Playing Inside the Lines of Labor Law: Professional Sports and the Non-Statutory Labor Exemption I.
Introduction Each day people across the country turn on ESPN in hopes of seeing a miraculous shot, a crazy buzzer beater, or the best save of the season. Unfortunately, it seems like this past-time is interrupted every few years by labor stoppages related to collective bargaining agreement negotiations. Several decades have passed since the sports we love to watch have progressed with society towards a more organized workforce. This industrial transformation can trace it’s origins to the increasing unionization of pro sports. The National Football League Player’s Association (NFLPA) for instance, the union representing professional football players is now a member of the AFL-CIO, one of the country’s more prominent labor organizations. Memberships like this have become more commonplace, and it seems the labor fight has always been led by football. 2011-2012 has the potential to be the tipping point regarding the intersection of labor law, anti-trust policy, and sports. This year alone, the following leagues have or will engage in some sort of collective bargaining related to organized labor; the National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB), National Hockey League (NHL), and the Arena Football league (AFL). One of the key features of this year’s collective bargaining has been the looming presence of “decertification.” This paper will analyze several concepts which embody the ongoing analysis of sports law, antitrust, and labor law. The first concept will be the unionization of professional sports, as well as the challenges which have brought it into the purview of the courts. It has been a long road with many twists and turns, many of which are
evaluated in this paper. Of primary importance is how courts have mistakenly opened doors which were never meant to be unlocked. I will then analyze anti-trust policy and the relatively recent application of antitrust to professional sports. Specifically, the paper will analyze the non-statutory labor exemption, and its application in labor actions. This will require an understanding of the proper venue to use this tool, the arguments for and against it, as well as the aftereffects of using the idea. Embodied within this antitrust examination is the use of union “decertification”; the labor definition and the non-statutory labor exemption definition used for antitrust reasons. Finally, I will try and find an alternative, albeit non-traditional solution to decertification in the professional sports arena. An alternative solution is needed because the use of decertification has bastardized the functions of Federal labor policy, creating a vacuum where a policy solution is needed. One promising arena which may provide a parallel structure is the use of Global Union Federations (GUFs). These are traditionally transnational in nature, and may provide a guide to the world of professional sports where each union relies on other league’s unions before taking offensive actions. II. The Law of the Land This paper would be remiss to not mention the labor and antitrust laws which have been utilized in the athletic union context. The antitrust question is controlled by the Sherman Act1, which Congress intended to protect competition, and prevent the formation of monopolies.2 “Every person who shall monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States or with foreign nations, shall be deemed guilty of a felony…”3
Section 1 of the statute is usually interpreted to restrict only unreasonable restraints of trade, thus allowing individuals to form contracts which govern the scope of trade.4 It would seem at first glance that antitrust policy should always control in a sports context regarding restraints on players. However, in dealing with this question the Court took a detour in arriving at the correct answer. The first time the question was dealt with in 1922, an exception was created for baseball, which has lasted since the Major League’s inception.5 Baseball is the only sport which had a blanket exemption from antitrust laws related to labor restraints until 1998, but still enjoys it in some respects.6 Thus the other professional sports must abide by the Sherman Act’s provisions seeking to protect against monopolies and unfair trade practices.7 As the Twentieth century progressed, a natural evolution occurred whereby athletes increasingly sought to organize into labor unions. The problem with the union movement was the ominous presence of the Sherman Act which if literally interpreted, seemed to and indeed did ban organized labor. In 1908, even before baseball received the gift of antitrust exemption, the ‘Danbury Hatters’ case exemplified the Court’s view that the Sherman Act barred organizing and other labor activities by the hatters’ union as an ‘illegal combination in restraint on trade’.8 Decisions such as the above led to the creation of the Clayton Act and the NorrisLaGuardia Act, which Congress passed in order to protect unions.9 The Clayton act was generally a failure in protecting labor, which resulted in the Norris-LaGuardia act as well as the National Labor Relations Act.10 These acts substantially broadened the scope of union activity, and not only allowed, but promoted employer-employee bargaining with respect to wages, hours, and other terms and conditions of employment.11 One of the
biggest problems with the passage of this act is that it still seemed to be at odds with the statutory labor exemption of the Clayton Act. The Eastern District of Pennsylvania interpreted the statutory labor exemption in Philadelphia World Hockey Club, inc., and provided an analysis which rings true today.12 When claiming the statutory labor exemption, which was intended to protect unions from antirust liability, a court is essentially outlining how far within the bounds of the Sherman Act, a union may act.13 A union may not act in complete disregard to all Sherman Act provisions. Rather, they must not act in concert with any non-labor group to effectuate their goals and policies.14 In order to use this statutory exemption, excepting a union from antitrust liability, the union must act in its own self-interest and not combine with a nonlabor group.15 This exemption does not help modern day professional sports unions because it seems to impact only working conditions, whereas a collective bargaining agreement advances interests such as salary, hours, and player movement in addition to working conditions. Courts recognized the gap in protection within the exemption, and expanded it to create the non-statutory labor exemption in Amalgamated Meat Cutters v. Jewel Tea.16 In that case, the Court, in a plurality opinion chose not to apply antitrust scrutiny to a multiemployer agreement restricting work hours.17 The agreement in Amalgamated Meat Cutters was a product of good faith bargaining between unions and employers concerning wages, conditions, and hours of employment, which are mandatory bargaining subjects under the NLRA.18 Antitrust implications of bargaining were balanced against labor policy and the Court deemed labor policy controlling, thus exempting the agreement from
