Legal Analysis of the Overwatch League Structure and the Code of Conduct: A Comparison Study
I've got a topic today that I've really been looking forward to discussing: the Overwatch League Official Rules, Terms and Conditions Inaugural Season (aka the Code of Conduct) (I will abbreviate this document as the "CoC" throughout this article). As an initial matter, I'd like to thank Richard Lewis for his work in acquiring and publishing this document to the world at large after Blizzard opted against doing so themselves. I will never quite understand their decision to attempt to keep the agreement behind closed doors after it became binding on the players. The Official Rules are either fair to everyone involved and the publication of the ORs will help dispel any rumors of unfairness, or the document is unfair to the involved parties, and the OWL League Office feared negative publicity by its publication. I'll leave the final determination of their justification up to my discerning readers.
I don't buy the explanation that Nate Nanzer gave back in January for not publishing the CoC: "[W]e just haven't gotten around to it." There was also some discussion about the document being a "living document," and that being another rationale for not publishing a line-by-line explanation of the CoC to the public. This is also unpersuasive, given the fact that the current iteration is binding and enforceable on the Players, as is evident from the fines and suspensions being handed down by the League Office.
A discussion of the League Office's rationale is probably a moot point now, since the CoC is out in the wild. You can find a copy of the Overwatch League Code of Conduct and Streaming Policy here. I will not be spending time on the Streaming Policy, as I don't find it as interesting a topic from a legal perspective, and if I try to cover every little facet of these documents I'll never finish this article.
I don't need to reinvent the wheel and describe all the non-legalese provisions that have been described and summarized in detail by many of the fine journalists in the esports community. The article by Maddy Myers on Kotaku is a good place to get an overview of the overarching provisions, although there are a few things that I'll briefly address. Myers states that the CoC bans "alcohol or marijuana." Instead, the CoC bans alcohol and marijuana while "the Team Member is engaged in League Events or on premises that are owned by or leased to the Team or League Office." It appears that players are free to partake on their own time off the premises (so long as it's kept off their stream). Finally, Myers' description of the licensing rights that the players give to the Front Office is missing a key fact--the licensing rights are "perpetual" in nature only so long as the likeness and game play of the Player is incorporated into materials and advertising while the Player is still an active member of the OWL. The League cannot continue to create new materials with a Player's likeness after their contractual agreement with the League is at an end.
Now, onto the legal analysis that I promised in the title.
Methodology for Today's Discussion
I am going to go out on a limb and assume that most people reading this article did not attend law school, and do not have a legal background. I could break down provisions and explain why those provisions do what they do from a purely legal, but my non-legal audience will likely find that confusing and/or terribly boring. After mulling over the question for the last week or so, I've decided that the best method for explanation of the OWL Official Rules and Code of Conduct is a comparison with another professional sport league. What everyone really wants to know is: "How do the obligations of the Overwatch League Players stack up against other professional sports players?" What the obligations mean in a vacuum is irrelevant. Esports professionalism should be striving to first reach the same level as traditional sports leagues, and eventually surpass them. As you'll see, the OWL still has a long road ahead of it to reach the stability and respectability of the "Big 4" (NBA, NFL, MLB, NHL).
What I'm going to do today is use the National Basketball Association's (NBA) player obligations as a comparison study on the reasonableness of the OWL player obligations (as established in the OWL Official Rules). This is by no means a perfect vehicle of comparison, but sometimes imitation, and learning from our predecessor's mistakes, can be the fastest path to improvement.
Comparison of the NBA's and OWL's Contractual Structural Makeup, and Why it's of Key Importance
I've probably already put a few of my readers to sleep with this subheading, and for that I beg forgiveness. I'll make it up to you with some graphics of exactly what I mean (disclaimer: I'm a lawyer, not a graphic designer).
What I mean by a contractual structural makeup is the inter-working mechanics between the various individuals, organizations, and groups that make up a professional sports/esports league (I will refer to this group collectively as the "Participants"). These mechanics are governed by contractual agreements between the Participants. Of important note, each party in the esports/sports ecosystem will have a different set of contracts that they are obligated to honor. These contractual relationships also establish the remedies that can be pursued for "breaches" of each respective contract. With that mouthful out of the way, let's see the relationships in play in both the OWL and NBA.
