Fans Win, Owners Lose: A Layman’s Breakdown

>> 4.26.2011

A few weeks ago, when Judge Susan Nelson heard the player’s request for a preliminary injunction in Brady vs. NFL, I wrote a little piece running down the possible outcomes:

. . . the best-case scenario, for fans, is that Judge Susan Nelson orders the two sides back to mediation, and to not come out until they reach a settlement. Unfortunately, that’s quite unlikely. The second-best-case scenario, is Judge Nelson granting an preliminary injunction—meaning, she rules in favor of the players, the lockout ends, free agency begins, and we have business as usual until the conclusion of the trial. This is more likely than her ordering the parties back to mediation, but still not very likely.

Fortunately for everyone not named Jerry Jones or Dan Snyder, the second-best-case scenario is exactly what happened. As everyone’s now heard, Judge Nelson enjoined the “lockout,” in an extensive 89-page ruling (click for .pdf of full text). As part of my half-a-degree in Political Theory, I did have some edumacation in reading court decisions. If you want the quick version, read ESPN’s Lester Munson, whose interpretation of Judge Nelson’s ruling pretty much says what I’m about to say, only a lot smarter and a lot more concisely.

First, the NFL’s main argument: that the NFLPA's decertification was a "sham," a legal end-around designed solely to prevent the NFL from locking out the union, as is the right of an employer during collective bargaining. Right off the bat, there’s a big problem with this:

“Among the negotiated terms of the SSA, the Players, who had de-certified their union in order to bring antitrust claims, acceded to the NFL’s demand that they re-certify their union within 30 days. As an apparent form of quid pro quo for that accession, the NFL agreed to waive any right in the future to assert the non-statutory labor exemption, after the expiration of the CBA, on the ground that the Players’ disclaimer was a sham or otherwise ineffective to end the labor exemption.” –p. 11

Oops. As a condition of the players’ reforming into a union back in 1993, the NFL expressly waived the right to use the “sham defense” if the NFLPA ever decertified again. Not only that, but the union did an airtight job of making absolutely sure it wasn’t a union anymore:

“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. (Id. ¶ 57; Doc. No. 91, Ex. B.) In addition, as of that time, the NFLPA 7 amended its bylaws to prohibit it or its members from engaging in collective bargaining with the NFL, the individual teams, or their agents. (Doc. No. 1, ¶ 58.) The NFLPA also filed notice with the Department of Labor to terminate its status as a labor organization. (Id. ¶ 59; Doc. No. 91, Ex. E.) Similarly, it filed an application with the IRS to be reclassified for tax purposes as a professional association rather than a labor organization. (Doc. No. 1, ¶ 60.) And on March 11, it also informed the NFL that it no longer would represent players in grievances under the soon-to-expire CBA, so that the players would have to pursue or defend on an individual basis any grievance with the NFL or the individual teams. (Id. ¶ 61; Doc. No. 91, Ex. C.)” –p.14

Honestly, the spirit of the NFL’s argument might be valid: the NFLPA’s leadership did decertify specifically to prevent a lockout, the NFLPA’s leadership is still all the same people—and, before this is all said and done, the NFLPA may well re-certify (under the same leadership) in order to negotiate a new CBA. However, Judge Nelson ruled, A) the NFLPA is definitely not a trade union now, B) they gave up significant rights when they decertified (like the right to collectively bargain, the right to strike, etc.), and C) even if it’s all a ruse, the NFL already promised it wouldn’t call the players out on it.

The owners' repeated insistence that the NFLPA “resume collective bargaining” post-decertification looks pretty silly now, eh? The NFLPA wrote into its bylaws that neither it, nor any of its members, can collectively bargain with the NFL, the teams, or the agents.

The NFL claimed that the federal courts had no right to hear the case, and Judge Nelson should refer the dispute to the National Labor Relations Board. The NFL had already filed a complaint with the NLRB alleging the players’ engagement in unfair labor practices, and noted that the NLRB had exclusive jurisdiction over such issues. Judge Nelson first pointed out that there’s a difference between exclusive statutory jurisdiction, where an issue can only be resolved in one place, and primary jurisdiction, where a court refers the parties to an outside agency (like the NLRB) because that agency is better-equipped to resolve the dispute. She cited a whole mess of precedent showing that this case would be subject to the latter, not the former.

