Sports in the news - what do the employment lawyers think this month?

Baseball and bookmakers: what to do when your employees engage in illegal activity

Shohei Ohtani, arguably baseball’s most recognisable and handsomely rewarded star, has had a very busy few months. 

Firstly, he joined the LA Dodgers, signing a contract worth an eye-watering $700 million, to be paid over the ten-year life of the contract. The structure of that contract is interesting enough to merit its own article, as it backloads the vast majority of his pay into the 2030s (allowing the Dodgers to offer competitive salaries to other players over the next few years). Ohtani will receive an annual salary of ‘just’ $2 million, with $68 million deferred each year without interest, to be paid in $68 million instalments between 2034 and 2043.  Any employment lawyer would be fascinated to take a peek at that contract…

Having made his big move, Ohtani swiftly became caught up in in a scandal that made headlines reaching the UK. It became clear that his former interpreter and close friend of many years, Ippei Mizuhara, had made payments to an illegal bookmaker from Ohtani’s account. Major League Baseball’s regulations strictly forbid players and team personnel from engaging in any form of wagering, whether legal or not, on baseball or other sports events. Betting is also illegal in California. For several weeks, there was a sense that Ohtani, baseball’s biggest star, could himself be implemented.

Ultimately, Ohtani has been cleared of any wrongdoing, whilst Mizuhara now faces federal bank fraud charges which could result in up to 30 years of imprisonment. Mizuhara was subsequently terminated by the Dodgers, and is accused of stealing over $16 million from Ohtani. 

The situation is reminiscent of recent cases which may be more familiar to a UK audience, also involving high-profile sports figures and sports betting. In 2023, Ivan Toney, a footballer for Brentford, received an eight-month ban from football after admitting to violating Football Association betting regulations. Toney had placed multiple bets on matches involving his own team and provided false information during the investigation. His ban was reduced by three months upon diagnosis of a gambling addiction.

The issues in these cases are complicated by specific rules applicable to sports stars (and by the illegality of betting in some US States) but many employers in the UK grapple with an employee’s addictive behaviour, and other conduct that is damaging to the employee’s own wellbeing. 

In cases involving a gambling addiction, employers will usually want to prioritise the well-being of the employee concerned, while addressing any potential impact on the workplace and business operations. It’s usually advisable for employers to approach the situation with empathy and confidentiality, and to schedule a private meeting with the employee to discuss the situation in a non-judgemental manner before deciding on next steps. It might then also be appropriate to encourage the employee to seek professional help and support through confidential channels, such as an Employee Assistance Program or external counselling services specialising in addiction. 

Of course, it might be that an addiction causes an employee to behave in a way that results in unacceptable conduct or performance, or (as in the case of Ohtani’s interpreter) constitutes illegal or immoral activity. In those cases, employers are entitled to hold a disciplinary process. The appropriate sanction may range from a verbal warning with an offer of support and assistance, to a dismissal for gross misconduct in the most serious or severe situations. 

In either case, employers will need to be mindful of knotty discrimination concerns. Addictions to alcohol, nicotine or any other substance do not constitute a disability under the Equality Act 2010 because they are expressly stated in an associated set of Regulations not to be considered impairments (and hence cannot be disabilities). However, an addiction to gambling (which is not a substance) is not excluded in the same way. Therefore, as long as the other elements of the test are met (namely, that the gambling addiction constitutes an impairment which has a ‘substantial’ and ‘long-term’ negative effect on an employee’s ability to do their normal daily activities) it may well constitute a disability. 

Disciplinary action based on an employee’s gambling addiction is therefore more fraught and complicated than it may first seem – employers should not assume that disciplinary action is a home-run.