Donald Sterling – The Man with the Silver Gun

Donald Sterling

Donald Sterling

Much is being said about Sterling and his recent racial comments secretly taped and made in private. Much of this discussion circulates around the internal punishment handed down by the NBA and their Board of Governors. There is no denying Sterling has said some bad things, but why is it exactly that private comment, recorded without Sterling’s knowledge, can be used against him? Sterling’s comments can be used against him, regardless of his right to privacy, because of particular contractual provisions between himself and the NBA. This answer does not seem too surprising, but why and how it is enforceable is interesting.

The reasons these sanctions are enforceable against Sterling are found in the contractual agreement each owner has with the National Basketball Association (NBA). The NBA owners have an internal contractual agreement they agree to follow, called the ‘Constitution and By-Laws of the National Basketball Association’ (the “Constitution”); the most recent version was signed and came into force on May 29th, 2012.[1].  Although constitutions are not normally considered contracts, Article 2 of the Constitution expressly states, “This Constitution and By-Laws constitutes a contract among the Members of the Association”.[2] What is really interesting about the Constitution is that until Sterling’s comments blew up social media, the Constitution was kept super-secret.[3]  Outside of NBA members, few actually knew what it said or contained. Enter Sterling and his secretly recorded racist rant. In order to explain and justify their punishment of Sterling, NBA Commissioner Silver disclosed the Constitution to the media and the public.

The Constitution is a binding document to which the owners of the NBA must adhere. The Articles or By-Laws found within (provided they do not purport to enforce anything illegal) the Constitution can be enforceable and binding in a civil court. The owners contractually agree to follow the Constitution and anything Sterling says or has said can be used against him in relation to his ownership, operation, or involvement with the NBA if it breaches the Constitution. Therefore Sterling’s indefinite suspension, $1,000,000.00 fine, and even the termination of his ownership of the L.A. Clippers can be enforced. The reasons for this require a deeper look into two Articles found within the Constitution: Article 13 and Article 35A.

Article 13: Termination of Ownership or Membership:

This Article of the Constitution contains two very important terms: Article 13(a) and Article 13(d). Article 13(a) indicates that if a Member or Owner shall “willfully violate any of the provisions of the Constitution and By-Laws, resolutions, or agreements of the Association” (emphasis added)their ownership can be terminated, forcing them to sell their franchise.[4] Article 13(d) provides further ammunition for the Association: “a failure to refuse or fulfill contractual obligations to the Association, Members, Players, or any 3rd party in such a way to affect the Association or its Members Adversely” (emphasis added) can also give reason to terminate ownership[5].

Sterling’s comments are unquestionably a breach of Article 13(a); his defense to a breach of Article 13(a) is that he did not willfully violate these provisions. The comments were made in (what he thought was) private and that it was not his intention to disclose this to anyone. Sterling has consistently stated he was upset, distressed and was coaxed into saying these things by his now ex-girlfriend.

This argument actually has a lot of merits. In fact, there are some lawyers and sports journalists in the United States that believe this argument, could be strong enough to prevent Silver from carrying out these sanctions[6][7] if Sterling brings the issues to court. Article 13 may very well be interpreted that way if Article 13(a) is read on its own, but I believe not enough attention by the media is given to Article 13(d). Article 13(d) is very powerful when used in conjunction with another article, Article 35A.

Article 35A: Misconduct of Persons Other than Players

Currently, there are not any Articles in the Constitution that explicitly require the owners to treat others with respect and candor, nor any section that requires them to be of good moral character; the Constitution only demands that of the Players.[4]  Rather, this expectation of the owners works in conjunction with a separate Article in the Constitution, Article 35A, which happens to also provide the NBA with the authority to suspend indefinitely and fine Sterling up to $1,000,000.00 for his actions… which of course they did.