Then, she explained why—even if the NLRB’s expertise outstrips her own—she declines to stay the injunction and refer the parties to the NLRB. For starters, the NFLPA isn’t a union anymore—and unlike in other cases where unions “decertified” but kept right on striking, picketing, and collectively bargaining, the NFLPA has completely ceased any unionesque activity. According to the NLRB’s own guidelines, the NLRB’s exclusive jurisdiction covers unfair collective bargaining practices, and there isn’t any collective bargaining happening. Judge Nelson is ruling on an injunction in an antitrust lawsuit filed by a bunch of employees against a monopoly, not a labor dispute:

“Even assuming that the question of the Union’s disclaimer is an issue of labor law, this Court need not refer it to the NLRB because it arises as a question embedded in the larger framework of this antitrust suit.” –p. 32

Judge Nelson cites the the NLRB’s own General Counsel in the 1991 dispute (in which the NFL used the “sham” argument against the NFLPA’s original decertification), and :

“’[T]he fact that the disclaimer was motivated by ‘litigation strategy,’ i.e., to deprive the NFL of a defense to players’ antitrust suits and to free the players to engage in individual bargaining for free agency, is irrelevant so long as the disclaimer is otherwise unequivocal and adhered to.’” –p. 40

The NLRB has heard this exact complaint from the NFL before, about this exact action by the NFLPA, and they already told the NFL it doesn’t hold water. Even if Judge Nelson referred everyone to the NLRB, the NLRB would likely dismiss the claim anyway. Finally, Judge Nelson points out that the players’ request for an injunction is based on the lockout causing them irreparable harm; holding the case up for months waiting for the NLRB, just to have them go “We already told you, this isn’t our thing” would just be doing more harm.

The NFL also argued that the Norris-LaGuardia Act prevents federal courts from issuing injunctions in labor disputes. However, 1) the Norris-LaGuardia act was expressly written to keep courts from stopping labor unions from forming. It’s a pro-worker, pro-union law; it was enacted because the courts were too often granting injunctions for business against workers, flouting the intent of laws already on the books (like the Clayton Act). She even cites her colleague, Judge Doty, in his ruling on 1992’s Jackson vs. NFL:

"'[i]t would be ironic if a statute that had been enacted to protect the rights of individual employees from improper actions by employers and the courts were turned against those employees and used to justify the continued application of a system found illegal under the Sherman Act.'" –p. 56

Even leaving aside the historical context of the Norris-LaGuardia Act, and that the Norris-LaGuardia Act says right in it it’s meant to provide protection for workers, it’s expressly designed to be enforced during labor disputes—and . . . brace yourself . . . this isn’t a labor dispute because the NFLPA isn’t a union anymore. Again, she cites Judge Doty:

Judge Doty, in this district, came to the same conclusion in 1992. Jackson v. Nat’l Football League, 802 F. Supp. 226, 233 (D. Minn. 1992) (concluding that the Norris-LaGuardia Act “does not preclude injunctive relief in the present case because such relief will not undermine any labor policy set forth in the Act,” once the bargaining relationship ended). This Court is, of course, not the first to have issued injunctive relief against the NFL despite its objections that such relief was precluded by the Norris- LaGuardia Act. –p. 67

She then lists several other cases where the NFL has tried invoking Norris-LaGuardia to protect itself from lawsuits, and every single time it got them nowhere. According to the Boston Globe’s Greg Bedard, Judge Nelson took a dim view of this argument even in the courtroom:

One of the haymakers Boies received from a very prepared Nelson – she said this case was all she studied the previous two weeks – was about the Norris-LaGuardia Act of 1937, which the NFL insists precludes the court from stopping a lockout.

“'Isn't there some bit of irony that the Norris-LaGuardia act, designed to protect employees from strike-breaking federal judges, should now be used to prevent an injunction of a wealthy, multiemployer unit seeking to break players who are no longer in a union?” Nelson asked.

