With 2011 Lockout Looming, the NFLPA Tour Stops in Pittsburgh, Part II

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[DeMaurice Smith and Ryan Clark at the One Team Tour event in Pittsburgh, via images.nflplayers.com]


Today's post will deal with something that had the Steelers in the news recently - decertification.  Here is the full item, from Yahoo News:

Pittsburgh Steelers players have voted to give the NFL Players Association their backing to decertify the union in the event of a labor lockout next year. The Steelers are at least the 10th group of players to vote to decertify if necessary, joining players from the Packers, Bengals, Bills, Colts, Cowboys, Saints, Eagles, Redskins and Giants. The vote, with no apparent dissenters, occurred during an hour-long meeting with NFLPA executive director DeMaurice Smith that followed practice Wednesday. By disbanding their union, the layers could sue the NFL under antitrust laws if there is a lockout. A similar move following a 1987 labor impasse led to the 1993 agreement that created free agency.

So what does that even mean?  Like me, did you cover your ears and say 'la la la' when the news came out?  Well, probably we need to pull our heads out of the sand and figure out the implications.  I will attempt to do that, after the jump:

 

What are the implications of this vote?  And what about that other stuff, about 'antitrust laws' and so on? Obviously the union still represents the players of the Pittsburgh Steelers at this point.  As of this writing about 20 teams have given their approval for the NFLPA  to decertify the union if they see fit.  (As far as I could find out, no team has taken a vote and voted against it.)  And just to clarify the above Yahoo news item, as I understand it, decertification doesn't disband the NFLPA.  It is just a declaration that it no longer is the negotiating agent for a given group of players.  But before I start saying 'whereas' and 'hereunto' and have to be led away, let's take a brief tour of the germane legal history (pun intended.)

We've all heard of the Sherman Act.  But what exactly is it?   It is legislation that Congress passed in 1890 that "requires the United States Federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act." In FTC v. Ticor Title Ins. Co, the Supreme Court reaffirmed in 1992, a hundred years later, that "The preservation of the free market and of a system of free enterprise without price fixing or cartels is essential to economic freedom." You can read much more about it here and the full text of the act here.

But Congress also decided very early in the game that labor unions, although they could be viewed as restraining free trade, had useful effects that outweighed this, and in fact were beneficial on the whole to free commerce.  Therefore they crafted several statutes (in the Clayton Act and the Norris-LaGuardia Act) that basically exempt organized labor and their activities - strikes, picketing, and so on - from federal antitrust laws. In 1935 they broadened this so-called statutory exemption to include collective bargaining activities in the National Labor Relations Act.

Anything involving the law gets murky really quickly, but in the case of sports law there are additional complications.  For one, the NFLPA is not a traditional sort of union in some senses.  For example, it doesn't negotiate salaries for its members, but allows them to negotiate their own deal as individuals.  On the management side, the NFL, which would seem to be a classic case of a monopoly, has an exemption from antitrust law because of the nature of sports and the need to decide a great many things as a group. The question is, how much territory does that exemption encompass?

This was explored during the 1980s, in Brown v. Pro Football, Inc.  The case came about because of the expiration of the old collective bargaining agreement, which expired in 1987.  The owners wanted a so-called developmental squad of up to six player (which is equivalent to the current practice squad.)  They proposed paying them a fixed rate of $1000 per week, rather than allowing them to negotiate their own salaries as all players had always done.  The NFLPA refused to cave on the issue, so the NFL went ahead and did it anyhow.  Ironically, their defense of this action drew upon the exemption for union activities found in the National Labor Relations Act, basically arguing that this was collective bargaining, and what was sauce for the goose was also sauce for the gander.  A group of practice squad players filed suit (Anthony Brown being the lead petitioner.) The Supreme Court upheld the NFL's application of the exemption, although the owners did discontinue fixed salaries for the development squads shortly after the suit was filed.  Whether the Supreme Court would still uphold it in the case of a new suit is the question.  The dissenting opinion indicated that the court had misapplied or misinterpreted the precedents. (This information came from an article in the Wisconsin Law Review which is available here, but you have to pay for it.)

A much more recent case with bearing on this issue was American Needle v. NFL.  This went all the way to the Supreme Court, and was decided on May 24th of this year.  In it, the NFL claimed that joint action of all teams was the only way to promote the 'brand' of 'NFL football.'  The Seventh Circuit Court had agreed, and declared that the NFL had the right to agree among themselves that only a single outlet could sell team gear.  The Supreme Court disagreed, much to the relief of the players' unions, who feared that

the leagues would next argue that "promoting" the game also meant a joint, anti-competitive deal on players' salaries and selection.  And the coaches, in turn, worried about an anti-competitive approach to hiring and paying the on-the-field managers. And so on. (from "Analysis: No antitrust "Trojan horse" - SCOTUSblog

Part of the reason the American Needle case was so important is that it denied that the NFL is exempt from antitrust law in all facets of its operations, and cannot create separate entities (such as the one in question in this suit, NFL Properties) to get around that.  However, the Supreme Court notably did not rule out the exemption in any other area than the one narrowly defined by the case.  Had the Court ruled in the NFL's favor, the case for the players would look much more bleak at the moment.

