Gabriel A. Feldman2013-05-22T19:58:58-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/author/index.php?author=gabriel-a-feldmanCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Gabriel A. FeldmanGood old fashioned elbow grease.The Legal Issues Behind the NBA Players' Decertification Strategytag:www.huffingtonpost.com,2011:/theblog//3.10811072011-11-08T08:27:32-05:002012-01-08T05:12:01-05:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/ What is decertification? Disclaimer of interest?
Decertification occurs when employees formally revoke the authority of their union to engage in collective bargaining on their behalf. Disclaimer of interest occurs when the union formally terminates its right to represent the players. Both procedures effectively dissolve the union and permit the employees to negotiate as individuals.
What is the process for decertification? What is the process for disclaimer of interest? How long do they take?
There are multiple steps to decertification. First, at least 30 percent of the players must sign a petition stating that they no longer want the NBPA to represent them as a union. Second, the petition must be filed with the National Labor Relations Board (NLRB). The NLRB must verify the petition and then schedule an election. Once the petitions have been received and validated, the NLRB will set a date for the decertification election. It is official NLRB policy to schedule a decertification election "as soon as possible," and uncontested elections can take place within 30 days of the verification of the petitions. But, given the complex circumstances of the NBA situation, it is more likely that the election will be scheduled approximately 45-60 days after the petitions are verified. The union is decertified if at least 50 percent of the voting players opt for decertification during the election.
Disclaimer is a less complicated process that could happen immediately-- the union must simply renounce its interest in representing the employees in collective bargaining. No formal petition, vote, or recognition by the NLRB is required.
30% of players must sign the petition and at least 50% of the players must vote for decertification, but which players are we talking about? The technical answer is that at least 30% (and then 50%) of the players within the "bargaining unit" are required. The NLRB is responsible for defining the members of the "bargaining unit." In 1995, the NLRB ruled that players who were on NBA rosters the previous season constituted the appropriate bargaining unit and were eligible to vote in the decertification election (more on that election below).
Didn't the players already authorize a decertification vote during the season?
No, during the season, the players voted to authorize the NBPA to disclaim interest. According to court filings, the players did not sign petitions authorizing a decertification election.
Are decertification elections rare?
No. Decertification elections are actually fairly common. In 2010, employees filed 530 decertification petitions. 238 of those petitions were withdrawn before any election was held.
Is the union frozen during the period of the petition and election?
No. The NBPA can continue to negotiate with the owners at any point before the vote to decertify the union. And, in between the time of the petition and the vote, the players can campaign for and against decertification.
Why are employees allowed to vote out their union in the middle of collective bargaining?
A fundamental principle of labor law--known as "voluntary unionism" is that employees have a right to choose to be in a union and a right to choose not to be in a union. This right exists both before and after a union is formed. In other words, employees can choose not to form a union, and can choose to break up that union (through decertification) after it has formed and has begun negotiating with an employer. If the employees choose not to form a union (or if they choose to decertify their union), they lose the ability to bargain collectively and must instead deal with their employers as individuals.
Can employers opt out of collective bargaining and choose to deal with employees individually?
No. The labor laws create an asymmetry. Only employees can choose--either by not forming a union or by dissolving their union---if a union, and thus collective bargaining, will exist.
Why would employees want to decertify their union?
In "traditional" industries (i.e., non-sports), employees may choose to decertify their union for a variety of reasons--among other things, they may believe the union is not representing the best interests of the employees, they may believe the union is corrupt or inept, or they may simply believe they are better off negotiating on their own than through collective bargaining.
Why would the NBA players decertify?
The NBA players may believe that the NBPA has not done a good job representing their interests in the CBA negotiations, or they may believe they are better off negotiating as individual employees without the benefit of a union, but the players would primarily be using decertification as a means to end. The end is the ability to bring an antitrust lawsuit against the NBA challenging the lockout as an antitrust violation. The players would argue that the lockout constitutes an illegal "group boycott" by the owners. The players would likely also challenge any of the rules that the league might put in place that restrict a player's ability to make money or otherwise impact the players working conditions. For example, the players could challenge the NBA's salary cap, the player draft, and other player and free agency restrictions.
What is a group boycott?
In antitrust terms, a lockout is a "concerted refusal to deal." The NFL players' antitrust complaint against the NFL earlier this year sums up well the NBA players' potential argument. In their complaint, the NFL players argued that:
The "lockout" constitutes an agreement among competitors to eliminate competition for the services of major league professional football players in the United States and to refuse to pay contractually-owed compensation to players currently under contract with the NFL for the 2011 season and beyond, in violation of Section 1 of the Sherman Act...The "lockout" operates as a perpetual horizontal group boycott and price-fixing agreement, which is per se unlawful...The "lockout" has injured and will continue to injure Plaintiffs and class members by depriving them of the ability to work as, receive contractually-mandated compensation for, and/or offer their services as professional football players in a free and open market.
Why do the players have to break up their union to bring an antitrust suit?
Here's the short version (for the even shorter version, skip to the next paragraph): Because of a doctrine known as the "non-statutory labor exemption." This exemption protects the product of collective bargaining from attack under antitrust law. Thus, any terms of the collective bargaining agreement are immunized from attack under antitrust law. But, the exemption extends beyond just the terms of an actual agreement -- the Supreme Court has held that the exemption applies, even in the absence of a current collective bargaining agreement, as long as a bargaining relationship still exists.
Essentially, players are required to make a choice between labor law (and collective bargaining) and antitrust law (and individual bargaining and litigation). If the players choose labor law, an antitrust shield is raised that prevents them from attacking NBA rules under the antitrust laws. To lower the shield and choose antitrust law, the players must end the collective bargaining relationship. The players would dissolve their union -- either through decertification or disclaimer of interest -- to surrender their collective bargaining rights and choose antitrust law instead of labor law. The players would then use antitrust law to challenge any restrictions imposed by the league and to ask a court to enjoin (block) the owners from locking them out.
What's the remedy? What can the players gain by bringing an antitrust suit?
The players would ask for two things in any antitrust suit against the NBA owners. First, they would seek an injunction from a court that would block the lockout and force the owners to re-open the league. Second, if they were unable to get an injunction, the players would seek money damages to compensate them for lost salaries and other financial injuries caused by the lockout. Antitrust law is a particularly powerful weapon because it gives private plaintiffs treble damages--i.e., three-times actual damages--for successful claims.
Of course, the threat of the injunction and the treble-damages may also give the players a more immediate benefit that does not require a court ruling--the risk of the antitrust litigation may give them leverage at the bargaining table and push the owners to make a deal (more on that below).
Has the NBPA ever dissolved its union?
No. There was a decertification movement in 1995, led by star players like Michael Jordan and Patrick Ewing. More than 200 players signed a decertification petition, but the players eventually voted 226-134 to accept a new six-year agreement rather than decertify their union. There were also reports that the players were considering decertification in 1998, but the players remained in the union.
Is it common practice for professional athletes to dissolve their unions?
It's not common. In fact, it has only happened twice. The NFLPA dissolved its union in March 2011 by disclaiming interest and voting (informally) to decertify. Prior to that, the NFLPA dissolved its union in 1989, which led to a legal battle that eventually helped the NFL players achieve real free agency.
Does the NBPA's pending unfair labor practice charge pose any obstacles to decertification?
It might. As a general policy, the NLRB will not conduct a decertification election while an unfair labor practice charge by the union is still pending. The rationale for the policy is that the conduct that gave rise to the unfair labor charge may be unfairly influencing the employees' decision to vote out their union. The NLRB is free to conduct the election if it believes that the pending charge will not interfere with the ability of the employees to make a free and fair choice regarding decertification.
What about the NBA's lawsuit in NY?
In August, the NBA filed a declaratory judgment action in NY, asking a court to declare, among other things, that the lockout was legal and that the NBPA's potential disclaimer tactic should be rejected as a sham. The NBA players have argued that the lawsuit was an improper attempt by the owners to gain home-court advantage (the Second Circuit has consistently ruled in favor of the NBA owners in antitrust litigation with the players) and that the case should be dismissed, because the law gives plaintiffs the choice of when and where to sue. Regardless of whether the NBA players choose to decertify or the NBPA disclaims interest, the players will seek to file their antitrust suit somewhere other than NY (most likely an employee-friendly jurisdiction like California). A battle over where the players' antitrust suit is heard could further muddy the already cloudy litigation waters.
If the players go forward with the decertification petition, is the 2011-2012 season completely lost?
Not necessarily. Although antitrust litigation is painfully slow, expensive, and unpredictable, the mere threat of decertification followed by antitrust litigation might cause the owners to move at the bargaining table. In other words, the owners might be willing to make concessions at the bargaining table to avoid the inherent uncertainty of antitrust litigation. Of course, decertification might have the opposite effect. The owners, wary of setting a precedent of caving at the bargaining table when the players threaten to decertify, might dig in their heels even further and call the players' decertification bluff. This could lead to the ultimate lose-lose situation--the NBA season is cancelled while the NBA owners fight the NBA players in court.
Assuming the mere threat of decertification/litigation is not enough to move the owners, the NBPA could (while the players are waiting for the decertification election) disclaim interest in representing the players. Disclaimer would permit the players to file their antitrust suit immediately. The NBA owners would argue that any such lawsuit must be heard in NY, so the players could either file in NY (unlikely) or file in another jurisdiction and engage in a legal battle to allow them to choose where the case is heard (more likely).
Even if it gets all the way to an actual decertification vote, the season isn't necessarily lost. It is possible--although a lot of things would have to go right for the players for this to occur--that the players are able to vote to decertify and file an antitrust in late December and get a court to issue a temporary restraining order blocking the lockout by early January. That's a bit of a long shot, but it's possible, and the mere possibility of it could be enough to convince enough of the owners to make a deal to avoid that outcome.
Did the NFL players decertify their union earlier this year?
No. The NFLPA disclaimed interest. Here are the exact steps taken by the NFLPA and the NFL players earlier this year:
• On March 11, 2011, the NFLPA informed the NFL that it had disclaimed interest in representing the players in collective bargaining as of 4pm that day.
• A substantial majority of the players also voted (though not in a decertification election) to end the collective bargaining status of the NFLPA and to restructure it as a professional trade association instead of a union.
• The NFLPA player representatives voted to restructure the organization as a professional association instead of a union.
• The NFLPA amended its bylaws to prohibit it or its members from engaging in collective bargaining with the NFL, the NFL's member clubs or their agents.
• The NFLPA filed a labor organization termination notice with the Department of Labor.
• The NFLPA filed an application with the IRS to reclassify itself for tax purposes as a professional association rather than a labor organization.
• The NFLPA ceased the regulation of player agents and other activities associated with being the collective bargaining representative of NFL players.
You're boring me, can you quickly tell me what happened after the NFLPA dissolved its union in March?
Following the dissolution of the NFLPA, a group of players filed a class action antitrust suit in federal district court in Minnesota, challenging the NFL lockout (which was implemented the next day) and a variety of player restraints. The players claimed that the lockout was an illegal "group boycott" under the antitrust laws and asked for a preliminary injunction to block the lockout, and for treble (ie, three-times) damages for any harm caused by the player restraints imposed by the owners.
In court, the owners raised three defenses in response to the players' attempt to enjoin the lockout. First, the owners argued that the Norris-LaGuardia Act (a set of federal labor laws) precludes federal courts from enjoining lockouts. Second, the owners contended that the dissolution of the players' union was a "sham" and that the collective bargaining relationship still exists. Therefore, the owners argued the non-statutory labor exemption is still in effect and immunizes the owners from antitrust attack. Third, the owners claimed that the pursuant to the doctrine of "primary jurisdiction," the court should defer to the National Labor Relations Board's ruling on the validity of the NFLPA's disclaimer of interest before proceeding with the case.
Judge Susan Nelson rejected all of the owners' arguments and enjoined (ie, lifted) the lockout on April 25, 2011. Four days later, an Eighth Circuit panel voted 2-1 to issue an emergency, temporary stay of Judge Nelson's order (ie, they put it on hold) and reinstituted the lockout. The same divided panel then granted a longer stay pending resolution of the appeal on the preliminary injunction, concluding that, based on their interpretation of the Norris-LaGuardia Act, they "have serious doubts that the district court had jurisdiction to enjoin the League's lockout." After hearing oral arguments from both sides, the same divided panel permanently dissolved the injunction, ruling (again) that the Norris-LaGuardia Act did not permit a federal court to enjoin a lockout. In its opinion, the Eighth Circuit did not address the non-statutory labor exemption (or primary jurisdiction) issues. The Eighth Circuit then remanded the case back to Judge Nelson to proceed with the remaining issues. Before the case progressed any further, however, the NFL and the NFL players settled the litigation, the NFLPA re-formed as a union, and the two sides agreed to a new 10-year collective bargaining agreement.
If the NFL Players "lost" their case in Brady v. NFL, why do the NBA players think they'll do any better?
The ruling in Brady obviously favors the NBA owners, but the NBA players may still have success in court for at least a few reasons. First, only courts within the Eighth Circuit are bound by Brady, and it is a virtual certainty that any antitrust suit brought by the NBA players would not be filed in a court within the Eighth Circuit (the NBA filed its preemptory legal action in NY, and the players would likely file their suit in an employee-friendly jurisdiction like California).
Second, let's be clear as to what the Eight Circuit decided in the Brady case. The NFL players argued that the NFL lockout was illegal and asked for 2 things--an injunction and damages. The district court preliminarily concluded that the lockout was illegal and granted the injunction. The Eighth Circuit reversed, narrowly holding that the Norris-LaGuardia Act prevents federal courts from enjoining lockouts. The court did not conclude that the lockout was illegal and did not conclude that the players were not entitled to bring their antitrust claim. So, even if a court was bound by Brady, it could still determine that the players are able to bring a post-dissolution antitrust suit challenging the lockout, and that the lockout was illegal. In other words, Brady does not prevent the NBA players from dissolving their union and bringing a successful antitrust suit for three-times damages.
Third, decertification (as opposed to disclaimer) may give the NBA players a more powerful argument in court. In Brady, the NFL argued that the NFLPA's disclaimer of interest was a sham, in part, because it "lack[ed] the formality of decertification" and was "literally a paper-thin statement, issued unilaterally by a union, that may readily be overturned." The formality of the decertification process could thus weigh in the NBA players' favor.