antitrust because it related to matters of “fundamental employee interests under the NLRA”.19 The non-statutory labor exemption was qualified in Connell Construction Co. v. Plumbers and Steamfitters Local Union No. 100.20 The Court held the exemption will only apply to agreements achieved through the collective bargaining relationship.21 In cases such as Connell where a union negotiated a clause requiring subcontractors to also have a collective bargaining agreement with the union, it was found to violate antitrust.22 The exemption was never meant to allow a union to negotiate a collective bargaining agreement which allowed them to impose a direct restraint on competition in a business market, by reducing the pool of available subcontractors.23 The agreement did not specify that subcontracting could only be performed by contractors with union agreements, but specified, it must have been by Local 100, thus violating an exemption meant to promote the strong labor policy in favor of employee association to eliminate wage and working condition competition.24 The agreement negatively affected non-union parties which were not part of the collective bargaining agreement.25 Amalgamated Meat Cutters and Connell make it clear that labor agreements which are negotiated in good faith concerning wages, hours and working conditions will be eligible for the exemption. The remaining law is decertification. True labor decertification is an involved procedure which requires numerous steps in accordance with §159 of the NLRA.26 The effect of filing a petition to rescind authorization is the secret ballot election.27 If the authorization is rescinded, then the role of the union in collective bargaining is instantly ceased.28 An example of this is seen in Retail Clerks International Association AFL-CIO v. Montgomery & Ward Company, where the employees voted for decertification, and the
union then sued to enforce a collective bargaining agreement.29 The court however, refused to enforce the agreement, since, once the union was decertified per election procedures of the NLRA, they no longer could continue as the bargaining agent for purposes of enforcing the agreement. This is not the decertification used by athletes. Decertification used in the professional sports world is actually disclaimer, since it is rare for the NLRB to receive petitions voting for non-recognition.30 The applicable law in labor and antitrust has thus been set out above. Where the struggle has developed throughout sports is the context of the exemption during collective bargaining negotiation. This is an issue courts have struggled with, and will continue to struggle with as the sports industry becomes more sophisticated in both economic and legal means. III. Fields of Fun to Fields of Fire: the Transformation of Professional Sports Off the Playing Fields Professional sports moved through the early twentieth century virtually devoid of collective bargaining agreements. Until 1967, most labor relations in sports were governed by contract law. This was the only system utilized to form working relationships in sports.31 While the first collective bargaining agreement was signed in 1967, it was actually basketball which was the first organized sport in which a union was able to achieve objectives for the players.32 In 1969, the NLRB first brought a sports union under their jurisdiction, since sports were interstate commerce subject to the NLRA.33 Since that time, many other unions have grown across sports, and with these unions came litigation.
The first time the labor exemption was litigated with respect to a union claim was in 1975, in Robertson v. NBA.34 In Robertson, the court struggled mightily in separating the statutory and non-statutory labor exemption.35 The above case, although invalidly so, stated that, an employer could never claim a labor exemption because it was created in favor of the unions only, which was never stated in earlier cases.36 Judge Carter also stated the labor exemption did not apply when it was in reaction to restraints proposed in favor of the employer, despite the fact that Jewel Tea addressed all good faith bargaining.37 Finally, the Judge held that rules concerning player restraints were not mandatory terms of collective bargaining, and then attempted to apply the statutory labor exemption.38 This was not a very helpful case in terms of understanding the dual exemptions, and has been lessened in importance over the years because of appeals court rulings. Mackey v. NFL was the first appeals case which involved the application of the non-statutory labor exemption to a collective bargaining agreement.39 The case centered around the ‘Rozelle rule’ which limited player movement by compensating teams who lost players to free agency with draft picks.40 Teams would then be reluctant to sign free agents because the cost may have been a high draft pick, thus the mobility of players was quite limited.41 When the players challenged the rule under antitrust rules, the NFL attempted to utilize the non-statutory labor exemption in order to defend against the action.42 The outcome of the case is not as important as the three-pronged test crafted by the court which stated the proper test for whether the non-statutory labor exemption applied was “whether…the restraint on trade primarily affects only the parties to the collective bargaining agreement…where the agreement sought to be exempted concerns a
mandatory subject of collective bargaining… [And] where the agreement sought to be exempted is the product of bona fide arms-length bargaining.”43 This test has been built upon over the years, thus to defeat the exemption and gain access to antitrust, a party must overcome one of these requirements, by demonstrating it is not met. IV. Overtime: the Non-Statutory Labor Exemption versus the End of the Collective Bargaining Relationship Of the three requirements for application of the non-statutory labor exemption, players have utilized decertification in order to attempt to end the collective bargaining agreement. Examples of players seeking to decertify the union have been seen most recently in the NFL during the 2011 lockout.44 Decertification was also discussed by the NBA during their respective lockout, although it was described as a “nuclear option.”45 Because of the third prong, the question for courts then became at what point does the collective bargaining relationship end? This question was first dealt with in Bridgeman v. NBA, a district court case out of New Jersey, as opposed to a district which was bound by the precedent of Mackey.46 In this case, the NBA had been negotiating a new collective bargaining agreement, and was having trouble settling on a final contract. To prevent ill will, the NBA player’s association (the union) and the league signed an agreement which provided a moratorium on courtroom actions for the period June 8, 1987 through October 14, 1987. Once the moratorium expired, the players filed actions with the NLRA, and the league continued to operate under the terms of the old collective bargaining agreement, in accordance with labor law.47 The players wanted to escape from the collective bargaining agreement, and thus argued that the collective bargaining agreement had ended at impasse48, and the
