No. 95-388
 
In The Supreme Court of the United States

OCTOBER TERM, 1995

ANTONY BROWN, ET AL.,PETITIONERS

V.

PRO FOOTBALL, INC., D/B/A WASHINGTON REDSKINS,
ET AL.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AND THE
FEDERAL TRADE COMMISSION AS AMICI CURIAE
SUPPORTING PETITION

STEPHEN CALKINS
General Counsel

DAVID C. SHONKA
Attorney
Federal Trade Commission
Washington, D.C. 20580

DREW S. DAYS, III
Solicitor General

ANNE K. BINGAMAN
Assistant Attorney General

LAWRENC G. WALLACE
Deputy Solicitor General

JOEL I. KLEIN
Deputy Assistant Attorney
General

PAUL R.G. WOLFSON
Assistant to the Solicitor
General

ROBERT J. NICHOLSON
ROBERT J. WIGGERS
Attorneys

Department of Justice
Washington, D.C. 20530
(202) 514-2217

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      QUESTION PRESENTED

Whether members of a multi-employer bargaining
unit may claim the protection of an implied labor
exemption from the federal antitrust laws after the
collective bargaining contract has expired, the
employers and the union have reached an impasse in
negotiations over a new contract, and the employers
have acted collectively to impose new terms of
employment.               

(I)

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     TABLE OF CONTENTS
                   			 Page

Interest of the United States and the Federal Trade
Commission  . . . .  1
Statement  . . . .  2
Summary of argument  . . . .  6
Argument:
An employer is not shielded from antitrust scrutiny
by an implied labor exemption to the antitrust laws
once collective bargaining has reached impasse and
the employer has imposed terms of employment ...   9
Conclusion . . . . 27

     TABLE OF AUTHORITIES

Cases:

American Ship Bldg. Co. v. NLRB, 380 U.S.300
(1965) . . . .20
Anderson v. Shopowners Ass'n, 272 U.S. 359
(1926)  . . . . 10, 12
Brown v. Pro Football, Inc., 1993 Trade Cas.
(CCH)Par 70(D.D.C. 1993) . . . .  3
Charles D. Bonanno Linen Service, Inc. v. NLRB,
454 U.S. 404 (1982)  . . . . 17, 24
Connell Construction Co., Inc. v. Plumbers &
Steam fitters Local No. 100, 421 U.S.616
(1975)  . . . . 10, 12, 14
Golden State Transit Corp. v. City of Los Angeles,
475 U.S. 608 (1986)  . . . . 22, 23
Group Life & Health Ins. Co. v. Royal Drag Co.,
440 U.S. 205 (1979) . . . .13
H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970) . . . .22
Laborers Health & Welfare Trust Fund v. Advanced
Lightweight Concrete Co., 484 U.S.539 (1988) . . . .16
Local Union No. 189, Amalgamated Meat Cutters
v. Jewel  Tea Co., 381 U. S. 676 (1965)  . . . . 14, 15, 25

(III)

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Iv

Cases-Continued              Page

Lodge 76, Int'1 Ass'n  of Machinists v. Wisconsin
Employment Relations Comm'n, 427 U.S. 132
(1976) . . . . 21
Mackey  v. NFL, 543 F.2d 606 (8th Cir. 1976),
cert. dismissed, 434 U.S. 801 (1977)  . . . . 11, 13, 18, 22
McCourt v. California Sports, Inc., 600 F.2d
1193  (9th Cir. 1979) . . . . 13
McNeil v. NFL, 790 F. Supp. 871 (D. Minn. 1992) . 11
Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S.
752 (1984) . . . . 17-18
Morales v. Trans World Airlines, Inc., 504 U.S.
374 (1992) . . . . 17
Morton v. Mancari, 417 U.S. 535 (1974)  . . . .  9
NLRB V. Brown, 380 U.S. 278 (1965) . . . . 19
NLRB v. Fansteel Metallurgical Corp., 306 U.S.
240 (1939) . . . . 20
NLRB v. Insurance Agents' Int'l Union,
361 U.S. 477 (1960) . . . . 1 4, 20, 21
NLRB v. Katz, 369 U.S. 736 (1962) . . . .16
National Gerimedical Hosp. & Gerontology Ctr. v.
Blue Cross, 452 U.S. 378 (1981) . . . .9, 10
Northern Pacific Ry. v. United States, 356 U.S.
1 (1958) . . . .13
Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989),
cert. denied, 498 U .S. 1040 (1991) . . . .2
Radovich v. National Football League, 352 U.S.
445 (1957)  . . . . 10, 11, 13
Silver v. New York Stock Exchange, 373 U.S.
341 (1963)  . . . .  13
United Mine Workers v. Bennington, 381 U.S.
657 (1965) . . . . 10, 12, 14, 15
United States v. Borden Co., 308 U.S. 188
(1939) . . . . 13
United States v. Container Corp., 393 U.S. 333
(1969)  . . . . 18

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v

Cases-Continued:

