We’ve had a chance to ponder in further detail the legal standoff in which the NFL and Michael Levy, counsel for Matt Walsh, are now engaged.  Mike Fish of ESPN.com has made that effort considerably easier by posting the dueling indemnity provisions that the two sides have exchanged.

Here’s the league’s offer, with what we believe to be the key language highlighted: 

“This will confirm that, subject only to the limited conditions set forth below, neither the National Football League, nor the New England Patriots, nor any of their affiliates will initiate litigation or arbitration proceedings against Mr. Walsh for the truthful disclosure to Senator Specter or his staff or to the League of facts of which Mr. Walsh may have become aware while employed by the Patriots.  This commitment extends to the disclosure of factual information that might otherwise be deemed confidential or a trade secret.  In return, you have confirmed that Mr. Walsh will share with the League office the same information that he shares with the Senator or his staff, and that he will do so at about the same time that he speaks with the Senator and/or his staff.

“The commitment is conditioned upon Mr. Walsh’s promptly returning to the League Office, after he has been interviewed by Senator Specter or his staff, any and all documents or other items that he may have taken improperly from the Patriots during the period of his employment there, or which are otherwise the property of the Patriots, and his confirming, in writing, that all such documents or items have been returned. If Mr. Walsh’s disclosures are truthful, the commitment not to initiate litigation or arbitration proceedings referred to above shall extend to the improper removal of any items that are returned.”

Levy proposes the following, again with what we think to be the key language highlighted:

“The National Football League and any and all of its affiliates (the ‘League’), on behalf of itself and the New England Patriots and any and all of its affiliates (the ‘Patriots’), agrees to indemnify, defend and hold Mr. Walsh harmless from and against all losses, liabilities, damages, costs, fines, expenses, deficiencies, taxes, and reasonable fees and expenses of counsel and agents, including but not limited to any costs incurred responding to any investigation, inquiry, or proceeding or in the course of enforcement of this agreement, which may be sustained by Mr. Walsh arising out of, related to or connected with, directly or indirectly, (i) the employment of Mr. Walsh by the Patriots and any actions undertaken by him in the course of his employment, (ii) the taking or retention by Mr. Walsh of any information, documents or other materials that may be deemed to belong to (or constitute or contain confidential information or trade secrets of) the League or the Patriots, or (iii) any disclosure by Mr. Walsh of any such information, documents or materials to any person or entity, including the alleged untruthfulness in that disclosure absent bad faith on the part of Mr. Walsh (’Claims’). The League and the Patriots also fully and finally release and forever discharge Mr. Walsh from any and all Claims that the League or the Patriots may now have, have ever had, or may have, whether known or unknown, suspected or unsuspected, related in any way to the matters described above. The League and the Patriots are aware that, under the law of certain jurisdictions, a release may not extend to certain claims that a person does not know or suspect exist at the time when the release is executed. To the greatest extent permissible, the League, on behalf of itself and the Patriots, expressly waives the benefit of those laws and acknowledges that it intends this release to extend to the full extent described. Neither the League nor the Patriots will institute, maintain, prosecute, or authorize to be commenced any action or other proceeding against Mr. Walsh either in law or equity based in whole or in part upon any of the foregoing.”

Okay, you can wake up now.

As we see it, the sticking point is the league’s insistence on “truthfulness” from Mr. Walsh.  But truthfulness is in the eye of the beholder.  As to Roger Clemens, Andy Pettitte technically isn’t being “truthful” regarding Pettitte’s Congressional testimony that Clemens admitted to using HGH.  Though Clemens isn’t inclined to call his good friend Pettitte a liar, Clemens could have taken that approach, if he had so elected.

In this case, a reasonable reading of the indemnity language exchanged by the parties could cause a reasonable person to believe that the NFL and/or the Patriots are prepared to label anything and everything Walsh says as untruthful, even if he genuinely and in good faith believes his statement.  Indeed, the Pats already have denied flatly any cheating in conjunction with Super Bowl XXXVI.  So if Walsh says that he videotaped the Rams’ walk-through (and if he doesn’t have the tape to back it up), his version would instantly be called “untruthful” by the entity whose interests would be most clearly affected if what Walsh says is true.

In our view, “good faith” is the key.  Walsh is willing to sacrifice indemnity upon a finding that any alleged untruthfulness was the product of bad faith on his part.  In other words, he can be sued — successfully — if there’s a finding that his statements to Senator Specter are made in bad faith.  It’s not full indemnity, and it exposes Walsh to litigation based on a contention that he’s a disgruntled employee who stole sensitive materials in the hopes of later selling them to other teams, blackmailing the Patriots, and/or simply causing trouble when the opportunity to do so ever might arise.

But he would be shielded from a pissing match over who’s right and who’s wrong, with the NFL and/or the Pats potentially taking the position that if Walsh is simply incorrect it necessarily means that he’s lying, and thus exposed to liability for his words, or his past actions in retaining club property.

Our concern for the league in this regard is that, by trying to win the legal tug-o-war with Walsh, the P.R. battle is being compromised.  More and more members of PFT Planet are getting suspicious, since the general impression being created in this regard is that the NFL either isn’t doing enough to get to the facts, or is trying in a roundabout way to keep them from coming out.

Here’s our suggestion (as if anyone cares).  The indemnity should apply only to claims for breach of the confidentiality agreement, and should apply to any statements made by Walsh in good faith.  He should be required to return the stolen materials to the team after meeting with Specter and showing them to him, and he will face no liability for taking those things.   

As to any potential claims for defamation, Walsh should be in the some position that he would occupy if there was no confidentiality agreement.  Thus, if he says something that is untrue, he faces liability pursuant to the applicable legal standard, which in the case of the New England Patriots presumably would be the standard that applies to defamatory statements made against public figures. 

That approach should cover everyone’s legitimate interests, and it should help to reduce the potential appearance that the league is trying either to engineer Walsh’s words, or to get him to shut up.

Besides, with litigation relating to Super Bowl XXXVI now pending in New Orleans and Congress likely to pursue this issue more aggressively if it perceives stonewalling, Walsh eventually will tell his story in response to a subpoena.

But that will take time.  Meanwhile, the shadow of what Walsh knows (and/or what he thinks he knows) will continue to hover over the Patriots franchise, and over the league itself.  If it’s inevitable that Walsh’s words will be heard, isn’t it in the best interests of the sport to get everything on the table sooner rather than later?