The NCAA basketball tournament captures the attention of millions of workers every year. From the time the matchups are released on ”Selection Sunday” (this year, on March 14), until the nets are cut down and ”One Shining Moment” is sung on the first Monday night in April, it’s a good bet (no pun intended) that your employees will be talking about the tournament, and probably betting on its outcome.

With the first round kicking off on March 18, March Madness looms just around the corner.

The Society for Human Resource Management reports that 30 percent of all employers know that NCAA office pools are taking place in their offices. Many employers turn a blind eye toward these pools, figuring that they help to maintain morale, build camaraderie, and allow informal bonding among employees who might not otherwise socialize.

The potential for a morale boost may be offset, however, by lost productivity resulting from Internet usage, game watching, absences, water cooler talk and other pool-related gossip.

It is now easier than ever for your employees to slack off at their desks thanks to the availability of free online viewing of all games, many of which occur during normal business hours. An industry consultant recently estimated that American employers will lose at least $4 billion in productivity during March Madness season.

If the average employee spends almost 15 minutes per day talking hoops, and the average employee makes $18 per hour, that employee costs his employer about $4.50 per day in lost work. Since an estimated 58 million workers follow the tournament, the daily loss is over $250 million, or $4 billion over the 16 working days of the tournament.

While this estimate may run high, there can be no doubt that the NCAA tournament affects employees and impacts their work.

Is an employer subject to legal exposure for allowing employee betting pools during March Madness? It depends. This form of betting is technically illegal under the law of Maine and most other states, and an employer who allows or provides a place for this type of activity to take place could put the employer at risk.

Nevertheless, the attorney general and the police are not likely to spend their time raiding small-scale office betting pools.

The practical steps an employer should take include making sure that managers and supervisors are not coordinating office betting pools, soliciting employee participation in office pools, or otherwise creating the appearance that the employer is sponsoring or endorsing a pool. That way, an employee who chooses not to participate in the pool and is later fired cannot claim that he was terminated for refusing to participate in illegal activity.

Management should also be vigilant for co-worker peer pressure or ostracism against those who choose not to participate in office pools.

Employers who have policies against gambling in the workplace may run into difficulty enforcing such policies against more serious types of gambling on the job if they knowingly allow office betting pools to exist.

If employees are allowed to spend significant amounts of time coordinating an office betting pool, moreover, other employees who are disciplined for wasting company time may be able to claim discriminatory treatment.

If employees are going to be allowed to participate in an office betting pool, therefore, they should be required to limit their time spent on such activities to meal and break periods.

Many employers choose to allow office pools to exist in spite of the risks. Use of some care in controlling the manner in which office pools are conducted may minimize the risk of consequences more serious than your favorite team losing in the first round.

 

DISCLAIMER: The materials in this column are provided for informational purposes only, do not constitute legal advice, and do not necessarily reflect the opinions of Fisher & Phillips LLP or any of its attorneys or clients. Neither this column nor the information contained herein is intended to create an attorney-client relationship between the viewer, reader, recipient, or user and Fisher & Phillips LLP.