United States v. Hutcheson, 312 U.S. 219 (1941)  . . . . 12 
United States v. Philadelphia Nat'1 Bank,
374 U.S. 321 (1963)  . . . . 9
United States v. Topco Associates, 405 U.S. 596
(1972)  . . . . 13
Statutes:
Act of Nov. 8, 1966, Pub. L. No. 89-800,  6(b)(l),
80 Stat. 1515 (15 U .S.C. 1291)  . . . . 26 
Clayton Act, 15 U.S.C. 12 et seq.:
 6, 15 U.S.C. 17  . . . . 12, 13
 20,29 U.S.C. 52  . . . . 12
Fair Labor Standards Act, 29 U.S.C. 201 et seq . . . . 23 
National Labor Relations Act, 1,29 U.S.C. 151  . . . . 21
Norris-LaGuardia Act, 29 U.S.C. 101-115  . . . .12
 4,29 U.S.C. 104  . . . . 12
Occupational Health and Safety Act, 29 U.S.C.
651 et seq . . . . 23
Sports Broadcasting Act of 1961, Pub. L. No. 87-331,
75 Stat. 732, 15 U.S.C. 1291 et seq . . . .26 
Sherman Act, 1, 15 U.S.C. 1  . . . . 11, 17
Miscellaneous:
H.R. 2740, 104th Cong., 1st Sess. (1995) (Fan
Freedom and Community Protection Act of 1995) . . . . 26
S. 1439, 104th Cong., 1st Sess. (1995) (Fans Rights
Act  of  1995)  . . . . 26
Roberts, Reconciling Federal Labor and Antitrust
Policy: The Special Case of Sports League Labor
Market Restraints, 75 Gee. L.J. 19 (1986)  . . . . 12 
Schneider, Unsportsmanlike Conduct: The Lack of
Free Agency in the NFL,64 S. Cal. L. Rev. 797
(1991)  . . . . 22

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In the Supreme Court of the United States

  OCTOBER TERM, 1995

  No. 95-388

  ANTONY BROWN, ET AL., PETITIONERS

          v.

PRO FOOTBALL, INC., D/B/A WASHINGTON REDSKINS,
         ET AL .

   ON  WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AND THE
FEDERAL TRADE COMMISSION AS AMICI CURIAE
    SUPPORTING PETITIONERS

INTEREST OF THE UNITED STATES AND THE
    FEDERAL TRADE COMMISSION

The United States and the Federal Trade Com-
mission have primary responsibility for enforcement
of the antitrust laws. Accordingly, they have a direct
interest in the correct formulation of any exemption
to the application of those laws grounded in competing
policies based on federal labor law. The United States
filed a brief as amicus curiae in this case in the court
of appeals and at the petition stage in this Court.

(1)

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2

        STATEMENT 

1. This is an antitrust action brought by pro-
fessional football players who were placed on "devel-
opmental squads" of National Football League (NFL)
team owners.  A collective bargaining agreement
between the owners-and the players' union, which had
no provision for developmental squads or for freed
salaries, expired in' 1987, and the owners and players
began negotiations towards a new agreement.l In
1989, the owners adopted a resolution allowing each
team to maintain a developmental squad of six first-
year players, whose salaries were to be a fixed
amount, agreed upon-by all the teams. That resolu-
tion was a departure from the customary NFL
practice of establishing all players' salaries through
individual negotiation. Pet. App. 6a.
In subsequent bargaining with the union, the
owners proposed to pay all developmental squad
players a fixed salary of 1,000 per week during the
1989- NFL season. After the players' union rejected
the concept of fixed salaries, the team owners
declared on June 16, 1989, that collective bargaining
had come to impasse. The NFL- then unilaterally
imposed the developmental squad proposal, and the
Commissioner of the NFL warned team officials that
any team that exceeded the $1,000 salary cap would be
subject to disciplinary action. Pet. App. 7a.
 Several players (petitioners here) then brought
this action to challenge the" developmental" squad
salary agreement. The owners (respondents) con-
                       
___________________(footnotes)

1 The expired agreement and the prior history of labor
relations between the NFL and the players' union are de-
scribed  in Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989), cert.
denied, 498 U.S. 1040 (1991).

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3

tended that their agreement to impose uniform
salaries was protected from antitrust scrutiny by an
implied, "nonstatutory" labor exemption from the
antitrust laws.  The district court struck that
defense, ruling that the owners' immunity expired
when the prior collective bargaining agreement
expired (Pet. App. 75a-79a), or, at the latest, when the
parties reached impasse in their negotiations (id. at
80a-86a). The district court also ruled that the fixed-
salary provisions were not shielded by an implied
exemption from the antitrust laws because they were
"never encompassed in the expired collective
bargaining agreement." Id. at 86a. The district court
subsequently granted  summary judgment for
petitioners on liability (id. at 93a-115a), and, after a
jury trial on damages, awarded them more than $30
million  in damages and permanently enjoined
respondents from collectively setting regular season
salaries for any category of players. Brown v. Pro
Football, Inc., 1993 Trade Cas. (CCH) Par 70,260 (D.D.C.
1993).
2. A divided panel of the court of appeals reversed.
Pet. App. la-60a. The majority ruled that the fixed-
salary agreement is legal because "the nonstatutory
labor exemption shields from antitrust challenge
alleged restraints on competition imposed through
the collective bargaining process, so long as the
challenged actions are lawful under the labor laws and
primarily affect only a labor market organized around
a collective bargaining relationship." Id. at 10a. In so
ruling, it rejected petitioners' argument that the
nonstatutory labor exemption "applies only where a
union has manifested its consent to a restraint on
trade by signing a collective bargaining agreement,"
id. at 14a, as well as the argument that the exemption