Article 35A(c) and (d) of the Constitution both explain what kind of “misconduct” is necessary before an owner can be punished, specifically 35A(c). Article 35A(c) stipulates, “Any person who gives, makes, issues, authorizes, or endorses any statements having, or designed to have, an effect prejudicial or detrimental to the best interests of basketball, shall be liable to a fine not exceeding $1,000,000.00 to be imposed by the Commissioner” (emphasis added).[9] Given that Silver is the Commissioner of the NBA, he appears to be the one who determines what is in the “best interests of basketball”. In addition, Article 35A(d) allows Silver to suspend Sterling from the NBA for an indefinite period of time provided that, if in Silver’s opinion, Sterling is guilty of conduct “prejudicial or detrimental to the Association”.[10]

A breach of Article 35A(d) will be hard for Sterling to argue against. His comments are certainly prejudicial and detrimental to the interests of basketball insofar that a variety of races, cultures, and ethnicities participate as players, owners, commentators, or managers/coaches, and fans. The suspension coupled with the $1,000,000.00 fine handed to Sterling by Silver seems a clear indicator that Sterling’s actions were considered very detrimental to the best interests of basketball. Article 35A(d) makes no mention of the word “willful” and so this punishment is justifiable. This leaves the final question of how Silver, acting as NBA Commissioner, utilized Articles 35A and 13(d) to terminate Sterling’s ownership of the L.A. Clippers.

What Silver did was actually rather clever. Article 35A is an article which sanctions an owner who acts in a manner disclosed therein. Article 35A is also an article of a contract with the NBA: the NBA Constitution. Article 13, as mentioned above, provides the authority to terminate ownership or membership for failing to adhere or abide by a contractual obligation to the NBA. Silver has interpreted Article 13 and 35A to mean that, when combined, he has the authority to punish and/or terminate Sterling’s ownership. Silver used a punitive article of the Constitution to enforce a more punitive article in the Constitution!

This type of punishment by the NBA (expulsion and termination of ownership) is unprecedented and an interpretation of Article 13 and 35A in conjunction with each other has never been considered. It appears it is now extremely difficult for Sterling to successfully defend himself; he made statements detrimental and prejudicial to the NBA and breached an Article in the Constitution, which in turn means he failed to fulfill his contractual obligations to the NBA. This failure triggers Article 13(d) which, in turn, will terminate Sterling’s ownership of the L.A. Clippers. All that is required is for the league to follow Article 14 (Procedure for Termination). Article 14 requires 75% of the Board of Governors vote to sustain the charges.[11]

Sterling’s position is a very tough one to be in. On the one hand, there’s the obvious historical precedence that Sterling is a substantially racist individual[12]who is running an organization with diverse players, coaches, management staff, fans, etc. There also remains the fact that Sterling’s recorded comments are full of bigotry and ignorance. On the other hand, without context and without hearing all the evidence, the NBA and general public essentially sentenced Sterling. Sterling is entitled to privacy and it is possible that his girlfriend was acting in a vexatious manner, goading him into making these statements. It is also possible (however improbable it may seem) that those statements were charged and not reflective of how Sterling actually feels.

Unfortunately for Sterling, when it comes to his contractual obligations to the NBA, his true feelings matter very little. When you enter into a contract, you must adhere to the contract or face whatever sanctions it may provide. In today’s social-media-obsessed world, there are so many things you can say or do which can be used against you. The Constitution Sterling agreed to did not state how his conduct must be unbecoming or in what context his prejudicial statements are made, just that he makes those statements. When read in conjunction with Article 13, especially 13(d), the results will likely be devastating.

The moral of Sterling’s story is this: when signing a contract (especially in a business/commercial context) that contains, what may be construed as,  obligations to maintain good moral character and conduct, make sure you are careful what you say and to whom. It is a real possibility in today’s world of technology that anything said, even in a private setting, will become known to others and be enough to terminate your contract. If you are ever uncertain, it is best to consult a lawyer.