It was one of the few times during the hearing that Boies, the legendary antitrust litigator, didn’t have a swift response.

Judge Nelson then took up the main issue from the players’ perspective: whether a preliminary injunction is needed to prevent “irreparable harm.” She first notes that the players aren’t asking for a blanket injunction granting them an early victory on the whole Brady vs. NFL case (abolition of the draft, restricted free agency, the salary cap, etc.) just a lift of the lockout so they can all keep working while the full case is tried.

Second, she notes that the legal standard here is that the players need to have a “fair chance of prevailing” at the full trial, not the higher “likely to prevail” standard that applies for injunctions against government actions. She notes that foremost, the players must be suffering, or likely to suffer, irreparable harm.

Third, she must balance the harm the players would suffer during the lockout against the harm the owners would suffer if the courts lifts the lockout. Finally, she must consider the public interest.

Judge Nelson immediately states that the players have done an excellent job of establishing irreparable harm:

"Here, even on the present preliminary record, the Brady Plaintiffs have shown not only that they likely would suffer irreparable harm absent the preliminary injunction, but that they are in fact suffering such harm now." --p.71

The NFL argues that 1) players missing out on getting paid now can get paid later, especially if the NFL loses the overall suit and must pay the players “treble damages” (three times what they rightfully owe the players, a common penalty). 2) the players aren’t going to suffer a season-ending injury while sitting around not working, and 3) not being able to work out with their teammates at team facilities doesn’t do them irreparable harm, either.

Honestly, at first blush, this holds water with me. Yes, the players are being harmed right now—free agents-to-be aren’t getting their paydays, players like Chris Houston don’t know if they’re to be restricted or unrestricted free agents (HUGE difference in payday potential), and those rookies about to be drafted won’t be able to sign either. However, all of those things are “we miss out on getting paid” problems, and of course if the NFL is found liable, the players will eventually get paid.

However, Judge Nelson again cites a mess of case law, including the Court’s own rulings in the previous cases, noting that players’ short careers, extremely high risk of injury, and the extraordinarily competitive NFL job market, even missing one year can derail a career.

As an example (not in Judge Nelson’s ruling, this is me talking), if the lockout were allowed to last until Brady vs. NFL was tried and decided, Jason Hanson might elect to retire rather than ride it out—thereby ending his career.  Second, we all talked about how rusty Mike Vick would be at playing quarterback after two years in prison; imagine a whole league where all the veterans haven’t played for almost two calendar years—then imagine them competing for jobs against rookies who were playing in college the whole time . . .

Judge Nelson accepts the players’ arguments that free-agents-to-be, like Logan Mankins, have already missed out on the usual March feeding frenzy that pushes salaries through the roof. A year of no football finally ending with a momentumless free agency period wouldn’t replicate the conditions that would produce long-term, big-money paydays that young proven veterans like Mankins typically fetch—and players usually only get one or two chances in their careers to sign deals like that.

Further, Von Miller’s inclusion as a plaintiff represents a rookie class that will have an unprecedentedly short—or nonexistent—window to make a team in 2011. If the lockout goes through 2011 and ends in 2012, you may have two whole classes of rookies competing for the same roster spots—and this April’s class would have a year’s-thick coating of rust.

Finally, for players who are due to be free agents in 2012, 2011 is their contract year; they must make the most of it in order to maximize their market value. If the lockout infringes on the season, an opportunity to build their marketability will be forever lost.

The NFL argued that the balance of harms is on their side, because if an injunction was granted it would rip the fabric of the NFL asunder! Fire and brimstone coming down from the skies! Rivers and seas boiling! Forty years of darkness! Earthquakes, volcanoes; the dead rising from the grave! Human sacrifice, dogs and cats living together... mass hysteria!

Instead, Judge Nelson again notes that the injunction is not to grant a full victory to the players in Brady vs. NFL, just to lift the lockout:

“In ruling upon that request for injunctive relief, this Court need not–and does not–address whether the non-statutory labor exemption still applies so as to shield the NFL from the Players’ other antitrust claims, that is, those regarding the various restraints the League imposes on the Players. Resolution of the issue of whether the exemption precludes relief on the NFL’s various Player restraints must await another day.” –p. 83

Judge Nelson turned her attention to the players’ case.