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4

expires when the parties reach impasse in negotia-
tions on a new collective bargaining agreement, see
id. at 20a-21a.
The court acknowledged that each of this Court's
previous cases involving the implied labor exemption
arose in the context, of an antitrust challenge to a
union-employer agreement that was still in force.
Pet. App. 15a. But" it did not consider that point
dispositive, for it viewed the nonstatutory labor
exemption as a "proper accommodation between the
congressional policy favoring collective bargaining
under the [National Labor Relations Act (NLRA)]
and the congressional policy favoring free com-
petition in business markets," Ibid. (citation omitted;
emphasis added by court of appeals). It reasoned that
"the juxtaposition of policies giving rise to the
exemption focuses on collective bargaining as a
process, not merely on the product of that process-
the collective bargaining agreement." Ibid. The ma-
jority therefore concluded that "the exemption must
be broad enough in scope to shield the entire
collective bargaining process established by federal
law." Id. at 16a. 
Postulating a "delicate balance of countervailing
power that characterizes the [collective bargaining]
process," the court stated that "[i]injecting the
Sherman Act into the collective bargaining process
would disrupt this- balance by giving unions a
powerful new weapon, one not contemplated by federal
labor laws."  Pet, App. 20a-21a. Accordingly, the
court reasoned, "a. proper respect for the national
labor policy" requires recognition of the exemption
"as a potential shield for all. lawful actions taken by
either unions or employers pursuant to the collective
bargaining process." Ibid. The court recognized that

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its holding "requires employees involved in a labor
dispute to choose whether to invoke the protections
of the NLRA or the Sherman Act," and that, in effect,
if employees wish to invoke the protections of the
antitrust laws, they must "forego unionization or
even decertify their unions."  Id. at 30a. But, the
court remarked, "[i]f [employees] choose to avail
themselves of the advantages of the collective
bargaining process," they have "many benefits" under
the federal labor laws (ibid.), and, "under the system
established by the federal labor laws, employees win
concessions not by filing antitrust lawsuits, but with
shrewd bargaining, favorable grievance settlements,
victories in arbitration, and, when necessary, by
striking" (id. at 31a).
Judge Wald dissented. Pet. App. 34a-60a. She
maintained that the majority's decision "sharply tilts
the playing field in employers' favor, and because of
that, will erode the vitality of collective bargaining
it self." Id. at 34a. She further suggested that, be-
cause the majority's decision " `effectively gives
[employers] *  the benefit of the antitrust
exemption without having to pay for it' through
concessions at the bargaining table, * * [t]he
symmetry, mutuality, and give-and-take that lie at
the heart of bargaining process are irretrievably
lost." Id. at 49a.
Starting from the principle that, "[a]bsent special
statutory or judge-made exemption, a multi-employer
agreement unilaterally imposing uniform industry-
wide terms of employment * * * runs afoul of the
antitrust laws," Pet. App. 35a, Judge Wald concluded
that an implied labor exemption does not shield from
antitrust scrutiny such terms when they are
unilaterally imposed after the parties have reached

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6

impasse in the collective bargaining process. Id. at
59a. She stressed that, while employers may not
unilaterally impose terms of employment during
collective bargaining, "after. impasse, the employer is
free [under federal labor law] to unilaterally impose
terms reasonably encompassed in bargaining pro-
posals already rejected by the union, because at that
point the employer has exhausted its statutory duty
to bargain." Pet. App. 52a. Therefore, she argued,
after impasse, the operation of the antitrust laws does
not frustrate the collective bargaining process, and
"when an agreement is no longer in sight or even
being sought[,] immunity from antitrust liability for
terms employers unilaterally impose should- termi-
nate." Id. at 60a. 

     SUMMARY OF ARGUMENT

In holding that the implied labor exemption from
the antitrust laws shields employers' concerted
actions in fixing wages from antitrust scrutiny
unless and until employees decertify their union, the
court of appeals extended that exemption far beyond
its proper scope. Because of the fundamental im-
portance to national economic policy of the Sherman
Act, antitrust exemptions must be narrowly con-
strued. In particular, an antitrust exemption to
accommodate a separate regime of federal law should
be recognized only if the exemption is necessary to
make the conflicting statutory scheme work. Even
then it should be confined to the minimum- extent
necessary.
To give effect to federal labor law, it is necessary to
shield the terms collective bargaining agreements
from collateral attack by the signatories under the
Sherman Act.  Collective bargaining could not

