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...
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