antitrust exemption no longer applied.49 The court accepted the Mackey test for deciding whether the non-statutory exemption applied, however, the issue in this case was whether the collective bargaining negotiations had ended, which is just one prong of the Mackey test.50 The Bridgeman court rightfully looked to labor law for guidance on whether negotiations had truly ended, such that the league was violating labor laws by imposing a condition.51 The court recognized that ceasing collective bargaining the moment a negotiation hit an impasse was contrary to the policy of the non-statutory labor exemption which was meant to promote collective bargaining.52 The court recognized that impasse is but one block on the way to negotiating an agreement, thus in their view “the exemption for a particular practice survives only as long as the employer continues to impose that restriction unchanged, and reasonably believes that the practice or a close variant of it will be incorporated into the next collective bargaining agreement.”53 The effect of this sine qua non is that the end of this reasonable belief would also constitute the end of the collectively bargained for provision.54 While this case has been glossed over because of later cases recounted below, this author believes it was the correct, rational decision. In producing this criterion, the court tried to honor the boundaries of the NLRA by deferring to prior NLRB decisions. Furthermore, it prevented the players from declaring an end to a bargaining relationship in order to access antitrust protections. Unfortunately, the case has been subsumed within the precedents of another circuit. A. Mr. Moooooooomentum Changes Teams With the ruling in Bridgeman, it seemed that at least one court would be amenable to a labor analysis of professional sports. However, from 1987-1992, the NFL player’s
union worked without a collective bargaining agreement. This was the result of a strike by the NFL players in 1987. Eventually, the union would decertify as a result of Powell I55, and usher in the modern era of sports, labor law, and anti-trust. 56 The central area of dispute in the 1987 negotiations for a new collective bargaining agreement was a system in which the NFL’s member teams held the rights to veteran players even after the expiration of their contracts. Because of this system, the teams could prevent a player from signing with other teams, much like the original Rozelle Rule57, although this time, the union waited until negotiating a collective bargaining agreement to fight the clause. 58 At the District Court level, Judge Doty rejected the Bridgeman test, and instead attempted to impose the labor impasse standard. Additionally, the district court held that once impasse is reached, the labor exemption automatically terminates, availing players of the antitrust statutes.59 Judge Doty was overruled by the 8th circuit in Powell III. In assessing the NFL’s argument in these cases, the court made future litigants painfully aware of the various approaches taken by courts in determining whether the Sherman antitrust act will never apply to player’s services.60 Instead, the court crafted their own standard for when the Sherman act could apply to players (employees) after a collective bargaining agreement expired.61 Once a labor relationship begins, the collective bargaining relationship continues beyond impasse, until the end of the relationship.62 The 8th circuit, after creating this standard for beyond impasse, took the ominous step of telling the parties they could “bargain further…resort to economic force [strike/lockout]…. [Or present] claims to the NLRB”.63 Unfortunately, because the court stated the collective bargaining relationship continues until the relationship ends, it left open the decertification option,
which would end the relationship.64 It is interesting that one of the primary reasons the court chose to hold antitrust laws inapplicable was that they wanted to pay heed to Federal Labor Policy.65 There were numerous side effects from this ruling. One which has remained primary is the idea of decertification of a union. In response to the court’s admonitions, the NFLPA decertified the union in December 1989, in order to attempt to destroy the labor relationship.66 Another side effect of the ruling is that Minneapolis has become the primary battleground for fights between player’s unions and the leagues.67 The Supreme Court dissented regarding granting certiorari to this case, but at least two judges wished to stem the growing circuit split related to this jurisprudence.68 Minneapolis has also become the primary location to file such labor actions. This is especially so given Judge Doty’s place on the district court in Minnesota which almost guarantees a first round win for players. One commentator believes that the decertification actions of the NFLPA following Powell III resulted in many improvements for football.69 As a result, the case led to a suit by Reggie White (White v. NFL) for free agency as well as a follow-up suit called McNeil.70McNeil and White shared the characteristic of non-application of the nonstatutory labor exemption because of the absence of a collective bargaining relationship.71 However, after both of these cases, the courts had still yet to address what would suffice for decertification in the future.72 Additionally, one Judge recognized the unique nature of this case, by stating what Judges in the past had gratuitously overlooked. A dissent recognized that this was a group of “high salaried, highly skilled athletes.”73 Recognizing
the unique character of the union allowed Judge Haney to correctly undermine the decertification which had occurred.74 In 1994, the NBA player’s union was the first to use these new Powell III standards during collective bargaining.75 NBA v. Williams is important to the jurisprudence because it was an opportunity for Powell III to be applied in a consistent manner.76 Noteworthy, however, is that the court recognized the varied opinions concerning how long the bargaining relationship lasts, as well as what in fact is the impasse standard.77 The court went through their own analysis of the issue, and determined the Powell III standard was correct, because it prevented an “exaggeration” of antitrust concerns.78 This author believes this case represents a valid attempt by one court to rein in the misuse of antitrust law, because as the judge cited from another case “Collective bargaining seeks to order labor markets through a system of countervailing power. Thus it is often referred by economists as bilateral monopoly. If such a structure is to be protected by law, then logically, the antitrust claims between employees and employers must be