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7

operate if labor agreements setting hours and wages,
once reached, could be assailed by the parties to the
agreements as unreasonable restrains of trade. And
because, once a collective bargaining agreement
expires, employers have an obligation under federal
labor law to maintain the status quo until the parties
reach either anew agreement or an impasse in their
negotiations, it is also necessary to extend until
impasse the antitrust immunity for the terms of the
labor agreements maintained by the employer during
the bargaining period.
When the parties have reached impasse, however,
there is no longer a justification for shielding col-
lective action fixing wages from antitrust scrutiny,
After impasse, federal labor law no longer prohibits
employers from altering the terms of employment,
and individual members of a multi-employer bar-
gaining unit may make interim arrangements with
the union on an individual basis. Employers can then
comply with both labor law and antitrust law, and
should do so. A broader exemption, lasting even after
impasse and as long as the employees maintain a
collective bargaining relationship with the employer,
would sacrifice the protections of antitrust law
without the need to accommodate competing require-
ments of labor law.
In rejecting an impasse standard and holding that
employees must decertify their union to pursue
remedies under the Sherman Act, the court of appeals
has inappropriately required employees to choose
between two sets of statutory rights afforded to them
by Congress.  Nothing in the text or legislative
history of the antitrust laws or the National Labor
Relations Act (NLRA) suggests that Congress in-
tended to grant a broad antitrust immunity to em-

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8

ployers of unionized employees, or to preclude those
employees from pursuing antitrust remedies pre-
sumptively available to all. Moreover, the imposition
of such a burden on the right of self-organization
granted to employees by the NLRA would disserve
rather than promote a central policy of the NLRA
itself. The court of appeals also gave undue weight to
the need to preserve the union-employer balance in
the collective bargaining process. The NLRA is not
concerned with any particular balance between
unions and employers. Indeed, it is withdrawal of the
antitrust cause of action.. that,. would interfere with
the free play of economic forces between employees
and employers anticipated by the NLRA. The broad
exemption fashioned _ by the court of appeals also
would create a disincentive to serious bargaining, by
providing employers with a valuable immunity with-
out requiring them to negotiate for it.
Although there may be cases in which it is not
entirely clear whether the parties have reached
impasse, that determination is not outside the com-
petence of the courts. In cases like this one, where
the employers have unilaterally imposed a change
in the terms of employment, no difficulty in determin-
ing the point of impasse exists, for such a change
amounts to an assertion. by the employers that
impasse has occurred; otherwise the employers would
be committing an unfair labor practice by departing
from the status quo while good faith bargaining is
still occurring. In other cases, where employers are
continuing in force collective restraints embodied in
an expired labor agreement, there may be justifica-
tion for continuing the exemption for such time as is
reasonable to allow employers to ascertain, upon
advice of counsel, that impasse has in fact occurred

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9

and to adjust their business operations accordingly.
Beyond that point, however, an implied antitrust
immunity for agreements among employers to fix
wages would no longer be grounded in the need to
accommodate federal labor law.

       ARGUMENT

AN EMPLOYER IS NOT SHIELDED FROM
ANTITRUST SCRUTINY BY AN IMPLIED LABOR
EXEMPTION TO THE ANTITRUST LAWS ONCE
COLLECTIVE BARGAINING HAS REACHED
IMPASSE AND THE EMPLOYER HAS IMPOSED
TERMS OF EMPLOYMENT

The court of appeals held that so long as employees
have a collective bargaining relationship with their
employers, they may not invoke antitrust law to
challenge their employers' concerted actions to fix
wages. See Pet. App. 6a, 28a, 32a-33a. That ruling
fails to take account of this Court's admonitions that
"[r]epeals of the antitrust laws by implication from a
regulatory statute are strongly disfavored, and have
only been found in cases of plain repugnancy between
the antitrust and regulatory provisions."  United
States v. Philadelphia Nat'l Bank, 374 U.S. 321,350-
351 (1963); accord National Gerimedical Hosp. &
Gerontology Ctr. v. Blue Cross, 452 U.S. 378, 388-389
(1981). That "well established" principle (id. at 388)
reflects the fundamental importance of the antitrust
laws as an element of national economic policy. It also
reflects the cardinal rule of statutory construction
that "when two statutes are capable of co-existence, it
is the duty of the courts, absent a clearly expressed
congressional intention to the contrary, to regard
each as effective." Morton v. Manari, 417 U.S. 535,
551 (1974).

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10

Those principles apply fully to accommodation of
the antitrust laws with the labor laws, which are also
an expression of fundamental national policy. Any
exemption from the antitrust laws to accommodate
national labor policy must be firmly grounded in what
"labor policy requires," Connell Construction Co. v.
Plumbers & Steamfitters Local No. 100,421 U.S. 616,
622 (1975), and should operate only to the extent that
there is an actual conflict with a requirement of
federal labor law. See United Mine Workers v.
Bennington, 381 U.S. 657, 666 (1965); National
Gerimedical, 45.2 U.S. at 390.
No such conflict requiring an ouster of the anti-
trust law exists once the parties have reached im-
passe in their negotiations over a new collective
bargaining agreement, After that point, it is possible
to give effect to the requirements of both labor law
and antitrust law, and there is no justification for
favoring one regime at the expense of the other.
When collective bargaining has reached impasse and
the employer has imposed terms of employment,
therefore, an implied labor exemption from the anti-
trust laws should not shield the employer. Accord-
ingly, the NFL may not claim the exemption in this
case. 1. a. Well before the enactment of the NLRA, it was
established that concerted action by a group of
employers to control the labor market is subject to
the antitrust laws. Anderson v. Shipowners Ass'n,
272 U.S. 359 (1926); see also Radovich V. National
Football League, 352 U.S. 445 (1957)? Indeed, the