There are three main agreements that govern behavior and obligations in the Overwatch League: the Franchise Agreements, Player Contracts, and the Official Rules, Terms and Conditions. Take a look at the lines--each party has a direct contractual agreement with each other Participant in the OWL. Note also the arrows--each document imposes obligations on both parties to the document.
This contractual agreement is between Activision Blizzard and each individual team. This agreement addressed, at minimum, the following:
The franchise buy-in amount per team to be paid to ActiBlizz (rumored to be approximately 20 million per team)
Revenue sharing provisions, in which the teams and League agreed to how to split profits
Minimum salary each team was required to pay to its players, health care to players, and housing for the same
How transfers and sales of teams would be handled
While the Franchise Agreements ("FA") are between the Teams and the League, it is evident that the FA also imposed requirements on specific baselines that would be required in the Teams' interactions with their players, even though these players were not themselves bound to these agreements (in the legal community this would be called "not in privity of contract"). This creates an interesting interaction where if either the League or the Team breaches one of these minimum requires stated in the Franchise Agreement (such as not providing health care to a Player) the Player himself/herself would not have grounds to sue, the Team or League would have to do so on the Player's behalf. Hopefully this will make more sense when I discuss how the NBA has their relationships structured.
This is the agreement between the Player and the Team. The League is not a party to this agreement (although as discussed above, the League imposed specific minimum standards that the Team has to provide to the Player, such as a 50k salary, and health care). This will be the document that establishes a Player's salary, benefits, obligations, and (likely) a buy-out clause. When the public thinks about a player's contract, this is likely the document they are thinking about. This document can, and almost certainly does, impose an additional set of conduct rules on the Player, separate and apart from those imposed by the League. This confusion between the seperate conduct rules was highlighted when the Fusion banned Eqo from streaming for 3 months. The OWL CoC does not allow for that particular punishment, but apparently Eqo's individual contract with the Fusion allows for the Fusion to revoke his streaming privileges.
The League cannot step into the middle and middle in the Player Contract. If a provision or the performance thereof of the Player Contract violates either the Franchise Agreement, or the CoC, the League must pursue action on one of those documents.
Overwatch League Official Rules (of which the CoC is a part)
We've finally reached the document we're here to discuss today!
*now you can see why I've refrained from getting into a discussion about the streaming policy*
As you might guess, this contractual agreement is between the individual Players, and the League. Every Player is required to sign the agreement to play in the OWL. It establishes both the structure of the OWL player (including number of games played, bonuses for placement, and substitution policies) and also imposes additional disciplinary measures on the Players. Where the example above discusses punishment dolled out by a Team, the League has the ability under the Offical Rules to fine and suspend players as well. A perfect example is the various fines and suspensions xQc underwent during his time as an OWL Player (I will be diving into the infamous "TriHard 7" example when I get to discussing the various provisions in the CoC).
I suspect there is also language in the Player Contract that requires the Player to sign the Official Rules published by the League in order to be paid (not confirmed, but given the structure of the Franchise Agreements, I wouldn't be surprised in the least). These three contracts are inextricably interconnected. The idea is that if you pull on one section of the web (one of the contracts), the rest of the web will bow to absorb the stress.
I will address the details of some sections of the Official Rules, including the Code of Conduct included therein, in a bit. For now, let's look at how another professional sports league, the NBA, has created their own contractual web.
What's this, a square instead of a triangle? The NBA has added an additional Participant, the National Basketball Player's Association ("NBPA"). They are also better known as the NBA Player's Union. This changes the entire makeup of the web. Of biggest note, there is not a set of arrows between the "Individual Players" and the "Front Office," which is in direct contrast to the OWL CoC, which is between each individual player and the League Office.
The legal ramifications of the lack of privity of contract (meaning a direct set of arrows between the Participants) between the Players and the Front Office are immense, and are a key part of what I want to discuss today. Hopefully this will also help show how a OWL Player's Union, which some players and lawyers are pushing to create, could help address some of the more onerous provisions imposed by the League on the Players. A discussion of the OWL CoC is inevitably connected with the respective bargaining positions of the Participants.
