March 3, 2011

The NFL Labor Wars: We’ve Only Just Begun

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Today marks the expiration of the current collective bargaining agreement of the National Football League.

Although there are specific issues at stake in the labor negotiations between the players union and the owners, such as the expansion to an 18-game season, revenue sharing and a possible rookie salary cap, in the end it all comes down to the money. Both sides want more of it and neither side is willing to cede a single penny to the other. Certainly it seems that progress is being made as both sides agreed to mediation about two weeks ago, but the fact remains that a new collective bargaining agreement is nowhere close to being signed. Just this past week, unnamed sources close to the negotiations mentioned that nothing would be agreed upon until September. Moreover, union decertification also seems to be a foregone conclusion at this point.

So what does this all mean — does the NFL world really come to an end today without a new CBA in place? Nothing could be further from the truth. The expiration of the CBA does not really affect the status quo because the terms of the old CBA will continue to apply as long as there is a collective bargaining relationship and the parties have not reached a point of impasse in the negotiations. For this to happen, the union and NFL must bargain in good faith. The NFL’s recent filing of an unfair labor practice charge with the National Labor Relations Board indicates, however, that the parties are acting more like five-year olds fighting over toys in a playground than grown men trying to negotiate a contract. The NFL is claiming that the players union is not bargaining in good faith to force impasse and eventually bring an antitrust lawsuit against the NFL. In order to bring such a suit against the owners and the NFL, the players union must vote to decertify itself.

A vote of decertification by the players would strip the authority of the union to bargain on the player’s behalf. The union creates a collective bargaining relationship, which immunizes the NFL from the wrath of antitrust scrutiny, even if the union-employer agreements create anticompetitive rules. Losing this antitrust protection would not lead directly to liability — courts might still find that the salary cap, free agency and other restrictions imposed on the players are reasonable in light of the way the NFL and other professional sports are organized.

The players union previously used decertification in order to file an antitrust suit in 1989 and was successful in claiming that “plan B free agency,” a system unilaterally implemented by the owners when the CBA expired, violated antitrust laws.

The player-friendly landscape today is markedly different from the one in 1989. The Supreme Court’s decision in Brown v. Pro Football, Inc., 1996, upheld an owner’s decision to unilaterally impose a fixed wage for developmental squad players. These players were not on current NFL rosters, but could be utilized by teams as substitute players in case of injury.  Essentially, the Court now allows unilateral terms imposed by the owners after the collective-bargaining period ends. Furthermore, circuit courts have provided protection for continued imposition of labor market restrictions after the CBA has expired. Consequently, the expiration of a CBA means very little if indeed the parties want to get a deal done. The terms of the CBA will remain in effect and exempt from antitrust challenge as long as the bargaining relationship exists.

Union decertification is different from the examples above because it terminates the bargaining relationship. However, the reasoning by the Second Circuit suggests that certain labor market restrictions will be exempt from antitrust scrutiny even if there is no bargaining relationship. The opinion explained that revenue sharing, the college draft and the salary cap system would remain exempt from antitrust scrutiny after the expiration of the CBA because the union had previously agreed to those restraints. This exemption should apply regardless of decertification because otherwise it would allow the union to seek treble damages for terms that it had previously agreed to. Moreover, it would provide the union with an incentive to forego negotiations and not bargain in good faith in an effort to recoup antitrust damages.

Ultimately the question on everyone’s mind is whether an antitrust challenge to some of the NFL labor restrictions will be successful. Furthermore, it is very likely that the owners will lockout the players in an attempt to increase their bargaining power, however, it is unclear whether a lockout is even possible without a union. Courts have yet to rule on such an issue. Thus, if the union decertifies, a lockout would be challenged as an antitrust violation and the outcome could provide increased leverage and bargaining power to the winner — but at what cost?

The “plan B free agency” the players successfully challenged in 1989 was a more restrictive system than the one that is in place now. Furthermore, since 1999, only one out of 222 antitrust challenges to player restraints has been successful. This does not mean that the players are dead in the water, but it will surely be an uphill battle. Moreover, a district court could also wait to hear any antitrust challenge until the NFL complaint filed with the NLRB is resolved.

The 1989 “plan B free agency” antitrust challenge ended in 1992 with a settlement in which both sides ended up making concessions to the other. Rather than continue to engage in finger pointing, the NFL and the players should remind themselves of what took place almost 20 years ago and actually attempt to negotiate in good faith; as opposed to forcing each other into a long drawn out legal battle that will not benefit either party and might actually end up alienating a large number of fans.

All that is certain at this point is that although the old CBA expires today, the NFL labor dispute is only just beginning.

Gabriel de Corral is a second-year law student at Cornell Law School and a Managing Editor for the Cornell Journal of Law and Public Policy. He can be reached at gad65@cornell.edu. Barely Legal appears alternate Fridays this semester.

Original Author: Gabriel de Corral