___________________(footnotes)

2  In Radovich the court summarily rejected as "lacking  in
merit" (352 U.S. at 454) the National Football League's argu-
ment that a prospective- player's allegation of a League boycott

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11

court of appeals acknowledged that, in the absence of
an exemption, a multi-employer agreement unilater-
ally imposing uniform industry-wide terms of employ-
ment would be subject to the antitrust laws. See Pet.
App. 24a (citing Radovich); id. at 35a (dissenting
opinion). But the majority believed that "the incep-
tion of a collective bargaining relationship irrevoca-
bly alters the governing legal regime," id. at 24a,
such that when there is "a labor market organized
around a collective bargaining relationship, antitrust
policy must give way" to labor law, id. at 28a.3

___________________(footnotes)

constituted a "labor dispute" immunized from antitrust scru-
tiny by the Clayton Act and the Norris-LaGuardia Act. Brief
for Respondents National Football League et al. at 59-63 (No.
94, 1956 Term) (Dec. 1956).
3 The court of appeals suggested that employers' anti-
competitive restraints on labor markets (as opposed to product
markets) are of little concern to the antitrust laws. Pet. App.
24a. The court also acknowledged, however, that petitioners
would have had an antitrust cause of action against respondents
if they had abandoned their union. Id. at 30a. The Sherman
Act indeed makes illegal "every" unreasonable contract, com-
bination and conspiracy in restraint of trade, 15 U.S.C. 1, and
does not exclude employers' agreements to fix wages (or other
terms and conditions of employment).
This case does involve a separate antitrust issue of whether a
collective restraint on wages is per se invalid or is subject to the
rule of reason. The joint venture characteristics of sports
leagues may justify analysis under the rule of reason of
unilateral league restraints on wage competition, even though
those restraints would be illegal per se in different industries.
See Mackey  v. NFL, 543 F.2d 606,618-620 (8th Cir. 1976), cert.
dismissed, 434 U.S. 801 (1977); McNeil v. NFL, 790 F. Supp.
871, 896-897 (D. Minn. 1992). The district court found an
antitrust violation even under the rule of reason; the court of
appeals did not reach that issue, which would be open for its
consideration on remand.

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12

Nothing in the text of the NLRA mentions any
antitrust exemption at all, let alone an exemption
specially for employers,  Nor does the legislative
history of the NLRA indicate any intent on the part
of Congress to create an antitrust immunity for
employers. Sections 6 and 20 of the Clayton "Act (15
U.S.C. 17, 29 U.S.C. 52) in conjunction with the
Norris-LaGuardia Act (29 U.S.C. 101-115) do grant
unions a statutory labor exemption to the antitrust
laws. That exemption, however, is available only for
union conduct taken in the course of a dispute over
terms and conditions of employment, and then only
"[s]o long as a union-acts in its self-interest and does
not combine with mm-labor groups." United States v.
Hutcheson, 312 U.S. 219, 232 (1941); Connell, 421 U.S.
at 622.4 The NFL is not entitled to the benefit of the
             
___________________(footnotes)

4 It has been suggested that, because the first sentence of
Section 6 of the Clayton Act, 15 U.S.C. 17, states that "[t]he
labor of a human being is not a commodity or article of
commerce," all employer-imposed restraints on labor markets
are exempt from antitrust scrutiny (whether or not the
employees are unionized). See Roberts, Reconciling Federal
Labor and Antitrust Policy: The Special Case of Sports League
Labor Market Restraints, 75 Gee. L.J. 19, 26-30 (1986); see also
Pet. App. 38a {dissent, summarizing commentary). As Judge
Wald observed (ibid.), it is "not possible to square this minority
view with the development of our antitrust jurisprudence."
The rest of Section 6 is plainly aimed at employees' organiza-
tions such as unions, and the legislative history of the Clayton
Act gives no indication that Congress intended to immunize
employers' unilateral (i.e., not negotiated with a union) com-
binations in restraint of labor markets. Moreover, a blanket
exemption for all restraints of labor markets, including those
imposed by employers, "could not be reconciled with this Court's
decisions in Anderson and Radovich. See also Bennington, 381
U.S. at 662 (noting that neither Section 20 of the Clayton Act
nor Section 4 of the Norris-LaGuardia Act "expressly deals