And so at long last we return to decertification.  The votes that have been taken are prophylactic.  They have no immediate result, but give the union the power to decertify itself in very short order if this is deemed necessary.  One of the things that the ability to quickly decertify is designed to avoid is a so-called "last best offer" from the NFL.  So what is that?  Well, just what you would think - a sort of final offer that the union is forced to accept.  Here are the circumstances under which it can be used:

An employer's ability to implement its last best offer when negotiations are fully exhausted is a well-established principle of labor law. The National Labor Relations Board (NLRB), federal courts and the U.S. Supreme Court have long held that an employer may unilaterally implement changes in terms and conditions of employment if: 1) the employer has negotiated in good faith; 2) the implementation occurs only when negotiations have truly deadlocked; and 3) the changes are consistent with pre-impasse employer positions. (From "Talking Points in Opposition to A-3419/S-2398 Without Strong Anti-Strike Language".)

The union wants to avoid the possibility of having to accept an offer from the NFL just prior to the March deadline that they don't like.  If they no longer speak for the players, obviously they can't accept an offer on their behalf.  And as Ryan Clark explained to me, the union can scarcely go running around trying to collect votes from the players during the off-season in a timely fashion.  So the players are pre-approving the union's ability to do this.

If the union is decertified, its no longer has the power to act for the players, who are then free to seek remedies as individuals.  These remedies would almost certainly take the form of a class-action suit against the owners. Everyone I asked specifically about that the other night affirmed that. I asked both Ryan and Nolan Harrison (the new Senior Director of Former Player Services for the NFLPA) about what they thought would be the result if there is no agreement and there is a class-action suit.  Nolan Harrison didn't seem particularly eager to discuss this, and I can scarcely blame him.  He did remind me that this strategy was used in 1987.  He said that he couldn't discuss what actions might be taken (fair enough) and merely asserted that the former players are standing with the current players to help them in whatever way they can.  Ryan Clark was a bit more forthcoming.  He stated that it was not the desire of the players to get to that point - that they were working towards avoiding a lockout in the first place. 

I asked him if the players wouldn't actually be in a weakened negotiating position if they had to take the decertification route. He agreed that they would, and pointed out that the owners would be able to cut their largest overhead (player's salaries) while still receiving television revenues.  (It is well documented by now that next season's TV deals are structured so that the league is paid whether or not there is a season, with the league under the obligation of repaying the 4 billion dollars in subsequent seasons.)   Ryan stated that the union has been encouraging the players to save a goodly chunk of their salaries so that they can make it through a lockout, and I got the impression that senior players with more resources might lend a hand to the younger, less well compensated players who may feel the pinch a good deal sooner.  Because one lesson that was learned in 1987, the so-called "scab" season, is that if the players cannot continue to speak as a whole because economic pressures are causing many to break ranks, they are in an increasingly weak position.

Although I was initially puzzled at the presence of seemingly random union leaders from, for example, the AFLCIO at the event Tuesday night, it makes more sense when you consider some of the collateral damage in the event of a lockout.  Assuming that the owners decide to hunker down, then stadium workers, industries dependent upon football revenues, the coaching staff, and so on are either facing income/salary reductions or layoffs.  In the current economic climate this obviously seems even less desirable than usual.

So the way it looks from my observation point is that the owners don't believe that the players' union is committed to an agreement, because the players have put in motion the things needful to decertify their union, and because they have been encouraged by their leaders to prepare themselves for a lockout.  The NFLPA doesn't believe that the owners are committed to an agreement, because the NFL has negotiated with one of the primary revenue sources to continue to receive income in the event of a lockout, and, for that matter, the fact that they have threatened a lockout. The owners would, I presume, counter that the TV deals are necessary just for their debt service (stadiums and who knows what else) and represents sensible business precautions in the event of unfortunate circumstances. The threat of a lockout is presumably their best negotiating tool. The players would respond that they are just being prudent so that they aren't at a complete  disadvantage, given that the owners are threatening them with a lockout.  As a fan, it doesn't sound terribly promising. 

My contact from the NFLPA asked me to mention the "Block the Lockout" petition, which can be found here. I offer this information for those who are interested.  I have no idea whatsoever whether it will make a difference, and I don't know whether the owners have a "Block the Decertification" petition, or whatever.  As I said in the first post, I'm presenting this information as neutrally as possible, but it is necessarily at least somewhat tilted towards the NFLPA, as I'm dancing with the one that brung me.

Stay tuned for my next riveting post, if you aren't already unconscious from this one.  It should get easier from here, or I hope so, for all of our sakes.  And obviously if any of you who are more knowledgeable on these issues or better qualified to read law briefs feel I've gotten any of my facts wrong or drawn the wrong conclusions from the facts I presented, please correct me.

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