Student Athlete Drug Testing Policies

Vernonia School District v. Acton 47J, 515 U.S. 646 (1995), was a U.S. Supreme Court decision which upheld random drug testing policies of student athletes in public schools. In Vernonia, the drug testing had been preceded by a series of attempts to eradicate drugs and widespread drug-related disciplinary problems. The District Court found that athletes were “the leaders of the drug culture.” (796 F. Supp. 1354, 1357). Initially, the District tried to tackle the issue by introducing special “drug problem” classes, speakers, and presentations designed to deter drug use, and even conducted K9 sniff searches – but to no avail. Disciplinary problems “had reached epidemic proportions,” at which point random drug testing appeared to be the only choice.

The school tested 10% of the athletes and the samples were sent to an independent laboratory, which is a common procedure under the WADA rules (World Anti-Doping Agency). The search is uncomfortable and intrusive. As a professional athlete, I have been tested many times, and can still be tested at any time, even at home, upon a 24-hour notice. Repercussions are severe: if I were found with any prohibited substance in my system, I would suffer a 2-year ban in  swimming and a lifetime ban in bodybuilding, not to mention the social stigma (being posted up in the Hall of Shame and publicly known as a “juicer”).

In Vernonia, WADA rules were followed: if a sample tested positive, a second test was administered as soon as possible to confirm the result (two samples A and B are collected from athletes and, if A is positive, sample B is tested). If the second test was positive, the athlete’s parents were notified, and the school principal would convene a meeting with the student and his parents, at which the student is given the option of either:

  • participating for six weeks in an assistance program that includes weekly urinalysis, or
  • suffering suspension from athletics for the remainder of the current season and the next athletic season.

The Policy stated that “a second offense results in automatic imposition of” suspension for the current season, and a third offense “in suspension for the remainder of the current season and the next two athletic seasons.” Such rules are very lenient in comparison to the consequences professional athletes would suffer in similar cases. Perhaps, the school should have invited a professional athlete, someone from the NFL or NBA, widely admired by the students, to explain the consequences to them.

Implications

The Fourth Amendment to the United States Constitution provides that the Federal Government shall not violate “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” The Fourth Amendment is applicable to the states via the Fourteenth Amendment (e.g. New Jersey v. T.L.O., 469 U.S. 325, 336-337 (1985)). The High Court held in Skinner v. Railway Labor Executives’ Assn., 489 U.S. 602, 617 (1989), that drug testing of urine constitutes a “search” under the Fourth Amendment.

The search must be reasonable, which means it must be only as intrusive as necessary to promote “legitimate governmental interests” (Skinner, supra, at 619 – quoting Delaware v. Prouse, 440 U.S. 648, 654 (1979)). Where searches are conducted by law enforcement, reasonableness implies that the police must obtain a warrant, issued upon a showing of probable cause. Nevertheless, warrantless searches may be reasonable where special needs exist, “beyond the normal need for law enforcement.” (Griffin v. Wisconsin, 483 U.S. 868, 873 (1987))

In T.L.O. (at 340, 341), the High Court found such “special needs” may exist in the public school context, where the warrant requirement “would unduly interfere with the maintenance of the swift and informal disciplinary procedures” and the need to maintain order in the schools. The key to a warrantless search in T.L.O. was “individualized suspicion of wrongdoing.”

In Vernonia, the High Court considered:

1)      the nature of the privacy interest upon which the search at issue intruded: under the Fourth Amendment, only “legitimate” privacy interests are protected;

2)      supervisory (in loco parentis) relationship between students and school actors: the “custodial and tutelary responsibility for children” which includes vaccinations, medical checks and screenings, etc. – therefore, students “within the school environment have a lesser expectation of privacy than members of the population generally.” (T.L.O., 469 U.S., at 348);

3)      the special status of athletes, holding that “legitimate privacy expectations are even less with regard to student athletes” because they change in locker rooms, conduct contact activities, shower together, etc. – activities that the High Court characterized summarily as containing “an element of `communal undress’ inherent in athletic participation.” (citing Schaill by Kross v. Tippecanoe County School Corp., 864 F. 2d 1309, 1318 (1988));

4)      the “compelling need” for the program (796 F. Supp., at 1363) – in other words, a “compelling state interest.”