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13

statutory exemption. Radovich, 352 U.S. at 454. And
while the existence of an express antitrust immunity
does not absolutely preclude the possibility of an
implied immunity as well, it does counsel care in
recognizing and defining such an implied immunity.
Cf. United States v. Borden Co., 308 U.S. 188, 201
(1939).
This Court has also long recognized the importance
of the Sherman Act as a "comprehensive charter of
economic liberty." Northern Pacific Ry. v. United
States, 356 U.S. 1,4 (1958); see United States v. Topco
Associates, 405 U.S. 596, 606 (1972). In light of that
importance, the Court has stressed that exemptions
to the Sherman Act must be narrowly construed,
Group Life & Health Ins. Co. v. Royal Drug Co., 440
U.S. 205, 231 (1979), and that an implied exemption to
the antitrust laws may be recognized only if that
exemption is "necessary to make the [conflicting
statutory scheme] work and even then only to the
minimum extent necessary." Silver v. New York
Stock Exchange, 373 U.S. 341,357 (1963). "This is the
guiding principle to reconciliation of the two statu-
tory schemes." Ibid.
b. Acting with caution and precision, the Court
has recognized a narrow immunity from the antitrust
laws for the terms of an existing collective bar-
gaining agreement that are intimately related to the
employees' wages, hours, and working conditions, and

___________________(footnotes)

with arrangements [in labor markets] between unions and
employers").  The lower courts have therefore correctly
concluded that Section 6 does not put collective action by
employers to restrict competition in labor markets outside the
reach of the antitrust laws. See Mackey v. NFL, 543 F.2d at
616-618; McCourt v. California Sports, Inc., 600 F.2d 1193,
1197 n.7 (6th Cir. 1979).

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that do not extend beyond the bargaining unit that is
a party to the agreement. See Local Union No. 189,
Amalgamated Meat Cutters v. Jewel Tea Co., 381
U.S. 676,688-690, G92-693 (1965) (opinion of White, J.);
cf. Pennington, 381 U.S. at 664-666. A1though some-
times referred to as a "nonstatutory" immunity (as
opposed to the "statutory" exemption for unilateral
union actions), the implied labor exemption to the
Sherman Act recognized in Jewel Tea is in fact
firmly grounded  in the requirements of another
statutory enactment, the NLRA. As the Court care-
fully summarized the rationale for the exemption in
Connell Construction Co., "a proper accommodation
between the congressional policy favoring collective
bargaining under the NLRA and the congressional
policy favoring free competition in business markets
requires that some union-employer agreements be
accorded a limited. nonstatutory exemption from anti-
trust sanctions." '421 US. at 622.
Essential to the formulation of the exemption in
Jewel Tea was the need to reconcile two federal
statutory regimes that would otherwise have been in
direct conflict. The purpose of the NLRA is to pro-
vide a means "to the ordering of the parties' indus-
trial relationship through the formation' of a con-
tract." NLRB v. Insurance Agents' Int'1 Union, 361
U.S. 477, 485 (1960). Moreover, the "strong labor
policy" embodie in the NLRA favors "the association
of employees to eliminate competition over wages and
working conditions." Connell, 421 U.S. at 622. The
implied labor exemption `simply reflects the common
sense recognition that "the goals of federal labor law
never could be achieved". if labor contracts, once
reached, were declared invalid under the antitrust
laws. Ibid.; see Jewel Tea, 381 U.S. at 712 (opinion of

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15

Goldberg, J.); Bennington, 381 U.S. at 664 (because
"wages lie at the very heart of those subjects about
which employers and unions must bargain," and be-
cause the law contemplates "agreements between the
union and employers in a multi-employer bargaining
unit, " "a union may conclude a wage agreement with
the multi-employer bargaining unit without violating
the antitrust laws"). As Judge Wald observed, "the
collective bargaining scheme * * *  would be
mortally undercut if collective bargaining agree-
ments were subject to collateral attack * * * as
`combinations in restraint of trade.'" Pet. App. 43a.
Thus, just as all three judges on the court of
appeals agreed that petitioners could proceed against
respondents under the antitrust laws if they decerti-
fied their union, they also all agreed that, if the
creation and pay of the developmental squads at issue
in this case were treated in an NFL-union collective
bargaining agreement, that agreement would be
exempt from attack under the antitrust laws while it
was in force. But in this case, the old collective
bargaining agreement expired, and the new manage-
ment proposal for fixed salaries (which had not been
included in any previous collective bargaining agree-
ment) was resisted by the union and was then imposed
by the team owners only after they declared an
impasse in the negotiations. This case is therefore
not governed by Jewel Tea, in which the employer
was attempting to attack, through the antitrust laws,
an arrangement to which it had agreed pursuant to
the collective bargaining regime established by the
labor laws. See 381 U.S. at 688 (opinion of White, J.).
Rather, the issue in this case is the duration of any
implied immunity for the employers' concerted action