The discussion about the Franchise Agreement in the OWL above mostly rings true for the NBA as well. There is no reason to go into additional detail today.
This is also likely substantially similar to the Player Contract's in the OWL (just with bigger numbers of course). These two agreements are similar enough to the OWL contractual structure to not warrant additional discussion. However, the last two agreements are where the biggest divergence is evident.
Membership in the Union
This agreement is between the Players and the Player's Union. All of the Players of the NBA are members of the NBPA. Since this is not an article on the structure of the NBPA, a basic summary is as follows:
Players join the NBPA upon entry to the NBA;
the individual Players agree to be bound by the decisions of the NBPA;
the NBPA elects Player Representatives to represent and negotiate on behalf of the NBPA to the outside world;
one of the major negotiations is between the NBPA and the NBA Front Office, which takes the form of the Collective Bargaining Agreement; and finally
the rank and file membership vote on any agreement brought back by the Player Representatives. The majority of the NBPA members must vote in favor of the Collective Bargaining Agreement for it to be binding.
This structure also creates interesting situations where even if a Player votes against the Collective Bargaining Agreement ("CBA"), if the majority of the other members of the NBPA vote in favor of it, they will still be bound by the CBA, by virtue of their membership in the NCPA.
This structure also highlights the tension inherent in a Player's Union. On one hand, by negotiating collectively, the Players have more bargaining power overall. Should a deal fall through, a collective shut-down of the NBA will occur (such as what happened in 2011). This would not occur if each player attempted to bargain individually. However, on the flip side of the coin, the individual Players give up the ability to bargain on his own behalf. They must go with the majority, even if they are in complete disagreement. Here's a fantastic article on how these tensions play out in practice, including a discussion of the 2011 lockout.
Collective Bargaining Agreement
The CBA is a contractual agreement between the NBA Front Office, and the NBPA. Since every player in the NBA is a member of the NBPA, the CBA is also binding on every Player, so long as it is ratified by the NBPA membership.
The CBA is the NBA's version of a Code of Conduct. It is a suitably impressive document (598 pages!), linked here for your viewing pleasure. I will be drawing direct comparisons between the OWL CoC, and the NBA CBA for the purposes of this article.
I'm now 2,250 words into this article and I've yet to quote a provision of the OWL Official Rules. Please let me know if you find all of this background information useful, or if I could have just delved directly into the contractual language without the preamble. I write for the pleasure of my audience, and to articulate my own understanding of what I see in the esports scene, but I am always interested in improving on my rhetorical style.
Analysis of Language from the Overwatch League Official Rules, Using the NBA Collective Bargaining Agreement as a Sample and Baseline
We've now established the primary players and documents that surround and inform the OWL Official Rules. It's now time to get down to the heart of the matter, the Overwatch League Code of Conduct, as contained in the Official Rules of the Overwatch League.
Code of Conduct: Standard of Conduct
First, we need to establish what standard that the players are being held to, before we can look at enforcement and appeal policies, which are in my opinion far more important than the actual vague behavioral standards promulgated by the CoC. Nevertheless, the written behavioral standard is the natural starting place for analysis:
6. CODE OF CONDUCT
(a) All Team Members and Owners must at all times observe the highest standards of personal integrity and good sportsmanship and act in a manner consistent with the best interests of the League, in each case as determined by the League Office (author's emphasis added). Team Members and Owners are required to behave in a professional and sportsmanlike manner in their interactions with other competitors, League officials, and members of the League Office, the media, sponsors and fans.
6.3 Illegal and/or Detrimental Conduct
(b) A player, Team Manager or Owner may not engaged in any activity or practice which (i) brings him or her into public disrepute, scandal or ridicule, or shocks or offends a portion or group of the public, or derogates from his or her public image, or (ii) is, or could reasonably be expected to be, detrimental to the image or reputation of, or result in public criticism of or reflect badly on, the Blizzard Group (author's emphasis added), the League Office, or any of their respective Representatives, the League, the other Teams or their respective sponsors or members, the Game or any other product or service of the Blizzard Group. For the avoidance of doubt, Team Member affiliation with individuals, entities or brands that are detrimental to the image or reputation of the Blizzard Group, the League Office, or any of their respective Representatives, the League, the other Teams or their respective sponsors or members, the Game or any other product or service of the Blizzard Group, as determined by the League (author's emphasis added), will be deemed as a violation of this provision and these League Rules.