The High Court ruled that all these points were met in Vernonia. It also developed and elucidated upon the defendants’ point that drugs are inherently dangerous to the young organism, the “role model” affects athletes’ drug use, and that, therefore, the “least intrusive” search practicable under the Fourth Amendment was not practicable in this case.

Taking into account “the decreased expectation of privacy, the relative unobtrusiveness of the search, and the severity of the need met by the search,” the High Court concluded that Vernonia’s Policy was “reasonable and hence constitutional.”

Conclusion

Suspicionless warrantless drug testing will likely be challenged again. The school officials must beware of the key criteria: minimal intrusiveness of the search in view of the age and sex of the students, and their status as guardians and tutors whose rights are given to them by children’s parents. Therefore, the district and schools must develop a unified, clear policy and obtain parents’ consent.

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Remedies under Title VII

Summary of Damages

A broad range of remedies are available in Title VII actions, which include compensatory and punitive damages in cases involving intentional discrimination based on a person’s race, color, national origin, sex (including pregnancy, gender identity, and sexual orientation), religion, disability, or genetic information.

Compensatory damages include the lost income, potential income differential (had the employee been promoted), and loss of future income, if any. Costs associated with employment search or even compensation for emotional harm may be included.

Punitive damages are rare but may be awarded to punish an employer who has committed an especially malicious or reckless act of discrimination.
There are limits on the amount of compensatory and punitive damages a person can recover. These limits vary depending on the size of the employer:
– For employers with 15-100 employees, the limit is $50,000.
– For employers with 101-200 employees, the limit is $100,000.
– For employers with 201-500 employees, the limit is $200,000.
– For employers with more than 500 employees, the limit is $300,000 (FindLaw, 2019).

In cases involving intentional age discrimination or “sex-based wage discrimination” under the Equal Pay Act, victims cannot recover either compensatory or punitive damages, but may be entitled to “liquidated damages” equal to back pay (Id.).

Back Pay

Back pay under Title VII includes primarily the loss of income, but may also include the loss of benefits (such as pension and insurance benefits), vacation time, bonuses, and pay raises. Back pay is limited by 2 years prior to the filing of the EEOC claim.

Reinstatement or Front Pay

The court may order the employer to rehire the employee (or remedy the action by other means: if the employee claims she should have been promoted or was unjustifiably and wrongfully demoted). If it seems unreasonable because the employer-employee relationship has so deteriorated that they cannot cooperate (e.g. Patterson v. Masem, 594 F. Supp. 386, supra) the court may award “front pay,” which is to compensate for the time it will take the plaintiff to find a new position, as well as the potential wage disparity between the old and the new job. Again, this may include more than just wages – but also the value of lost bonuses, commissions and employee benefits.

Equitable Relief

“Equitable relief” in Title VII cases means relief which puts the plaintiff into the economic position he would have been in had the discrimination not occurred. This usually includes back pay and either front pay (see above) or an order requiring the employer to place the employee in the job position he was denied due to discrimination (Fl litig8r, 2012).

Compensatory and Punitive Damages

Compensatory damages under Title VII means primarily emotional distress. Because such damages are vague (often requiring an expert to testify), there are mandatory caps on them (stated above).

Punitive damages are awarded rarely, even where intent is proven. The courts look for more than intent, such as malice or ill-will, intentional violation coupled with managerial authority and clear lack of good faith in enforcing anti-discrimination policies. Punitive damages are not available in a law suit against a governmental employer.

The combined award of punitive and compensatory damages may not exceed the caps stated above (Fl litig8r, 2012).

Avoidable Consequences and Mitigation

If the employer is able to rebut the first claim (of disparate treatment), and the court acknowledges that the employer’s motives may have been “mixed,” it will commonly award the attorney fees but no other remedy.

The doctrine of Avoidable Consequences means that plaintiff’s recoverable damages will not include those damages that the plaintiff could have avoided with reasonable effort and without undue risk, expense, or humiliation. The court in Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998, pp. 765, 1036), and Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (p. 807, 1998) stated that, in an employee’s action under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) seeking damages for workplace sexual harassment not involving a “tangible employment action,” (such as demotion or termination) an employer “may establish a partial or complete defense” by proving:

  • That the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and
  • That the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

This doctrine often mitigates or completely eviscerates plaintiff’s rights to damages.