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16

taken after the collective bargaining agreement
expired.
2. The court of appeals was correct to reject the
district court's conclusion (Pet. App. 72a-80a) that an
implied labor exemption protects only wage re-
straints to which the union currently agrees-a posi-
tion that would require termination" of the exemption
immediately upon expiration of a collective bargain-
ing agreement. Id. at 19a; see id. at 51a-52a (dis-
senting opinion). That position cannot be reconciled
with the obligation of employers under federal labor
law to maintain the terms of employment established
by an expired collective bargaining agreement until
impasse. NLRB v. Katz, 369 U.S. 736, 742-743 (1962).
If the antitrust exemption ended- before impasse,
employers who feared that continued adherence to
particular terms pending negotiation of a new agree-
ment might constitute an antitrust offense would face
conflicting legal obligations. They could modify the
objectionable terms, but they would thereby risk
being charged with an unfair labor practice, for the
NLRA forbids unilateral changes in working condi-
tions prior to impasse.  See Laborers Health &
Welfare Trust Fund v. Advanced Lightweight Con-
crete Co., 484 U.S.  539, 544 n.6 (1988); Katz, 369 U.S.
at 743 (unilateral. imposition of conditions of employ-
ment during period of bargaining is a "circumvention
of the duty to negotiate"). Or they could adhere to the
terms of the expired agreement, but that course
would carry the risk of treble damages under the
antitrust laws.  In those discrete circumstances,
there is a conflict between the labor laws and the
antitrust laws such that both cannot be given full
effect, and the antitrust laws should yield to the more
specific, and later enacted, obligations of the NLRA.

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17

See Morales v. Trans World Airlines, Inc., 504 U.S.
374,384-385 (1992).
The situation is significantly different once the
parties have reached impasse in their bargaining for a
new contract. After that point, employers no longer
have a duty under the labor laws to maintain the
status quo of the expired contract. As this Court has
pointed out, once there is an impasse, members of a
multi-employer bargaining unit are free as a matter
of labor law to negotiate individual arrangements on
an interim basis with the union, since such individual,
interim agreements "deter * * * unit fragmenta-
tion" and thereby promote collective bargaining.
Charles D. Bonanno Linen Service, Inc. v. NLRB,
454 U.S. 404, 415-416 (1982). The same reasoning
logically leads to the conclusion that, after impasse, it
is not an unfair labor practice for individual em-
ployers in a multi-employer bargaining unit to make
unilateral, interim changes in their terms of employ-
ment, notwithstanding union opposition, if those
changes have been offered as good-faith proposals
during the bargaining process. After impasse, there-
fore, labor law no longer requires that employers act
collectively to maintain or enforce provisions incon-
sistent with the antitrust laws. Employers are then
able to comply with both the labor laws and the anti-
trust laws, and should so comply.
That does not mean that, after impasse, members of
a multi-employer bargaining unit will be forbidden
from continuing in force all the terms of an expired
collective bargaining agreement. As a matter of sub-
stantive antitrust law, employers who, after impasse,
independently decide to impose terms of employment
do not violate Section 1 of the Sherman Act, for that
Act applies only to agreements. E.g., Monsanto Co. v.

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18

Spray-Rite Serv. Corp., 465 U.S. 752,761,763 (1984).
The expiration of antitrust immunity, therefore. will
not lead to a disruption of labor markets or a whole-
sale revision of terms of employment merely because
the parties have reached a (perhaps temporary)
standoff in their negotiations. Indeed, since (as we
have suggested, p. 17, supra) members of a multi-
employer bargaining unit may independently impose
interim terms of employment that were previously
put forth in good faith in the collective bargaining,
many employers' terms imposed independently after
impasse may well resemble or duplicate those that
were part of the expired agreement. But concerted
action by employers after impasse to impose particu-
lar terms on employees (or to notify one another
before doing so, cf. United States v. Container Corp.,
393 U.S. 333 (1969)) should be subject to antitrust
scrutiny, whether or not the employees are union-
ized.5

___________________(footnotes)

5 Some joint action by employers in a multi-employer
bargaining unit must of course, fall within an implied exemp-
tion if the collective bargaining regime is to operate. Thus.
resumption of good-faith bargaining between the union and the
employers in the multi-employer bargaining unit to reach a
new agreement would be within the implied exemption, just as
the bargaining to negotiate the expired contract was exempt.
Also, there may be circumstances in which joint action by
employers, even if subject to antitrust scrutiny, would be
reviewed under the rule of reason rather than a per se rule of
invalidity. See Mackey v. NFL, 543 F.2d at 618-620. For
example, in the case of a sports league, a joint decision by the
employers to lock out their employees and to field teams with
replacement employees might under some circumstances be
permissible, even though a similar action would constitute a per
se illegal concerted refusal to deal in other contexts. since it
could be impractical for some teams that were the subject of a

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19

3. The court of appeals believed, however, that a
much broader antitrust immunity for employers was
necessary to give room to the process of collective
bargaining contemplated by the NLRA. At the heart
of its rationale was a concern that applying the
antitrust laws would disrupt "the delicate balance of
countervailing power * * * by giving unions a
powerful new weapon, one not contemplated by the
federal labor laws."  Pet. App. 19a-20a.  That
reasoning is seriously flawed in several respects.
The main objection to the court of appeals' con-
clusion is that it departs from the principle mandat-
ing narrow construction of exemptions to the
Sherman Act. As we explain above (pp. 9-10, 13,
sup-a), the fundamental importance of the antitrust
laws requires that any implied exemption be no
broader than necessary to permit operation of a
separate statutory scheme that imposes conflicting
duties. After impasse, nothing in employers' specific
legal obligations established by the NLRA conflicts
with the antitrust laws' prohibition against com-
binations in restraint of trade. Yet, in rejecting an
impasse standard and holding that employees must