If we end up with an antitrust lawsuit between the players and the owners, who is likely to win? Given the complex and novel nature of the legal issues involved-- regardless of one's views on the merits of decertification and disclaimer-- it is simply impossible to predict the outcome of an antitrust suit filed by the NBA players. Remember, even in the Brady case, two federal judges sided with the NFL players, and two federal judges sided (in part) with the owners. Granted, the NFL got the two judges it needed, but there's no guarantee that a different set of judges in a different court will rule the same way. So, neither side should be particularly comfortable with the strength of their legal positions.
From a fan's perspective, the hope is that the uncertainty and risk to both sides involved with decertification and an antitrust suit are enough to push the two sides to make a deal at the bargaining table. If not, I might be back later this year with an antitrust litigation primer...
]]>The Legal Issues Behind the Looming NBA Lockouttag:www.huffingtonpost.com,2011:/theblog//3.8814092011-06-21T14:52:06-04:002011-08-21T05:12:02-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
At this point, we all know about the major business issues -- moving from a soft salary cap to a hard one; scaling back salaries; reducing the length of contracts, etc. Rather than rehash those issues, I want to focus on what might happen if the two sides can't reach an agreement by June 30. What are the legal options for each side? Here are the short answers: the owners can lock the players out or impose their "last, best offer" upon reaching a bargaining impasse. The players can strike, or dissolve their union and bring an antitrust suit. But, what does all that mean? Below, I answer a series of questions about the legal issues and options that might arise over the next several weeks. This will be Part I in a series that will provide a "user-friendly" explanation of the complicated road the NBA and its players might be facing. I start with some of the basic issues and then progress to the more complex ones. If you have a background in labor law or if you read my primer on the NFL labor situation (here and here) you can skim the first few questions.
Here we go...
What is a lockout?
Essentially it's a form of leverage for the owners designed to put pressure on workers so they will negotiate or give in at the bargaining table. Legally defined, a lockout is the "withholding of employment by an employer from its employees for the purpose of either resisting their demands or gaining a concession from them." In other words, in a lockout, employers are allowed to refuse to let the employees work, and therefore get paid. A lockout is prohibited if it is motivated primarily as an attempt to discourage union membership or interfere with employees' organizational rights. Lockouts can occur before or after a bargaining impasse has been reached.
Would the NBA owners be permitted to lock the players out?
Yes, as long as the lockout is used for the purpose of increasing bargaining power, not to discourage union membership or to interfere with the players' organizational rights.
In the event of a lockout, can the owners hire replacement players?
Yes, employers may hire temporary employees during a lockout where the harm to the locked out employees is "comparatively slight" and the decision to hire is motivated by a legitimate business reason. The NBA has not used replacement players in the past and are unlikely to do so this time around, because sponsors, fans, and networks simply do not want to see (or pay to see) Shane Falco playing for the Lakers instead of Kobe Bryant.
Have NBA owners locked out players in the past?
Yes. On July 1, 1995, the owners locked out the players for 74 days during the offseason. The parties agreed to a new CBA in time to play a full regular season. In 1998, after opting out of the 1995 CBA, the NBA owners locked out the players again. The 1998 lockout lasted 204 days and led to the cancellation of 464 regular season games and the NBA All-Star Game. When the lockout finally ended in January 1999, the regular season was shortened to 50 games.
The owners' second option is to wait for impasse to impose their "last, best offer" rather than locking the players out. What does that mean?
After bargaining to impasse, labor law permits employers unilaterally to implement changes to the terms of the previous collective bargaining agreement. These changes must be "reasonably comprehended" within the employer's pre-impasse proposals -- in essence, this means that, after impasse, the owners can implement their "last, best offer" as the new set of rules to govern the NBA and its relationship with the players.
Why would the owners implement their last, best offer?
As an alternative to a lockout. By implementing their last, best offer, the owners would essentially be saying to the players, "take it or leave it (or dissolve)." By implementing their "last best offer" instead of locking the players out, it would force the players to either accept the terms while continuing to negotiate or strike (or dissolve their union). In any of those events, the owners would not be the ones responsible for a work stoppage.
If it comes to it, will the owners implement a lockout or their last, best offer?
Based on statements from David Stern, it appears that the owners will choose to lock out the players if no deal is reached by the expiration of the CBA. So, why not just impose the last, best offer and avoid a work stoppage? Because a lockout puts maximum economic pressure on the players -- the theory is, if the players are not getting paid, they are more likely to cave and give in to more of the owners' negotiating demands. And, the owners fear that the players will bring an antitrust attack against whatever rules they put in place as part of their last, best offer. That is close to the worst-case scenario for the owners -- they are paying the players while the players are suing them.
Is June 30 truly "D-Day" for a new agreement?
No, if the two sides are making significant progress, which looks unlikely at the moment, they can agree to extend the deadline for the expiration of the CBA to buy them more time to reach a deal.
What is the fastest land animal?
The cheetah.
What can the Players do if there is no agreement?
The players have their own economic weapons. Labor law encourages collective bargaining by providing a proper balance of power between employees and employers. To ensure this balance, labor law gives employees a few options of their own with which to wage labor combat. The principle moved that the NBA players could make in their upcoming labor discussions are the threat of a strike and the threat to dissolve their union.
What is a strike?
A strike is when a group of employees ceases work in order to gain leverage in bargaining negotiations. To be protected under the labor laws, a strike must be associated with a labor dispute between the striking employees and an employer. Striking employees are not paid during a strike and can be replaced by replacement workers.
What is decertification? Disclaimer of interest?
Decertification occurs when employees formally revoke the authority of their union to engage in collective bargaining on their behalf. A related concept is the "disclaimer of interest," where the union formally terminates its right to represent the players. Both procedures effectively dissolve the union.
What is the process for decertification? What is the process for disclaimer of interest?
There are multiple steps to decertification. First, at least 30 percent of the players must sign a petition stating that they no longer want the NBPA to represent them as a union (this process began several months ago). Second, the petition must be filed with the NLRB. The NLRB must verify the petition and then schedule an election. The union is decertified if at least 50 percent of the voting players opt for decertification. Disclaimer is a less complicated process -- the union must simply disclaim interest in representing the employees.
Why would the players break up their own union?
The players would use decertification or disclaimer of interest as a means to end. The end is the ability to bring an antitrust lawsuit against the NBA challenging a potential lockout or any of the rules that the league might put in place that restrict a player's ability to make money or otherwise impact the players working conditions. For example, the players could challenge the NBA's salary cap, the player draft, and other player and free agency restrictions.
Why do the players have to break up their union to bring an antitrust suit?
Here's the short version (for the even shorter version, skip to the next paragraph): Because of a doctrine known as the "non-statutory labor exemption." This exemption protects the product of collective bargaining from attack under antitrust law. Thus, any terms of the collective bargaining agreement are immunized from attack under antitrust law. But, the exemption extends beyond just the terms of an actual agreement -- the Supreme Court has held that the exemption applies, even in the absence of a current collective bargaining agreement, as long as a bargaining relationship still exists.
Essentially, players are required to make a choice between labor law (and collective bargaining) and antitrust law (and individual bargaining and litigation). If the players choose labor law, an antitrust shield is raised that prevents them from attacking NBA rules under the antitrust laws. To lower the shield and choose antitrust law, the players must end the collective bargaining relationship. The players would dissolve their union -- either through decertification or disclaimer of interest -- to surrender their collective bargaining rights and choose antitrust law instead of labor law. The players would then use antitrust law to challenge any restrictions imposed by the league and to ask a court to enjoin (block) the owners from locking them out.
Has the NBPA ever dissolved its union?
No. There was a decertification movement in 1995, led by star players like Michael Jordan and Patrick Ewing, but the players voted 226-134 to accept a new six-year agreement rather than decertify their union. There were also reports that the players were considering decertification in 1998, but the players remained in the union.
Is it common practice for professional athletes to dissolve their unions?
It's not common. In fact, it has only happened twice. The NFLPA dissolved its union in March 2011 by disclaiming interest and voting (informally) to decertify. Prior to that, the NFLPA dissolved its union in 1989, which led to a legal battle that eventually helped the NFL players achieve real free agency. For more on that, click here.
In 338 words or less, can you tell me what happened after the NFLPA dissolved its union in March?
Following the dissolution of the NFLPA, a group of players filed a class action antitrust suit in federal district court in Minnesota, challenging the NFL lockout (which was implemented the next day) and a variety of player restraints. The players claimed that the lockout was an illegal "group boycott" under the antitrust laws and asked for a preliminary injunction to block the lockout, and for treble (ie, three-times) damages for any harm caused by the player restraints imposed by the owners.
As of now, we have only had proceedings on the preliminary injunction. In court, the owners raised three defenses in response to the players' attempt to enjoin the lockout. First, the owners argued that the Norris-LaGuardia Act (one of the key federal labor laws in this dispute) precludes federal courts from enjoining lockouts. Second, the owners contended that the dissolution of the players' union was a "sham" and that the collective bargaining relationship still exists. Therefore, the owners argued the non-statutory labor exemption is still in effect and immunizes the owners from antitrust attack. Third, the owners claimed that the pursuant to the doctrine of "primary jurisdiction," the court should defer to the National Labor Relations Board's ruling on the validity of the NFLPA's disclaimer of interest before proceeding with the case.
Judge Nelson rejected all of the owners' arguments and enjoined (ie, lifted) the lockout on April 25, 2011. Four days later, an Eighth Circuit panel voted 2-1 to issue an emergency, temporary stay of Judge Nelson's order (ie, they put it on hold) and reinstituted the lockout. The same divided panel then granted a longer stay pending resolution of the appeal on the preliminary injunction, concluding that, based on their interpretation of the Norris-LaGuardia Act, they "have serious doubts that the district court had jurisdiction to enjoin the League's lockout." Oral arguments were heard by the Eighth Circuit on June 3, 2011, and a decision is pending. So, for now, the lockout is still in place because 2 of the 3 judges on the Eighth Circuit panel believe that courts do not have the power to enjoin lockouts.
The Players are alleging that the lockout is an illegal "group boycott." What does that mean?
A group boycott occurs when separate entities agree to refuse to do something. To use a non-antitrust example, you might recall the classic college football group boycott, when all of the Notre Dame players agreed to refuse to play in the big game against Georgia Tech (but Georgia Tech is one of the best offensive teams in the country!) unless their 5-feet nothing, 100 and nothing teammate got to suit up. In the NFL litigation, the allegation is that the owners have agreed to refuse to sign and pay their players.
Why is the NFL players' class-action lawsuit called Brady v. NFL?
The NFL players named several high profile players, including Tom Brady, Drew Brees, and Peyton Manning, as plaintiffs to represent the class. The case was shortened to Brady v. NFL because Brady's name comes first, alphabetically. So, if Ikaika Alama-Francis had been one of the named plaintiffs, the case would have been Alama-Francis v. NFL.
What impact will the NFL litigation have on the NBA and NBPA?
Great question (thanks). As of now, it looks like the NFL and the NFL players may settle and reach a new CBA before the Eighth Circuit makes a final decision. If that happens (that's still a big "if"), we will be left with a narrow, preliminary ruling from the court, indicating that a lockout cannot be enjoined by a federal court. That ruling obviously strongly favors the NBA, but it still would not prevent the NBA players from dissolving their union and seeking treble damages for harm caused by the lockout. And, that ruling will only be binding on the NBA and NBPA if they end up in the Eighth Circuit.
If the NBA and NBPA end up in litigation like the NFL and the NFLPA, can the case be brought somewhere other than the Eighth Circuit?
Yes, and where the case gets filed is key. It is the legal equivalent of home-court advantage. We're not just talking crowd noise, we're talking about refs actually giving your team the calls. (Think Hoosiers: "It's bad enough we have to play in this cage you call a gym, your players are playing like a bunch of animals."). If you can get the case filed in a jurisdiction that is more sympathetic to your legal positions, you stand a greater chance of winning the case.
The now-expired NFL CBA gave a federal judge in Minnesota jurisdiction over disputes arising under the CBA. The NBA CBA has no such provision, so the suit could be filed in any state that has an NBA team. If the NBA players dissolve their union and bring an antitrust suit, it is highly likely they will avoid the Eighth Circuit and look to file in a jurisdiction that has suggested that the Norris-LaGuardia Act does not prevent courts from enjoining lockouts. Based on the NFL players' briefs in Brady, they believe that the First, Seventh, and Ninth Circuits would be more favorable to the players on that issue. The First (Massachusetts), Seventh (Illinois, Indiana, Wisconsin), and Ninth (Arizona, California, Oregon) Circuits are all home to at least one state with an NBA team.
Do the players have any other moves?
Yes, the NBPA has already filed an unfair labor practice charge against the NBA, alleging, among other things, that the league was dealing directly with the players instead of the union and that the league had refused to provide relevant financial data. Through that charge, the NBPA has asked the National Labor Relations Board to enjoin the owners from locking out the players.
Can the owners make the first move in court?
Yes, and there is precedent for this in NBA labor history. During the negotiations for a new NBA CBA in 1995, the NBA players informed the owners that they believed the college draft, salary cap, and certain free agency restrictions would be subject to successful challenge under the antitrust laws after the expiration of the CBA. Six days prior to the expiration of the CBA, the NBA filed a "declaratory action" in federal district court in New York asking the court to declare that continued implementation of those rules did not violate antitrust law. The district court --and the Second Circuit on appeal -- ruled in favor of the owners, holding that the non-statutory labor exemption protected terms contained in a CBA from antitrust attack even after the CBA had expired.
Why would the owners move first?
To get the home-court advantage I discussed above. By filing first, the owners can dictate where the case is heard, and can choose a jurisdiction that has ruled more favorably on the owners' legal positions. Thus, the owners may want to file in the Eighth Circuit to take advantage of the preliminary pro-owner ruling in Brady, or they may want to file the case in NY so that they can end up back in the Second Circuit.
Most NBA players have guaranteed contracts. Doesn't that mean they will get paid during a lockout?
No. During the 1998 NBA lockout, players with guaranteed contracts filed a grievance before an independent arbitrator claiming that they were entitled to be paid during the lockout. More than 200 players under guaranteed contracts claimed they were collectively due more than $800 million. The arbitrator ruled against the players, holding that the guarantee language in their contracts did not override the default rule that employers may withhold payment during a lockout. So, unless a player negotiated a guarantee in the event of a lockout, he will likely not be paid. For more on this, click here.
