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No more free California arbitration for fighters or managers?

By Zach Arnold | May 13, 2015

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Some very interesting and perhaps important changes are being debated in the California Legislature to amend the way business is handled by the California State Athletic Commission.

Senate Bill 469, amended on April 22nd, includes several key amendments.

No more free arbitration for fighter/manager contract disputes

“Under existing regulation, a person who seeks arbitration of a contract dispute is required to send a written request for arbitration to the commission and to the Office of the Attorney General, as specified.

“This bill would codify these regulatory provisions in statute and would authorize the commission to recover the costs for the arbitration from the parties subject to the arbitration.”

Question: how will indigent, cash-strapped fighters who can barely afford legal representation be able to afford the costs of paying both the athletic commission & the Attorney General’s office?

A change in the fine structure for fighters who fail drug tests

B & P code section 18843 says the Athletic Commission can fine a fighter up to $2,500 for each violation. The new Senate bill would change the fine limit:

“(b) Notwithstanding any other provision, the commission may also assess a fine equal to __percent of the total purse for a violation of Section 18649 related to the use of prohibited substances.”

On Monday (May 11th), SB 469 passed the Senate Appropriations committee on a 7-0 vote.

The bill has now been placed on the “suspense file,” meaning it will be revisited after a new budget is passed in order to analyze what the economic impact of the bill will be.

Emergency appropriations bill to pay out lawsuit cash to Sarah Waklee & Dwayne Woodard

Senate Bill 302, introduced on February 23rd and amended on May 7th, would appropriate $141,250 from the Athletic Commission to help pay for some of the proposed lawsuit settlements that the Department of Consumer Affairs & the Athletic Commission have reached with former athletic inspector/front office employee Sarah Waklee and veteran athletic inspector Dwayne Woodard.

SB-302 requests $71,250 to DCA to help pay for a $95,000 settlement to Waklee on her sexual harassment & hostile workplace lawsuit. SB-302 also requests $70,000 of Athletic Commission budget money to help pay for a settlement with Dwayne Woodard.

You can view the legislative text here and print off a PDF.

What makes the appropriations bill interesting reading is that while it does not reveal the full amount of the settlements paid to both Waklee & Woodard, it does completely erase any sort of confidentiality with these settlement agreements when you have both settlements being openly discussed in both the state Legislature and also on Athletic Commission budget sheets.

It is also interesting to note that DCA is dumping a fairly good amount of settlement charges on Andy Foster’s yearly budget when he personally had no involvement in the causes of action alleged in the two lawsuits.

The appropriations bill passed on the Senate floor Monday by a 35-0 vote. It’s now being fast-tracked over the state Assembly.

Disclosure of private settlement details made public by Legislature

Incredibly, a state Senate floor analysis released on May 8th spilled the beans regarding the settlement process for both the Sarah Waklee & Dwayne Woodard lawsuit settlements.

If the Department of Consumer Affairs wanted these details private, the state Legislature did the opposite.

Senate analysis of Sarah Waklee settlement

Sarah Waklee v. California State Athletic Commission, Department of Consumer Affairs.

(Sacramento County Superior Court, Case No. 2012-00135227)

$71,250 settlement, payable from the Athletic Commission Fund.

This lawsuit resulted from an employment dispute. The complaint was filed by an employee of the State Athletic Commission, Sarah Waklee, who worked for the Commission since 2004, becoming Lead Athletic Inspector in 2007. Ms. Waklee filed suit in the Sacramento Superior Court on November 5, 2012, against the Department of Consumer Affairs (DCA) and several other employees of the Commission, alleging preferential treatment, harassment, and gender discrimination.

In late 2014, following depositions and upon calculating current and prospective litigation costs, the DCA, in consultation with the Attorney General’s office, negotiated and accepted a settlement agreement with Waklee. The settlement offer included a dismissal of the suit with prejudice; Waklee’s resignation from the Commission; and a payment to Waklee in the amount of $95,000.00 on or before June 30, 2015. DCA was able to absorb $23,750 within its existing spending authority. The appropriation in this bill will pay the remaining $71,250 from the Athletic Commission Fund.

The reason they revealed the settlement details? A rush to get the financial transaction done before the end of the Fiscal Year on June 30th.

As for the proposed settlement details on Woodard’s lawsuit? Key note: this appropriation deals with the hit the Athletic Commission is taking, not what hit DCA is taking here.

Dwayne Woodward v. California State Athletic Commission, Department of Consumer Affairs.

(Los Angeles County Superior Court, Case No.BC487180)

$70,000 settlement, payable from the Athletic Commission Fund.

This lawsuit also resulted from an employment dispute. The complaint was filed by an employee of the State Athletic Commission, Dwayne Woodward, a 30-year employee who worked for the Commission as an inspector. Mr. Woodward filed suit in the Los Angeles Superior Court in August of 2012 against DCA and the Commission, alleging, among other things, age discrimination, retaliation, and harassment in violation of the Fair Employment and Housing Act.

Woodward sought a total of $1.9 million in damages, including $750,000 for age discrimination, $750,000 for retaliation, $164,954.24 for lost earnings, $100,000 for attorney fees, and $123,715.68 for three years of future earnings. After several good-faith negotiations, the parties concluded that it would be in their best interests to settle their disputes to avoid the expense, inconvenience, and uncertainty of a trial. The January 15, 2015 settlement calls for dismissal of the suit with prejudice, and a payment from DCA to the plaintiff in the amount of $70,000 (with $35,000 due by June 30, 2015, and $35,000 due by July 15, 2015). This claim is to be paid through an appropriation from the Athletic Commission Fund.

Compare and contrast the language of the Senate analysis on the two lawsuit settlements. The analysis on Sarah Waklee’s lawsuit settlement basically said that DCA calculated it would cost them more in AG fees than it would be to pay the settlement and get the matter over with.

The analysis on Dwayne Woodard’s case is couched in much different terms. “Good-faith negotiations.” I suspect we will find out just how good faith those negotiations really were in future state documentation.

Their definition of confidential is certainly different than mine. Why would any attorney negotiating a settlement with the state of California believe that such settlements would be kept confidential if they are disclosed in appropriations? A unique situation where the state government is actually transparent for a change.

Topics: CSAC, Media, Zach Arnold | 1 Comment » | Permalink | Trackback |

One Response to “No more free California arbitration for fighters or managers?”

  1. George Dodd says:

    I would hope there is some consideration when arbitrating with fighters that have no money. These fighters that are just starting out and trying to get noticed, usually sign with promoters without having anyone review the contract and then at times left to come before arbitration with a family member that has no background in legal matters. They would be at a disadvantage when going up against a promoter that has deep pockets and a legal team to protect them. That is why arbitration was made available to protect these fighters and now they will be at a disadvantage.


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