Attorney Fees

Last but not least (certainly for attorneys), attorney fees will be awarded to the prevailing plaintiff under Title VII. These fees are usually based on the reasonable hourly rates for attorneys of equivalent experience in the same area. If the court concludes that the plaintiff pursued (or continued to pursue, upon adjudication) the case frivolously and without merit, attorney fees may be awarded to the defendant. This happens rarely, because meritless litigation is often grounds for reprimand, suspension, or even legal malpractice.

– – –

References:

Essex, N. L. (2016). School Law and the Public Schools. Memphis, TN: Pearson Education Press.

FindLaw (2019). Title IX Remedies and Criticisms. Thomson Reuters. Retrieved from https://education.findlaw.com/discrimination-harassment-at-school/title-ix-remedies-and-criticisms.html

Fl litig8r (2012). Damages in Title VII Employment Discrimination Case. Retrieved from http://www.workplacediscriminationlaw.com/damages-in-a-title-vii-employment-discrimination-case/

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Nandrolone in Judo? Bouras v. IJF

The case is that of Bouras v. International Judo Federation (Court of Arbitration for Sport (CAS) Lausanne, 20.12.99, CAS 99/A/230). What was at issue for Bouras was the length of suspension and whether the results achieved while the doping tests had not yet been announced were valid and the athlete could thus keep his trophies.

Djamel Bouras was a judoka and member of the French Judo Federation (FFJDA). At the request of the French Ministry of Youth and Sport, Bouras was subjected to an out-of-competition drug test on 2 October 1997. He tested positive. On 18 April 1998, the FFJDA Anti-doping Commission, to which the case had been referred, decided to impose a two-year suspension on Bouras, with one year suspended.

Bouras filed an appeal against this decision with the FFJDA Anti-Doping Appeals Commission, which decided that the case was outside its jurisdiction. The French Minister of Youth and Sport then asked the National Anti-Doping Commission for its opinion. The Commission suggested that the sanction imposed by the FFJDA should not be increased because of doubts surrounding the origin of the nandrolone metabolites found in Bouras’ samples.

Based on this opinion, the Minister of Youth and Sport ruled in a decree of 9 July 1998 that Bouras should be suspended for one year. The International Judo Federation (IJF) took up the case and its Executive Committee heard the athlete and the FFJDA President on 9 October 1998. On 10 October 1998, since Bouras had said that a further analysis was about to prove his innocence, the IJF Executive Committee postponed its final decision, considering that Bouras had been suspended since 2 October 1997.

On 14 October 1998, Djamel Bouras appealed to the CAS, which decided to set aside the IJF’s decision of 10 October and to suspend Bouras for fifteen months, i.e. until 19 March 1999, taking into account the period of suspension already served (“time served”). On the basis of this decision, the IJF decided to nullify the results achieved by Bouras at the World Championships in Paris in October 1997 and to withdraw the silver medal awarded on that occasion.

On 25 June 1999, Bouras filed an appeal against this decision with the CAS, arguing that: 1) the IJF’s decision had been taken without the involvement of both parties; 2) the IJF had not been competent to rule on the case once it had been referred to the CAS; 3) under the “non bis in idem” rule, disciplinary action could not be taken against an athlete more than once for the same offence (our “double jeopardy”); 4) since the test had not been carried out during a competition, the IJF’s decision had no legal foundation.

On 30 August 1999, the IJF filed its response, in which it stated that a distinction should be drawn between the disciplinary sanction, i.e. suspension, and the sporting sanction, i.e. disqualification and forfeiture of the medal, which it thought were automatic.

The CAS declared Bouras’ appeal admissible and set aside the decision taken by the IJF Executive Committee in April 1999, in which it disqualified the appellant from the 1997 World Championships and ordered the forfeiture of the medal he won on that occasion. The grounds for this decision were, firstly, that the decision to disqualify the athlete had no valid foundation either in the IJF Anti-doping Regulations, which at the time made no provision for out-of-competition drug tests, nor in the IOC Medical Code, which only made provision for suspension, rather than disqualification, as a result of this type of test. Furthermore, the appellant’s results could not be invalidated, since he had not been suspended when participating in the World Championships. At the time of the event, the IJF regulations stated that suspensions should begin on the date on which the test result was announced rather than the day when the sample was given.