If the owners lock out the players, can the players play in professional basketball leagues overseas?
From a legal perspective, that's a tough question that gets us into uncharted territory. For more on that, click here. But, from a practical perspective, we appear to have our answer -- in February, David Stern said that players will be free to play elsewhere if there is a lockout. That said, recent reports suggest that playing overseas will not be a viable option for most players.
]]>NFL Labor Negotiations: Are We Headed for the Doomsday Scenario?tag:www.huffingtonpost.com,2011:/theblog//3.8249102011-02-18T08:51:41-05:002011-05-26T19:37:11-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
This is a potential game-changer. The NFL is essentially trying to block the NFL players from decertifying their union. Why is that significant? As I discussed earlier, the decertification/antitrust suit one-two punch is the NFLPA's most powerful economic weapon for two reasons. First, it allows the players to bring an antitrust challenge against the NFL's player restraints. Second, it potentially blocks the ability of the NFL to lock out the players (click here for more detail on both of those points). So, an order blocking the NFLPA from decertifying would prevent them from exercising their strongest offensive (an antitrust suit) and defensive (blocking the lockout) weapons, and give the owners a big advantage at the bargaining table.
Last week, in Part I of my analysis of the legal issues surrounding the NFL CBA negotiations, I took a closer look at the lockout and decertification weapons, and readers responded with some great comments and questions. Here, in Part II (The Sequel!), I'll start with a few of the more common general questions I have received over the last few days and then move on to an analysis of what could happen if the owners lock out the players. If you are looking for my take on the big question -- will there be a lockout? -- you can jump to the end...
Why can't the NFL players force the owners to open up their books and show them their financials? Didn't the NBA owners volunteer to show the NBA players their books?
This has become one of the focal points of the negotiations. The owners claim they need to pay the players less because of rising costs, but they refuse to reveal the details of these costs. Whether or not this is a smart negotiating tactic, the NFL owners have no legal obligation to open up their books. Labor law is very clear on this point -- as long as the owners don't claim an "inability to pay," the players cannot compel them to open their books. The owners can claim, however, that they are having "general economic difficulties," as long as they don't say "we can't afford to pay the players." The NBA owners, however, have previously claimed an inability to pay, so they knew the players were entitled to see the books. For the NBA, the argument is "we can't pay." For the NFL, the claim is "we won't pay." That's the difference between open and closed books...
Do the players have any access to the financials of the teams?
Yes. The players have a right to an audit that allows them to see the revenue side of the owners' books, but they do not have a right to see the cost side. Of course, the owners have argued that they need to pay the players less because of rising costs and decreasing profitability. That is not a very convincing argument -- for the players or the fans -- if the owners refuse to put numbers behind the rhetoric. Without full access to the books, there is simply no way for the players to evaluate the profitability of the teams...
Did the Supreme Court's ruling in American Needle v. NFL have any impact on the labor negotiations?
Yes. The players' decertification strategy only works if the players can then bring an antitrust suit against the NFL owners under Section 1 of the Sherman Act. Section 1 of the Sherman Act only applies to agreements, and it takes two to make an agreement. So, for example, if all of the manufacturers of wool hats in the world got together to make a series of agreements, those agreements would be scrutinized under Section 1 to ensure they were not anticompetitive (e.g., to ensure that the manufacturers were not agreeing to fix prices). The question is, what happens when all of the NFL teams in the world get together and make a series of agreements? Should those agreements be scrutinized under Section 1?
In American Needle, the NFL argued that they are a single entity, and thus incapable of violating Section 1 (because a single entity cannot reach an agreement with itself). If the Supreme Court had agreed with the NFL, the league and its owners would have been immune from antitrust attack under Section 1, thus destroying the ability of the players (or anyone) to attack the league and its rule. The NFL lost the case, and the decertification weapon was preserved...
If there is a lockout, will there still be an NFL draft?
Yes. The NFL Draft will take place on April 28-30, and will be the last "League activity" under the current CBA. However, with a lockout in place and no new agreement, the league has indicated that teams cannot sign their draft picks and cannot sign undrafted players or other free agents. The signing of drafted and undrafted players will remain frozen during a lockout. So, the teams can pick the players in the draft, but that's it...
Did the threat of a lockout scare away underclassmen from entering the draft?
Apparently not. A record 56 underclassmen have declared for the draft for this year. Some of these underclassmen will likely go undrafted (7 underclassmen were not picked in the 2010 draft), but even if there is a lockout, NCAA rules prohibit them from returning to college.
Can Bill Belichick videotape other teams' practices during the lockout?
Players are prohibited from entering team facilities during a lockout, so without a new CBA in place, there would be no minicamps, no training camps, and no practices, so this shouldn't be an issue. But, good question.
What happens to the players who are under contract for next year and beyond? Will they get paid during a lockout?
No. The general rule under labor law is clear -- employers do not have to pay employees during a lockout. After all, the lockout is an economic weapon owners can use to give them leverage during negotiations. It is designed to put economic pressure on employees by depriving them of the ability to work and the ability to get paid. If employees were paid during a lockout, the lockout would be less of a threat and the employees would have little incentive to return to the bargaining table and reach a deal.
What about the small number of players with guaranteed contracts? Will they get paid during a lockout?
That's a slightly tougher question, but the answer is still (most likely) no. Here's how the analysis plays out: The default rule is that employees do not get paid during a lockout. Unless the parties agree otherwise, this default rule will kick in (that's, of course, what makes it a default rule) and permit the NFL owners to withhold payment to NFL players under guaranteed contracts during a lockout. The question then becomes, does the "guarantee" between the player and the owner change the default rule and require that the player be paid?
To answer that question, we can do two things: First, we look to the language of the guarantee provisions in the player contracts. There are two types of guarantee provisions in NFL contracts -- injury and skill. As you might expect, these provisions guarantee payments to players in the event of a release based on serious injury or lack of playing skill. But they do not guarantee payment in the event of a lockout. Thus, (unless the parties agreed otherwise), typical guaranteed NFL contracts do not change the default rule and these players will not be paid during a lockout.
Second, we can look to the past and see if this issue has come up in other leagues. And, it has. During the 1998 NBA lockout, more than 200 players with guaranteed contracts filed a grievance before an independent arbitrator claiming that they were collectively owed over $800 million. The arbitrator ruled against the players, holding that the guarantee language did not override the default rule.
Bottom line: unless a player negotiated a guarantee in the event of a lockout, he will likely not be paid.
Can free agents play football in the UFL or another football league during a lockout?
Yes. If a player is no longer under contract with an NFL team, he is free to play in another league during a lockout.
Can players who are still under contract play in the UFL or another football league during the lockout?
Perhaps, but this is a much tougher question, and we're back in uncharted territory. This issue simply does not come up in other industries. In a typical industry, an employee's contract ends when the CBA expires. So, if an employer locks out his/her employees after the expiration of a CBA, the employees are no longer under contract and are free to work elsewhere. In the NFL, however, players sign contracts that can -- and often do -- extend beyond the terms of the CBA. And, the terms of these standard player contracts are clear:
Without prior written consent of the Club, Player will not play football or engage in activities related to football otherwise than for Club or engage in any activity other than football which may involve a significant risk of personal injury. Player therefore agrees that Club will have the right, in addition to any other right which Club may possess, to enjoin Player by appropriate proceedings from playing football or engaging in football-related activities other than for Club or from engaging in any activity other than football which may involve a significant risk of personal injury.
In other words, an owner has the right to prevent a player from playing non-NFL football or engaging in any other dangerous activity (e.g., boxing) during the term of the contract. But, does an owner have the right to prevent a player from playing non-NFL football at the same time he is preventing him from playing NFL football because of the lockout? There's no clear answer to that question. The owners would argue that the above provision is enforceable during the lockout, while the player would argue that all of the provisions of the contract are frozen during the lockout.
So, if a player did try to join another league during a lockout, there would be a fight...
Do the NFL players believe they have the right to play for a different league during a lockout?
Yes, but they also anticipate a fight. In the "NFLPA Guide to the Lockout" it recently distributed to NFL agents, here's what the PA said: "During a lockout, players will be allowed to play elsewhere, but there is no guarantee that the NFL clubs won't try to stop you."
David Stern, the Commissioner of the NBA, recently chimed in on this issue. Surprisingly, he made it clear that NBA players would have the right to play elsewhere during an NBA lockout. Here's what he said: "If, in fact, there's a lockout, then the player is free during the course of the lockout to do what he wants to do if his contract is in effect. I don't want to play that game with anybody. ... If we have a collective bargaining arrangement with the union and there's a lockout, then last time around [in 1998] players were free to do what they're going to do, because they've been locked out."
Would anything else prevent an NFL player from playing for a different league during a lockout?
Yes, any NFL players still under contract with an NFL team would not be able to play in the Canadian Football League. The CFL has a provision in its rules that prevents teams from signing players that are currently under contract with another league or team.
Has this issue -- players joining other leagues during a work stoppage -- come up in the past?
Yes, but not frequently. During the 2004-05 NHL lockout, many NHL players played in European leagues. But, it was reported that the NHL owners did not try to stop these players from leaving. During the 1982 NFL strike, it was reported that NFL owners obtained state court injunctions prohibiting the players from engaging in "All Star" games independently of the NFL. And, as I mentioned above, David Stern commented that the NBA players were free to play in different leagues during the 1998 NBA lockout.
Is it realistic for another football league to start up during a lockout?
No. Even if players were able to join the other league during the lockout, there is no telling how long the lockout would last. During the 2004-05 NHL lockout, most NHL players who left to play for European leagues negotiated a termination provision with their new teams that allowed them to return to the NHL as soon as the lockout ended. NFL players would likely demand the same protection, thus making it too risky for a new league to form. That said, an existing league -- like the UFL -- could stand to gain a short-term benefit by signing locked-out players.
Is March 3rd truly "D-Day" for a new agreement?
No. The NFL and the NFLPA could agree to extend the deadline for the expiration of the CBA. In fact, in 2006, the two sides did just that, agreeing to push back the expiration date of the CBA (and the start of free agency) a week while they worked out a new deal.
Will coaches be paid during the lockout?
That depends. Most head coaches will receive their full salaries even if no football is played next season. Assistant coaches won't fare as well. Some teams have the right to terminate (without pay) their assistant coaches in the event of a lockout, while others are obligated to pay their assistants their full salaries. Most teams fall somewhere in between, with their assistant coaches getting paid based on how many games are missed. For more on this issue, click here.
What about the fans? If they bought tickets for games next season and there is a lockout, will they get a refund?
Yes. The NFL has announced that fans with individual game tickets and season tickets will be offered full refunds if games are canceled because of a lockout.
It's all a guessing game at this point, but what is the likelihood of an extended work stoppage?
As we get closer to the expiration of the NFL Collective Bargaining Agreement, the great unanswered questions remain: Will there be a work stoppage? And, if so, how long will it last? It's anyone's guess as to when the two sides will reach an agreement (and everyone is guessing), but looking back at the past is often a good way to predict the future. And, a closer look at the "doomsday" work stoppages of the past -- where at least one regular season game was canceled -- reveals a fairly clear trend. Significant work stoppages occurred when one side was looking for a sea change--some radical transformation of the relationship between the parties. For example, in 1998-99, the NBA owners insisted on (and got) a cap on maximum player salaries. The owners locked out the players and 464 total games were canceled, including the NBA All-Star Game. In 1994-95, the MLB owner insisted on (and did not get) a salary cap. The players went on strike and 920 games were canceled, including the postseason and the World Series. In the best professional sports work stoppage movie of all time, the 2000 movie The Replacements (the Detroit News raved, "it's better than average"), professional football players went on strike late in the season, apparently because of "salary disputes" (it's not clear who got what, but Shane Falco did save the day).
And, most recently, in 2004-2005, the NHL owners insisted on (and got) a salary cap. The owners locked out the players and the entire season was cancelled, including the playoffs and the Stanley Cup. Other lengthy work stoppages were caused by fights regarding basic rights of free agency for the players. In each of these cases, one side claimed that the current system was broken (see the chart here for more details).
In the current negotiations, we're not dealing with fights over the creation of free agency or the implementation of a salary cap. The players have free agency and the owners have a cap. But, are the owners asking for a sea change? That's a difficult question. One could make an argument that the NFL's latest proposal for a rookie wage scale--which could actually impact a majority of NFL players--would represent something close to a sea change. But, despite the NFL's proposal, it's difficult for anyone to argue--even the owners--that the system is broken. The NHL owners were willing to cancel an entire season because they believed they lost less money by not playing games than by playing games. That is certainly not the situation facing the owners and their multi-billion dollar television deals.
So, if the past is any guide, we may not be looking at a major work stoppage for the NFL...
*Technically, the NFLPA is "disclaiming interest" in representing the players, and the players are decertifying the NFLPA as their representative, but I refer to it all as "decertification" for sake of simplicity.
(Many thanks to my research assistants in the Tulane Sports Law Program -- Jon Phelps, Lee Rudin, and Jeff Sundram--for all of their help in putting this together)
]]>NFL Lockout: The Legal Issues Behind the NFL-CBA Negotiationstag:www.huffingtonpost.com,2011:/theblog//3.8205792011-02-09T09:22:03-05:002011-05-25T18:30:24-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
These are interesting times for the National Football League. Immediately after producing the most watched television show in U.S. history, the focus has shifted towards the negotiations for a new collective bargaining agreement between the NFL and the NFLPA.
At this point, we all know about the major issues -- carving up a $9 billion pie; adding 2 regular season games; creating a rookie salary cap; building gigantic stadiums with gigantic scoreboards that have an actual seat (inside the stadium) for every ticket sold; etc.
Rather than rehash those issues, I want to focus on the legal options of each side if they can't reach an agreement by the March 3rd (Update: Now, March 11th) expiration of the CBA. The basics are easy: the owners can lock the players out or impose their "last, best offer" upon reaching a bargaining impasse. The players can strike, or decertify and bring an antitrust suit. But, what does all that really mean? Below, I answer a series of questions about the legal issues and options that might arise over the next several weeks. I start with some of the basic issues and then progress to the more complex ones (if you have a background in labor law, you should skip the first 11 or so questions).
