Dean Johnson Breaks Down The NFL Lockout
The owners and players of the NFL are playing a very dangerous legal game. The outcome could determine not only the future of football, but all of pro sports and organized labor in America.
The entire litigation is a bargaining ploy by both sides designed to give them leverage in contract negotiations.
To understand the legal background, you have to know a little labor history. Here it is in a nutshell:
1. Labor law and Antitrust Law potentially conflict with one another. Antitrust Law, specifically Section 1 of the Sherman Antitrust Act prohibits “all contracts, combinations and conspiracies in restraint of trade.” Theoretically, both unionization and sports leagues violate antitrust laws. When union members combine into a single organization-a union-to negotiate wages, and when employers bargain exclusively with a union, both employers and employees are engaged in a “combination in restraint of trade.” When team owners form a league, refuse to hire any players except through a draft, and set salary caps, they are engaged in a classic “combination in restraint of trade.”
Yet, recognition of unions and collective bargaining are not only allowed, but required, by federal law.
Congress resolved this conflict in part by granting an exemption from the antitrust laws for employers who bargain with a union. The courts have also granted a partial exemption from the antitrust laws for labor related activities.
A Union must be “certified” by the NLRB in order to become the exclusive bargaining unit for a group of workers. Workers can also “decertify” a union, if they no longer wish to be represented by a union. If there is no certified bargaining unit, the antitrust exemption goes away. In other words, if there is no certified union, each employer must bargain with each individual worker as to wages and working conditions.
For pro sports, this means, effectively, no player draft. Each team is free to bargain for the service of any player at any price.
2. Injunctions have traditionally been used as a weapon by management to stifle actions by employees. Historically, employers who were faced with a strike, or with threatened unionization, would seek and obtain injunction prohibiting collective action by their employees.
For this reason, the Norris-LaGuardia Act and other provisions of federal Labor Law prohibit Federal Courts from issuing injunctions in labor disputes.
In March, NFL players started this battle by decertifying the NFL Players’ Union. This meant that the NFL’s antitrust exemption went away. Players, led by quarterback Tom Brady, then sued the NFL for antitrust violations.
The NFL treated the action as a strike, and locked the players out.
Players then argued to the Minnesota District Court that they would suffer “irreparable harm” from the lockout, and so asked for an injunction. The League responded that this was a labor dispute, and that, therefore, the federal court could not issue an injunction.
The trial judge disagreed. She said that this was an antitrust dispute, not a labor dispute and that, therefore, she could issue an injunction. So she enjoined (stopped) the lockout.
The league went to the Eighth Circuit Court of Appeals.** The court temporarily lifted the injunction. The decision was 2-1. So the bottom line is the lockout is back on for now.* But, the Eighth Circuit has yet to make its stay permanent. The Court will hear arguments from both sides before it decides. The future of the football season could hang in the balance.
But there is a lot more at stake than one football season. The game that is being played here is dangerous for both sides, for pro sports and for labor-management relations everywhere. Pro football, and pro sports in general, have long feared the loss of the antitrust exemption. If the players’ tactic is successful, it might well be followed by players in other sports. The loss of the Antitrust exemption could make pro sports leagues unworkable.
The injunction is traditionally a weapon used by management against labor. If the players are successful in convincing the Eight Circuit that the injunction is available in labor disputes in certain contexts, they see it used against them, against players in other sports and against union members everywhere.
Both sides are aware that they are playing a high-stakes game of chicken, with potentially disastrous consequences. Neither side wants to kill the goose that laid the golden egg, but, with $9 Billion dollars in revenues at stake, games of brinkmanship can get out of hand.
The eighth circuit will set briefing schedules shortly to decide whether the their stay should be made permanent.
The case can be followed on PACER.
The case is Appeal No. 11-1898 Tom Brady, etc., al v. National Football League, et al..
*If this confusing process of injunctions, stays, stays of stays and so on sounds familiar to those of us in the Bay Area, it is because we went through the same thing in the Prop 8 litigation. By the way, David Boies, counsel for the Prop 8 plaintiffs, also represents the NFL in this case.
**The choice of the Eight Circuit as the venue for this case may be strategic. The Eight Circuit was the first to articulate the Mackey test. This test restricted the application of the NFL Antitrust Exemption.