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May a Banned Athlete Sue for Economic Damages?

The issue above was answered by the High Court in 1997 in the case of Edvards v. BAF (High Court of Justice, Chancery Division, United Kingdom, 23.6.97). Let us examine it closer.

The substance in question in the case below is not mentioned. However, we know that the most favored anabolic steroid among powerlifters is Deca (Nandrolone), also mentioned in the previous article, and Dianabol. Many athletes take Deca because it fuels the synovial fluid and helps joints recover and endure the stress of high poundage. Dianabol increases nitrogen retention and protein synthesis. It is the only steroid that was developed (by the Russians, of course) in order to enhance athletic performance.

Paul M. Edwards was an amateur athlete and member of the British Athletic Federation. On 22 October 1994, pursuant to the rules of the IAAF, the British Athletic Federation suspended Edwards for four years after he tested positive for anabolic steroids. He became a tabloid piece and was never overly hypocritical about the use. Once he claimed that the tests were wrong because “all his ampules were broken by the airport handlers,” indicating that, therefore, he was “drug-free.”

Subsequently, Edwards applied to the IAAF for reinstatement, asking for remission of the last two years of the ban. His application was refused. Hence, Edwards sued BAF, challenging the lawfulness of this refusal on the grounds that similar requests by other athletes had been granted. These “other athletes” were members of other athletic associations both within and outside the European Union (EU) whose local laws limited the length of such bans to two years (we have already mentioned in a previous post the case of Katrin Krabbe whose suspension in excess of two years was held “disproportionate to a first offence of doping” by the Munich Appeals Court).

Following Krabbe’s decision, the German Athletic Federation wrote to the IAAF Council, requesting that it reinstate two of its members, Martin Bremer and Ms. Tiedkte, who had been suspended for four years under the IAAF Rules, on the grounds of “exceptional circumstances” as defined in IAAF Rule 60.8. The IAAF did so, specifying what the “exceptional circumstances” provided for in Rule 60.8 mean: they exist when an athlete’s national law (or court ruling) prohibits a four-year ban.

Several other athletes have been reinstated as a result, hence Edwards claimed that: 1. the IAAF could not lawfully treat his application differently because the four-year ban was lawful in Great Britain; 2. the refusal of his application constituted discrimination against him which was unlawful under the Treaty of Rome (Articles 59 to 66 – on freedom to provide services within the EU). The IAAF challenged this contention, while the British Athletic Federation adopted a neutral position.

The court first had to ask whether Edwards was providing services within the EU, within the meaning of Articles 59 to 66 of the Treaty of Rome. The second issue would be if Articles 59 to 66 applied to IAAF Rule 60, i.e. would his be considered “exceptional circumstances” and, if so, did the application by the IAAF of Rule 60 constitute discrimination on grounds of nationality in the sense prohibited under Articles 59 to 66 of the Treaty of Rome?

To put it in plain English: did the shot-putter have a job and was he making money, and would this restriction be that of “services” in the EU applied unevenly (4 years instead of 2).

Edwards contended that the four-year ban constituted interference with his freedom to earn his living as an athlete within the EU. Therefore the IAAF Rule 60 should be held invalid because it contravened Articles 59 to 66 of the Treaty of Rome. The IAAF maintained that Rule 60 lay outside the scope of Articles 59-66 because it was a “sporting rule” only. For instance a rule regarding the length of matches is a sporting rule. To what extent a “banned substance” positive finding prohibition could be considered merely a sporting rule was yet to be decided.

IAAF claimed that the purpose of IAAF Rule 60 was to regulate the sporting conduct of athletes and to ban cheating by taking drugs. The sanctions were therefore essential to the sport. Arguably, the four-year ban was reasonable and justified. Any economic consequences, however serious, were incidental to the sporting rule, whose primary goal was to regulate sporting conduct.

IAAF also showed that Rule 60 did not constitute discrimination based on nationality because it applied equally to all members, even though its impact was different in different states because of their national laws. There was no discriminatory intent in the rule itself. States have the right to determine the length of sanctions. German decisions Edwards cited had no precedential value in England, thus no value in the EU.