Here we go...
What is a lockout?
A lockout is the "withholding of employment by an employer from its employees for the purpose of either resisting their demands or gaining a concession from them." In other words, a lockout is when an employer refuses to let workers work, and therefore get paid, as a form of leverage. A lockout is prohibited if it is motivated primarily as an attempt to discourage union membership or interfere with employees' organizational rights. Lockouts can occur before or after a bargaining impasse has been reached.
Would the NFL owners be permitted to lock the players out?
Yes, as long as the lockout is used for the purpose of increasing bargaining power, not to discourage union membership or to interfere with the players' organizational rights.
Would the NFL owners be permitted to lock out Brett Favre, and only Brett Favre?
Good thought, but it would not be permitted under labor law.
In the event of a lockout, can the owners hire replacement players?
Employers may hire temporary employees during a lockout where the harm to the locked out employees is "comparatively slight" and the decision to hire is motivated by a legitimate business reason. The NFL used replacement players in 1987 during the players' short-lived, and largely unsuccessful, strike.
Have owners locked out players in the past?
Yes. There have been lockouts in the NBA, the NHL and MLB.
The lockout cautionary tale, of course, is the NHL. The NHL lost its entire 2004-05 season after the NHL owners locked the players out, marking the first time in North American professional sports labor history that an entire season was lost.
The owners' second option is to wait for impasse to impose their "last, best offer" rather than locking the players out. What does that mean?
After bargaining to impasse, labor law permits employers to unilaterally implement changes to the terms of the previous collective bargaining agreement. These changes must be "reasonably comprehended" within the employer's pre-impasse proposals -- in essence, this means that, after the impasse, the owners can implement their last, best offer as the new set of rules to govern the NFL and its relationship with the players.
Why would the owners implement their last, best offer?
It's an alternative to a lockout. By implementing their last, best offer, the owners would essentially be saying to the players, take it, leave it, or decertify). By implementing their last, best offer instead of locking the players out, it would force the players to either accept the terms while continuing to negotiate, strike, or decertify. In any of those events, the owners would not be the ones responsible for a work stoppage. The NFL owners implemented their last best offer during the 1989 collective bargaining negotiations. As I discuss below, those negotiations ended with decertification and an antitrust suit.
What can the Players do if there is no agreement?
The players have their own economic weapons. Labor law encourages collective bargaining by providing a proper balance of power between employees and employers. To ensure this balance, the principle weapon that labor law provides to employees is the right to strike. Decertification is also a potential weapon for the players.
What is a strike?
Generally speaking, a strike is when a group of employees ceases work in order to gain leverage in bargaining negotiations. To be protected under the labor laws, a strike must be associated with a labor dispute between the striking employees and an employer. Striking employees are not paid during a strike and can be replaced by replacement workers.
Are the NFL players going to strike?
At this point, a player strike seems unlikely for at least two reasons. First, the NFLPA has publicly stated that they will not go on strike. Obviously, the players are not legally bound by their public statements, but a strike following their "Let us Play" campaign would not sit well the public. Second, players don't want to be the ones responsible for a work stoppage. In addition to the public relations hit they might take, a strike is a particularly risky move for professional football players, who have very short windows to make very large amounts of money. Most players won't want to voluntarily shorten that window through a strike.
What is decertification? And, what is a disclaimer of interest?
Decertification occurs when employees formally revoke the authority of their union to engage in collective bargaining on their behalf. In other words, decertification dissolves the union. A related concept is the "disclaimer of interest," where the union formally terminates its right to represent the players.
What is the process for decertification?
There are multiple steps to decertification. First, at least 30 percent of the players must sign a petition stating that they no longer want the NFLPA to represent them as a union (this process began several months ago). Second, the petition must be filed with the NLRB. The NLRB must verify the petition and then schedule an election. The union is decertified if at least 50 percent of the voting players opt for decertification.
What is the process for disclaiming interest?
The process for disclaiming interest is much simpler. The NFLPA can file a notice with a federal judge (Judge Doty, if they disclaim before the expiration of the CBA) and inform the owners that the union no longer represents the players.
Why would the players break up their own union?
The players would dissolve their union as a means to end. The end is the ability to bring an antitrust lawsuit against the NFL challenging all of the rules that they have in place that restrict a player's ability to make money or otherwise impact the players working conditions. For example, the players could challenge the NFL's salary cap, the player draft, franchise tags and other player and free agency restrictions.
Why do the players have to break up their union to bring an antitrust suit?
Here's the short version (for the even shorter version, skip to the next paragraph): Because of a doctrine known as the "non-statutory labor exemption." This exemption protects the product of collective bargaining from attack under antitrust law. Thus, any terms of the collective bargaining agreement are immunized from attack under antitrust law. But, the exemption extends beyond just the terms of an actual agreement -- the Supreme Court has held that the exemption applies, even in the absence of a current collective bargaining agreement, as long as a bargaining relationship still exists.
Essentially, players are required to choose labor law (and collective bargaining) or antitrust law (and individual bargaining and litigation). If the players choose labor law, an antitrust shield is raised that prevents them from attacking NFL rules under the antitrust laws. To lower the shield and choose antitrust law, the players must end the collective bargaining relationship. Decertification/disclaimer of interest is how the players surrender their collective bargaining rights and choose antitrust law instead of labor law.
Have professional athletes dissolved their union in the past?
Yes, the NFLPA disclaimed interest in representing NFL players in 1989. On November 6, 1989, the Executive Committee of the NFLPA notified the NFL Management Council that it was abandoning all collective bargaining rights. On December 5, 1989, player representatives from the then-24 NFL teams met and unanimously voted to decertify, thus ending the NFLPA's status as the players' collective bargaining representative. The NFLPA then re-formed as a voluntary professional association. The "new" NFLPA enacted new by-laws which prohibited the NFLPA or its members from engaging in collective bargaining with the NFL.
Was the 1989 disclaimer of interest successful for the NFLPA?
Very. Following the dissolution of the union, a small group of players filed an antitrust suit challenging the restrictive "Plan B Free Agency" rules that the owners unilaterally implemented (as their last, best offer) after the expiration of the CBA (McNeil v. NFL). A jury found that Plan B was an unreasonable restraint of trade and awarded damages to four of the players, ranging from $50,000 to $240,000. Players then filed a class action suit (White v. NFL) challenging Plan B and all free agency restrictions (including the draft). At that point, the players had tremendous leverage, and the parties agreed to settle the litigation. The settlement -- which included the creation of real free agency for the players -- was then embodied in the new CBA.
How long did it take for the NFLPA to achieve their victory when they dissolved in 1989?
The NFLPA disclaimed interest in December of 1989 and the jury reached its verdict in the McNeil case in September of 1992. A new CBA was signed in February of 1993.
Decertification/disclaimer of interest has been referred to as the "nuclear option," the "silver bullet," the "doomsday weapon," and a "tender contemplation on duty and the crippling weight of expectancy" (that last one may have been about The King's Speech). Is decertification/disclaimer really that powerful?
Yes and no. Yes, because it subjects the owners to antitrust attack and treble damages and could be used to block an owner lockout. Even the mere threat of decertification or disclaimer can help shift collective bargaining leverage in favor of the union.
No, for two reasons: First, depending on the timing of the disclaimer, the NFL will try to challenge it as a "sham." In essence, this argument is that the dissolution of the union is not "real" -- it is being done merely to improve the players' bargaining position, and in reality the NFLPA is still acting as a union behind the scenes (and, they will point to the disclaiming and re-certification in 1989 as further proof that it is being used as a bargaining tactic rather than for any genuine reason). The NFL will argue that the union is still representing the players and still bargaining on behalf of the players, and therefore the labor exemption should continue to apply.
In other words, the owners will use the "duck" defense- if it looks like a union, talks like a union, and acts like a union...it's a union (and therefore the players can't bring an antitrust suit).
Second, the NFL will argue that the NFLPA's sham disclaimer violates its duty to bargain with the NFL in good faith.
(The NFL made both of these arguments in 1989, and was unsuccessful on both counts.)
(Update: the NFL owners recently filed a claim with the NLRB arguing that the NFLPA has not bargained in good faith because of their plan to dissolve the union.)
And, even if disclaimer is successful, it is only the first step in a lengthy process. Disclaimer merely opens the door for the players to bring an antitrust suit against the NFL and its teams. The players will then have to fund a potentially long and expensive antitrust suit -- an antitrust suit they could lose.
Are there any other risks to dissolving the union?
Yes. Players will also lose all of benefits contained in the CBA. This includes pensions, insurance benefits and medical benefits. Other benefits of the union, such as control over agent certification and group licensing rights, could also come under attack. Additionally, if the union no longer exists, the owners will be free to implement any rules they want (including, for example, removing the minimum player salary and the salary floor).
What would the players be challenging under antitrust law?
Section 1 of the Sherman Act prohibits agreements that unreasonably restrain trade. Generally speaking, an agreement is an unreasonable restraint if its anticompetitive effects outweigh its procompetitive benefits, as judged under the "Rule of Reason." The players would be arguing that all rules that restrict a player's ability to make money or restrict a player's mobility -- including the salary cap, the draft, and free agency restrictions -- are unreasonable restraints.
If it comes down to it, will the players win their antitrust suits?
Perhaps, but perhaps not. Antitrust cases are complex and unpredictable, even more so in the sports arena. Each side does have a few points in their favor. On the one hand, courts have already held that a variety of player restraints were unreasonable -- and thus illegal -- under the Sherman Act. For example, courts have struck down age restrictions, player drafts, and free agency restrictions, including NFL's "Plan B Free Agency," as violations of the Sherman Act. (All of these restrictions have reappeared in sports leagues -- immune from antitrust attack -- as part of league collective bargaining agreements.) On the other hand, modern versions of these player restraints are less restrictive than the earlier versions that were challenged (and defeated). And, the numbers are not on the players' side -- from 1999 to 2009, defendants won 221 out of 222 antitrust cases decided under the "rule of reason".
When can the NFLPA disclaim interest?
Whenever they want, but here's where things start to get interesting (in the event that you didn't find the other stuff interesting). Under a literal reading of the current CBA (in Article LVII, Section 3), if the players wait until after the expiration of the CBA to dissolve their union, two things happen: first, the players cannot bring an antitrust suit for at least six months (or until the parties bargain to impasse, whichever happens last); second, the owners cannot challenge the dissolution as a sham. (Note: There is some question as to whether the parties intended that literal reading. That provision may not actually prevent the players from bringing an antitrust suit immediately if they dissolve their union after the expiration of the CBA).
In any event, the players have made it clear that they plan to dissolve their union (if at all) before the CBA expires, both to avoid any potential delay under the terms of the CBA and so that they can file the disclaimer with Judge Doty (who, at least by reputation, is "player-friendly").
Can the owners lock out the players if they have already dissolved their union?
Now we're dealing with completely uncharted territory. Once the players dissolve their union, any attempt by the owners to lock them out could be challenged as an antitrust violation. The argument would be that the teams have unreasonably restrained trade by agreeing to refuse to deal with all of the players.
Additionally, the players could argue that the lockout is an unfair labor practice that interferes with their right to choose whether or not to form a union. Essentially, the players would be claiming that the owners are forcing them to form a union (Why would the owners force the players to form a union? -- to get the antitrust protection of the non-statutory labor exemption.)
Either way, if the players dissolve their union, they will likely immediately file for an injunction that seeks to prevent the owners from locking them out.
If the owners can't lock out the players after they dissolve their union, what happens?
The owners would likely agree on rules to continue operating the league, and the players would challenge some of those rules as antitrust violations. Any rules that the owners agreed to (including an agreement not to run the business at all), could be subject to antitrust attack.
What has happened when unions in other industries have decertified/disclaimed interest?
Good question (thanks). Still in uncharted territory here. There is not much (if any) precedent out there to guide us in these situations, as unions in other industries usually spend time figuring out how to stay unified, not how to dissolve.
(Many thanks to my research assistants in the Tulane Sports Law Program -- Jon Phelps, Lee Rudin, and Jeff Sundram--for all of their help in putting this together)]]>The Supreme Court Puts to Rest the NFL's Single Entity Defense in American Needletag:www.huffingtonpost.com,2010:/theblog//3.5880862010-05-24T20:51:13-04:002011-05-25T16:35:20-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/click here). A broad victory for the NFL threatened to rewrite sports antitrust law and change the way professional sports leagues operate. Instead, the Supreme Court unanimously ruled against the NFL, and, well, the opinion did not rewrite sports antitrust law and will not change the way professional sports leagues operate. There has already been a lot written about the case today, so I am just going to cover four of the bigger points.
1) This was a resounding defeat for the NFL on the single entity argument.
Not only did the Supreme Court Justices unanimously reject the NFL's single entity defense, but Justice Steven's opinion thoroughly rejected it. Although the case only involved the licensing of intellectual property to apparel manufacturers, Justice Stevens' holding applied to all operations of the NFL (and, by extension, the NHL and the NBA). Here is some of the key language from the opinion:
• "The teams compete with one another, not only on the playing field, but to attract fans, for gate receipts and for contracts with managerial and playing personnel...[and] in the market for intellectual property."
• "Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned."
• "The question whether NFLP decisions can constitute concerted activity covered by §1 is closer than whether decisions made directly by the 32 teams are covered by §1. . . . Nevertheless we think it clear that for the same reasons the 32 teams' conduct is covered by §1, NFLP's actions also are subject to §1, at least with regards to its marketing of property owned by the separate teams."
In other words, for all conceivable purposes, and after decades of litigating the issue, the single entity argument for professional sports leagues is dead.
2) The decision does not mean that the NFL's exclusive license with Reebok is illegal.
This case was always a lottery ticket for the NFL. If they had won, it would have been a significant victory that partially immunized the NFL from attack under the antitrust laws. The next American Needle--perhaps a baseball card manufacturer or a video game company--would have been unable to challenge exclusive licenses between the NFL and its competitors.