extinguished.”79 The antitrust claims have obviously not ceased, otherwise the issue of decertification would not still arise. Language like the above from the Southern District of New York gives more context concerning why a league would take advantage of the Minnesota courts if nothing else. B. The See-Saw Battle Continues Between Powell III, and Williams it was somewhat unclear what direction the non-statutory labor exemption would move. Brown v. Pro Football, Inc. gave
some insight into the direction the Court believed was correct.80 After the 1987 NFL strike, the league did attempt to negotiate with the Player’s Association on certain issues. One of the prominent issues was the status of practice squad players.81 These players were free agents who failed to make the rosters, but were used for practice, as well as for injury substitutes during the season.82 During collective bargaining negotiations, the NFL put forward a plan which would pay these players a weekly salary. The players rejected the proposal, thus the league believed impasse had been reached on this issue, and instead put in place their proposal for the weekly salary.83 The practice squad players then attempted to use antitrust laws to force the NFL to accede to their preferred bargain.84 At the trial court in the District of D.C., the players won a large verdict, which was reversed by the appeals court based on labor law.85 Finally, the Supreme Court granted certiorari on the issue of essentially, whether the non-statutory labor exemption would shield the NFL from antitrust for enforcing an agreement on their proposal during impasse.86 The Court held that the non-statutory labor exemption survived at least to the point at which the NFL put in place their resolutions because of labor law.87 According to the Court it is fundamentally illogical to have a legal requirement of collective bargaining but to preclude agreements amongst the parties which would restrict competition.88 The exemption must have applied when the NFL imposed their last, best good-faith offer on this term, as a matter of deference to the policy of labor law, and disallowing antitrust courts from interpreting employeeemployer relationships.89
The Court took the time to identify the consequences of precluding the exemption to apply in this context. If antitrust laws apply, then once impasse is reached, an employer would face sanctions once they impose an offer.90 Also, if an employer sought to avoid antitrust liability by ceasing negotiations once impasse was reached, then they would be subjected to labor law violations, meaning an employer will always be in a lose-lose situation, if after impasse, the exemption ends.91 The Court in reaching this decision did provide employers some leeway in post-impasse conduct, but again, no standard was set which would relate to when a union could take advantage of antitrust provisions, and in fact the majority rejected calls by both parties to “draw a line in the sand.”92 Justice Stevens did dissent on this case, but his focus underlies a recurring issue within the context of professional sports unions.93 Athletes as a whole tend to individually negotiate their contracts exacerbating the gap between antitrust and labor law.94 Justice Stevens notes that the practice of individual salaries prevailed prior to collective bargaining, but this author believes, this substantially weakens his argument in favor of finding antitrust violations.95 NFL players gained many benefits by unionizing, but this case exhibits the fact that in so doing, they implicitly gave up the right to negotiate as high a salary as possible. Collective labor means the players have given up some individual rights in return for the economic power of collective action. By availing themselves of labor laws, the non-statutory labor exemption implicitly prevented players from complaining if during negotiations a proposal was not agreed upon and the league enforced their good faith proposal in accordance with labor laws. Justice Stevens makes a
mistake in attempting to allow players to receive two bites of the apple, one under the NLRA, and one under the Sherman Act. C. Will this Game Ever End? As mentioned above, in 2011, the NFL did disclaim their union. The players were frustrated by the slow pace of negotiations, and sought the help of the courts upon being locked out by owners.96 Once locked out, the players sought an injunction against the lockout because they believed it violated antitrust laws.97 The players wasted very little time in making the calculated decision to disclaim the union and proceed right to antitrust law. The players disclaimed their union on the same day they filed the lawsuit in their home-court of Minnesota.98 Judge Doty issued an injunction, which was immediately appealed by the NFL to the 8th circuit.99 On appeal, rather than deal with the issues of Brown concerning impasse, the Court reviewed only the injunction, despite the NFL’s argument that the disclaimer was a “sham”, used in order to gain access to the antitrust laws.100 This majority opinion was not helpful at all, except in the context of injunctions, which is outside the scope of this paper. The dissent by Judge Bye recognized the opportunity to utilize Brown in analyzing the applicability of the exemption when negotiating parties reach impasse. 101 While this author disagrees with the outcome, Judge Bye does attempt to use established principles to suggest that once the union collapsed, the antitrust rights should have applied.102 He correctly took the majority opinion to task for discounting the union completely in upholding the injunction.103 The majority opinion created a perverse reality which promoted unionization for the League,
because decertification would be a positive for the formerly collective employees whom would then be rewarded with antitrust claims.104 This case was very disappointing, because it could have provided an answer to a problem which may become even more ingrained in jurisprudence. D. Time-Out: The Impact of Decertification The decision to decertify is not one which should be made lightly. While there is some current benefit to using the process in order to gain access to antitrust, there are some distinct negatives. One overarching negative is the lack of collective action.105 Without the backing of a union, the bargaining process obviously ends, along with any terms or conditions meant to protect players.106 There could easily be a situation in which an injured player is simply let go by a team because of outstanding medical costs, and since there would be no union to provide a meaningful redress, the player is out of luck. This would probably lead to a poor relationship between teams and players.107 Also problematic is the role that salaries will play in producing a divisive group of players. If there is no union, then there are collective salaries, either maximums or minimums. In essence, the free market will drive superstar salaries exorbitantly high, while depressing the wages of the average player.108 This is an unsustainable model in a business which is based around the concept of team. The final problem with decertification, although athletes may not care, is it does a disservice to collective bargaining. In Brown, the Court stressed that the NLRB oversees the collective bargaining process.109 By utilizing antitrust, athletes are not just taking collective bargaining away from the appropriate
