“Beyond the Final Whistle” – Nevada Clarifies Post-Employment Arbitrability and Unconscionability in The National Football League v. Gruden

I. Introduction

On 11 August 2025 the Supreme Court of Nevada delivered a landmark sports-law and arbitration opinion in The National Football League; Roger Goodell v. Jon Gruden. At stake was whether the NFL and its Commissioner could force former Las Vegas Raiders head-coach Jon Gruden to arbitrate tort claims flowing from the leak of private e-mails that precipitated his resignation. The Court affirmed the district court’s refusal to compel arbitration, holding that:

the arbitration clause inside the 447-page NFL Constitution does not survive Gruden’s departure from the league, and
even if it did, the clause is unenforceable as procedurally and substantively unconscionable.

The ruling reshapes three converging areas of law:

post-employment reach of industry-wide arbitration regimes,
the unconscionability calculus for sophisticated parties, and
the limits on non-signatories who invoke equitable estoppel to compel arbitration.

II. Summary of the Judgment

Applying California contract doctrine under the Federal Arbitration Act (FAA), the Nevada Supreme Court:

Rejected applicability of Article VIII § 8.3(E) of the NFL Constitution because the text covers only “members, players, or employees” currently within the league; Gruden was a former employee.
Declared the clause unconscionable on a sliding scale:
- Procedural unconscionability: 447-page constitution incorporated by reference into a seven-page coaching contract, non-negotiable.
- Substantive unconscionability: (a) Commissioner Goodell would arbitrate claims about his own alleged misconduct; (b) the NFL can alter the clause unilaterally at any time.
Denied equitable estoppel: Gruden’s tort claims were not “inextricably intertwined” with his coaching contract; the NFL Parties, as nonsignatories, could not invoke the contract’s separate arbitration clause.
Accordingly, it affirmed the district court’s order refusing arbitration; litigation will proceed in court.

III. In-Depth Analysis

A. Precedents Cited and Their Influence

RUAG Ammotec GmbH v. Archon Firearms, Inc. (Nev. 2023) – sets de novo standard for reviewing denials of motions to compel arbitration.
Johnson v. Walmart Inc. (9th Cir. 2023) – allocates burden of proving an agreement to arbitrate to the party seeking arbitration.
Granite Rock Co. v. Int’l Brotherhood of Teamsters (U.S. 2010) – confirms that general contract principles temper FAA’s pro-arbitration policy.
Armendariz v. Foundation Health Psychcare (Cal. 2000) – seminal California test requiring both procedural and substantive unconscionability; Court borrowed its “sliding scale.”
OTO, LLC v. Kho (Cal. 2019) – clarifies “oppression” and “surprise” in procedural unconscionability.
Beltran v. AuPairCare, Inc. (10th Cir. 2018) – illustrates unconscionability where stronger party controls arbitrator selection.
Al-Safin v. Circuit City Stores, Inc. (9th Cir. 2005) – condemns unilateral modification of arbitration clauses.
Soltero v. Precise Distribution (Cal. App. 2024) & Goldman v. KPMG LLP (Cal. App. 2009) – outline California’s narrow doctrine of equitable estoppel for nonsignatories.

Together, these authorities empowered the Court to override the FAA presumption where contractual text and fairness principles required.

B. Court’s Legal Reasoning

Textual Interpretation – The term “employees” in Article VIII § 8.3(E) is “unambiguously” limited to current employees when read with Article VIII § 8.6 and the Constitution’s overall structure. A league constitution is not a traditional bilateral employment contract but a governance document defining the Commissioner’s intra-league authority.
Unconscionability Framework
- Adhesion established by mandatory incorporation and lack of bargaining over the Constitution.
- Procedural unconscionability heightened by the “surprise” of embedding 447 pages within a 7-page deal.
- Substantive unconscionability demonstrated by (i) self-arbitration (Goodell as judge of his own cause) and (ii) unilateral amendment power.
- Sliding-scale test: minimal procedural + extreme substantive = clause unenforceable.
Equitable Estoppel – For nonsignatories, California requires that claims be rooted in duties imposed by the very contract containing the arbitration clause. Gruden’s tort claims concern external conduct (alleged intentional leak), not performance of contractual promises; therefore estoppel fails.

C. Likely Impact of the Judgment

Sports Industry: League constitutions (NFL, NBA, MLB, NHL, MLS) often confer sweeping arbitral powers on commissioners. This decision signals that those provisions may not reach former personnel and must withstand unconscionability scrutiny.
Corporate Governance: Any entity relying on broad internal charters (e.g., trade associations, professional bodies) must reassess whether ex-members can be forced into internal dispute systems.
Arbitration Drafting: The opinion incentivises:
- Clear survival language for post-employment disputes,
- Independent selection of neutral arbitrators, and
- Notice-and-consent mechanisms for unilateral amendments.
- Litigation Strategy: Plaintiffs may now structure pleadings to avoid intertwining tort claims with contract obligations, undermining nonsignatory attempts to compel arbitration via equitable estoppel.
- Nevada Jurisprudence: The state aligns with California’s rigorous unconscionability doctrine, offering a predictable analytic template for future FAA cases filed in Nevada.
IV. Complex Concepts Simplified

Federal Arbitration Act (FAA)

1947 federal statute favoring enforcement of written arbitration agreements, but allowing ordinary contract defenses (fraud, duress, unconscionability).

Arbitration Clause vs. Arbitrator Selection Clause

The first says “we will arbitrate”; the second says “before whom we will arbitrate.” Courts can sever a defective selection clause yet enforce the duty to arbitrate.

Procedural vs. Substantive Unconscionability

Procedural: Problems in the contract’s formation (surprise, unequal bargaining).
Substantive: Unfair or one-sided terms (biased arbitrator, unilateral change).

Equitable Estoppel (Arbitration Context)

Doctrine letting a nonsignatory enforce an arbitration clause when the suing party’s claims presume the contract’s existence and are tightly woven with its terms.

Incorporation by Reference

A short contract can “pull in” a longer document; but parties are bound only if the language clearly identifies and incorporates that document.

V. Conclusion

“The presence of an arbitration clause does not bind a party to arbitrate any claim, with any other party, at any time.” — Nevada Supreme Court

The Court’s unanimous order (with a two-judge dissent) illustrates a mature arbitration jurisprudence that respects the FAA’s pro-arbitration bent yet refuses to rubber-stamp clauses that overreach. By cabining commissioner-controlled arbitration to current insiders and policing one-sided terms, Nevada has elevated fair-play principles above the playing field. Stakeholders in sports, entertainment, and any industry governed by expansive constitutions should audit their dispute-resolution language now—before the next whistle blows.