"As the Brady Plaintiffs observe, the NFL does “not contest that their ‘lockout’ is a per se unlawful group boycott and price-fixing agreement in violation of antitrust law.” (Doc. No. 41, at 6 (Mem. at 1).) Rather, the NFL’s defense is confined to their argument that the non-statutory labor exemption from antitrust liability continues to protect the League because the NFLPA’s disclaimer was invalid and ineffective and that resolution of that issue is for the NLRB and not this Court. Because this Court has disposed of those arguments, the NFL presently has identified no defense against Count I of the Brady Plaintiffs’ Complaint. That the policies and decisions of the individual teams constitute “concerted action” seems plain."

Right, the way the NFL operates is flatly illegal if there’s no union, no collective bargaining, and no antitrust exemption. The NFL doesn’t, and really can’t, contest that. Their only defense is “Well they are too still a union,” which . . . yeah.

Finally, Judge Nelson must rule on the "public interest," and . . . yeah. If the owners win, the only people who win are the owners:

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. –p.87

If you haven't noticed, the league is precisely 0-fer in this ruling. On every single point, Judge Nelson sided against the owners. The courts’ order shouldn’t really be a surprise:

Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:

1. The Brady Plaintiffs’ motion for a preliminary injunction [Doc. No. 2] is GRANTED;

2. The Eller Plaintiffs’ motion for a preliminary injunction [Doc. No. 58] is MOOT; and

3. The “lockout” is enjoined.

So what does this all mean? First, as Pro Football Talk’s Mike Florio notes, the league’s legal strategy smacks of arrogance, ignorance, or both. They brought, essentially, the exact same argument to the exact same court about the exact same greivance as White vs. NFL. The NFLPA decertified, and the NFL trotted out the same “yeah, but it’s a sham decertification,” and the “actually, this Court has no right to rule on this issue” defenses. It shouldn’t be a surprise that they’re in line to get the exact same result.

What of the NFL's appeal to the conservative Eighth Circuit Court of Appeals? Look, this isn’t about “liberal” or “conservative” courts. As agent Howard Shatsky noted on Twitter, Judge Doty is an ex-Marine appointed by Ronald Reagan. Judge Nelson cited him, but also TONS of other precedent on every single one of these points. The ruling is an 89-page monster; as Lester Munson and Mike Florio and several others have said, it’s been carefully constructed from the ground up to prevent an overturn. The Eighth Circuit may well be “business friendly,” but they’ll be reviewing a blowout of a decision, with a high standard of deference. In order to stay, or overturn, this ruling, they’ll need to find that Judge Nelson “abused her discretion,” which is highly unlikely.

Ultimately, it’s what I’ve been saying all along: the owners think you’re dumb. The owners think the players are dumb. The owners think it’s their amazing business skills—and not the product on the field, nor the passion of the fans—that has fueled the success of the NFL. Throughout these negotiations, the NFL has presumed that not only will the NFL remain an incomparable entertainment juggernaut, but that it will continue to grow at unprecedented rates: 278% by 2027! The NFL wants to keep the players from their share of that pie in the sky, and to ensure that they don’t care who suffers. Not their employees, not their local economies, certainly not the players whose backs they’re making the money off of, and definitely not the fans whose pockets are the source of all this revenue.


7 comments:

Anonymous,  April 26, 2011 at 6:02 PM  

The owners think I am dum? I must be because I am sooooo pumped up for the draft!!!!! Great article as usual

Anonymous,  April 26, 2011 at 7:18 PM  

I find it incredulous that the NFL is even holding a draft. In 1993, Justice Sonia Sotomayor issued a supreme court ruling in Maurice Clarett v. NFL that stated "A draft cannot be sustained without a CBA".

This supports the principle of a CBA, and lends legitimatacy to every point that the NFLPA has sustained, thus far.

The League, and the NFLPA agreed to hold a 2011 draft in a bilateral statement.

Why? Because the NFL draft is a media event. The players can challenge it's validity, and win in Federal court, should they wish to do so.

