?”

The Browns face a looming public relations disaster for their actions. If and when Watson ever takes the field for the Browns, the protests will be loud and boisterous with this person they have now gotten ‘comfortable’ with enough to give him the richest contract in the history of the NFL (did I mention it was ‘fully guaranteed’?)

Of course, there is the question of knowledge and ultimate liability of his prior employer, the Houston Texans. After the NYT story broke, the plaintiffs’ attorney Tony Buzbee announced he would be adding the Texans to his lawsuit. He did so this week. As reported by the Houston Chronicle, the Texans claim that when the story broke back in March 2021, the team “issued a statement that said the post was “the first time we heard of the matter” and the organization hoped to “learn more soon.”” However, according to the amended claim, either the Texans knew all along or failed to do so through conscious indifference.

It turns out that the Texans had provided Watson with a form non-disclosure agreement (NDA) when he said one of the message therapists raised a claim against him back in 2020. Additionally, the Texans were allegedly aware of Watson not using the Texans facility for massages with team therapists and looking on the internet for his own set of therapists even when using non-Texan facilities. Of course, there is also now the allegation that Watson used 66 different therapists over 17 as noted above. Did the Texans know, or should they have known?

We have a full cacophony of allegations of sexual harassment, actual knowledge or conscious indifference, failure to engage in substantive due diligence, likely discipline for the player but not enabling teams with an appeal to the NFL Commissioner and at least four trials in the offing. Just imagine how much worse it will get for everyone involved.

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Daily Compliance News

March 8, 2022 the Turbocharged Edition


In today’s edition of Daily Compliance News:

  • Putin’s war has turbocharged anti-corruption. (Politico)
  • Lawyers as gatekeepers.  (Radical Compliance)
  • Was it a culture change or just messaging? (NYT)
  • NFL Nightmare comes true. (ESPN)
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Daily Compliance News

February 8, 2022 the Ng Trial Begins Edition


In today’s edition of Daily Compliance News:

  • Roger Ng trial jury selection begins. (Reuters)
  • NFL microcosm of country.  (WSJ)
  • Elon Musk and Tesla under SEC scrutiny yet again. (NYT)
  • Ex-Goldman banker settles discrimination suit with fund. (Bloomberg)
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Daily Compliance News

February 2, 2022 the NFL Sued Edition

In today’s edition of Daily Compliance News:

  • SEC flags ESG risks for ratings firms. (Reuters)
  • Former Miami coach sues NFL for racial discrimination.  (WSJ)
  • Alberto Salazar was banned for assault. (NYT)
  • International Anti-Corruption Court? (National Post)
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Daily Compliance News

November 15, 2021 the Sleazy, Not Corrupt edition


In today’s edition of Daily Compliance News:

  • UK sleazy, not corrupt.(TheGuardian)
  • Jon Gruden sues NFL. (WSJ)
  • MBAs adding ESG. (NYT)
  • Time to resign? (WaPo)
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Blog