First of all, wow. This is quite the mouthful. While the provisions as a whole are worth reading, I highlighted what I see as the most important language: ". . . in each case as determined by the League Office." This language will be a recurring theme throughout our examination of the Code of Conduct--Activision Blizzard explicitly retains all power and discretion to punish what they see as a violation of the Code of Conduct. Now, let's take a look at how the NBA has addressed this issue in their Collective Bargaining Agreement:
Article 6 PLAYER CONDUCT
In addition to any other rights a Team or the NBA may have by contract (including but not limited to the rights set forth in paragraphs 6 and 16 of the Uniform Player Contract) or by law, when a player fails or refuses, without proper and reasonable cause or excuse, to render the services require by a Player Contract or this Agreement, or when a player is, for proper cause, suspended by his Team or the NBA . . .
As you'd expect from a 500 page document, there is far more detail than what is contained in the OWL's approximately 23-page Official Rules. As noted by the CBA, the NBA has embedded most of its Code of Conduct standards within the Player Contracts with the Teams. It includes the following:
(a) The Team my terminate this Contract upon written notice to the Player if the Player shall: at any time, fail, refuse, or neglect to conform his personal conduct to standards of good citizenship, good moral character (defined here to mean not engaging in acts of moral turpitude, whether or not such acts would constitute a crime) and good sportsmanship, to keep himself in first class physical condition, or to obey the Team's training rules;
. . .
at anytime fail, refuse, or neglect to render his services hereunder or in any other manner materially breach this Contract.
At first blush, there are some similarities between the OWL CoC, and the conduct rules that are imposed on NBA players through the CBA and their Player Contracts. In fact, I'd argue that "highest standards of personal integrity" and "good moral character" are vague enough to encompass much of the same conduct.
However, there is a very glaring additional duty imposed on the OWL Players that is not imposed on the NBA Players--the duty to take no action that could cause damage to the reputation of Activision Blizzard, what I will call the "public disrepute" provision.
This obligation imposed on the OWL Players to avoid causing reputational damage to the League is so broad as to overwhelm any attempt to reasonably define its outer limits. It is possible to conceive a million different situations and actions undertaken by a player that could caused "perceived" reputational damage to the League. This provision is, by far, the worst provision in the Overwatch League Official Rules. I expect that a court of law would find this language to be so vague that it would be unenforceable in many situations.
The NBA CBA makes one reference to when the NBA will examine potential reputational damage caused by a Player: when the player is alleged to have committed domestic violence, sexual assault, and/or child abuse. Even then, repuational damage is not a violation in and of itself. Instead it is just a factor the NBA examines before placing a player on administrative leave pending an investigation into serious issues regarding violence, sexual assault, or child abuse. If this isn't a study of opposites, I don't know what is.
Code of Conduct: Enforcement of Violations and Appeal Process
A Code of Conduct is only as powerful the ruling body's ability to enforce the rules. If the behavior standards are the rules of the road, the enforcement provisions are police that investigate a potential violation, arrest the violator, and are also the judge that sentences the violator within the guidelines. Enforcement provisions also establish what level of evidence is required to "convict" a violator, and what defenses a violator is entitled to raise.
I'd like to note that while the rules of freedom of contract allow great leniency for enforcement provisions, there is an outer limit of what is allowed, and should a given contract go too far, it can be struck down by the court system as "against public policy." We shall assume for the purposes of this discussion that the enforcement provisions in the OWL Official Rules and the NBA CBA are not against public policy.
The key enforcement language from the OWL Official Rules is as follows:
2. ROLE OF THE LEAGUE OFFICE
2.3 League Office Discipline
(a) In order to establish the integrity of the League and preserve its reputation for open and fair competition, the League Office will have the right to impose certain sanctions and violations of the Official Rules. By agreeing to these League Rules, each Team Member and each Owner acknowledges and agrees that (i) he/she/it may be subject to public reprimands, fines, suspensions, debarment and/or disqualifications imposed by the League Office for violation of the Official Rules; and (ii) these reprimands, fines, suspensions, debarment and/or disqualifications are reasonable and necessary in order to maintain public confidence in the honest and orderly conduct of League games, matches or tournaments and the integrity of the League, the Game and the Teams.