In conclusion, a sporting rule regarding prohibited substances is of more importance than any economic impact on the athlete it may have, simply because banning drugs in sport is more important – to both the health of the athlete as well as the quality and ethics of sport – than money. Athletes should always bear this in mind before they consider that first “shortcut” dose. Economic damages is a non-issue.

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Nandrolone in Long Distance Swimming

Nandrolone is one of the powerful androgenic steroids, available on the market under the trade name Deca-Durabolin. Its inevitable side effects include severe masculization in women, erectile dysfunction and gynecomastia in men, and cardiovascular damage in all. When you hear about the numerous bodybuilders who have died from heart disease or suffered from heart issues, Deca is the culprit.

This is a case of David Meca-Medina v. FINA and Igor Majcen v. FINA (Court of Arbitration for Sport, Lausanne, 29 February 2000, CAS 99/A/234 and CAS 99/A/235)

David Meca-Medina was a member of the Spanish Swimming Federation (for non-swimmers, FINA stands for “Fédération Internationale de Natation Amateur” transl. “International Amateur Swimming Federation”). Igor Majcen was a member of the Slovenian Swimming Federation (also FINA affiliate). They placed first and second respectively at the World Cup in Salvador de Bahia, Brazil, on 1/31/1999. They were tested at the end of the race. The two cases were heard jointly.

First, the plaintiff (FINA) must meet the burden of proof that a doping offence had been committed, which is provided by the positive test. The Sanction is issued and the defendants appeal the sanction, which is why we refer to them as appellants. The appellants (the swimmers here) must rebut this proof by showing how the substance got into their system and that they neither harbored the intent to use it nor were negligent in consumption of supplements that contained it.

The results obtained here showed consumption of nandrolone precursors (substances such as Nandrox, available on the market in a pill form – whereas Deca usually has to be injected), a recognized cause of several positive tests (CAS 98/214, Bouras v. IJF). The appellants argued that the source of the prohibited substance was their innocent consumption of pork the night before. This is so unlikely that it is laughable, but, being presented in court, they would have to have a solid proof, such as a piece of pork or an expert testifying thereto, which they failed to produce. Finally, the restraint on livelihood to the appellants’ freedom within the European Community was justified (Wilander v. Tobin (ITF), 1997; see also the previous case Johnson v. Athletics Canada and IAAF).

It must be added that Meca-Medina has made it more difficult for sports organizations and bodies to issue “sporting rules” – because in order for a sporting rule to be characterized as such by the court, it must not have an economic impact, which means it must be narrowly-tailored to the particular sport without affecting the athlete economically which, in today’s world, is practically impossible.

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Doping, Restraint of Trade, Denial of Natural Justice

 

Case of Johnson v Athletics Canada and IAAF (Ontario Court of Justice, Canada, 25.7.97)

Issues: Doping; lifetime ban; validity of sanction; restraint of trade; denial of natural justice

Ben Johnson, was banned for two years in 1988 at the Olympic Games in Seoul, where he ran 100m sprint in 9.79 second! He tested positive for stanozolol, the use of which his coach did not deny. He was attacked by Carl Lewis, who was given the gold medal. Linford Christie moved up to the silver medal and won gold at the next Games. All of them, including Dennis Mitchell and Desai Williams, were at some point suspected of doping.

In 1993, Ben Johnson competed in Montreal and was tested after the race. The sample tested positive and Johnson did not exercise his right of appeal under the rules of Athletics Canada (AC) and the International Amateur Athletics Federation (IAAF). He was therefore banned for life. Johnson applied to the Ontario Court of Justice for a declaration that the lifetime ban issued against him by AC and the IAAF, which barred his participation in athletics events, was contrary to the common law doctrine of restraint of trade.

In his application, Johnson claimed that he had not appealed because of apprehension regarding the partiality of the Appeal Committee. Johnson’s primary submission was that the lifetime ban constituted restraint of trade. He also claimed that he had been denied justice under Natural Law because the proceedings of the IAAF and AC in 1993 had been unfair.

