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NFL Players Union Antitrust Lawsuit

Unit II – Characteristics of a Mixed Market Economy

Mr. Stewart’s Economics

Fall Semester 2017

Standards Covered:

*NES 9: Competition (National Standard)

*NES 16: Role of the Government (National Standard)

*Illinois State Goal: 15.C.5a

*CCSS.ELA-Literacy.RH.11-12.1,3 (Common Core – ELA Reading History)

*CCSS.ELA-Literacy.SL.11-12.1,3,4 (Common Core – Speaking and Listening)

Daily Objective: Students will be able to analyze and evaluate whether or not the government should intervene to breakup monopolies.

Essential Question: When should the government intervene in the economy to ensure competition?

Everything You Need to Know About the NFL Antitrust Lawsuit

Getty Images NFL Players Association Executive Director DeMaurice Smith pauses during remarks March 11 as he and a group of player representatives arrive for labor talks in Washington, DC. (Photo by Jonathan Ernst/Getty Images)

On Friday, negotiations between the NFL players and owners over a new collective bargaining agreement fell apart after 17 days.

From there, the sides retreated into their corners and issued initial salvos. The owners “locked out” the players, essentially refusing to pay them or allow them access to their training facilities. The players’ response they “decertified” the union and filed  this 52-page antitrust complaint against the league in Minnesota federal court.

With all its talk of CBAs and decertification and lockouts, the situation isn’t necessarily an easy one to get your arms around. But here, in this post, we’ll attempt to answer your most pressing questions about the situation, with a little help from sports law guru and Vermont Law School professor Michael McCann.

Can’t these guys get along? Professional football has never been more popular in this country; its players have never been better compensated; the league (and its owners) have never been richer. Why the dispute?

The staggering amount of money brought in by the NFL — it’s currently a $9.3 billion industry — is actually what’s behind much of the problem. The players and owners can’t agree on how to divvy up much of the revenue. Another issue: whether to expand the season from 16 games to 18 games and how much access to financial information the owners should have to give to the players.

But at the heart of the dispute is money, and how much of it should go to either side.

What is decertification and why did the union need to do it prior to filing suit?

Decertification simply refers to the act of disbanding the union by the union members, i.e, the players. McCann explained to us that the former collective-bargaining agreement included a stipulation that said that the union couldn’t file an antitrust suit against the league. So the union had to disband in order to sue.

The owners have since then claimed that the decertification move was bogus. What’s that about and how will that be resolved?

McCann explained that a move to decertify a union has to be approved by the National Labor Relations Board. In this story, the WSJ’s Matthew Futterman explains that he owners amended a complaint they filed with the NLRB  in February, in which they claimed the players union wasn’t bargaining in good faith. The amended complaint alleges that the decertification is a sham.

The players union denies that and said a settlement in a previous lawsuit with the NFL prohibits the league from opposing the decertification.

The NLRB must conduct an investigation into the matter before deciding whether to file a complaint on behalf of the NFL with an administrative law judge, whose decision could take six months.

In the meantime, what does the antitrust lawsuit look like? And why do the players’ grievances fall under the umbrella of antitrust law?

Well, first things first. The league really operates as a classic cartel — 32 individual entities working in concert with one another. (It’s a view of the NFL that was largely supported by the U.S. Supreme Court in the American Needle case.) The lawsuit challenges the amateur draft, salary cap, free agency restrictions and other elements of the current structure as violating Section 1 of the Sherman Antitrust Act.

McCann explains that the structure was exempt from antitrust challenge under the old collective-bargaining agreement, but that now the CBA has expired, the exemption no longer applies.

Who are the lawyers on the case?

Both sides have lawyered up with just about the heaviest of heavyweight lawyers money can possibly afford. Leading the charge for the players: Weil Gotshal’s Jim Quinn and Dewey & LeBoeuf’s Jeff Kessler. (The two used to work together at Weil and are no strangers to these sorts of fights — typically working on behalf of the players.)

The head of the union, DeMaurice Smith, is a former litigation partner at Patton Boggs.

The owners are bringing in some big guns as well — namely David Boies and former U.S. Solicitor General Paul Clement, now at King & Spalding. Jeff Pash, the NFL’s general counsel, cut his teeth at Covington & Burling alongside former NFL commish Paul Tagliabue.

Why was the case filed in Minnesota?

The WSJ’s Futterman tackled this issue in this post, over at the Daily Fix, earlier this month. Wrote Futterman:

The question a lot of NFL fans may wonder right now: Why does this judge in Minnesota have all this power over the NFL while federal courts play no role in the other sports, and why are NFL owners so afraid of him?

The answers have their roots in a 1993 class-action suit filed by Reggie White to declare a group of NFL players free agents.

Fearing that Judge Doty would impose a system that neither side would like in that case, the NFL and the players union negotiated a settlement that became the foundation of the current collective bargaining agreement. In fact, the settlement of the White case is embedded within the CBA itself. This means that as long as this CBA is in effect, Judge Doty is charged with enforcing the settlement and making sure the CBA adheres to it.

Click here, also, for an NYT article on the issue.

So is this all really going to play itself out in court or will the parties ultimately hammer it out at the negotiating table?

Of course, this is the $9.3 billion question. but McCann told us that he thinks at some point a deal will be reached. “At the end of the day, there’s too much at stake here, especially for the players,” he said. “The loss to them probably won’t be felt immediately, but they’re not being paid, and at some point that’s going to start hurting.”

McCann also pointed out, again, that the league has been so enormously successful in the past decade, that “it’s hard to imagine they wouldn’t have a season.”

Who’s in the right here? Who deserves our sympathy?

“It’s hard to be overly sympathetic with either,” said McCann. “We’re talking about millionaires arguing with billionaires.” In that way, McCann said, it’s not like the situation in Wisconsin, in which it might be easier to have a bit of sympathy for “teachers making $40,000 a year.”

What happens next?

The players have moved for an injunction to keep the owners from locking them out. The motion will be heard on April 6. Briefings by the plaintiffs and defendants are due on March 21 and March 28, respectively.

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