Lessons Learned from L’Affair Gruden

The fallout from the John Gruden imbroglio has widened and deepened. Many have asked why the NFL sat on the Gruden emails which were uncovered in the investigation of the toxic culture of the Washington football team, known to the NFL since the spring of this year, are only now coming into the public eye. Additionally, if the first email where Gruden disparaged the head of the NFL’s players union with a racial slur, which if it had not been brought to light by the Wall Street Journal (WSJ) on Sunday of this week, would it have been released by the NFL or Las Vegas Raiders at all? Finally, why did the NFL only send the first email to the Raiders when clearly there were many, many more that were unearthed. All good questions and they demonstrate several salient factors, not the least being as how the fallout from one event and investigation, can impact an entire industry. However, even without current answers to these and other questions there are several very important lessons for the compliance professional.
Don’t Put Stupid Stuff in Emails
Before we get to compliance, consider the most basic problem here. Not that Gruden is simply a racist, homophobe, sexist, misogynist and a person with little moral compass. We might have never known what was in his heart, if Gruden had not put those immoral values into emails over eight years. The reason he is now out of professional football, probably forever, is that he put his values into emails, in the crudest terms possible. Twenty years ago, I did corporate training on this very topic. That training is apparently still needed. Imagine how the civil litigation will look when all this gets to trial. All the plaintiff’s lawyer(s) will have to do is read the emails to demonstrate a wide variety of civil wrongs and regulatory breaches and the only question left will be damages.
Fallout from Unrelated Investigations
In the 21st century, nothing happens in a vacuum. The offending emails were uncovered in an unrelated investigation. These emails largely came from outside the entity being investigated (the Washington football team) and the investigative firm turned them over to the entity overseeing the investigation, here the NFL. As noted above, it is not clear what action the NFL might have taken against Gruden, his former employer ESPN or his current employer, the Las Vegas Raiders. Gruden’s resignation from the Raiders may well forestall an answer into those questions.
Now imagine the same scenario when the Securities and Exchange Commission (SEC) investigates Activism for its toxic work environment (or the Department of Justice (DOJ) for that matter) or when the SEC investigated Lordstown Motors for a variety of other fraud and accounting issues. What if a set of similar emails appeared, all coming from an outside 3rd party, such as Gruden’s did to the Washington football team President Bruce Allen? Would the company employing that same 3rd party receive an email from the SEC requesting all emails from the offending employee? Would the SEC want to look at all emails? How would your company respond? Is the EEOC going to get involved? Will they (or the SEC) be contacting ESPN, owned by the Walt Disney Company, a publicly traded organization about the culture at ESPN which allowed Gruden to send those emails. Are you ready to respond to them? 
What is Due Diligence?
No person wakes up in their mid-40s or 50s and thinks, today is the day I will start sending out racist, homophobic, sexist or misogynist emails and a throw away my moral compass. No one. They were like that long before they started doing so. Gruden had thought and felt those things long before he put them into print. Put another way, a leopard does not change it spots overnight. They were there for a long time.
As our colleague Candice Tal, founder of Infortal, continually reminds us, due diligence is not a one-time event nor a cursory google search. It is a sustained deep dive investigation. Gruden did not become a racist, homophobic, sexist and misogynist overnight. You can bet there are other pieces of evidence of his values and beliefs out there. The then Oakland Raiders signed Gruden to the richest professional football contract ever given to a coach, $100 million over 10 years. Yet they apparently did little to no background due diligence on him. Was there evidence of his racist, homophobic, sexist and misogynist views in the public record? Would it have mattered to the Raiders? Would the Raiders have hired him anyway? Perhaps so but at least they might have known about Gruden’s racist, homophobic, sexist and misogynist values and tried to manage that risk. Of course, they might have passed on hiring him altogether if they knew what the fallout could look like.
Culture, Culture and More Culture
What is the culture of your organization? Why did the NFL allow such a culture to flourish that would allow a Monday Night Football commentator on ESPN to hold the job and then become the highest paid professional coach? Is it because the Maga-hatter wearing NFL owners are all Trump supporters? What about the other employees who make up those organizations? Professional football players are 70% African American. What do Gruden’s remarks, the NFL’s non-response and the Raiders hiring communicate to them about how management thinks of them? Raider owner Mark Davis advised people to look to the NFL for answers.
Bill Rhoden, writing in The Undefeated, an ESPN publication, put it succinctly, “my concern is about the legion of enablers who supported Gruden all of these years. What about them? Who are they? The NFL has gotten rid of its Gruden problem. It has not gotten rid of Gruden-ism: regressive sensibilities that stand foursquare against diversity, inclusion and tolerance.” He went on to say, “The reality is that the NFL, for all of its attempts to move forward, has been revealed as a regressive organization populated by white men who hold views about race and power that are antithetical to progress and enlightenment. Trust me, Gruden is not the only person who holds these beliefs. He’s the only one stupid enough, or emboldened enough, to express them via email.”
In short, the NFL has a huge culture problem. But you cannot change unless you admit you have a problem. We have seen nothing from the NFL that indicates it believes the problem is beyond John Gruden.