(b) The League Office will have the right to monitor compliance with the Official Rules and investigate possible breaches of the Official Rules. By agreeing to these League Rules, each Team Member and each Owner agrees to cooperate with the League Office in any internal or external investigation that the League Office conducts relating to a suspect violation of the Official Rules or Applicable Law. Team Member and Owners have a duty to tell the truth in connection with any investigation conducted by or for the League Office and have a further duty not to obstruct any such investigation, mislead investigators or withhold, tamper with, or destroy evidence.
* * *
(d) The League Office's determination as to the appropriate disciplinary action will be final and binding. The League Office reserves the right to lock out Teams and/or Players whose eligibility is in question or who have been disqualified or are otherwise ineligible to participate in League Events.
This is the entirety of the disciplinary process established by the OWL League Office (other than the appeal provisions, which I will address last). Sections (a) and (b) are, in my opinion, well drafted and perfectly reasonable. Section (c) discusses specific punishments, which were also reasonable, and not worth discussing.
Section (d) is where the problems begin. Activision Blizzard has yet again established itself as the final arbiter for disciplinary action, and contractually decreed that its decision is final and binding. While someone needs to be the final decision maker, this disciplinary policy has left out three key components that should have been included prior to the final and binding decision in section (d):
Mandatory Player and Team involvement in the disciplinary process, which includes the right of the Player and Team to make their side of the case known to the League Office (this is often referred to as "Due Process" in the court system).
A requirement that the League create a written record of the disciplinary process, including the position of the Player or Team, evidence in support of a finding of a violation of the Official Rules, and exactly which rules have been violated.
An adequate appeals process that does not require seeking relief from an outside entity (such as an arbitrator or court).
This really gets to the heart of what is currently wrong with the Official Rules--while I do not believe the OWL Front Office is being malicious in their Official Rules, I do believe that the current structure of the Official Rules and Code of Conduct have a severe lack of Due Process rights for the Players, and an inadequate amount of reporting requirements to make sure that the process is fair for all involved.
A perfect case-in-point is the suspension of xQc (which I promised I'd get back around to discussing). xQc was suspended for allegedly "repeatedly us[ing] an emote in a racially disparaging manner on the league's stream and on social media . . ." This is quite the accusation! What is perfectly evident, even to an outside observer, is that xQc did not have an adequate opportunity to present evidence in his own defense. Blizzard accused xQc of using "TriHard" when an African-American caster was on the screen (TriHard is an image of an African-American man--a detailed discussion of the usage of this emote is beyond the scope of this article). However, viewers, and xQc himself, were quick to point out that xQc had used the "TriHard" emote repeadily in the past, even when there was not an African-American man on the screen. There is no indication that xQc had an opportunity to present this evidence in his defense before he was suspended, and before the OWL Front Office essentially announced to the world that xQc had acted in a racially insensitive manner. The Official Rules do not currently require that the Front Office give xQc any opportunity to defend himself. This is a travesty of justice.
So, if the enforcement process for the Overwatch League is deficient, is the process any better in the NBA? You bet it is:
6. PLAYER CONDUCT
6.11 League Investigations
(a) Players are required to cooperate with investigations of alleged player misconduct conducted by the NBA. Failure to so cooperate, in absence of a reasonable apprehension of criminal prosecution, will subject the player to reasonable fines and/or suspensions imposed by the NBA.
* * *
(b) Execpt as set forth in Section 11(c) below, the NBA shall provide the Players Association with such advance notice as is reasonable in the circumstances of any interview or meeting to be held (in person or by telephone) between an NBA representative and a player under investigation by the NBA for alleged misconduct, and shall invite a representative of the Players Association to participate in or attend.