agency, but they are ending the collective bargaining relationship all together. It would seem to be a broken system which rewards a collective group to disclaim a valid union in order to improve the benefits of collective bargaining as a group of individuals. V. Changing the Rules In light of the holding of Brown, and the non-decision in Brady110, it is important to analyze why some believe that changing towards a true rule outlining limits is a viable alternative, as well as how it would have applied to Brady.111 The proposed “Kotler Rule” would apply the exemption where the provision challenged is the product of the “reasonably ordinary operation of a collective bargaining agreement.”112 The rule is intended to speak to conduct which would normally fall under the NLRA, while excising the use of antitrust laws to enact the federal labor law framework.113 This rule seems good in practice, but I believe it is much too broad. The “Kotler rule” does not look at effects on the market, but rather, on what conduct is controlled. This rule is promising, but needs more structural framework. While it attempts to use NLRA framework, I believe that such a rule would be susceptible to varied court interpretations. If anything, a rule should aim to keep these disputes out of court. For instance, in the Brady case, if the “Kotler Rule” were in effect, a court would have to dive into the issue of deciding whether a provision is a mandatory bargaining provision. If it were, then the “Kotler Rule” would apply, and no antitrust laws would be used. This may seem good, but in fact, it does not determine an outline for impasse, or when a proposal is in good-faith, or even
how to address forum shopping. Instead, it is more likely that such a result would continue the practice of filing complaints in the 8th circuit, in hopes that a ruling would be friendly towards the union. The “Kotler Rule” would also lead to courts becoming involved in collective bargaining to the point where it would no longer be a privately negotiated set of standards. Every proposal would be analyzed under whether it is an ordinary NLRA clause. If a union did not like a clause, they could simply delay until a court ruled, and similarly the leagues could propose ambiguous clauses to test the lines. It is a good start, but I believe because of the unique nature of professional athletes, a private-public regulatory framework which encompasses some of the “Kotler Rule” would be more useful. A. Making the Game Flow: Keeping Sports out of Courts The main problem with the current state of the law is that players are almost rewarded for decertification. Usually, when this decertification occurs, it is not in good faith as required, but rather is used to gain access to antitrust violations.114 How can the courts prevent continued “decertification” in contravention of the NLRA? The best way, in this author’s view is to create a hybrid Global Union Federation, which would complement the existing antitrust and labor laws. Along with this new hybrid organization, whose role will be defined below, sports unions would need to be exempted from antitrust law related to labor restraints during collective bargaining negotiations, thus precluding the perverse incentive to use antitrust as collective bargaining leverage. This exemption from antitrust laws on the basis of labor would also
provide a disincentive to decertification, since antitrust would not settle collective bargaining issues. This would not preclude player strikes, lockouts, or formal decertification. GUFs are international federations grouping together unions from the same craft or industry. The GUF then negotiates an International Framework Agreement (IFA) which governs the rights of the parties.115 IFAs are characterized by four elements, three of which would greatly benefit professional sports: the involvement of an overarching union federation in the negotiation of an agreement; a rights content derived from an International Labor Organization (ILO) instrument which would control individual rights in a collective industry, and procedure to review the implementation of the agreement.116 In the context of sports, the overarching union would be made up of a negotiator chosen by each athletic union in order to represent the divergent interests of large and small alike. A key characteristic of a GUF is that it still functions by respecting freedom of association as well as collective bargaining.117 If the GUF is not performing collective bargaining, then why even undertake creating them? Simply put, the organization would allow a social dialogue to take place between owners, and athletes, especially in light of the defined rights in the ILO document. The IFAs between the GUF and the leagues would promote a meeting space, where each side may voice their opinion concerning ongoing labor arrangements.118 IFAs in other contexts often contain communication policies, officers with administrative responsibilities, informal channels for reporting concerns, as well as formal complaint procedures.119 The
formal complaint procedures are usually heard in arbitration. This framework would replace the public courtroom with arbitration rooms, and use experts from the field of labor law.120 The presence of formal complaint procedures would be very important in this proposed model. If athletes are unsure whether a negotiated clause is related to labor, they can use the GUF to speak about the intent with league heads. If that fails, the NLRB will still be in place, and the two sides could ask for an advisory letter concerning the specific policy. Once the NLRB has ruled on whether a policy is labor-related or not, then the complainant could bring it to the attention of the proper court if it falls within antitrust. The importance of this complaint framework is it would prevent an unnecessary application of the non-statutory labor exemption. Parties would know in advance where a court’s ruling was needed because of the arbitrator in place. The beauty of the GUF/IFA system is in the way it complements existing laws.121 This part of the framework encompasses some of the “Kotler Rule.”122 On the opposite side of an advisory NLRB opinion concerning labor would be decertification. Since the arbitrator and possibly the NLRB will have ruled on whether an issue primarily impacts labor, it will be up to a union to decide to decertify. The decertification of a union would have to accord with American Sunroof, and still be in good faith.123 If in good faith, then the union decertification would continue until formal union recognition procedures have occurred.124 This would prevent the current system of a disclaimer which promotes union desire to decertify and employer predisposition to unionization. It
