Employment & Labor Insider

EDITOR’S NOTE: A version of this article was previously published on Forbes.com.

Last week, Lauren Leichtman and Arthur Levine, the owners of the San Diego Wave women’s pro soccer club, sued the club’s former President, Jill Ellis, alleging that she fraudulently told the owners that she would remain with the club after they acquired it in October 2024. (Ms. Ellis was coach of the U.S. Women’s National Soccer Team when they dominated the world for an extended period of time.)

Ms. Ellis’ attorney countered that the lawsuit came only after Ms. Ellis requested $1.2 million owed to her in deferred compensation.

The litigation reveals that Jessica Berman, Commissioner of the National Women’s Soccer League, does not seem to have the authority typical of commissioners in sports.

Commissioner authority historically

The first commissioner in professional sports was baseball’s Kennesaw Mountain Landis. He was appointed in 1920 to respond to the Black Sox scandal, in which players on the Chicago White Sox were found to have thrown the 1919 World Series in exchange for payments from mobsters. Since the hiring of Commissioner Landis, the role of the commissioner in sports has been understood as one having broad authority to govern the sport according to what the commissioner believes to be in the sport’s best interests.

Courts have regularly rejected challenges to decisions made by the Commissioner of Major League Baseball and its predecessors. In 1931, a federal court in Illinois dismissed a suit from the then-minor league Milwaukee Brewers challenging Commissioner Landis’ rejection of an optional player contract between the St. Louis Browns and the Brewers, holding that “the commissioner acted clearly within his authority.” In 1977, a federal judge in Georgia held that Commissioner Bowie Kuhn had the authority to discipline the Atlanta Braves for violations of a recently imposed no-tampering policy under his broad authority to act “in the best interests of baseball.” The next year, a federal appeals court affirmed a decision upholding Commissioner Kuhn’s authority on the same ground to disallow the Oakland Athletics’ sale of left fielder Joe Rudi and pitcher Rollie Fingers to the Boston Red Sox for $2 million, and pitcher Vida Blue to the New York Yankees for $1.5 million.

Courts have also regularly rejected lawsuits brought by players in the National Football League and their Players Association challenging the authority of Commissioner Roger Goodell to adjudicate player disciplinary matters. The courts typically cite the Commissioner’s broad authority as agreed to in the collective bargaining agreement between the NFL and the NFL Players Association.

Disputes go private

At some point, the various sports leagues realized that the intra-league disputes that exposed baseball’s dirty laundry in the 1970s would be better resolved in a non-public forum. To that end, all of the major North American pro sports leagues now have provisions in their governing documents (for example, a Constitution and Bylaws) that require most disputes about league business to be decided in an arbitration presided over by the Commissioner or the Commissioner’s designee. In addition to providing privacy, these processes were intended to ensure that “the best interests of the sport” were taken into account.

The arbitration provisions also extend to disputes between clubs and their employees because employees of professional sports teams generally agree to abide by league rules, typically via an Employee Handbook.

Commissioner authority now uncertain

The broad authority of commissioners to adjudicate disputes within their leagues is currently experiencing unprecedented uncertainty. In August, the U.S. Court of Appeals for the Second Circuit held that Commissioner Goodell could not be the arbitrator in an action initiated by Coach Brian Flores alleging that the NFL and several clubs had racially discriminatory hiring practices. Just days before that, the Nevada Supreme Court ruled that permitting Commissioner Goodell to arbitrate a dispute between former coach Jon Gruden and the NFL would be “unconscionable.”

The Second Circuit explained that its ruling did not alter prior decisions in which it had upheld the broad authority of the NFL Commissioner to be the arbitrator in disputes over player conduct. The important distinction is that the player conduct arbitration process was negotiated with and agreed to by the NFL Players Association, whereas Mr. Flores and Mr. Gruden had no meaningful opportunity to negotiate over the NFL’s arbitration process.

Back to Berman: Commissioner authority in women’s soccer

Commissioner Jessica Berman is no stranger to commissioner authority. She started her career as an attorney at Proskauer Rose, a law firm that regularly assists sports leagues and teams in employment litigation and arbitration. Next, Commissioner Berman spent 13 years as an attorney at the National Hockey League, including many years as one of the league’s top attorneys negotiating with players.

After she took over in April 2022 as Commissioner of the NWSL, Ms. Berman was steadfast in asserting her apparent authority to address some of the league’s problems. After two separate investigative reports were issued in the fall of 2022 that identified numerous instances of sexual, racial, and other inappropriate comments and misbehavior by NWSL coaches and executives, the NWSL announced that Commissioner Berman had banned five coaches from the league permanently and banned two others until 2025.

Yet the lawsuit by the San Diego Wave against President Ellis suggests that Commissioner Berman does not have the same broad authority of commissioners in other leagues. Specifically, it does not seem that the NWSL’s operating documents (including the limited liability company agreement among its club-members), require that disputes between teams and their employees be subject to arbitration before the Commissioner. 

Although Jill Ellis might have challenged Commissioner Berman’s authority to adjudicate the dispute a la Mr. Flores and Mr. Gruden, the absence of such a provision is an own goal for the NWSL. At a time when the NWSL is growing but also facing increased competition domestically and internationally, it is unhelpful to have a public lawsuit involving one of its clubs and one of the most successful soccer coaches in recent memory (women’s or otherwise).  If the lawsuit proceeds, there will almost certainly be the public disclosure of facts, claims, and documents that the NWSL would prefer to keep private. One wonders how carefully the Wave’s owners and attorneys considered these issues before filing their lawsuit.