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What Values Lurk in a Person’s Heart? Read Their Emails to Find Out

John Gruden resigned as the coach of the Las Vegas Raiders Monday night. He did so after some of the most racist, homophobic and misogynist emails he had sent surfaced in an unrelated investigation. The emails were some of the worst things you could ever imagine anyone typing. They not only spoke to the character and values of the man who sent them but pulled the curtain back on a wider culture in the National Football League (NFL) which seemingly not only tolerates such behavior but celebrates it as well. Most importantly, the entire episode presented multiple lessons learned for every compliance professional. This post will be the first of a two-part blog series on Gruden’s emails, the fallout and how every compliance professional can walk away with multiple lessons learned from this sordid affair.
It all started with the Wall Street Journal (WSJ) reported that Gruden sent an email back in 2011 “about DeMaurice Smith, the executive director of the NFL Players Association, to a team executive. Gruden’s email described Smith with a racist trope common in anti-Black imagery. “Dumboriss Smith has lips the size of michellin tires,” he wrote in the email reviewed by The Wall Street Journal.” From there it only got worse, much worse. The New York Times (NYT) reported  “Gruden’s messages were sent to Bruce Allen, the former president of the Washington Football Team, and others, while he was working for ESPN as a color analyst during “Monday Night Football.” In the emails, Gruden called the league’s commissioner, Roger Goodell, a “fa—-t” and a “clueless anti football p—-y” and said that Goodell should not have pressured Jeff Fisher, then the coach of the Rams, to draft “qu–rs,” a reference to Michael Sam, a gay player chosen by the team in 2014.”
The NYT went on to report, “In numerous emails during a seven-year period ending in early 2018, Gruden criticized Goodell and the league for trying to reduce concussions and said that Eric Reid, a player who had demonstrated during the playing of the national anthem, should be fired. In several instances, Gruden used a homophobic slur to refer to Goodell and offensive language to describe some N.F.L. owners, coaches and journalists who cover the league.” He even said that an owner of a team Gruden coached to the Super Bowl should perform a specified sex act on him.
All of these emails were sent when Gruden was either employed by ESPN, the worldwide sports leader, or by then Oakland Raiders now the Las Vegas Raiders. The NFL espouses racial equality, respect for the LGBTQ community, anti-misogyny and player safety. It certainly appears that both in his heart and, more importantly, when sending emails Gruden was none of these things and held none of those values. As Sports Illustrated (SI) said, “The contents of these published messages are crude and derogatory, and at odds with the values the NFL claims to espouse. Gruden apologized after the first email was released but continued to assert that he is not racist and had no racial intentions with his comments, demonstrating apparently willful disregard for the harm inherent to the words he chose. When the Times published the contents of the rest of the emails, Gruden’s own words disqualified him from leading an NFL franchise, moreover one with an openly gay player, Carl Nassib, and in a league that is 70% Black.”
How did all these emails ever see the light of day? ESPN, the same organization which employed Gruden during much of the relevant time frame, said, “The emails came to light during the NFL’s investigation into workplace misconduct with Washington, as “the league was informed of the existence of emails that raised issues beyond the scope of that investigation,” according to NFL spokesperson Brian McCarthy. Senior league executives reviewed the content of more than 650,000 emails, including the one the Journal reported was written by Gruden to [Bruce] Allen. The NFL sent pertinent emails to the Raiders for review.” The Washington Football Team (as they are now known) had its own toxic culture with the team being fined $10 million and the owner being removed from its day-to-day operations for a period of time.
Over a seven year period, one of the most prominent NFL commentators and later the highest paid coach in the NFL, Gruden was making $10 million annually, on a 10-year contract, sending out racist emails about the head of the NFL players union, criticizing in the crudest way possible the Commissioner of the NFL, disparaging the only openly gay professional football player, attacking the first female referee and encouraging a former employer (and boss) to perform a sex act on him. What lurks in the heart of the man? In Gruden’s case he put it all out in these emails. Did he have those same values when he was a lead analyst at ESPN and later the highest paid coach in pro football? I think we know the answer to that question as well.
What did Gruden say in response to all of this? When the initial email was reported by the WSJ, he simply replied that he did not recall the email. Gruden then amended that statement to say, “Gruden told ESPN that he routinely used the term “rubber lips” to “refer to a guy I catch as lying … he can’t spit it out. I’m ashamed I insulted De Smith. I never had a racial thought when I used it,” Gruden told ESPN. “I’m embarrassed by what’s out there. I certainly never meant for it to sound that bad.” [emphasis supplied – as in how bad did he intend for it to sound?] ESPN issued a terse statement saying in part, “The comments are clearly repugnant under any circumstance”.
Join us tomorrow where I consider what all of this means for compliance officers, corporate America and our collective values.