would also reflect the weight which should be attached to any decision to decertify. While thus far, it seems the system is only advantageous to workers; IFAs are also helpful to employers. One of the primary benefits seen by companies who enact such agreements is that people view companies in a positive light regarding corporate responsibility.125 In the context of modern professional sports organizations this is a huge positive considering the 24 hour news cycle labor disputes often take up. If an IFA effectively prevents a labor action from devolving into a legal battle, the public image of a respective league is greatly improved.126 The greatest challenge lies in crafting and implementing the IFA. Because collective bargaining is still recognized on the local level, the national organization would have to provide a spokesperson from the respective unions, as well as getting the unions as a whole to volunteer to be part of the organization.127 A key understanding with the passage of any IFA would be that it is not instantaneous, but rather progress would take time, since all parties would be in a new system.128 Over this time, there would of course be costs. Many may argue the costs of implementing such a system would outweigh the value returned. This is shortsighted, because it does not take into consideration the amount lost due to cancelled games and practices. For instance, over the course of the year 2011-2012, both the NBA and NFL were subject to lockout. The NFL lost off-season practice time, during which player’s would have been paid. The NBA did not start until Christmas of 2011, and when it did begin, the
season was significantly shortened. The combination of these lost games not only impacted the individual players but also the respective cities which host teams and rely on tax dollars from players who work in those cities.129 Implementation of the system would reduce labor actions and cost less money. Another criticism may be that implementing a GUF detracts from the unionization rights which have been gained over the previous several decades. This is oversimplifying the nature of the game. Rather than detracting from unionization, this system would galvanize unions across the sports industry to work together towards the common goal of labor peace with social responsibility.130 VI. A New Season Over the course of this paper, the sports world which began as individual entertainers transformed into an industry with a complex legal framework utilizing antitrust and labor provisions. This is not only unnecessary but wrong. Professional athletes across different unions would greatly benefit from a system akin to the GUF. Rather than dealing with questions concerning impasse and the beyond impasse standard, the GUF would put in place a simple private-public framework. Courts would only be used when the NLRB or an arbitrator, who specializes in labor law, felt that decertification could be used to achieve the desired goals. While it is radical to depart from what has been normal, it is also a system which closes off the respective player’s unions from using incorrect law. It is time, once and for all, for the realization that antitrust law should not be used as a back-up to labor law. That is the true essence of why a GUF and corresponding
IFA is the correct step for unions to pursue. Prosperity, peace, and playing the game can coexist if given the proper milieu.
15 U.S.C.A. §§ 1-7 (2012). 54 Am. Jur. 2d Monopolies and Restraints of Trade §1 (Database Updated 2012). 3 15 U.S.C.A. §2. 4 First recognized by the Supreme Court in the early 20th century Standard Oil Co. v. United States, 22 U.S. 1, 55 (1911) The objective anti-competitive purpose will not invalidate a restraint which is “not unreasonably restrictive of competitive conditions”. 5 Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs et al., 259 U.S. 200, 208 (1922) the business of giving baseball exhibitions is purely a State affair. but see Flood v. Kuhn, 407 U.S. 258, 258 (1972) The antitrust exemption of baseball is an established aberration in light of the fact that the other interstate professional sports are not afforded the same protections. 6 15 U.S.C.A. §26b. The Curt Flood Act of 1998 revoked baseball’s antitrust exemption relating to labor relations. Now, baseball players may bring actions under antitrust related to the collective bargaining agreement, and most notably compares baseball to all other professional sports negotiations. 7 See supra. n.4 and 6. 8 Loewe v. Lawlor, 208 U.S. 274, 292 (1908). 9 Martin I. Kaminsky, The Anti Trust Labor Exemption: An Employer Perspective, 16 Seton Hall L. Rev. 4, 11-13. 10 29 U.S.C.A. §§151-169 (2012). See Milk Driver’s Union v. Lake Valley Farm Products, Inc., 311 U.S. 91, 102 (1940) “The NLA—considered as a whole and in its various parts was intended to drastically curtail the jurisdiction of Federal Courts in labor disputes--- [and it] was further the purpose of Congress to further extend the prohibitions of the Clayton Act [preventing decisions interpreting union activity as antitrust violations”. 11 See 29 U.S.C.A. §102, 158(d) (2012); See e.g. Cox, Archibald, The Duty to Bargain in Good Faith, 71 Harv. L. Rev. 1401, 1408 (1958) “An employer must look upon labor as an equal partner, and…one partner cannot do anything without the other.” 12 Philadelphia World Hockey Club, inc. v. Philadelphia Hockey Club, inc., 351 F. Supp. 462, 497-99 (E.D. Pa. 1972). 13 Id. at 498. 14 Id. at 498 citing United Mine Workers v. Pennington, 381 U.S. 657, 664-65 (1965). 15 Id. at 497. 16 381 U.S. 676 (1965). 17 Id. 689-90. See also Charles D. Bonnano Linen Serv. V. NLRB, 454 U.S. 404, 409 (1982) The NLRA does not specifically endorse multi-employer bargaining, but the Supreme Court has interpreted such agreements to be a “vital factor in the effectuation of …collective bargaining.” 18 Amalgamated Meat Cutters, 381 U.S. at 689. 19 Id. at 691. 20 421 U.S. 616 (1975). 21 Id. at 635. 22 Id. at 624. 23 Id. at 623. 24 Id. at 622. 25 Id. at 622-24. 26 29 U.S.C.A. §159 (e). A union must file a petition with the board, along with 30% of the employees that they desire a union be authorization to bargain for them be rescinded and a secret ballot election conducted. 27 Id. 28 See e.g. Retail Clerks Intern. Ass’n AFL-CIO v. Montgomery Ward & Co., 316 F.2d 754, 757-58 (7th Cir. 1963). 29 Id. 30 Corrugated Asbestos Contractors, Inc. v. NLRB, 458 F.2d 683, 687 (5th Cir. 1972).