The loss, however, does not change very much for the league. This case did not open the floodgates for antitrust litigation; it only ensured that the doors did not close. The sports antitrust world now returns back to the way it was before this case was first decided and the NFL will be subjected to the same antitrust scrutiny they have been subjected to for the last 50 years. The issue before the Supreme Court was not whether the NFL's exclusive licensing arrangement is legal under the antitrust laws. The issue was only whether the licensing arrangement should even be subject to scrutiny under the antitrust laws. American Needle got a big win in front of the Supreme Court, but they have not won their lawsuit. Not even close. Now, they have to start from the very beginning and try to prove in federal district court that the NFL-Reebok deal is an unreasonable restraint of trade.
3) The NFL did get some language from the opinion that will be helpful in future cases.
There is no reason to believe that the Supreme Court's rejection of the single entity argument makes it any more likely that American Needle will prevail in the underlying antitrust case (or that a suit against the NFL's exclusive deal with EA Sports would be successful). In fact, there is language in the opinion that might help the NFL in antitrust litigation going forward. For example, Justice Stevens notes that professional sports leagues are "not trapped by antitrust law"--just because NFL teams are multiple entities capable of violating Section 1 of the Sherman Act does not mean that every agreement the teams make does violate Section 1. Instead, Justice Stevens explained that the teams "share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games." Although these common interests were not sufficient to render the multiple teams a single entity, Justice Stevens made it clear that the teams' shared interest in the success of the league and in maintaining the competitive balance of the teams in the league "may well justify a variety of collective decisions made by the teams." The American Needle opinion thus arms the NFL with a strong argument that many of their agreements are "justified" (i.e., legal) and would survive an antitrust challenge.
4) The NFL players and the union can breathe a sigh of relief.
From the beginning, the NFL argued that this case was about apparel, not labor. But, it was clear that a broad victory in this case would have had a direct impact on labor negotiations. If the NFL had been ruled a single entity for all purposes, then the players would have lost the ability to decertify and challenge player restraints under the antitrust laws (as they successfully did in the early 1990s). The decertify-and-sue tactic is a weapon of last resort for the players, but it is a powerful weapon, and the players may have lost some of their leverage at the bargaining table if Supreme Court had ruled that the NFL was immune from antitrust attack. Although it was always a long-shot that the Supreme Court would block the players from bringing antitrust claims, the owners were in no rush to begin negotiating until the case was resolved, just in case they got a sweeping victory. That obviously did not happen, but the owners are no worse off than they were before the American Needle case was filed. Now that the American Needle cloud has lifted, however, the parties might be more likely to restart CBA negotiations.
]]>Brian Cushing Wins the AP Defensive Rookie of the Year Award... Again: Defending the Associated Press and the NFL (Part I)tag:www.huffingtonpost.com,2010:/theblog//3.5774802010-05-15T12:21:48-04:002011-05-25T16:30:24-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
The revote has provoked a tremendous amount of outrage--outrage over the AP's decision to have a revote, the results of the revote, Cushing's defiant denials, the NFL's drug policy, and the decision to cast an 11-year old as the new Karate Kid (that last one may be unrelated). Some of the outrage may be appropriate, and I agree that the Cushing 18 sent the wrong message by re-voting for Cushing, but I'm not here to pile on the criticism of Cushing or the 18 members of the media who re-voted for him. Instead, I want to defend the AP and the NFL. I'll start with the AP here and then move on to the NFL later in the week.
The AP's decision to revote has been attacked as (among other things) an inappropriate attempt to rewrite history and a threat to the finality of awards. Some members of the Cushing 18 were so opposed to the revote decision that they re-voted for Cushing as a protest against the decision to revote. One voter--Ed Bouchette--actually changed his vote to Cushing from Jairus Byrd in protest. I don't quite understand the anger and the retaliatory votes that the revote triggered.
Granted, in an ideal world, the AP would have had a rule calling for a revote in these circumstances, but these were unusual, unprecedented circumstances. Never before had a player tested positive at the beginning of one season, only to have the positive result come out after the season (and voting for player awards) had ended. The revote, though, was not a threat to the sanctity of the AP honors or a challenge to the finality of awards. It was just an attempt by the AP to give the Defensive Rookie of the Year award to the "right" player in light of newly discovered information that was directly relevant to Cushing's performance during his rookie year. If the voters believed that Cushing deserved the award despite his violation, so be it. Voters made that decision in 2002 when they voted Julius Peppers the Defensive Rookie of the Year after he violated the NFL's steroid policy and served a 4-game suspension. A similar decision was made in 2006 when Shawne Merriman was voted to the Pro Bowl after he violated the policy and served his 4-game suspension.
Of course, I understand the opposition to honoring a player with an award during a season in which he used a banned substance. But, why the opposition to allowing a revote to strip a player of an award when we discover--well after the season has ended--that the player achieved the award while using a banned substance? Is this really any different than the International Olympic Committee ("IOC") stripping an athlete of a medal when it discovers--well after the games have ended--that the athlete was doping during the competition? Or the NCAA taking away wins or national championships from a team when it discovers--well after the season has ended--that one of the players on the team was ineligible?
The IOC actually stores the doping samples it collects from athletes for 8 years so that they can be re-tested as new testing methods become available. Any positive test can be applied retroactively and used to strip athletes of medals and results. In 2009, the IOC stripped an athlete of a gold medal from the 2008 Beijing Olympics based on the results of a new type of drug test that did not exist in 2008. More new testing procedures will be developed, and more old medals will be stripped, as far back as the 2006 Olympics. I don't hear much of an outcry when the IOC decides to strip Olympic athletes of their medals based on a retroactive test, and I didn't hear any outcry when Marion Jones lost her medals after she admitted to using banned substances.
So, why the outrage here? It can't be because the AP left Cushing on the revote ballot. After all, if the voters felt that Peppers was deserving in 2002, why not allow them to decide if Cushing was deserving in 2009? It also can't be because the AP didn't automatically elevate the second place finisher to first, like they do in the Olympics when the gold medal finisher is disqualified. After all, in an Olympic event, we essentially know that the silver medalist would have won the race if the gold medalist had not run. We don't know that the AP voters would have voted for the second place finisher if Cushing had not been eligible. So, if the AP winner becomes ineligible, how do we figure out the new winner? Well, a revote seems like a sensible solution to me.
Will this precedent open the door to re-votes in the future? Perhaps, but why is that a bad thing? If the concern is that we'll never have any finality, then we can institute a statute of limitations--all awards are final unless challenged within 3 years. But, don't we want the ability to strip athletes of awards and achievements if we later learn that they earned them while using performance-enhancing (or related) substances? The AP's process may not have been perfect, but we can protest an imperfect process in ways that don't honor those who use banned substances.
]]>Breaking Down the Latest Development in the Star Caps Sagatag:www.huffingtonpost.com,2010:/theblog//3.5681042010-05-07T14:23:42-04:002011-05-25T16:25:21-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/StarCaps saga took yet another turn on Thursday when Minnesota state court Judge Gary Larson finally answered the basic question of the case -- can the NFL suspend Pat and Kevin Williams? It took almost 2 years to get there (you can find a detailed description of the case here), but Judge Larson concluded that Minnesota law does not prevent the NFL from suspending the Williamses. So, in one sense, this was a victory for the NFL.
But, there is also a loss wrapped inside this victory. Since this case began, the NFL has been seeking a determination -- first from the federal courts, then Congress, and now Minnesota state court -- that the NFL's drug policies trump state law, so that players cannot resort to state laws to challenge drug suspensions. The NFL did not get that sweeping pronouncement from the federal courts, Congress, or from Judge Larson.
Instead, Judge Larson held that the Minnesota Drug and Alcohol Testing in the Workplace Act (DATWA) and the Minnesota Consumable Products Act (CPA) apply to professional sports leagues. Why? Well, most simply, because the statutes do not provide any explicit exception for the sports leagues. Although the legislative history of the statutes make it fairly clear that those laws were not created to govern the performance-enhancing drug testing of professional sports, Judge Larson was not willing to ignore the plain meaning of the statute to read in an exception for the NFL.
Let's take a closer look at Judge Larson's opinion and what it means for the league and the players going forward.
Judge Larson made four key findings that led to his ultimate conclusion that the NFL may suspend the Williamses: 1. The NFL is the employer of the Williamses for purposes of DATWA; 2. The NFL violated DATWA's three-day notice requirement; 3. The Williamses were not harmed by the NFL's violation of the notice requirement; 4. The Williamses failed to prove that the NFL violated DATWA's confidentiality provision.
Let's take each one in turn:
1. The NFL is the employer of the Williamses for purposes of DATWA.
This was a significant issue for the NFL, because DATWA only applies to drug testing conducted by "employers" of Minnesota employees. A ruling that the NFL is not the employer of the players would have been a sweeping victory for the NFL, immunizing the league from DATWA (and potentially from other similar state statutes). Instead, noting that the NFL "controls everything about the drug testing process," Judge Larson held that the NFL and the Vikings are joint employers of the players, and thus the NFL is subject to DATWA.
2. The NFL violated DATWA's three-day notice requirement.
The Williamses alleged that their suspensions violated several provisions of the Minnesota state laws, but Judge Larson held that the NFL only violated DATWA's notice provision, which requires the drug laboratory to disclose a positive test to the employer within three days of the test, and then requires the employer to disclose the positive test within three days after receiving the positive test report from the lab. The Williamses were initially tested on July 26, 2008, but Kevin Williams did not receive notice of his positive test results until September 26, 2008 and Pat Williams did not receive notice until October 3, 2008. The NFL had a simple explanation for why it took (much) longer than three days to disclose the results: The NFL uses the UCLA Olympic Analytical Laboratory for its testing (a lab that Judge Larson concluded "meets or exceeds the requirements" for testing under DATWA), and "the UCLA lab is overworked and cannot possibly conduct player drug tests within three days."
3. The Williamses were not harmed by the NFL's violation of the notice requirement
This was the key finding in the case that gave the NFL its "win." Although the NFL clearly violated DATWA's three-day notification requirement, Judge Larson concluded that the violation did not cause the Williamses any harm. Here's the relevant language from Judge Larson's opinion:
When asked how he was harmed by any delay in notification, Kevin responded, "I don‟t know, I wasn‟t." Similarly, Pat answered, "I guess I wasn‟t harmed." Because Plaintiffs did not suffer any damages as a result of the delay in notification, they are not entitled to relief under DATWA.
In other words, because the Williamses admitted that the delay did not damage them, the NFL's technical violation of DATWA did not warrant lifting the suspensions.
4. The Williamses failed to prove that the NFL violated DATWA's confidentiality provision.
The other issue left to be determined at the trial was whether the NFL violated DATWA's (and the NFL's own) confidentiality provision by disclosing the Williamses' positive test results to the public. Because the Williamses admitted at trial that they disclosed the news of their positive test to several other people, Judge Larson found that it was "impossible for the Court to conclude by a preponderance of the evidence that the NFL must have violated DATWA‟s confidentiality provision."
Judge Larson also spent a surprising amount of time chastising the NFL throughout the opinion. For example, although Judge Larson could not determine that the NFL was responsible for leaking the results of the Williamses' positive tests, he noted that "the media leak was clearly of no importance to the NFL Commissioner, as he did nothing to determine that the NFL did not violate DATWA's confidentiality provision. The Commissioner did not conduct an investigation or make any inquiries into the matter." Judge Larson also commented that the lawyer for the NFL who did conduct an investigation into the leak "was likewise cavalier about the leak of highly-confidential information or potential violation of state law" and that his testimony at trial about the issue was "contradictory" and "not credible."
Judge Larson also addressed the NFL's failure to notify the players that StarCaps contained bumetanide, despite the fact that the league became aware that StarCaps contained the banned substance as far back as 2006. Judge Larson noted that "Bumetanide is a very potent and dangerous drug and can cause serious side effects, including death, if inadvertently taken and not under the supervisions of a physician," and that counsel for the NFL "made a conscious decision not to inform the FDA or any other regulatory agency [or the NFL Players] that Star Caps contained Bumetanide." Judge Larson added that the NFL directed the drug policy administrator "to report any future players for discipline who tested positive for Bumetanide, even though their use thereof was inadvertent." Judge Larson thus concluded that the NFL "was playing a game of 'gotcha.'"
Where does this leave us? Well, after nearly two years of litigation, we are back where we started. The Williamses will be suspended by the NFL when the season starts, as will Will Smith (Charles Grant was released by the Saints and Deuce McAllister retired). But, the legal maneuvering isn't over yet.
Here's what we can expect:
1) The Williamses will appeal Judge Larson's decision to the Minnesota Court of Appeals and they have already asked Judge Larson to stay the suspensions pending the result of the appeal (which could stretch out past the beginning of the NFL season).
2) The NFL might appeal the 8th Circuit's decision (which held that the NFL Policy did not trump state law) to the U.S. Supreme Court.
3) To close the possible floodgates of Minnesota players suing every time they test positive and are not given notice within three days, the NFL might ask the Minnesota state legislature for an exemption from DATWA (or at least from DATWA's notice provision). Such an exemption would not be unprecedented -- Louisiana's workplace drug testing statute contains a provision that explicitly excludes NFL and NCAA athletes from its regulations.
4) The NFL might continue to press for federal legislation that permits the collectively bargained drug policies of professional sports leagues to trump state workplace drug laws. According to Sports Illustrated's Peter King, California Representative Henry Waxman is close to introducing this type of legislation in the House.
For now, the Williamses will not be on the field when the 2010 NFL season kicks off. But, this saga is far from over...
]]>Expanding the NCAA Tournament May Be a Bad Idea: And Not for the Reason You Thinktag:www.huffingtonpost.com,2010:/theblog//3.5248542010-04-04T20:33:14-04:002011-05-25T16:05:22-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
Other than the folks at the NCAA, coaches are only people who seem think that expansion is a good idea. That's not a huge surprise: 32 more spots means 32 more coaches who can claim they had a successful season by making it to the (Really) Big Dance. It reminds me a little of the days when I was a kid in summer camp and everyone got a trophy just for playing. It seemed like a good idea at the time and I'm sure it kept me from crying, but it became pretty clear that a trophy wasn't a real sign of success. Granted, the NCAA isn't handing out tournament spots to all teams, but expanding to 94 will change the measure of success and failure. For most teams, just making the Big Dance is a real accomplishment. With the expansion, making the Really Big Dance will be expected for most big-time programs, and missing the tournament will be seen as an inexcusable failure. Yes, the odds of "success" will be higher, but the weight of failure will be that much greater.
