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Passing Judgment – NFL Lockout News and Analysis
The NFL plans on seeking a stay from Judge Nelson pending an expedited appeal to the Eighth Circuit Court of Appeals arguing that federal law bars injunctions in labor disputes. If there is no stay of Nelson’s decision, free agency and other offseason business could begin in theory, but it is unknown how it would operate.
“This is a good ruling, for sure, but I never want to celebrate until it’s actually over,” said NFLPA Players Association executive George Atallah. On the contrary, NFL Commissioner Roger Goodell said that Nelson’s ruling in favor of the players may “endanger one of the most popular and successful sports leagues in history.” Goodell believes that the players’ approach would force the NFL to operate in a vastly different manner, and that only some star players and their agents would benefit while a majority of players (and fans) will suffer.
Roger Goodell and DeMaurice Smith are not posing for the movie poster for Beverly Hills Cop IV.
But as fans, we already have suffered. The fact that the owners likely orchestrated this whole fiasco several years ago and are now creating a labor dispute because $9 billion in revenue is not enough to share is a tough pill to swallow for NFL fans living in a cash-strapped economy. The players are not free from blame, but the onus needs to be on the owners and the Commissioner’s office for creating this mess and making it exponentially worse. NFLPA executive director DeMaurice Smith said on ESPN: ”If we’re in a world where players are actually suing so they can play football … that tells me we’ve lost our way.” Well said.
The two sides have unsuccessfully participated in federal mediation multiple times over the last several weeks. The main issues still separating NFL owners and players are how to divide the $9 billion in revenue the league generates, the NFL’s push to expand the regular season to 18 games and benefits for retired players.
BACKGROUND
The most recent collective bargaining agreement expired 11:59 p.m. on March 11, 2011. The players determined that it was not in their interest to remain unionized if the existence of such a union would serve to allow the NFL to impose anticompetitive restrictions with impunity. A substantial majority of the players voted to end the collective bargaining status of their Union, and the player representatives of the Union then voted to restructure the organization as a professional association rather than as a union. Accordingly, at approximately 4:00 p.m. on that day, the NFLPA informed the NFL that it disclaimed any interest in representing the Players in further negotiations. The NFLPA also filed notice with the Department of Labor to terminate its status as a labor organization. See Brady, et al. v. NFL, et al., CASE 0:11-cv-00639-SRN-JJG (D. Minn.) at 13 (April 25, 2011).
The NFL argued that the decertification of the NFLPA was a sham and that the National Labor Relations Board should first rule on a league complaint filed about the decertification before the federal courts decide on the players’ lawsuit.
Once the union was decertified and players were allowed to file grievances on their own behalf, they filed a complaint alleging several antitrust claims under Section 1 of the Sherman Act as well as breach of contract and related tort claims. They allege that the NFL and its thirty-two separately owned and independently operated teams have jointly agreed and conspired – “through a patently unlawful group boycott and price-fixing arrangement” or “a unilaterally-imposed set of anticompetitive restrictions on player movement, free agency, and competitive market freedom” – to coerce the players “to agree to a new anticompetitive system of player restraints” that will economically harm the Plaintiffs. Of importance regarding the classification of the NFL and its 32 separately owned teams, the United States Supreme Court recently ruled that the NFL is comprised of 32 individual corporations and cannot form a single corporate entity to evade Section 1 of the Sherman Act to develop, license and market their intellectual Property. See American Needle, Inc. v. National Football League, 130 S. Ct. 2201 (2010).
One of the alleged anticompetitive agreements is the NFL’s lockout aimed at shutting down the entire free agent marketplace, as well as a boycott of rookies and players currently under contract. The players moved for a preliminary injunction the same day seeking “to enjoin the NFL from perpetuating the lockout.” In response, the NFL claims Judge Nelson and the District Court of Minnesota may not enjoin their “exercise of their labor law right to lock out their player-employees” as the lockout “is unquestionably lawful and permitted by federal labor law.”
To Nelson’s credit, she took into consideration everything and everyone who is potentially affected by a lockout imposed by the NFL and the ramifications for possibly not playing football in 2011. Plaintiffs argued that because of the constant pressure to prove their physical and economic worth, the loss of an entire year in a short professional athletic career cannot be recaptured and, therefore, cannot be adequately compensated by damages. The players further argue that time spent off the playing and practice fields diminish their skills. As a result of sitting out an entire season, this diminishment in skills could shorten or end the careers of some players.
Judge Nelson also considered the public interest in her analysis. In fact, Supreme Court has reiterated that courts “should pay particular regard for the public consequences in employing the extraordinary remedy of injunction.” The public has an interest in the enforcement of the Sherman Act, which, by seeking to ensure healthy competition in the market, has a broad impact beyond the immediate parties to this dispute. Moreover, the public ramifications of this dispute exceed the abstract principles of the antitrust laws, as professional football involves many layers of tangible economic impact, ranging from broadcast revenues down to concessions sales. And, of course, the public interest represented by the fans of professional football – who have a strong investment in the 2011 season – is an intangible interest that weighs against the lockout. In short, this particular employment dispute is far from a purely private argument over compensation.
Apparently Skynet has become self-aware. Goodbye world.
While this decision is a victory for the players and for the fans, it is by no means an indication that a quick resolution is in order. The decision has no impact on the NFL Draft which is scheduled to begin this week. Because there is no operative collective bargaining agreement and the NFLPA has been decertified, players may not be traded once they are selected by an NFL team. The only trading that can take place is the exchange of draft picks – not people. Additionally, the 2011 season is still potentially in jeopardy. We can only hope that the Court’s ruling will help promote continued mediation and settlement discussions between the players and owners. I shudder to think, but can you imagine what the winter would be like without the NFL and fantasy football? Inconceivable (yes, a Princess Bride reference).
