This year, the NCAA men’s basketball tournament will capture the attention of millions of workers during office hours like no other sporting event.

From the time the pairings of teams in the tournament were released this past “Selection Sunday” until the nets are cut down on the first Monday night in April, it’s a good bet (no pun intended) that your employees will be talking about the tournament, and probably betting on its outcome.

Because these office pools are an annual rite in many American offices, many employers turn a blind eye toward these pools, figuring that they help to maintain morale, build camaraderie, and allow informal bonding among employees who might not otherwise socialize.

A number of issues may accompany the office fun and improved office morale created by an employer’s laissez-faire take on the tournament, and it’s important for businesses to be aware of them.

For example, the potential for a morale boost may be offset by lost productivity resulting from Internet usage, game watching, absences, water cooler talk and other pool-related gossip.

To illustrate, an industry consultant estimated last year that American employers lost at least $1.8 billion in productivity during the first week of March Madness, based on the fact that nearly 45 percent of the total nonfarm work force is estimated to have participated in office pools in 2010.

Also important for companies is the question of whether an employer is subject to legal exposure for allowing employee betting pools during March Madness. This form of betting is technically illegal under the laws of Maine and most other states, and an employer who allows or provides a place for this type of activity to take place could put the company at risk. But the attorney general and the police are not likely to spend their time raiding small-scale office betting pools.

What is important is that the employer take steps to ensure the company is not creating the appearance of sponsoring or endorsing a pool. The practical steps an employer should take include making sure managers and supervisors are not coordinating office betting pools and soliciting employee participation in office pools. That way, an employee who chooses not to participate in the pool and is later fired cannot claim he was terminated for refusing to participate in illegal activity. Employers also should be vigilant for co-worker peer pressure or ostracism against those who choose not to participate in office pools.

Employers who have policies against gambling in the workplace may run into difficulty enforcing such policies against more serious types of gambling on the job if they knowingly allow office betting pools to exist. If employees are allowed to spend significant amounts of time coordinating an office betting pool, moreover, other employees who are disciplined for wasting company time may be able to claim discriminatory treatment. If employees are going to be allowed to participate in an office betting pool, therefore, they should be required to limit their time spent on such activities to meal and break periods.

Many employers choose to allow office pools for March Madness in spite of the risks. Care and forethought in controlling the manner in which office pools are conducted may minimize the risk of consequences more serious than your favorite team losing in the first round.

Jonathan Shapiro is the regional managing partner of Fisher & Phillips LLP’s New England office in Portland ( The materials in this column are provided for informational purposes only, do not constitute legal advice, and do not necessarily reflect the opinions of Fisher & Phillips LLP or any of its attorneys or clients. Neither this column nor the information contained herein is intended to create an attorney-client relationship between the viewer, reader, recipient, or user and Fisher & Phillips LLP.