About the Law of Privacy in Canada

In respect to the law of Privacy in Canada, here is a bit of useful information. The Criminal Code of Canada imposes a general prohibition on interception of private discussions or communications, but we can record our own conversations with other people. In theory, this means we can record ourselves talking to others. However, it does not necessarily mean we can broadcast this information to the public like Sterling’s ex-girlfriend has done. Section 184(1) of the Criminal Code stipulates that it is illegal to willfully intercept a private communication.[13] Section 183 states that the term “intercept” includes recording a communication and “private communication” includes “… any telecommunications made by an originator to be received by a person and is made under circumstances which it is reasonable for the originator to expect that it will not be intercepted by any person other than the person intended by the originator to receive it”.[14] Therefore this interpretation is rather broad and could, if serious enough, lead to criminal liability.

There also exists the Tort of Intrusion upon Seclusion in Ontario, which was created after the recent Ontario Court of Appeal case in 2012, Jones v Tsige.[15] This tort permits you to successfully sue those who “snoop” or “intrude” into your private information (such as a bank employee using your account information for personal reasons). Unfortunately, the tort has a cap of $20,000.00 in recovery. That being said, the courts have not ruled out that in exceptional circumstances (such as forcing the sale of an outrageously expensive NBA franchise) higher punitive and aggravated damages could be awarded.[5]

It is also worth noting that in Jones v Tsige, the Ontario Court of Appeal stated that “in the future torts such as ‘public disclosure of embarrassing private facts about the plaintiff’, as well as ‘publicity that places the plaintiff in a false light in the public eye’” could be created.[5] If either of these were to be created in Ontario, it will provide the aggrieved party an opportunity to sue for damages resulting from private facts being exposed or misused.

In California, the latter of these aforementioned torts, false light law, does currently exist. However, the false light law of California would have required that Sterling not be a racist which, based on the evidence, he almost surely is. In any case, if these laws applied in Sterling’s circumstance, it would afford him the ability to sue his likely-now-ex-girlfriend. Given how much he’s worth though, I doubt he needs it.

References and Footnotes

  1. NBA, Constitution and By-Laws of the National Basketball Association – May 29, 2012, online: NBA <http://mediacentral.nba.com/media/mediacentral/NBA-Constitution-and-By-Laws.pdf>
  2. Ibid. Article 2.
  3. an Feldman, NBA Reveals Once-Secret Constitution and By-Laws, online: NBC News – NBC Sports <http://www.nbcnews.com/news/sports/nba-reveals-secret-constitution-after-donald-sterling-scandal-n93506>.
  4. NBA, Constitution and By-Laws of the National Basketball Association – May 29, 2012 Article 13, online: NBA <http://mediacentral.nba.com/media/mediacentral/NBA-Constitution-and-By-Laws.pdf>.
  5. Ibid.
  6. Michael McCann, Sterling, NBA set for epic legal fight over Clippers, online: Sports Illustrated – Sports Law <http://sportsillustrated.cnn.com/nba/news/20140429/donald-sterling-nba-adam-silver-clippers-lawsuit-lifetime-ban/>/
  7. Dave Hoffman, Judge, Jury, and Arbitrator: The NBA Constitution, online: Concurring Opinions <http://www.concurringopinions.com/archives/2014/04/judge-jury-and-arbitrator-the-nba-constitution.html/comment-page-1#comment-187240>.
  8. NBA, Constitution and By-Laws of the National Basketball Association – May 29, 2012 Article 13, online: NBA <http://mediacentral.nba.com/media/mediacentral/NBA-Constitution-and-By-Laws.pdf>.
  9. Ibid. Article 35A(c).
  10. Ibid. Article 35A(d).
  11. Ibid. Article 14.
  12. Tony Manfred, Here Are the Shockingly Awful Donald Sterling Stories That the NBA Ignored for Years, online: Business Insider <http://www.businessinsider.com/donald-sterling-racist-history-2014-4>.
  13. Criminal Code, R.S.C. 1985, c. C-46, s 184.
  14. Criminal Code, R.S.C. 1985, c. C-46, s 183.
  15. Jones v Tsige, [2012] ONCA 32, 108 O.R. (3d) 241.
  16. Ibid.
  17. Ibid.
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