But, I'm not here to debate the merits of the possible move to 96. I have my doubts about the "more of a good thing is better" logic behind the move (1 CTU mole on 24 is a good plot twist; 2 CTU moles means they need a new HR person), but I'm also not convinced that 64 is a magic number. Yes, we all love the tournament with its 64 teams and don't see a need to change it, but we all (ok, maybe not all) loved Major League Baseball with two divisions in each league and no wildcard, and MLB's playoff expansion hasn't turned out so badly.
There is, however, a more subtle implication of a larger field that may have a much larger long-term impact down the road than the (potentially) temporary backlash from fans and pundits. As John Feinstein hammered across during the press conference, a 96-team tournament means more games, which means more missed classes for the players. Under the NCAA's expansion proposal, 32 teams (the top 8 seeds from each region) will get a bye. The other 64 teams (the 9-24 seeds in each region) will play first round games on the first Thursday or Friday of the tournament. The remaining 64 teams (the 32 teams with the bye and the 32 survivors from the first round) will then play on Saturday or Sunday. The winners of those games will then play on the following Tuesday and Wednesday, followed by the Sweet 16 on Thursday and Friday, the elite eight on Saturday and Sunday, and then the final four the following week.
So, let's assume that Northwestern finally makes the tournament as a 21 seed (success for Northwestern!). If they make a magical run to the Sweet Sixteen, they will miss almost a week and a half of classes traveling for the games. When Feinstein raised this issue at the press conference, Greg Shaheen, a Senior VP for the NCAA, seemed unprepared (or unwilling) to respond to the basic point. Commentators have jumped all over this as a sign of the NCAA's hypocrisy, and Shaheen's "response" may have hurt the NCAA's public relations efforts (though it actually seems to have distracted people from the substance of the debate), but there is a much bigger issue at stake here.
Like the NFL, the NCAA has been the target of a number of antitrust lawsuits over the last few decades. And, like the NFL, the NCAA has spent a considerable amount of time and money arguing that they should be exempt from antitrust law (Once upon a time, the NCAA argued--unsuccessfully -- that they should be considered a single entity and immune from antitrust law. We'll see what the Supreme Court says about that argument for the NFL later this year). Although courts haven't given the NCAA complete antitrust immunity, they do recognize that NCAA rules governing college athletes should be given more deference than NFL or NBA rules governing professional athletes. The deference afforded the NCAA stems from two factors: college athletes are amateurs, and they are students. So, the NCAA has been protected from antitrust attack when they create rules that promote amateurism (i.e, restrictions on athlete compensation) and academics (i.e., eligibility requirements).
The special treatment starts from the top. Here's what the U.S. Supreme Court said in the landmark Board of Regents case in 1984:
The NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports. There can be no question but that it needs ample latitude to play that role, or that the preservation of the student-athlete in higher education adds richness and diversity to intercollegiate athletics and is entirely consistent with the goals of the [antitrust laws].
The Court added that "It is reasonable to assume that most of the regulatory controls of the NCAA are justifiable means of fostering competition among amateur athletic teams and therefore procompetitive because they enhance public interest in intercollegiate athletics."
But, the NCAA needs to tread lightly. Judicial deference to the NCAA is not unconditional. While some commentators have been screaming for years that the NCAA cares about money, not amateurism, courts have continued to defer to the NCAA in antitrust cases when the NCAA makes rules governing student-athletes that are arguably related to maintaining amateurism and furthering academic ideals. That deference could fade if the NCAA makes decisions -- like expanding the tournament -- that seem to put the "athlete" ahead of the "student" in student-athlete. At a minimum, it will give ammunition for plaintiffs to use in antitrust cases -- and their quest to obtain treble damages -- and give judges and juries a reason to more strictly scrutinize NCAA rules.
This is not a hypothetical risk. The NCAA is currently facing a class action antitrust lawsuit brought by Ed O'Bannon (and will surely face more antitrust suits down the road) that claims that the NCAA's use of former college athletes in video games, commercials, and other commercial enterprises violates the antitrust laws. The NCAA's amateurism/academics argument is already weakened in that case because the plaintiffs are former -- not current -- student-athletes, but expanding the tournament at the expense of academics will make it even more difficult for a judge or jury to give any deference to the NCAA.
There is no question that the NCAA and its member schools do a lot of important things with the money they earn from college basketball and football, but the NCAA has to be able to explain how an additional 32 teams in the already successful and lucrative tournament is worth an additional week (or more) of missed classes. Gary Shaheen had no answer at the press conference, and the stakes will be a lot higher in the courtroom.
]]>The Big Four Pro Sports Leagues are Cracking Down on Athletes, but NASCAR Wants its Drivers to "Have at it and Have a Good Time"tag:www.huffingtonpost.com,2010:/theblog//3.5195472010-03-31T00:19:02-04:002011-05-25T16:00:23-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/Icky Shuffle, the Sack Dance, the fun bunch, anything resembling Billy White Shoes Johnson, the Dikembe Mutombo finger wag, and NBA players dressed comfortably.
Whether we agree with the rules or not, it's easy to see what drives the leagues to make the changes--concern for the safety of players and fans, a desire to protect the image and integrity of the game, pressure from Congress, and a need to present a product that fans want to see. So, among many other things, we now have a strict NFL conduct policy, penalties and fines for excessive celebrations on the field, an NBA dress code, tougher penalties for steroid use, and various rules protecting athletes from hits to the head.
Of course, not everything is off limits. While it may soon be a fineable offense to cough on or near a quarterback in the NFL (we don't want Tom Brady getting a cold, do we?) the NHL still tolerates (if not embraces) fighting. We can quibble with the NHL's decision to allow the fights, but we can understood why they made it--hockey fans love to see fights, and it's not so bad if the players beat on each other every now and then.
But, it is a little hard to understand the latest ruling by NASCAR. For those who missed it, a few weeks ago Carl Edwards intentionally drove his car into Brad Keselowski 's car at about 190 mph. Keselowski's car spun, flipped in the air, and slammed into the barrier in front of the stands. At the time, Keselowski was running fifth at the Atlanta Motor Speedway, while Edwards was more than 150 laps behind. Edwards claims that he did not intend to flip Keselowski's car, but he made it clear that he intentionally crashed his car into Kezelowski's because of a feud simmering between the two drivers.
Edwards' punishment? A three race probation, but no suspension. To put that in perspective, the NBA recently suspended Channing Frye for 1 game for swinging and missing (twice) with punches during a game. Granted, NASCAR has always operated differently from the big 4 pro sports leagues. Only NASCAR would unveil a drug testing policy with no list of banned substances (in fairness, they did recently add a list, helping transform it from a choose-your-own-adventure (and lawsuit) document to an actual drug policy). The drivers have no union and thus no real voice in the operation of the sport, there is no collective bargaining agreement, and most NASCAR rules and regulations are cloaked in secrecy (fine, they're just not released to the public, but secret cloaking sounds more menacing).
But, why not discipline a driver for committing an intentional "foul," where the foul can kill the driver or even a spectator? What were they thinking? Where's the line here? How many ways can I restate the same question? Well, NASCAR made the answer pretty clear (at least to the first three questions) in public statements earlier this year. Here's what Robin Pemberton, NASCAR's vice president of competition, had to say about policing drivers this year: "We will put it back in the hands of drivers, and we will say, 'Boys, have at it and have a good time.'" NASCAR president Mike Helton added: "There's an age old saying that NASCAR, 'If you ain't rubbing, you ain't racing... I think that's what the NASCAR fan, the NASCAR stakeholders all bought into, and all expect." So, earlier this year, NASCAR lifted restrictions on bump-drafting and allowed drivers to increase horsepower to add excitement (and perhaps crashes) to its races.
And, now, apparently, drivers are allowed to intentionally wreck other cars in the middle of a race. Even for NASCAR, and even given the desire to "let the boys (plus Danica Patrick) have it and have a good time," this seems like a strange decision. No matter how exciting the action might be if the cars and drivers were completely unregulated, NASCAR has to take some steps to protect its drivers and spectators. And, of course, it does. As much as we all might want to see drivers shoot the tires of their competitors with mini-bombs during races (or maybe it's just RC Pro-Am fans who want to see that), NASCAR has a strict liability approach for cars and equipment that do not conform to NASCAR's regulations. Any variation from the requirements--no matter who was responsible for the variation--subjects the driver (and the crew) to potential discipline. These strict regulations are designed to prevent "cheating" and to protect anyone on or near the track during a race.
Given the speed of the races, there is no way to make a race completely safe, and drivers assume some risk every time they get in a stock car. Fans also assume some risk that a piece of a stock car could fly off the track and into the stands every time they watch a race (at least every time they watch a race in person). Some risk is a necessary tradeoff for the excitement of the race itself. But, drivers and fans should not have to assume the risk of one driver intentionally crashing his car into another driver at 190 miles per hour. NASCAR drivers can still "have at it" without trying to wreck their competitor's car in the middle of the race. If NASCAR wants to let its drivers get into fistfights after the race or taunt into each during the week, fine. If that's what it takes to get people to watch a race (or a hockey game), so be it. It's one thing to create excitement, but when the lives of drivers and spectators at risk, one would expect NASCAR to take some control. Let's hope they do before it's too late...
]]>The Washington Wizards Dumped Jamison, Butler, and Haywood -- Can They Dump Arenas and His Contract?tag:www.huffingtonpost.com,2010:/theblog//3.4881242010-03-05T17:42:20-05:002011-05-25T15:45:22-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/gun play. Jamison was due $28.4 million through the 2012 season, and Butler was under contract for $10.5 million for next season, so the team-gutting has left the Wizards in a position to be able to sign one of the mega free agents that will be available next summer.
The Wizards would be in an even better position to remake their team if they could get rid of Arenas, his gimpy knee, and his, well, Gilbert-ness (Sports Illustrated referred to him was the "Wizard of Odd"). But, Arenas is due nearly $80 million over the last 4 years of his contract, making him virtually untradeable (though is it that hard to imagine the Knicks trading for Arenas if they can't sign Lebron/Wade/Bosh or any of the other big names next summer?). So, what are the Wizards to do? One option is to build around him and hope that he can stay healthy and on the court (perhaps he can follow the lead of his team's name change and shift his focus from guns to Harry Potter?). The other option -- and one that General Manager Ernie Grunfeld is reportedly considering -- is to void Arenas' contract based on his gun troubles, which would instantly rid the team of Arenas' salary and its cap implications.
The route the Wizards take may depend on the answer to a simple question: Can the Wizards terminate Arenas' contract? To answer that question, let's take a look at the relevant rules:
• Section 5 of the NBA Standard Player Contract ("Conduct"): Requires a player to "give his best services," "be neatly and fully attired in public," "conduct himself on and off the court according to the highest standards of honesty, citizenship, and sportsmanship," and not "do anything that is materially detrimental or materially prejudicial to the best interests" of his team or the NBA.
• Article 35 of the NBA Constitution ("Misconduct"): Allows the Commissioner to suspend or fine a player who, "in his opinion...shall have been guilty of conduct that does not conform to standards of morality or fair play, that does not comply at all times with all federal, state, and local laws, or that is prejudicial or detrimental to the Association."
• Article VI, Section 9 of the NBA Collective Bargaining Agreement ("Firearms"): Prohibits a player from possessing a firearm at any NBA facility or event. Any violation of the provision is considered "conduct prejudicial to the NBA" and thus subject to commissioner discipline under Article 35 of the Constitution.
• Section 16 of NBA Standard Player Contract: ("Termination"): Allows a team to terminate a player's contract if the player shall " at any time, fail, refuse, or neglect to conform his personal conduct to standards of good citizenship, good moral character (defined here to mean not engaging in acts of moral turpitude, whether or not such acts would constitute a crime), and good sportsmanship...."
Based solely on these provisions, two things seem pretty clear: First, the Commissioner has the authority to suspend Arenas for possessing multiple guns in an NBA locker room. Second, the Wizards have the right to terminate Arenas' contract. But, there is one more crucial provision in play here that has been overlooked in much of the coverage of this story.
The NBA CBA has a "double jeopardy" provision that prevents a team and the commissioner from disciplining a player "for the same act or conduct." The section states that "the NBA's disciplinary action will preclude or supersede disciplinary action by any Team for the same act or conduct." On its face, this provision would seem to prevent the Wizards from terminating Arenas' because the NBA has already suspended him. But, we're not done yet. The next subsection of the CBA provides an exception to the exception: "The same act or conduct by a player may result in both a termination of the player's Uniform Player Contract by his Team and the suspension of the player by the NBA if the egregious nature of the act or conduct is so lacking in justification as to warrant such double penalty."
So, the $80 million question comes down to this -- was the "egregious nature" of Arenas' conduct "so lacking in justification as to warrant" a league-imposed 50 game suspension and the termination of his contract? Past cases are not particularly helpful, as it has been rare for a team to void an NBA player contract based on improper conduct.
The closest precedent we have for this case is the infamous choking incident involving Latrell Sprewell, then a member of the Golden State Warriors. For those too young to remember, Sprewell choked (after threatening to kill him) then-head coach P.J. Carlesimo at a practice. In fairness, Sprewell was apparently angry at Carlesimo for yelling at him during practice (the coach allegedly told him, among other things, to "'put a little mustard" on his passes). The league suspended Sprewell for 82 games and the Warriors terminated the final three years (and $23.7 million) of his contract. Sprewell appealed, and an arbitrator reduced the suspension to 68 games and overturned the termination of the contract, holding that voiding the contract would constitute an impermissible "double punishment" under NBA rules.
So, at a minimum, for the Wizards to terminate Arenas' contract, they would likely have to convince David Stern (and perhaps an arbitrator) that Arenas' conduct was more egregious than Sprewell's. Would they have a compelling argument? Perhaps. Let's compare the two. Arenas violated a specific written NBA rule prohibiting the possession of guns on NBA property (on a team that changed its name from the Bullets to the Wizards to avoid an association with gun violence). Sprewell violated a rule that was so obvious ("don't choke your coach") the NBA did not feel the need to write it down. Arenas compounded the situation by joking about the incident on twitter and in a pre-game team huddle on the court. Sprewell, after being wrestled away from his coach by his teammates, retreated to the locker room to cool off, and then returned to the court 20 minutes later to throw a punch at Carlesimo (and was later charged with reckless driving and served three months under house arrest during his suspension). Arenas had a prior gun offense -- he was suspended in 2004 for failing to properly register a gun. Sprewell had a prior fighting offense -- two years before the choking incident, Sprewell fought with his teammate Jerome Kersey. After the fight, he threatened to return with a gun (fret not, he only returned with a two-by-four). (Each player has also had interesting things to say about salaries. Arenas agreed to take $16 million less than the league maximum in signing his current deal with the Wizards, explaining: "What can I do for my family with $127 million that I can't do with $111 million?" Sprewell had a different perspective. While making $14.6 million with the Timberwolves, he grew unhappy with negotiations over his new contract, telling reporters: ''Why would I want to help them win a title? They're not doing anything for me. I'm at risk. I have a lot of risk here. I got my family to feed.'')