These are the opening gambits in what will become a disgrace. The NFL knows that come what may, there will always be a ready source of new talent.

The NFL's insouciance will breed long lasting resentment among fans, and lure two sport college athletes into more lucrative careers in baseball, or basketball.

For the player's part, they will continue to garner the public's sympathy, while winning in the courtroom. A process that could take years.

The outcome? A new NFL that must regrow a fan base (of which they are certain). The Players? Well, they come and they go. What owner really cares?

It's time for the fans to organize a boycott, I think. Afterall, those 2010 free agents, and 2011 free agents and rookies are paying the price for the NFL's opting out of the CBA.

The writing was on the wall with that simple act.

Cheers,

Mike

Anonymous,  April 26, 2011 at 8:02 PM  

Great writeup! As a law student who just wrote an article about preliminary injunctions in labor disputes, your analysis appears spot on.

Thanks for dissecting it.

Alvin2112,  April 27, 2011 at 1:12 AM  

I hope this means there going to start OTA's and that soon, but I'm still skeptical. This isn't going to be a win for the fans if the players win the Brady case and the draft, salary cap, etc is abolished. That just means the Cowboys with Jerry Jones's billions and teams like that get all the best players while our Lions and everyone else fight for table scraps without having a chance to compete against the big spenders. That would kill the NFL. It sure would be great for greedy lawyer/agents who don't want a rookie salary cap, it takes their money away. The players need to start listening just as much as the owners. The players are now being run by agent lawyers who are looking out for themselves more then anyone. I can't believe I just typed that, being I'm on the left of things and absolutely hate greedy billionaires, but it is what it is.

Al

Mike,  April 27, 2011 at 1:18 PM  

There's no way the Brady case gets 100% of its objectives. Abolishing RFAs, salary caps, and a draft all abolish parity as well and, like you said Alvin, would create a system where the teams with big bankrolls would not only be able to pay big time vets big bucks, but would be able to attract all of the best college prospects as well.

What the Brady case is doing is illustrating a mirror for what the NFL is asking to put in place in their viewpoint...a clearly absurd laundry list of demands that would severely injure the sport. Tom Brady knows what his demands will do to the sport if met and I'll wager Tom Brady *doesn't want* to win that case. I will wager dollars to donuts that once the lockout is lifted and the players get an agreement with the NFL that no further action will be taken against any future NFL players union (similar to the previous lockout), the NFLPA will recertify and discussions toward a new CBA will continue while using 2010 RFA/UFA rules and salary caps. The only major hiccup here is that incoming rookies more than likely won't be signing any contracts until a new CBA is signed in lieu of a rookie wage scale.

I'm very happy, though, to see that the Lions organization (both the front office and the players) seem to have retained civility and friendship. For all the talk of a missing free agency, the lack of coaching to young players, etc, that could and would damage our progress, I think the most damaging would have been to brew some bad blood between players and Ford/Lewand/Mayhew/coaches. I'm very thankful for players like KVB that saw this too and told friends and teammates to stay away until this hodgepodge is cleared up.

alvin2112,  April 27, 2011 at 2:02 PM  

Mike, thanks for the rundown on all that stuff. I know that Brady vs. the NFL is more of a bargaining leverage stunt, but what if this thing does go all the way and it isn't dropped?

That's what happened during the collusion case back in the 90's and the players won. That case was needed, because it opened up Free Agency, which is only fair. I just hope it doesn't come to that again. I don't think it will, I think at some point it comes back to the bargaining table, but it'd be a disaster if this thing stays in court.

Great point on the Lions as a team and organization Mike. I'm grateful that the Lions brass and players have handled this situation with as much class as they have and that no bad blood has occurred. It shows me that this team does have good management now and that it also has great leaders on the roster, like KVB.

Al

Mike,  April 27, 2011 at 4:22 PM  

IMO that would be a worst case scenario. Like I said, I highly doubt that the vast majority of players actually *want* the things that Brady has laid out since a very small minority of them would actually TRULY benefit. Brady vs. NFL isn't a fight for an end, it's a fight for the means.

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