Pro Teams Claim Analytics are ‘Mine!’ Through Non-Disclosure Agreements
In the hypercompetitive world of sports analytics, teams face the ongoing risk of rivals recruiting top staff and extracting valuable trade secrets. A new book sheds light on this phenomenon and how teams try to mitigate the risk—and how these efforts may in the long run hurt the broader industry.
Mine!: How the Hidden Rules of Ownership Control our Lives (Penguin Random House) is a tour de force on everyday ownership quandaries. Authored by Columbia Law School professor Michael Heller and UCLA School of Law and UCSB Bren School of the Environment professor James Salzman, Mine! is written in an accessible style reminiscent of Freakonomics and Nudge.
The book, which was released on Tuesday, tackles numerous scenarios that can spark debate, even confrontation.
Take, for instance, who should decide if, and when, a reclinable airline seat can recline. As Mine! details, “one of the oldest justifications for ownership” is “it’s mine because it’s connected to something of mine.” The person who wishes to recline can point to their seat having a recline button. But when the flight began, passengers were told seats must remain “in their full, upright and locked position.” Initially, at least, the space belonged to the person seated behind. “First come, first served,” Mine! reminds, is a powerful rule of thumb. Mine! explains how some passengers go so far as to buy a “Knee Defender”—a device that blocks a seat from reclining—to forcefully claim possession. Heller and Salzman reveal how “the law is silent” on the recline decision. Governments let airlines decide and airlines, in turn, rely on what the authors term “strategic ambiguity” so that passengers are deliberately left unsure (flight attendants noticeably omit discussion of the recline button during announcements). Airlines can then “sell the same space twice on every flight.”
Similar types of “ownership” disputes, Mine! explores, are found in athletes’ careers. Heller and Salzman explain the history of the “reserve clause,” which from 1879 to 1975 allowed baseball teams to “own” players’ employment and prevent them from changing teams. Teams were permitted to renew players’ contracts on a year-to-year basis and with modest raises. Curt Flood challenged the clause in the U.S. Supreme Court in 1972 and, a few years later, arbitration hearings led to its demise. But Heller and Salzman explore how similar restraints persist. They write about the NCAA’s ability to control the labor, scholarship dollar amounts, name, image and likeness of college athletes. The NCAA’s control has come under legal fire, including in NCAA v. Alston and in NIL legislative efforts, but largely remains in place.
The book also delves into legal covenants that inhibit sports team employees and others. Mine! notes that about 20% of American workers are subject to noncompete clauses and related measures. These restrictions block a worker from joining a competitor business, in some cases for many months after employment ends. Coders in tech companies, doctors employed by hospitals and actors on TV shows are frequent targets. As Mine! explores, warehouse workers, hair stylists, yoga instructors, teenage camp counselors and fast food workers are expected to sign them. Even in states where noncompetes are unenforceable under the law, Heller and Salzman stress that employers “routinely insert [them] in employment contracts.” This is because “people often wrongly believe their signature binds them, even to illegal terms.”
Pro teams frequently rely on a similar device to “own” employment: nondisclosure agreements or NDAs. These agreements normally prohibit employees and former employees from disclosing trade secrets and other proprietary information. Failure to adhere to an NDA can trigger a breach of contract lawsuit, with ex-employees at risk of paying monetary damages to their old company. NDAs can appear in employment contracts and employee handbooks. Their enforceability depends on state law and often requires they be limited to specific, carefully defined categories deemed essential to an employer’s operations.
The use of NDAs in pro sports has received the attention of legal commentators, including in Protecting Big Data in the Big Leagues by Lara Grow and Nathaniel Grow, and Roger Allan Ford’s Trade Secrets and Information Security in the Age of Sports Analytics. NDAs can cover numerous categories of insights on players and team decision-making, including analytics, playbooks, signals used during games, scouting reports, trade proposals, biometric measurements, player health reports and dietary strategies.
An NBA team executive told Sportico, “Every [NBA] team uses NDAs, and it’s no different from the high tech industry or other industries where information is prized.” The executive added it’s not only scouts and other talent evaluators who must sign NDAs. Trainers, video production staff and anyone who gains insights are also bound.
Heller and Salzman worry about the prevalence of NDAs, including by teams, and how they limit the sharing of knowledge and can be overly broad.
“Consider an analytics staffer,” Heller and Salzman told Sportico in an interview, “who toils away deep into the night, night after night, breaking down every aspect of data that can give his or her team an edge on the floor. When another team offers a better offer, as a society don’t we want that person to have the chance to progress in their careers? NDAs block that.”
At the same time, Heller and Salzman acknowledge that teams must protect trade secrets. “The challenge,” they explain, “is how to protect sports teams’ data but not harm their staff. You don’t want your precious data walking out the door to your competitor. But what we have at the moment is over-protection—NDAs reaching deep into the organization that are likely unenforceable in many states.”
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