So, which conduct was more egregious? It's a close call, but add in the fact that Arenas pleaded guilty to a felony and that the NBA has take a tougher stance on conduct in the last several years, and the Wizards can at least make a straight-face argument that Arenas' conduct warrants double punishment and permits them to void his contract.]]>The Saints Are Finally in the Super Bowl -- Now Please Let Us Watch the Game in the Superdometag:www.huffingtonpost.com,2010:/theblog//3.4414112010-01-29T00:07:36-05:002011-05-25T15:20:23-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
That's one of the great things about sports. It brings complete strangers together, whatever their differences. What else could give us the scene in the French Quarter after the game? It was a city-wide hug-fest (Mardi Gras in the French Quarter provides a slightly less family-friendly hug-fest), with everyone--from kids to cops--shouting the same "who dats." Super Bowl Sunday provides another opportunity to recapture that experience. According to reports (and personal experience), the Superdome has been inundated with requests to watch the Super Bowl in the stadium. But, the NFL, citing copyright law, will not allow it. We've all seen the disclaimer:
This telecast is copyrighted by the NFL for the private use of our audience. Any other use of this telecast or of any pictures, descriptions, or accounts of the game without the NFL's consent is prohibited.
The NFL has been consistently zealous in protecting the copyright of its broadcasts. The league has prohibited any "mass out-of-home viewings" of their games, including games broadcast in movie theaters, schools, museums, hotels, and even churches (the NFL makes an exception for bars). In 2007, churches in Indianapolis and Chicago canceled Super Bowl parties after the NFL informed them that broadcasting the game in the church constituted a mass out-of-home viewing and violated the law (the NFL relented in 2008 and now allows churches to show games as long as the church does not charge admission). There's no real debate that the NFL has the right to prohibit these broadcasts. The NFL has a copyright in the broadcast of its games and this copyright allows the NFL to control the dissemination of these games (don't worry, the copyright laws do not prevent you from inviting friends over for a Super Bowl party at your house). There's also no question that the NFL has created a valuable product--so valuable that the networks are willing to pay billions of dollars for the rights to show those games--and that the league should be able to prevent unauthorized broadcasts that dilute the value of their televised games.
And, with the proliferation of new technology that allows viewers to watch games away from their televisions--on cell phones, laptops, and soon, iPads--the NFL is rightly concerned about finding ways to ensure that they maintain control--and benefit financially from--the rights to their broadcasts. The NFL cannot be blamed for shutting down pirated broadcasts of their games on the internet and taking all other steps to protect their product. But, is prohibiting fans of Super Bowl teams from watching the Super Bowl in their team's stadium a necessary step? As the NFL has explained in the past, it prohibits mass out-of-home broadcasts of games because fans watching games in public places (as opposed to on their home televisions) do not count for the Nielsen ratings, so more fans watching outside of their homes means lower ratings, which means lower revenue for the NFL through it television deals. But, the NFL has accounted for fans watching games on cell phones and laptops, so why not in stadiums? And, if the league can capture the value of the fans who choose to watch the games on non-traditional devices, why not capture the value of fans who choose to watch the game on a large television in a stadium?
The NFL doesn't have to worry about a slippery slope problem. They can limit this to the teams playing in the Super Bowl in a given year (or, for the sake of people in New Orleans this year, they can create a teams-whose-home-cities-have-been-ravaged-by-a-hurricane-and-flood-and-have-made-it-to-the-Super-Bowl-for-the-first-time-in-franchise-history-and-play-in-a-dome-are-allowed-to-show-the-Super-Bowl-in-their-dome exception). Allowing two stadiums worth of fans to watch the big game together outside of their homes will not destroy the value of the league's television deals. The number of fans who can fill two stadiums is a drop in the bucket compared to the total number of television viewers (and, after all, they will all be watching the game on television!). The league already makes an exception to allow fans to watch games in bars and churches, so why not two stadiums? It's not difficult to account for the number of fans who enter two stadiums, and it's certainly easier to account for them than it is to account for the fans who are watching the games in bars and churches across the country. And, unlike in bars and churches, the team can charge an admission fee (which can be shared by teams, or perhaps this year, can be donated for relief efforts in Haiti).
So, NFL, why not let 71,000-plus strangers come together and share what--for many fan-- could be a once-in-a-lifetime experience? At best, you make about 140,000 fans happy and add to the popularity of your already wildly popular sport. At worst, you lose about 140,000 fans from the television ratings. To put that in perspective, 151.6 million people watched the Super Bowl on television last year. Yes, we can all watch at home with friends, family, and co-workers, but we do that all the time. On this one night, why not let us experience this together, as a city?
]]>Why FIFA Did Not Suspend Thierry Henrytag:www.huffingtonpost.com,2010:/theblog//3.4291062010-01-19T22:54:42-05:002011-05-25T15:15:20-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/ Thierry Henry's infamous handball against Ireland in World Cup Qualifying raised two (slightly less significant) issues. First, should Roger Federer be worried about the Gillette jinx? And, second, should Henry be worried about a suspension for the handball? We'll have to wait and see on the first question, but the FIFA Disciplinary Committee answered the second question on Monday morning, announcing that Henry would not be suspended for doing everything short of handing the ball to William Gallas in front of Ireland's goal.
Why did FIFA decline to punish Henry? Before we answer that question, let's take a look at how these types of issues are handled in by professional sports leagues in the United States. The NFL, NBA, NHL, and MLB rules give their commissioners a fair amount of discretion to discipline players for misconduct that takes place on the playing field or court. There is no list of punishable offenses and there are no guidelines that dictate a specific punishment for a particular offense. The rules are intentionally vague to allow the commissioner to be flexible and take into account all of the facts and circumstances of the case--how severe was the conduct, was this a first offense, was there provocation, etc.--and to allow the commissioner's decisions to be made on a case-by-case basis. More serious misconduct committed by repeat offenders can be treated more harshly than mild offenses committed by otherwise model citizens. Here is a quick look at the discipline meted out by commissioners for some of the more notable cases of on-the-field misconduct.
• Rick Porcello suspended 5 games in 2009 for hitting Kevin Youkilis with a pitch amidst a flurry of beanballs by the Tigers and Red Sox (MLB);
• Chris Simon suspended for 30 games in 2007 for stomping on the leg of Jarko Ruutu (NHL);
• Jose Offerman suspended indefinitely from the Atlantic League of Professional Baseball after attacking a player with a bat in 2007, then banned for life earlier this week from the Dominican Republic Winter League for punching an umpire;
• Albert Haynesworth suspended for 5 games in 2006 for stomping on the head of a helmet-less Andre Gurode (NFL);
• Sammy Sosa suspended for 8 games (later reduced to 7 by an arbitrator)in 2003 for using a corked bat during a game (MLB);
• Ron Artest suspended for the remainder of the season (which meant 73 regular season games plus 13 playoff games) in 2004 for charging into the stands and fighting with fans after an on-court altercation with Ben Wallace (NBA);
• Joe Horn fined $30,000 in 2004 for making a cell phone call in the end zone to celebrate a touchdown (NFL);
• Rodney Harrison suspended for 1 game in 2002 for hitting Jerry Rice with his helmet (NFL);
• Roger Clemens fined $50,000 for throwing a splintered bat at Mike Piazza during Game 2 of the 2000 World Series (MLB);
• Roberto Alomar suspended for 5 games in 1996 for spitting on an umpire (MLB);
• Charles Martin suspended for 2 games in 1986 for throwing Jim McMahon to the ground (NFL);
• Kermit Washington suspended for 26 games in 1973 for punching Rudy Tomjanovich in the face (NBA).
So, how should FIFA have handled (no pun intended) Henry's handball? Was this a case of serious misconduct? Was this "cheating," like corking a bat in baseball? Or, was this a mild offense? Was this just a penalty that should be dealt with (or not, as was the case with Henry) on the field? Well, we know what FIFA decided to do--nothing. And, their decision to do nothing was met with a collective, "duh," as most of the folks who chimed in on the subject seemed to think that it would be ludicrous for FIFA to suspend a player for merely using his hands during a game. The general sentiment seemed to go something like this: Yes, the goal should have been disallowed and, yes, Henry should have received a card, and yes, it was unfair to Ireland, but the real blame lies with the ref, not Henry, and Henry should not be suspended.
But, a closer look at the FIFA Disciplinary Code shows that a suspension for Henry's handball was not so farfetched. Unlike the rules governing commissioner discipline for U.S. sports leagues, the FIFA code provides a specific list of punishable offenses ("serious infringements") and punishment guidelines for each infringement. In particular, the rules provide for a minimum 2 game suspension for "assaulting (elbowing, punching, kicking etc.) an opponent;" a minimum 6 game suspension for "spitting at an opponent or any other person;" and a 1 game suspension for "denying the opposing team a goal or an obvious goal-scoring opportunity by deliberately handling the ball." Deliberately handling the ball to help your own team score a goal, however, is not listed as a serious infringement (it likely constitutes "unsporting behavior," which does not subject a players to suspension), so FIFA claimed that they simply did not have the ability to suspend Henry under their own rules.
From the perspective of disciplining a player, is there a real difference between using your hand to score a goal versus using your hand to prevent a goal? And, is it (4 games) worse to spit on an opponent's foot than it is to punch him in the face? Maybe, maybe not. But, unlike the commissioners of the professional sports leagues, the FIFA Disciplinary Committee does not get to make those judgments.
]]>American Needle and the NFL's Single Entity Argumenttag:www.huffingtonpost.com,2010:/theblog//3.4095322010-01-02T23:09:37-05:002011-05-25T15:05:19-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/more here. Sports law blog For a more detailed discussion, you can read more here. All of the Supreme Court briefs are available here.)
Not surprisingly, this case is about a lot more than whether the NFL's exclusive license violates Section 1 of the Sherman Act. Instead, at issue here is whether the NFL is even capable of violating Section 1. Section 1 of the Sherman Act only applies to agreements, and (as Rob Bass and DJ EZ Rock might have put it) it takes two to make an agreement. So, for example, if all of the manufacturers of wool hats in the world got together to make a series of agreements, those agreements would be scrutinized under Section 1 to ensure they were not anticompetitive (e.g., to ensure that the manufacturers were not agreeing to fix prices). The question is, what happens when all of the NFL teams in the world get together and make a series of agreements? Should those agreements be scrutinized under Section 1?
In American Needle, the NFL argued that they are a single entity, and thus incapable of violating Section 1 (because a single entity cannot reach an agreement with itself). The NFL concedes that they do not look like a traditional single entity -- that is, a single firm with a single owner. Instead, the NFL argues that they are a single entity because the NFL is a product that can only be created by cooperation among its teams, and none of its teams have any economic value without the league. The NFL's argument is that the product created by the NFL teams is an interconnected series of games (the regular season) that leads to a playoffs, that eventually produces a Super Bowl champion, and that no individual team can produce this product on its own. Rather, the teams must make a series of agreements with each other--where to play, when to play, under what rules, etc. The NFL believes that this interdependence and need for cooperation renders the league a single entity, and that all of the agreements made by the league and its teams --ranging from scheduling to free agency restrictions to salary cap rules to franchise relocation restrictions --should thus not be subject to scrutiny under Section 1.
This is not a new argument. Sports leagues have been making this same argument for over thirty years, and virtually every court to address the issue has rejected the argument for over thirty years, often finding that agreements made by teams have violated Section 1. In American Needle, however, the district court held -- and the 7th Circuit affirmed -- that the NFL acts as a single entity when collectively licensing its intellectual property, and that the single entity classification of the league must be made "one facet of the league at a time." I'll talk a bit more about the merits of the NFL's argument and the broad implications of the case in a later post, but I want to quickly touch on three basic points that have either been overlooked or misconstrued by the press covering this story.
1) If the NFL loses the case before the Supreme Court, it does not mean that all of their exclusive licensing arrangements illegal. This case is a lottery ticket for the NFL. If they win, it could be a significant victory. I'll discuss why and how it might impact fans, players, and potential licensees in a later post. If the NFL loses, nothing really changes. The issue before the Supreme Court is not whether the NFL's exclusive licensing arrangement is legal under the antitrust laws. The issue is whether the licensing arrangement should even be subject to scrutiny under the antitrust laws. If the NFL wins, they escape Section 1 scrutiny. If the NFL loses, their arrangement will then be analyzed under the rule of reason, where a court will weigh the pro-competitive benefits of the agreement versus its anticompetitive effects.
There is no reason to believe that the Supreme Court's rejection of the single entity argument makes it any more (or less) likely that American Needle would prevail in the underlying antitrust case (or that a suit against the NFL's exclusive deal with EA would be successful). Rather, it only subjects the NFL to the same antitrust scrutiny they have been subjected to for the last 50 years. American Needle could win the underlying case, but only if it could prove that the anticompetitive effects of the NFL's exclusive apparel licensing deal outweighed its pro-competitive benefits
2) Curt Flood lost his case before the Supreme Court. Although only indirectly related to the case, there has been much discussion of Curt Flood and his fight for baseball free agency that went all the way up to the United States Supreme Court in 1972. Despite what some commentators have been writing, Flood lost that case. His fight is an important part of baseball history, but that case actually reaffirmed baseball's (and thus the reserve clause's) exemption from competition law. For a terrific read on that case and its significance, I highly recommend Brad Snyder's A Well Paid Slave: Curt Flood's Fight for Free Agency in Professional Sports. Major League Baseball players actually won free agency in a 1975 arbitration involving Dave McNally and Andy Messersmith.