Under the Restraint of Trade issue, Johnson contended that the lifetime ban constituted restraint of trade in the form of an activity from which he earned his livelihood. The Court of Justice accepted that the lifetime ban was in restraint of trade because AC and IAAF enabled Johnson to exploit his talents in order to earn a living. It was clear that the financial gain resulted from participation in competitions.

However, the ban was deemed reasonable and was not an illegal restraint of trade because it was necessary to protect Johnson from the effects of use of prohibited substances for the sake of his own health. It was also necessary to protect the right of athletes to fair competition and to know that the race involved only their own skill, strength and spirit rather than their pharmacologist. The public also had an interest in the protection of the integrity of the sport.

As to the Denial of Natural Justice, Johnson argued that the actions and proceedings of the IAAF and AC in 1993 had been unfair and that, as a result, he had been denied natural justice. The constituent elements of natural justice had been set out by the Supreme Court of Canada in the case of Lakeside Colony of Hutterian Brethren v Hoffer (1992): “The content of the principles of natural justice is flexible and depends on the circumstances in which the question arises. However, the most basic requirements are that of notice, opportunity to make representations and an unbiased tribunal.” Johnson was at all times represented by counsel, entitled to hearings and presentation of evidence, but had failed to avail himself of any of the various opportunities available to him for further hearings on the merits. Thus, degree of fairness under the Natural Law was met.

Ben Johnson’s case is actually one of the long line of stanozolol cases – so long that Wikipedia has its own entry: List of Doping in Sport, Stanozolol Sec. 1.6. Stanozolol abuse began almost immediately after it was discovered and brought to market in 1962 under the tradenames Winstrol and Stromba. It can be legitimately used in senile post-menopausal osteoporosis, debility in elderly patients, some gastrointestinal disorders, trauma, anemia, during post-operative convalescence, and it is also used as a veterinary drug to stimulate appetite and weight gain; but even in veterinary medicine, it is used sparingly because it may cause tumors.

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Clenbuterol – Spiropent Abuse in Sport

See the source image

I have recently seen a great increase in the abuse of the drug called Clenbuterol, available on the market under the brand name Spiropent, used by prescription only. It is a bronchodilator used for asthma. It has stimulating effects and is abused for its fat burning properties. It is on the WADA Prohibited List and strict sanctions apply when abused without a validly approved Therapeutic Exception.

The earliest case I recall is that of Katrin Zimmerman Krabbe v Deutscher Leichtathletik Verband (DLV) and International Amateur Athletic Federation (IAAF) (Munich Court of Appeal, Germany, 28 March 1996).

Katrin Krabbe was a German athlete, member of the German Athletics Federation (DLV). She tested positive for Clenbuterol and admitted taking it. She had no record of asthma and bought Spiropent on the black market. At that time, Clenbuterol was used for fattening up pigs and calves in order to increase their lean muscle mass.

She received a one-year suspension at first, which the DLV deemed insufficient and decided to suspend her for three years. Katrin Krabbe appealed to the District Court (Landgericht) for a declaratory judgment which would make the suspensions imposed by the DLV and IAAF inapplicable. Her request was dismissed by the District Court. The athlete then took her case to the Munich Court of Appeal.

The Court decided that the two penalties (DLV and IAAF) were separate. The one-year suspension imposed by the DLV was legally enforceable because the appellant was a member, purchased the annual Federation membership card and was thus contractually bound by the rules of the Federation.

According to Article 116 of the German Civil Code (BGB), an implicit contract existed between the athlete and the Federation. The same contract is binding under the US laws. The athlete tried to argue that since Clenbuterol was not on the DLV’s list of prohibited substances, it was presumed to be acceptable. The Court dismissed this argument because the DLV had rightly pointed out that the list of substances also banned the use of substances that had an identical effect to that of those on the list.

In other words, Katrin Krabbe had contravened the principles of sportsmanlike conduct and fair play by taking Spiropent bought on the black market – a substance for which a medical prescription was required – and by refusing to give accurate information on drug test forms. The evidence also showed that Katrin Krabbe was aware of the issues associated with abuse of Spiropent.