Heather R. Insley, Major League Umpires Association: Is Collective Bargaining the Answer to or the Problem in the Contractual Relationships of Professional Sports Today. 29 Cap. U.L. Rev. 601, 602 (2001) infra note 8 The NBA was the first league to sign a collective bargaining agreement in 1967. 32 Id. 33 Id. at 613. 34 389 F. Supp. 867 (S.D. N.Y. 1975) but see supra. note 13, at 498-99 The NHL attempted to claim the non-statutory labor exemption, but was not allowed because there was no proof of union conspiracy with the NHL in reaching an agreement. 35 Robertson, 389 F. Supp. at 886-87. 36 Id. at 884-886 with supra. note 16 – 17. 37 Robertson, 389 F. Supp at 886-87 with supra. note 17. 38 Robertson, 389 F. Supp. at 389. 39 543 F.2d 606 (8th Cir. 1976). 40 Id. at 610-11. 41 Id. 42 Id. at 612. The court did declare that the rule violated Sherman antitrust provisions under a ‘rule of reason analysis.’ 43 Id. at 614-15. 44 See e.g. Brady v. National Football League, 640 F.3d 785, 788-89 (8th Cir. 2011). 45 Sam Amick, Group of NBA Players Discuss Possibility of Decertification, Sports Illustrated, November 3, 2011, http://sportsillustrated.cnn.com/2011/writers/sam_amick/11/03/nba.labor.union/index.htm. 46 675 F. Supp. 960 (D. N.J. 1987). 47 Id. at 963. 48 Impasse is the point at which 2 parties in a labor situation are deadlocked. Neither party can move forward or retreat from its position at this point. It requires good faith to get to impasse. C.C. Bjorklund, Collective Bargaining Impasse, 25 Am. Jur. Proof of Facts 2d 241 (2012). 49 Id. at 961. 50 Id. at 965. 51 Id. 52 Id. at 966. 53 Id. at 967. 54 Id. 55 Powell v. National Football League, 930 F.2d 1293 (8th Cir. 1989). As a point of reference it should be noted that Justices White and Blackmun recognized the impending problems with this line of cases, and would have granted certiorari on this case. 498 U.S. 1040 (1991). 56 Peter King, The Surreal Strike of 1987: Remembering a walkout that helped create today’s NFL, Sports Illustrated, October 15, 2007 at 13. Peter King is one of the foremost NFL writers, and this title sums up his memories of the strike. At the time of the article the NFL was booming, and league popularity was at an all time high. 57 See supra. n. 40. 58 Powell v. National Football League (Powell I), 678 F. Supp. 777, 780-81 (D. Minn., 4th Div. 1988). 59 Powell I, 678 F. Supp at 788-89. 60 Powell III, 930 F.2d at 1301 citing Mid-America Regional Bargaining Association v. Will County Carpenters, 675 F.2d 881, 893 (7th Cir. 1982) and Prepmore Apparel v. Amalgamated Clothing Workers, 431 F.2d 1004, 1007 (5th Cir. 1970). These cases both involved employees attempting to use antitrust statutes to enforce provisions of their respective collective bargaining agreement. 61 Powell III, 930 F.2d at 1302. 62 Id. at 1303-04. 63 Id. at 1304. 64 Id. but See American Sunroof Corporation-West Coast Inc. 65 Id. at 1303. 66 McDonough, Eric R., Escaping Antitrust Immunity- Decertification of the National Basketball Players Association, 37 Santa Clara L. Rev. 821, 842-43 (1997). The NFLPA did not recertify as a union until 1992, but they did not abide by NLRA statutes.