3) The NFL already has an exemption from the antitrust laws for its television deals with CBS, NBC, and Fox. In the 1950's, the NFL teams agreed to pool their broadcast rights together and sell them as a package to the networks. A federal court held that this agreement violated Section 1 of the Sherman Act and prohibited it. Thus, the NFL teams were required to sell their television rights individually. In 1961, however, Congress passed the Sports Broadcasting Act, which permits NFL teams to pool all of their television rights and sell them as a package on network television. In other words, it exempts the network television deals from scrutiny under Section 1. Thus, regardless of the Supreme Court's decision in American Needle, the NFL's television deals with the CBS, Fox, and NBC cannot be challenged under Section 1. American Needle could, however, have an impact on the NFL's deals with DirecTV and with the NFL Network. More on that, and much more on American Needle, in posts to come.]]>Dwayne Bowe and the NFL's StarCaps Sagatag:www.huffingtonpost.com,2009:/theblog//3.3778952009-12-02T19:52:45-05:002011-05-25T14:50:26-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/
For those of you unfamiliar with the StarCaps story, you can read the details here (insert link to sports-law.blog), but, in honor of the late Abe Polin, here is a quick Wizard-point (anyone, anyone?) recap:
• The StarCaps Five were (coincidentally) using StarCaps, a legal, over-the-counter weight-loss supplement.
• StarCaps was created by the "Diet Queen to the Stars," Nikki Haskell. According to Haskell's promotional materials, StarCaps is a "natural dietary supplement...The secret is in StarCaps' unique ingredients...its all-natural blend of papaya and garlic from the higher Andes of Peru." (Umm, Miss Haskell--it's not a secret if you tell everyone).
• Although not listed on the ingredients, StarCaps contained bumetanide, a substance banned by the NFL Policy. (See, that's a secret, Miss Haskell).
• Bumetanide, like other diuretics, is banned for two reasons. First, diuretics can be used to mask the use of performance-enhancing drugs; second, diuretics can pose a threat to player health and safety.
• Although there is no evidence that the the StarCaps Five intended to take or knew they were taking bumetanide, they were all suspended for four games under the NFL Policy because, as the policy states, "You and you alone are responsible for what goes into your body."
• Side note: Oxford recently announced that "unfriend" was the new word of the year. This raises two issues for me. First, I'm not one to question the wise folks at Oxford, but shouldn't we recognize "friend" as a verb before we start throwing a parade (or whatever new words get) for "unfriend"? Second, before creating new words, can we fix some of the old ones? If so, I'd like to start with "bimonthly" (or biweekly, or biannually). According to our friends at Oxford, bimonthly can mean either "twice a month" or "every two months." Really?? We don't want to be more specific than that, but we want to make sure we have a word to describe what happens when I no longer want someone seeing pictures of my family on Facebook?
• The NFL Policy specifically warns players that supplements are dangerous: "Even if they are bought over-the-counter from a known establishment, there is currently no way to be sure that they contain the ingredients listed on the packaging or have not been tainted with prohibited substances.... If you take these products, you do so AT YOUR OWN RISK."
• The Five challenged the suspensions in court because, among other things, the NFL was aware that StarCaps contained bumetanide but did not notify the players. Jamar Nesbit, another player for the New Orleans Saints, also tested positive for bumetanide after taking StarCaps, but chose not to challenge the suspensions. Instead, Nesbit (the Pete Best of the StarCaps Five) served a four-game suspension and then brought a lawsuit against the manufacturers of StarCaps. Shortly after Nesbit's StarCaps lawsuit was filed, the FDA took StarCaps off of the market. (For those of you who missed out on StarCaps, have no fear. Haskell is now marketing the "StarCruncher," which she proclaims is "the first piece of sexy exercise equipment and the perfect way to get in shape and lose weight." Finally, an exercise machines sexy enough for me to start working out!)
• In court, the Williamses also claimed that the suspensions violated Minnesota's state workplace drug testing laws. Minnesota's workplace drug laws are extremely "employee-friendly," and provide significant protections and rights for employees subject to drug testing by private employers in Minnesota.
• The NFL claimed that the collectively bargained NFL Policy trumps individual state laws because the NFL needs to maintain a uniform drug policy without interference from individual states.
• The U.S. Court of Appeals for the Eighth Circuit rejected all of the Five's claims except for the Williamses claims that the suspensions violated Minnesota law. The Eighth Circuit held that the NFL Policy does not trump Minnesota state law and that a Minnesota state court gets to determine (in a trial scheduled for next year)if the suspensions of the Williamses violate Minnesota law.
• The Williamses suspensions were thus lifted, pending the result of the trial in Minnesota state court. Although the Saints players were not protected by Minnesota law and thus were still subject to suspension, Roger Goodell chose not to suspend the Saints until the Minnesota state court ruled.
So, to sum up (note to self: it's probably not a good sign when your recap needs its own recap), a federal court ruled that the NFL Policy does not trump Minnesota state law, and that a Minnesota state court gets to determine if the Williamses suspensions are permitted under Minnesota state law. The NFL thus cannot suspend the Williamses until the state court rules on that issue. And, because the NFL could not suspend the Williamses until the state court trial, Commissioner Goodell chose not to suspend the three Saints. Well, we all know how the story ends--the Vikings are 10-1 and the Saints are 11-0, and the moral of the story is that cheating pays. Ok, not quite. In reality, the story is not over. In November, Commissioner Goodell requested that Congress consider passing federal a law that permitted the terms of a professional sports leagues drug testing policy to trump state law. At the moment, it appears that Congress has chosen not to take any action.
Nevertheless, this ongoing saga raises a number of interesting issues, and I'm going to focus on one (in the interests of full self-promotion, er, disclosure, I testified at the StarCaps Congressional hearing--video and transcripts can be found here): Why does the NFL believe that they need--and are entitled to--special federal legislation that would allow them to violate state laws? The NFL's answer to this question is pretty simple--if they don't get the federal legislation, their performance-enhancing drug policy will be destroyed. The crux of the NFL's argument is that they have a unique need for a uniform drug testing policy. They cannot have different rules apply to players simply because they play for different teams in different states. A non-uniform policy raises at least two potential problems for the NFL. First, it is (arguably) inherently unfair to treat players differently for engaging in the same misconduct. Second, non-uniformity has the potential to impact the competitive balance of the league. There is little doubt that the NFL at least attempts to achieve some form of balance, or parity, among its teams. Whether they are successful or not is a question for another post (and for Detroit Lions fans), but the NFL has a valid argument that unequal treatment of players under the NFL Policy can have an impact on whatever balance the league has created.
The StarCaps saga provides a good example of these possible problems. The Williamses used the same banned substance, under the same general circumstances, as the three players from the Saints. Thus, it would be inherently unfair to treat the Saints players more harshly than the Vikings for engaging in the same conduct. And, the harsher treatment of the Saints players would put the Saints at a competitive disadvantage on the field (or give the Vikings a competitive advantage).
Additionally, the NFL argues that if the Eighth Circuit's ruling is followed by other courts, then the only way the NFL can maintain uniformity is to ensure that every provision of its policy complies with every provision of every applicable state statute. In other words, the NFL Policy can only be as strict as the most lenient, or "employee-friendly," policy. Thus, in a sense, individual states would be able to dictate how the NFL conducts its drug testing. For example, if Florida has a state law (which it does not) that does not allow for the punishment of an employee for a first drug offense, then the NFL can only maintain a uniform policy by not punishing any players--not just those playing for Florida teams-- for a first offense.
These concerns are not completely unfounded, but they are overstated, and it is premature to ask Congress to take any action at this point. Here's why. No court has actually ruled that the suspensions of the Williamses violate Minnesota state law. The Eighth Circuit only held that the suspensions and the NFL Policy must comply with state law. Thus, before seeking help from Congress, NFL should litigate the case in state court. That is a fairly obvious solution, but it has a good chance of success, because there is simply no reason to believe that these Minnesota laws were intended to regulate or limit the ability of professional sports leagues to test for the use of performance enhancing drugs. The Minnesota legislature was concerned about the use and abuse of performance-detracting and addictive drugs (including alcohol and tobacco) by its employees. The legislature was not concerned about the use of performance-enhancing drugs--cheating--by professional athletes. A Minnesota court could thus end this saga and any threat to the NFL by ruling that the NFL Policy does not violate the spirit of the Minnesota laws.
If the NFL loses the case in state court (or even if they win), the NFL's next step should be to seek an exemption from the Minnesota state legislature, not from Congress. The NFL can ask the Minnesota legislature to carve out an exception in the Minnesota statutes that makes clear that those laws do not apply to the collectively bargained performance enhancing drug testing policies of professional sports leagues. Such an exception would not be unprecedented-- Louisiana's workplace drug testing statute contains a provision that explicitly excludes NFL and NCAA athletes entirely from its regulations. And, Minnesota already amended its law in 2005 to allow random drug testing for professional athletes. If Minnesota modified its laws in 2005 for sports leagues, there is no reason to believe they would not do it again.
Granted, seeking an exemption from Minnesota might solve this particular problem, but what about all of the other states with similar laws? Well, I'm glad I asked that question. Of the 23 states that are home to an NFL team, only 5 (Arizona, Louisiana, Maryland, Minnesota, and North Carolina) have any form of mandatory statutory workplace drug regulations, and only 3 of those (Maryland, Minnesota, and North Carolina) have possible conflicts with the NFL Policy. Thus, other than Minnesota, only 2 states present potential conflicts for the NFL, and even those potential conflicts are relatively insignificant.
In short, the Eighth Circuit's ruling has not destroyed the ability of the NFL to test for performance-enhancing drug use. The NFL's suspension of Dwayne Bowe for using a diuretic, while not garnering much attention, is pretty good evidence that the policy still works. Missouri, like most other relevant states, has no law that provides additional protection for Bowe. And, the better solution to deal with the few state laws that might conflict with the NFL Policy is to ask those states--and not Congress--to clarify their laws.
]]>College Football and Competitiontag:www.huffingtonpost.com,2009:/theblog//3.3569282009-11-13T11:57:50-05:002011-05-25T14:40:23-04:00Gabriel A. Feldmanhttp://www.huffingtonpost.com/gabriel-a-feldman/Three's Company in 1979, so let's not shed too many tears.
How did we get from 23 games for an entire season to 54 games in one week? The obvious answer can be summed up in 1 word: Money. The networks are paying an obscene amount of money to broadcast college football games. The SEC just agreed to 15 year deals with ESPN and CBS that will pay over $3 billion combined. The less obvious answer takes 2 words: Antitrust Law. I know, not as sexy, but while money gets the headlines, antitrust law is often lurking in the background of the big sports stories. From free agency to salary caps to the location of teams to the number of teams in a league to the number of games on television, antitrust law has had a key role. Yet, nobody likes to talk about it. Why not? Well, I blame it on bad marketing. Antitrust law just doesn't sound fun. Or interesting. Or accessible. Or particularly useful to the things that most people care about, like sports. In fact, no words beginning with "anti" sound remotely appealing. Except maybe Antigua.
If we called it what many other countries call it -- competition law -- I think people might pay more attention to it. Global warming suffers from a similar problem (here I am, solving all of the world's problems in my first post!). If you really want us to pay attention to global warming, shouldn't you call it something more ominous? Like, "global burning." Or "global annihilation." Or, "your hairspray is killing my grandkids." So, from here on out, I'm sticking with competition law instead of antitrust.
And, what I hope to do in this space is discuss a variety of legal issues that arise in the sports stories we read about every day that tend to lurk in the background. Whether it is competition law, intellectual property, or basic contract law, the legal issues often get overlooked in the coverage of the story or mangled by those covering the story (I pass no judgment on the manglers. I'll be mangling plenty of things in this column, just hopefully not the legal issues. We spend most of our time mangling things, and when we find something we don't mangle, we get to make fun of those who do mangle it. That's just the way it works.). I'll try to tackle one or two stories per week and answer some of the basic legal questions that often get unanswered.
So, back to college football on television. The story starts back in 1939 with the first televised college football game: Fordham versus Waynesburg College. I know, it's hard to believe that rivalry has been so heated for so long. For many years after that glorious battle, the NCAA had a simple belief -- television was bad for college football. The fear was that fans would not buy a ticket to see the game live if they could sit at home and watch the game on the couch. The concept of blocking the broadcast of a game to encourage live attendance is not a completely foreign or anachronous concept, particularly to NFL fans in Jacksonville this year. But, for a time, the NCAA did not simply black out games when fans were not attending them, they blacked out all games. Yes, it was as if the entire nation was a Jacksonville Jaguars fan in 2009 -- the only way you could see a game is if you went to the stadium. The NCAA eventually lifted the blanket prohibition and entered into national network television deals that strictly limited the number of games that the networks could televise. So, in 1979, ABC could only televise 1 or 2 games per week and could only show a limited number of any particular school's games. The revenue from the television contract was then shared among all the schools.
Understandably, some of the big football schools, like Georgia and Oklahoma, were unhappy with the restrictions. They wanted more of their games televised and wanted more money from the television broadcasts. So, Georgia and Oklahoma brought a competition lawsuit against the NCAA claiming that the television restrictions were an unreasonable restraint of trade and thus illegal. The NCAA defended their television plan by claiming that they needed these restrictions not only to protect live attendance at games, but also to protect the game and the student-athletes. The NCAA was concerned that, without the restrictions, the sport would become more like professional football and the focus would shift from academics and amateurism to profits and television exposure. Teams would be chasing players because good players meant a good team, a good team meant more television exposure, and more television exposure meant more money. The NCAA was both worried about the tactics schools might use to chase the good players, and how the schools that were not willing to use those tactics or chase those players would be able to compete.
The case went all the way up to the Supreme Court and the Court held that the NCAA's television plan was illegal because it did the very thing that competition law is designed to prevent -- it limited competition and reduced output (the number of games on television). Without the restriction, teams would be able to compete with each other for television revenues and the number of televised games would increase. Well, the court clearly got that part right. The restriction was lifted, big time college football programs started competing for billions of dollars of television revenue, and virtually every game except for Fordham-Waynesburg is now televised. We all knew that money was a factor in the evolution of college football on television from 1979 to today (speaking of evolution, is it just me, or is Quagmire from Family Guy the modern, cartoon version of Larry from Three's Company?) , but competition law was the hidden force that allowed it all to happen. ]]>