Eighth Circuit Upholds Negotiations as Primary Labor Dispute Forum

JURIST Guest Columnist Erick Posser, Villanova University School of Law Class of 2013, is a staff writer for the Villanova Sports and Entertainment Law Journal and an Executive Board member of the Villanova Sports and Entertainment Law Society. He writes on the implications of the Eight Circuit's decision in Brady v. NFL...
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The plaintiffs in Brady v. National Football League are nine professional football players and one prospective professional football player, who have been or seek to be employed by the NFL. The plaintiffs filed suit on behalf of themselves and similarly situated players seeking a declaratory judgment, damages and injunctive relief. They also seek to enjoin the NFL owners from locking the players out, which would prohibit players from entering NFL club facilities, receiving compensation or benefits, performing any employment duties, making promotional appearances and consulting medical and training personnel.

On March 11, 2011, as the deadline approached for negotiating a new collective bargaining agreement and stipulation and settlement agreement, the National Football League Players Association (NFLPA) notified the NFL that it would decertify as a union, effectively disclaiming its interest as the players' collective bargaining representative. The NFL responded by filing an amended unfair labor practice claim with the National Labor Relations Board (NLRB), asserting that the NFLPA's decertification was a "sham" and that the decertification coupled with subsequent litigation was an unlawful subversion of the collective bargaining process.

Responding directly to the NLRB claim, the players commenced the instant action in the US District Court for the District of Minnesota, asserting multiple claims against the NFL. First, they argued that the non-statutory labor exemption does not apply to the instant case because the players were no longer represented by the NFLPA and, accordingly, no longer had a collective bargaining relationship with the NFL. Second, they claimed that the NFL's planned lockout was an illegal boycott and price-fixing arrangement that violated § 1 of the Sherman Act." [PDF] Third, they purported that the planned lockout violated state contract and tort laws. Finally, they alleged that the NFL planned to continue or institute anticompetitive practices in violation of the Sherman Act.

Hearing the case on appeal, the opinion of the US Court of Appeals for the Eighth Circuit began by considering whether the National Labor Relations Act (NLRA) deprived the district court of jurisdiction to enjoin the NFL lockout. The court indicated that Congress was intent upon largely taking the federal courts out of the labor injunction business with the exception of a few circumstances spelled out in the NLRA. Although the impetus for the NLRA was dissatisfaction with injunctions entered against workers in labor disputes, the statute also requires that injunctions against an employer participating in a labor dispute conform to the NLRA. Thus, the first issue to be decided was whether the NLRA provided jurisdiction for the district court's injunction, or whether the matter was to be decided by the NLRB.

The district court previously held that federal jurisdiction was proper and enjoined the NFL from locking out the players. Ultimately, the court found that the NLRB did not deprive the federal courts of jurisdiction because Brady did not involve or grow out of a "labor dispute." The Eighth Circuit, however, found that pursuant to the definition of labor dispute provided in § 13(c) of the act, the case did involve or grow out of a labor dispute. Furthermore, the Supreme Court has observed the statutory definition of labor dispute to be extremely broad and congressional intent suggests that the NLRA's scope was to be far-reaching. As such, the Eighth Circuit held that this was a controversy concerning terms of employment, and that the players sought broad relief that would impact the terms or conditions of employment for the entire industry of professional football. In particular, the Eighth Circuit disagreed with the district court's conclusion that this was a dispute over commodities rather than a controversy over terms and conditions of employment.

The Eighth Circuit further held that while § 13(a) does not provide the operative definition of labor dispute; its requirements were, nevertheless, fulfilled, as the dispute involved persons engaged in the same industry. Accordingly, it found that the district court improperly departed from the text of § 13(a) when it found the provision to require that employees be unionized. The Eighth Circuit refused to add such a requirement of unionization, holding that employees may engage in activities for the purpose of mutual aid or protection without the existence of a union, and that lawsuits resulting from such activities can be deemed to involve or grow out of labor disputes. Therefore, the fact that the player's union decertified in order to pursue antitrust litigation did not impact the finding of a pre-existing, or ongoing, labor dispute for purposes of the NLRA.

The Eighth Circuit's conclusion that the preliminary injunction did not conform to the provisions set forth in the NLRA was a limited holding that highlighted the importance of collective bargaining between the NFL and the players. Seemingly, the Eighth Circuit decided Brady through a narrow, textual-based determination of the applicability of the NLRA to the facts of the instant case. Despite the court's strict, textual analysis, the opinion does contain some weaknesses.

