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Brady, et. al v. NFL

March 14, 2011

 

Tom Brady in happier NFL times

Last Friday, the NFL players’ union decertified, players sued the NFL in their individual capacities, and the NFL owners locked the players out. Thanks to the power of the internet, everyone has access to the complaint filed by the players. Here are some quick takeaways:

1) Leading up to the lockout, everyone was well aware of the union’s intention to decertify. Decertification would allow the players, in their individual capacities, to sue the owners claiming violations of federal antitrust law. There was also noise made to call decertification a “sham.” In other words, the argument was that decertification was just a technical process, but the players were still united in a collective and would continue bargaining with the owners in order to end the lockout. This “sham” argument would be used by the owners to persuade the court that the lawsuit should not go forward because the non-statutory labor exemption, applicable when there is a union to perform collective bargaining, does not allow the antitrust claims.

Reading the complaint, there are several instances throughout the 52 pages in which the NFLPA reminds the court that the NFL has agreed not to make this argument. In paragraph 81, the language is clear that the owners will not argue that decertification is a sham. The players go on to show that the owners have violated this agreement. What is interesting to me is the foresight that goes into labor negotiations. The NFLPA predicted an argument that the NFL would make and attempted to cut it off contractually. Courts put a great amount of weight on arms-length negotiations and contractual language, so this was an astute move by the NFLPA in the early 90s to protect future players.

2) The law suit covers an expansive range of players. Tom Brady, among others, represents the group of players that is under contract but will not be paid. Vincent Jackson, among others, represents the group of players that has been franchised. Mike Vrabel, among others, represents free agents without a contract. Von Miller represents the group of players that are entering the NFL Draft.

Why this range of players? Each represents one of the arguments that the players are making against the league. Brady represents the argument that the owners are interfering with contracts by locking players out and not paying them. Jackson represents the restraint on mobility and ability to obtain market value for a player’s skills. Vrabel represents the league’s interference with free agency and the ability for a player to find a team and work in his business and trade. Miller represents the restrictive nature of the NFL draft. The players argue that each of these elements is an antitrust violation.

3) The players accuse the owners of several claims that are said to be per se illegal. These are group boycotts – agreeing to lock out the players, price fixing – imposing a salary cap, and market allocation – the player draft. Per se violations are thought to be so anticompetitive that an analysis of their rationale is not necessary. On their face, per se violations are thought to be illegal, but the court can find that these practices are not violations on their face, have a potentially reasonable rationale, and deserve analysis under a rule of reason. The rule of reason looks at each practice and analyzes whether it is an unreasonable restraint on trade. Is there a purpose to a player draft? Does the industry need a salary cap? Are interests of teams and players served by the franchise tag? Each restriction is analyzed in the context of the business of professional football to decide whether it is an unreasonable restraint on trade that may have a less restrictive alternative to serve the same purpose.

Obviously, the players want the court to find per se violations that do not require an analysis of the function and reasonableness of the purported restraints, but courts do not have to find per se violations even if the restraint has been deemed as a per se violation in past situations. In a famous case in which the University of Oklahoma, among other schools, sued the NCAA, the court claimed that the NCAA’s violations were per se violations but because of the unique business of NCAA sports, the rule of reason should be applied. Thus, the players must be ready to argue that the purported restraints are unreasonable and the goals served by these restraints could be served in a less restrictive way.

4) Finally, the practices that the players claim to be unreasonably restrictive may still be implemented for future NFL seasons. For example, the players will most likely agree to a salary cap and a player draft for future years. When bargaining, the players may accept these practices in exchange for other benefits. They may also except them because they serve a rational purpose. The salary cap protects competitive balance, and the NFL draft allows the bad teams to obtain the best players. Just because a practice is claimed to be unreasonably restrictive doesn’t mean that it will not be a part of future NFL seasons.

This should be an interesting and messy process to watch, especially if you like the law.

– Jason

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