What Does Fining Jerry Richardson Amount to?

A billionarie is out $2.75 million; did the NFL make the right move?

David T. Foster III/Charlotte Observer/TNS/Getty Images

The NFL announced Thursday that it will impose a $2.75 million fine on former Panthers owner Jerry Richardson. A league investigation substantiated workplace misconduct allegations made in a December Sports Illustrated piece, which detailed sexual harassment and racial discrimination. SI reported that Richardson made financial settlements with at least four former employees. The NFL said that its investigation turned up, “similar matters that have not been the subject of public discussion”—in other words, more misconduct than than SI’s story reported. Richardson’s fine will be put towards several organizations that address race- and gender-based issues, and fund league-wide workplace training.

That fine is less than one percent of the $2.3 billion that the Panthers sold for—Richardson, who had a 48% stake in the team, made around $1 billion from the sale. Whether it’s $2.75 million or $200 million, how do you set a price on bad behavior?

Eric Montgomery is an employment lawyer in Charlotte who once worked as an attorney for Richardson’s food service company. (He knows the former Panthers owner personally.) Montgomery says that, although the amount of the fine likely won’t impact Richardson, it’s significant because it’s rare that a CEO-type is fined by the company for workplace misconduct. “I haven’t heard of too many situations where the company fined its own employee for misconduct of this nature,” he says. “If more companies took that approach it would certainly have an effect to curb that kind of behavior. This is certainly a major development in the NFL and hopefully the other sports leagues take notice, and big companies take notice as well.”

Former U.S. attorney and SEC chair Mary Jo White conducted the league’s investigation into Richardson. As a result of her findings, White gave recommendations for the NFL’s conduct committee to consider implementing. One of those recommendations is to specifically prohibit the use of non-disclosure agreements to limit the reporting of potential violations or cooperation in NFL investigations. SI reported that Richardson or the Panthers had reached settlements in exchange for NDAs with at least four employees, a practice that kept his behavior quiet for many years.

Montgomery says paying for silence is a typical practice when it comes to misconduct in the workplace and he’d be shocked if the league put that recommendation into practice. “That would be earth shattering,” he says. “I can’t see a team willing to pay someone half a million and not have a non-disclosure agreement.”

It will be interesting to see which, if any, of White’s recommendations will be adopted by the league. One natural next step among them: a hotline to report workplace misconduct anonymously.

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