In its decision, while the Eighth Circuit analyzed the intent of Congress in creating the NLRA, it failed to fully analyze the legislative history. As the dissent points out, the legislative history reveals House of Representatives committee reports that discuss goals of protecting labor rights and defeating attempts at employer protection. This is essentially the crux of the players' argument that the act only extends protection to employees, not employers. This case did pose potentially severe implications for the NFL. If the court affirmed the injunction, the NFL owners would have been forced to operate their organizations and honor players' contracts with no collective bargaining agreement in place. Thus, it is possible that the repercussions of finding the federal courts to have jurisdiction weighed into the court's decision and drove the strict, textual analysis.

Moreover, the Eighth Circuit expressed no view on the scope of the non-statutory labor exemption that posed a potential obstacle to the success of the players' antitrust claim. Unfortunately, the court only spoke to the narrow issue on appeal, regarding the scope of the NLRA. This left the issue of whether the players' antitrust lawsuit would have withheld the protection offered by the labor exemption unanswered.

Nevertheless, the Eighth Circuit's textual analysis of the NLRA was correct and its conclusions justified within the text of the statute. First, the facts in Brady reasonably lead to the conclusion that the two parties were involved in a case growing out of or involving a labor dispute. The lawsuit and the collective bargaining prior to the filing of the lawsuit concerned the terms and conditions of the players' employment. It was also reasonable to conclude from the text and precedent that there is no requirement that employees be unionized in order for a labor dispute to occur. Given that both parties have been under a collective bargaining relationship for the past 18 years, the fact that the players chose to pursue antitrust laws over collective bargaining did not erase their labor relationship with the league.

In general, the Eighth Circuit came to the correct conclusion by vacating the district court's decision to enjoin the NFL lockout. Seemingly, the court erred in ignoring the legislative history of the NLRA, which provided some interesting insight and difficult obstacles for the court to overcome. Yet the decision to stand by the express language of the NLRA and analyze the scope of the statute under a strict, textual interpretation led to the most reasonable resolution in Brady. There were many implications posed by this labor dispute that would have impacted each individual member and organization of the NFL. By vacating the injunction and upholding the lockout, it is fair to assume that the court decided the proper forum for curing these issues was the negotiation table, not the federal courtroom.

The Eighth Circuit's decision in Brady is a significant development in the law surrounding professional sports. The decision is especially important because it stands to impact all future labor disputes between professional sports leagues and players' unions, including the current lockout taking place in the National Basketball Association. Although there is criticism that the Eighth Circuit's opinion is too narrow, the decision comes as no surprise to the legal community. Furthermore, Brady can even be viewed as a positive holding for both parties involved.

For the NFL, Brady was a major victory and validation of its legal strategy. First, Brady upheld the use of lockouts for employers as a means of pressuring employees into accepting terms in collective bargaining. Going forward, every professional sports league will likely rely on Brady when locking out their players during a collective bargaining impasse. Second, the NFL successfully eliminated the injunction, the players' biggest weapon and collective bargaining chip. As a result, the players were left to decide between either continuing to pursue the merits of their antitrust claim or caving into various demands from the owners and settling on a new collective bargaining agreement. Ultimately, this decision was an easy one for the players because an antitrust trial would have resulted in years of costly litigation. This would have been unfavorable as the players would have lost significant compensation, suffered from diminishing skills and come up against the Eight Circuit a second time.

Nevertheless, Brady does offer some benefits for the players in future labor disputes. Primarily, the Eighth Circuit does not speak on the merits of the players' antitrust claims, leaving the option open going forward. Furthermore, the Eighth Circuit suggested in oral arguments that the non-statutory labor exemption ends within six months to a year. Thus, the players were able to pressure the owners with the prospect of an antitrust suit, gaining some collective bargaining leverage that allowed for a quick settlement and more favorable terms in the new collective bargaining agreement.

In conclusion, Brady brought a return to football and potentially an end to some professional sports related litigation. Neutral arbitrators, not judicial oversight, will resolve future labor disputes between the NFL and the NFLPA. Although Brady seems to be a narrow opinion on its face, the Eighth Circuit essentially saved the 2011 NFL season and allowed for both parties to resolve their differences around the negotiation table.

Erick Posser studied Sports Management at Syracuse University. He interned at Q2 Sports and Entertainment and Evolution Group Media Talent LLC in New York and at Sports Professional Management in New Jersey.

Suggested citation: Erick Posser, Eighth Circuit Upholds Negotiations as Primary Labor Dispute Forum, JURIST - Dateline, Nov. 2, 2011, http://jurist.org/dateline/2011/11/erick-posser-labor-dispute.php.



This article was prepared for publication by Elizabeth Imbarlina, an assistant editor for JURIST's student commentary service. Please direct any questions or comments to her at studentcommentary@jurist.org

 

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