However, the IAAF rules did not provide for any review of DLV sanctions, and the court therefore deemed the IAAF sanction excessive. In compliance with IAAF Rule 54, the DLV had decided, via its Legal Committee, to impose a twelve-month suspension for violation of the principles of sporting behavior. Rule 54 was the rule applicable to non-doping cases. IAAF Rule 53.2.2 applied only if the disciplinary procedure described in Rule 54 had not been correctly followed by the National Federation. This implied that Rules 54 and 53.2 could not both be applied to the same case.

Rule 53 could not be used as a legal basis for the punishment of “unsportsmanlike conduct,” which had already been considered and sanctioned by the relevant national sports federation. Furthermore, if, contrary to the above, Rule 53.2 could serve as the legal basis for an extra sanction imposed by the IAAF, the extension of the suspension breached the principle of proportionality. The suspension of 3 years 9 months was excessive. It was generally accepted that a four-year suspension usually meant the end of an athlete’s career.

The DLV Legal Committee therefore considered a two-year ban to be the maximum for a first offence against the rules on doping. The same opinion was held by the “Deutsche Sportbund” and the IOC. Since “unsportsmalike conduct” was less serious than doping itself and since this was the athlete’s first offense, the IAAF’s sanction was excessive, disproportionate and unfair.

 

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Fiduciary Duty in Real Estate Transactions

When you employ a real estate broker or salesperson as your agent, you are the principal. The relationship of agent and principal is fiduciary in nature, founded on trust or confidence reposed by one person in the integrity and fidelity of another. Included in the fundamental duties of such a fiduciary are good faith and undivided loyalty, and full and fair disclosure. Such duties are imposed upon real estate licensees by license law, rules and regulations, contract law, the principals of the law of agency, and tort law. The object of these rigorous standards of performance is to secure fidelity from the agent to the principal and to insure the transaction of the business of the agency to the best advantage of the principal.

A real estate broker is strictly limited in his or her ability to act as a dual agent. As a fiduciary, a real estate broker is prohibited from serving as a dual agent representing parties with conflicting interests in the same transaction without the informed consent of the principals. If dual interests are to be served, the disclosure to be effective must lay bare the truth, without ambiguity or reservation, in all its stark significance.

A real estate agent must prove that prior to undertaking to act either as a dual agent or for an adverse interest, the agent made full and complete disclosure to all parties as a predicate for obtaining the consent of the principals to proceed in the undertaking. Both the rule and the affirmative defense of full disclosure are well settled in law. You may always object to the dual agency and not accede to the terms.

In a purchaser/seller transaction in which dual agency arises, the agent must not only clearly explain the existence of the dual agency issue and its implications to the parties, the agent must also obtain a written acknowledgment from the prospective purchaser and seller to dual agency. That acknowledgment requires each principal signing the form to confirm that they understand that the dual agent will be working for both the seller and buyer, that they understand that they may engage their own agent to act solely for them, that they understand that they are giving up their right to the agent’s undivided loyalty, and that they have carefully considered the possible consequences of a dual agency relationship.

The fiduciary duty of loyalty that your real estate agent owes to you prohibits your agent from advancing any interests adverse to yours or conducting your business to benefit the agent or others.

Significantly, by consenting to dual agency, you are giving up your right to have your agent be loyal to you, since your agent is now also representing your adversary. Once you give up that duty of loyalty, the agent can advance interests adverse to yours. For example, once you agree to dual agency, you may need to be careful about what you say to your agent because, although your agent still cannot breach any confidences, your agent may not necessarily use the information you give him or her in a way that advances your interests but, rather, those of the other party.

As a principal in a real estate transaction, you should always know that you have the right to be represented by an agent who is loyal only to you throughout the entire transaction. Your agent’s fiduciary duties to you need never be compromised.

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Predatory Lending

predatory-lending

There is no simple checklist for determining whether a particular loan or loan program is predatory. Loan terms that are helpful to one borrower may be harmful to others. For example, it is important to distinguish subprime lending from predatory lending. Subprime lending includes loans to persons who present heightened credit risk because they have experienced problems repaying credit in the past, or because they have only a limited credit history. Loans that serve these borrowers have a legitimate place in the market when they have been responsibly underwritten, priced and administered. Predatory lending, on the other hand, is not limited to one class of borrowers. Signs of predatory lending include the lack of a fair exchange of value or loan pricing that reaches beyond the risk that a borrower represents or other customary standards.