* * *
31. GRIEVANCE AND ARBITRATION PROCEDURE AND SPECIAL PROCEDURES WITH RESPECT TO DISPUTES INVOLVING PLAYER DISCIPLINE
31.9 Special Procedures with Respect to Player Discipline
(a) A dispute involving (i) a fine of $50,000 or less or a suspension of twelve games or less . . . shall not be subject to a hearing before . . .but instead shall be processed exclusively as follows:
1. Within 20 days following written notification of the action taken . . .the Players Association (with the approval of the player involved) may appeal in writing to the Commissioner.
2. Upon written request . . .the Commissioner shall designate a time and place for a hearing as soon as is reasonably practicable. . .
3. . . .[f]ollowing the conclusion of such hearing, the Commissioner shall render a written decision, which decision shall, absent further proceedings pursuant to Section 9(a)(5) below, constitute full, final and complete deposition of the dispute, and shall be binding upon the player(s) and Team(s) involved and the parties to this agreement.
* * *
5. If the dispute. . .is not resolved in a manner satisfactory to the player as a result of the procedures set forth above. . .seek review with the Player Discipline Arbitrator as set forth below.
Rather than risk putting my readers to sleep, a summary of the NBA discipline procedure is as follows
For a Minor Sanction (<50k fine, 12 games or less suspension):
The Player is notified of the League's intention to discipline the Player.
The Player can request a phone call with the commissioner to discuss the matter, with a representative from the NBPA (Union) listening in.
If the Front Office carries through with the discipline, the Player can appeal and request a hearing.
The arbitrator that rules on the hearing must do so in writing.
If the NBPA disagrees with that decision (note: the Player himself is no longer in the driver's seat), and the decision involved a financial penalty, it can appeal it to another arbitrator who can remove or reduce the financial penalty in that arbitrator's sole discretion.
This whole process is for what the NBA considers minor penalties! The Overwatch League could institute the above policy for all violations, and it would still be a massive improvement on the current system.
The NBA CBA establishes that in the case of a "major" punishment, the Player is entitled to a more favorable standard of review ("arbitrary and capricious" instead of "abuse of discretion." )
If all of the above fails to work out the issue
Overwatch League Appeals Process
The OWL Official Rules does have a section for a resolution of disputes (which is essentially an appeals process), but it is not nearly as friendly to the Players, Owners, and Teams:
9. RESOLUTION OF DISPUTES
9.1 Disputes Regarding League Rules
The League Office has final, binding authority to decide disputes with respect to the breach, termination, enforcement, or interpretation of Sections 1, 2, 3, 4, 5, and 6 [the CoC] of these League Rules ("Rules Dispute"), as well as related relief. Rules Disputes and Team Member violation reports should be submitted to the League Office. . .
9.2 Binding Arbitration for Arbitration Disputes
Any dispute, claim or controversy that the League Office may have against Team Members or that Team Members might have against the League Office . . .will be finally settled under the Rules of Arbitration of the International Chamber of Commerce by a single arbitrator appointed in accordance with the said Rules. The place of arbitration will be Las Angeles, California. All matters relating to the arbitration, including any final award, will be considered the confidential information of the parties to the Arbitration Dispute.
Those unfamiliar with the ICC might first believe that this is a perfectly fine system. The OWL Players get to arbitrate their issues in a similar manner to the NBA Players, right? That is not the case.
If the Player wants to arbitrate any claim in front of the ICC, they will pay at minimum, $5,000 just to start the process. There is no such cost provision required of the NBA Player's internal arbitration process. There is a ton of literature of how unfair external arbitration processes can be to an average employee. The average OWL Player will simply not have the resources to bring a dispute to an arbitration panel, and there is no other recourse available to the Players. This needs to be fixed as soon as possible.
Please don't take my criticisms of the Overwatch League Official Rules as a condemnation of the OWL Front Office, or Activision Blizzard as a whole. I actually do believe that the Official Rules are a good first step in legitimizing the esports scene as a true player in the professional sports scene. There is, however, still a lot of work to be done to get our Player's rights up to the industry standard. I also hope that this article helped to show exactly how helpful a player's union can be in improving Player's rights in a professional sports league, and why OWL Players should continue to push to establish a true player's union.
Please reach out to me if you have any questions or thoughts regarding this article. I'll be more than happy to speak to anyone about it.