Edvard Pettersson

(CN) — Former Las Vegas Raiders head coach Jon Gruden will have to go through arbitration to pursue his claims that the National Football League leaked purportedly homophobic and misogynistic emails by him to the media, which forced him to resign from the Raiders in 2021.

The Nevada Supreme Court on Tuesday sided with the NFL and reversed a state court judge who had denied the league's request to compel arbitration.

In a split decision by a three-judge panel of the state's top court, Chief Justice Elissa Cadish and Justice Kristina Pickering said that, contrary to what a judge in Las Vegas decided two years ago, Gruden can't rely on his lawyer's representations to argue that a confidential settlement with the Raiders after his resignation ended his agreement to arbitrate disputes with the league.

"The settlement agreement is not in the record, and the district court improperly relied on counsel's statements about it over the NFL parties' objection," the majority wrote. "Because Gruden did not disclose the settlement agreement or offer any evidence as to its contents, he failed to establish that it rescinded the employment agreement and its arbitration obligations, and the district court's finding to the contrary was not based on substantial evidence."

Likewise, the two-judge majority found the lower court judge was wrong in agreeing with Gruden that the arbitration agreement in his contract was "unconscionable" and couldn't be enforced.

Not only did Gruden expressly acknowledge in signing the most lucrative coaching contract in NFL history that he understood the terms of the league's constitution and its arbitration provisions, he was represented by a top agent and was the very definition of a "sophisticated party," the majority found.

As to his argument that the arbitration is substantively unconscionable because NFL Commissioner Roger Goodell, a defendant in Gruden's lawsuit, could end up being the arbitrator adjudicating Gruden's claims, the majority said it wasn't clear that Goodell would actually be the arbitrator and that he could designate a third party to handle the dispute.

Legally, however, the judges said that since the arbitration agreement isn't procedurally unconscionable, Gruden can't argue that it's substantively unconscionable either.

By having to resolve his claims through arbitration, Gruden loses substantial leverage in possible settlement negotiations with the NFL because the league doesn't need to worry about a hostile trial jury awarding a huge amount of damages to the former Raiders coach.

“The panel’s split decision would leave Nevada an outlier where an employer can unilaterally determine whether an employee’s dispute must go to arbitration and also allow the employer to adjudicate the dispute as the arbitrator," Adam Hosmer-Henner, Gruden's attorney, said.

"We certainly agree with the dissent’s characterization of the NFL’s position as outrageous and unconscionable and intend to ask the full Nevada Supreme Court to resolve these important issues through en banc reconsideration.”

Inside Allegiant Stadium in Las Vegas, Nevada. (Martin Kidston/Missoula Current)
Inside Allegiant Stadium in Las Vegas, Nevada. (Martin Kidston/Missoula Current)

Justice Linda Bell penned the dissent, writing that as a former employee of the league Gruden was no longer bound by the arbitration agreement. The offensive emails he sent went out between 2011 and 2018, before he was rehired by the Raiders and while he worked as ESPN, Bell noted. The lawsuit was filed after he had resigned from Raiders.

In addition, Bell said the arbitration clause Gruden agreed to was procedurally as well as substantively unconscionable.

"I would find at least a minimal amount of procedural unconscionability because Gruden was powerless to negotiate the terms of the NFL Constitution and its inclusion made his employment agreement take-it-or-leave-it," she said.

Gruden claims in his 2021 complaint that the NFL and Goodell sought to obliterate his career and reputation “through a malicious and orchestrated campaign.” Gruden resigned from his post that year after emails decried as racist, misogynistic and homophobic resurfaced.

According to the complaint, these emails were unearthed during an investigation into sexual harassment and abuse allegations at the Washington Football Team. Gruden claims Goodell and the NFL held onto the emails for months before they were leaked to the national media.

In the complaint, Gruden refers to the purported effort by Goodell and the NFL as “Soviet-style character assassination.”

Gruden claims he was singled out and held to a different standard, arguing that of the 650,000 emails obtained during the investigation, only a tiny fraction of those written were "weaponized" against Gruden. Gruden maintains the emails gathered during the investigation were supposed to remain confidential.