As a general rule, predatory lending involves at least one, and perhaps all three, of the following elements:

  • Making unaffordable loans based on the assets of the borrower rather than on the borrower’s ability to repay an obligation;
  • Inducing a borrower to refinance a loan repeatedly in order to charge high points and fees each time the loan is refinanced (“loan flipping”); or
  • Engaging in fraud or deception to conceal the true nature of the loan obligation, or ancillary products, from an unsuspecting or unsophisticated borrower.”

The Community Reinvestment Act (CRA) examination process reviews each bank’s record, based on the standards appropriate for its size and operation. Predatory lending can have a negative effect on a bank’s CRA performance, specifically, including violations of: the Fair Housing Act and the Equal Credit Opportunity Act involving discriminatory credit practices; the Truth in Lending Act, regarding rescission of certain mortgage transactions, and regarding disclosures and certain loan term restrictions in connection with credit transactions subject to the Home Ownership and Equity Protection Act; the Real Estate Settlement Procedures Act regarding the giving and accepting of referral fees, unearned fees or kickbacks in connection with certain mortgage transactions; and the Federal Trade Commission Act regarding unfair or deceptive acts or practices. Other practices may warrant the inclusion of comments in an institution’s performance evaluation. These comments may address the institution’s policies, procedures, training programs, and internal assessment efforts.

Predatory lending harms individuals and communities and raises risk management and consumer compliance concerns for financial institutions. Predatory loans can have a negative impact on a bank’s CRA evaluation. The loans may violate fair lending laws and other consumer protection laws, resulting in legal or regulatory action. Questionable loan underwriting and the risk of litigation raise additional safety and soundness concerns.

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To Terminate or Not to Terminate

Termination of employment document

Termination of employment document

 

California Labor Code §1400 affords us the following definitions: under Sec. (c) layoff means a “separation from a position for lack of funds or lack of work.” This means that there is no fault on the part of the employee for a layoff and the employee may be eligible for unemployment and other benefits.

The same paragraph, Sec. (f) defines the word “termination” as “the cessation or substantial cessation of industrial or commercial operations in a covered establishment.” Thus TERMINATION and LAYOFF are the same, but while the former refers to the termination of the business, the latter terminates the employee. Again, there is no stigma attached to “termination.”

What does “being fired” mean in this context? The state of California follows the “at will” presumption, which means that in the absence of an employment contract, there is a presumed “at will” employment. Under “at will” an employee can be fired for any reason or no reason at all, but the reason, if any, may not be unlawful. Unlike with a layoff or termination, the term “I was fired” usually carries the stigma of “for a cause,” such as being late to work, or not performing one’s duties. Employers who are “firing” their at will employees for “lack of funds or lack of work” should therefore use the term layoff or state that they are “terminating” the employment.

The most common “unlawful reason” for firing an employee is usually some kind of public policy violation, which may amount to “wrongful termination.” If there is an apparent “causal connection” between the policy violation, there may be sufficient grounds for a “wrongful termination” action. This causal connection is often in the form of a retaliation against the employee for something he or she has rightfully done:

If an employer discharged an employee in violation of rights granted by the First Amendment to the US Constitution.

If an employer violates his or her own discharge policy (written or implied).

If an employer the employment-related provisions in the Bankruptcy act or Fair Credit Reporting Act.

If an employer violates of a federal or state discrimination law.

If an employer discharged or fired an employee in retaliation for whistle blowing, wage garnishing, exercising union rights, serving in a military, and legally taking a leave under the Family and Medical Leave Act.

Interestingly, some courts (though not all) also recognize the Good Faith and Fair Dealing exception to At-Will Employment. This is a contract concept, which states that although employees are employed “at will,” there is a covenant of good faith and fair dealing between them and the employer, prescribing the latter to treat them fairly: the employer may not be transferring employees to prevent them from collecting sales commissions, misleading them about their chances for promotions and wage increases, fabricating reasons for firing an employee when the real motivation is to replace that employee with someone who will work for lower pay, repeatedly transferring an employee to remote, dangerous, or otherwise undesirable assignments to coerce the employee into quitting without collecting severance pay or other benefits that would normally be due.

 

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