Richard R Sandomir, Court in Minnesota has been a Home Field for League’s Labor Disputes, New York Times, March 12, 2011, available at http://wwwnytimes. com/2011/03/13/sports/football/13judge .html?_r=1&pag ewanted=all. Interestingly, in that same article Judge Doty was very critical of the money aspect that owners were fighting for. Especially, because in his view, owners routinely act as if they are routinely being beaten down. 68 Powell, 498 U.S. at 1040. Justice White would have granted cert. which would be unremarkable but for the fact he was an ex-professional football player. 69 Eric R. McDonough, Escaping Antitrust Immunity—Decertification of the National Basketball Association, 37 Santa Clara L. Rev. 821, 842-43 (1997). 70 See McNeil v. NFL, 790 F. Supp. 871 (D. Minn. 1992); White v. NFL, 822 F. Supp. 1389 (D. Minn. 1993). 71 McNeil, 790 F. Supp. at 866-67 and White, 822 F. Supp. at 1430-31. Those sections address the ongoing structure of the NFLPA as a union. 72 But see American Sunroof Corporation-West, Inc., 243 NLRB 1128, 1129-30. A disclaimer was valid where the union evidenced intent to comply with the disclaimer by taking actions consistent with the disclaimer. with Corrugated Asbestos Contractors, Inc., 458 F.2d at 687.A disclaimer to be effective, must be done in good faith. 73 930 F.2d at 1305 dissent of Judge Haney. 74 Id. 75 NBA v. Williams, 857 F. Supp. 1069, 1077 (S.D.N.Y. 1994). 76 Id. 77 Id. at 1076-77. 78 Id. at 1078. 79 Id. citing Michael S. Jacobs & Ralph K. Winter Jr., Antitrust Principles and Collective Bargaining by Athletes: of Superstars in Peonage, 81 Yale L.J. 1, 22 (1971). 80 518 U.S. 231 (1996). 81 Id. at 234-35. 82 Id. 83 Id. 84 Id. at 235. 85 50 F.3d 1041 (C.A.D.C. 1995). 86 518 U.S. at 234. 87 Id. at 236. 88 Id. at 237. 89 Id. at 237-38. 90 Id. at 241-42. 91 Id. 92 Id. at 247-49. 93 Id. at 251-266. 94 Id. at 256. 95 Id. 96 Brady v. National Football League, 640 F.3d 785 (8th Cir. 2011). 97 Id. at 787. 98 Id. at 788. 99 Brady v. NFL, No. 11639, F. Supp. 2d, 2011 WL 1578580 (D. Minn. Apr. 27, 2011). 100 Brady, 640 F.3d at 788. 101 Id. at 798. 102 Id. at 799. The court should have ruled that the disclaimer was in bad faith, and allowed negotiations to reach an actual impasse. By ruling in this case, I believe they set a dangerous roadmap whereby anytime a professional sports union feels collective bargaining is failing, decertification will never be questioned, and antitrust instantly utilized. 103 Id. 104 See Id. 105 Michael C. Harper, Multiemployer Bargaining, Antitrust Law, and Team Sports: the Contingent Choice of a Broad Exemption, 38 Wm. & Mary L. Rev. 1663, 1723-25 (1997).
Id. at 1725. Id. 108 Id. at 1726. 109 Brown, 518 U.S. at 242. 110 See supra. n. 79 and n. 95. 111 Johnathan Kotler, Parallel Unionism in Professional Hockey: Redefining the Non-Statutory Labor Exemption to the Antitrust Laws, 17 Fordham Intell. Prop. Media & Ent. L.J. 843, 864-66 (2007). This will be known as the “Kotler Rule.” 112 Id. 113 Id. 114 See Brady, supra. n. 95. 115 Renee-Claude Drouin, Promoting Fundamental Labor Rights Through International Framework Agreements: Practical Outcomes and Present Challenges, 31 Comp. Lab. L. & Pol’y J. 591, 592-93 (2010). Normally, the agreements are negotiated across borders so that transnational companies maintain production while respecting international labor rights. There is no reason the idea can not be adapted to professional athletes, especially because one of the primary motives is to keep revenue steady and encourage labor peace. 116 Id. at 593. A provision concerning suppliers and business partners was not included because the product which is created by athletes is not a consumable good in the way that a Nissan or a Chiquita Banana is. 117 Id. at 594-95. 118 Id. 119 Id. 120 Id. 121 See generally Id. at 596, 600. GUFs are intended to highlight national labor law, and existing industrial frameworks, in order to facilitate dialogue as well as improvements to the spheres within which a given trade is operated. 122 See supra. n. 111. 123 See supra. n. 64. 124 See 29 U.S.C. §§159 (West 2012). This is the NLRA section which governs representative elections. 125 Id. at 607-08. 126 Id. at 607. Many companies have noticed a defined reduction in labor disputes upon enacting IFAs. 127 Id. at 612. 128 See Id. at 618. When Chiquita and IKEA enacted IFAs, it did take a long time for the attitudes concerning unionization to progress. The respective sports leagues could expect less time than did these companies because Federal labor law accepts unionization, and in fact endorses it. 129 Patrick Rische, NBA Lockout Costs League $800 Million…and Counting; Players Justified to Fight in Courts, Forbes, November 16, 2011, available at http://www.forbes.com/sites/prishe/2011/11/16/nbalockout-costs-league-800-million-and-counting-players-justified-to-fight-in-courts/. 130 Id. at 628 citing John Brathwaite & Peter Drahos, Global Business Regulation 538, 7 (2000). GUFs have been called a “weapon for the weak” that allows social actors to “create opportunities for themselves to change existing regulatory orders.”