labor dispute to use replacement employees while other teams
used their regular employees or fielded no team at all. Cf.
NLRB v. Brown, 380 U.S. 278 (1965) (when one member of a
multi-employer bargaining unit is the subject of a selective
strike, other members of the unit may lock out their employees
and hire temporary replacement workers, to preserve the
integrity of the multi-employer group). Similarly, the rule of
reason may in some circumstances shield continued collabora-
tion by members of a multi-employer unit to maintain joint
benefit or retirement plans previously established through the
bargaining process. In short, expiration of the blanket implied
exemption does not preclude specific accommodations of labor
law policies in applying the antitrust laws.

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20

decertify their union to pursue remedies under the
Sherman Act, `the- court of appeals has inappropriately
required employees to choose between two sets of
statutory rights afforded them by Congress. A
central policy of the NLRA-its conferral on
employees of a right to self-organization would be
burdened rather than promoted by needlessly denying
only to unionized employees the antitrust remedies
presumptively available to all.6
Second, contrary to the court of appeals' belief (Pet.
App. 19a-20a), the labor laws are not addressed to
preserving any particular balance of power between
unions and employers. As the Court stated in NLRB
v. Insurance Agents' Int'1 Union, 361 U.S. 477, 490
(1960), the NLRA does not authorize the NLRB "to
act at large in equalizing disparities of bargaining
power between employer and union." Yet that is
essentially what the court of appeals has undertaken
to do here; the court's result was predicated on a
concern that unionized employees should not have
(what it perceived as) the "powerful new weapon" of
an antitrust cause of action at their disposal, since
that would give -them "an advantage in bargaining

___________________(footnotes)

6 Enhancing the right of employees to self-organize was the
primary thrust of the NLRA. American Ship Bldg. Co. v.
NLRB, 380 U.S. 300, 316 (1965). congress also gave great
emphasis in the NLRA to the role of unionization and collective
bargaining in promoting labor peace. See NLRB v. Fansteel 
Metallurgical Corp., 306 U.S. 240, 247 (1939). There is no
reason to believe that the Congress that wrote a law to facilitate
unionization also meant to create by implication in that same
law a sweeping pro-employer antitrust exemption that em-
ployees can avoid only by abandoning their unions or not
forming them in the first place-even when there is no conflict
between the requirements of the two legal regimes, as is the
case after impasse.

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21

over a salary provision about which union members do
not care deeply enough to strike." Pet. App. 20a.
To the contrary, it is withdrawal of the antitrust
cause of action from the union that would intrude on
the collective bargaining process by "regulating] the
choice of economic weapons" available to the parties.
NLRB v. Insurance Agents' Int'1 Union, 361 U.S. at
490. As the district court observed, the implied labor
exemption can actually provide a disincentive for the
employer to bargain earnestly and to sign a new
collective bargaining agreement; if the employer is
satisfied with the terms of the expired agreement,
"all it need do is maintain the status quo and continue
to receive exception from antitrust liability for
restraints to which the union no longer agrees." Pet.
App. 73a.  The court of appeals' ruling would
effectively give the employer the benefit of an anti-
trust exemption without having to pay for it through
concessions at the bargaining table.7
Third, as Judge Wald pointed out, the majority's
stress on the need for the exemption to protect the
process of collective bargaining is basically miscon-

___________________(footnotes)

7 Particularly unpersuasive is the court of appeals' apparent
preference that unions strike rather than sue under the
antitrust laws (Pet. App. 20a). The stated policy of the NLRA
is to reduce the number of strikes. 29 U.S.C. 151. It does not
follow that, because unionized employees would not strike over
a particular term or condition of employment, they should not
be able to challenge it as a violation of the Sherman Act or some
other law. Unions have numerous economic weapons short of a
strike. See, e.g., NLRB v. Insurance Agents Int'l, 361 U.S. at
480-481; Lodge 76, Int'l Ass'n of Machinists v. Wisconsin
Employment Relations Comm'n, 427 U.S. 132, 133-134, 148-149
(1976). The NLRA does not require that unionized employees
precipitate a workplace crisis to advance their bargaining
goals.

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22

ceived. Compare Pet. App. 16a-17a with id. at 48a-49a.
It is true in a sense that the NLRA focuses on the
bargaining process, rather than the result of that
process, in that neither the NLRB nor the courts
have authority to impose contract terms on the
parties. H.K. Porter Co. v. NLRB, 397 U.S. 99, 108
(1970). An antitrust cause of action against the
employer for concerted action in fixing wages does
not contravene that principle, however. Even if the
employees were successful in their antitrust suit, the
eventual result would not necessarily be the striking
of the offending term from the (eventually negotiated)
contract. The parties could still bargain to place a
restraint on wages in the labor agreement, and the
union could extract some concessions from manage-
ment in return.8 The presence-or even the potential
presence-of an antitrust cause of action may play a
role in the bargaining, but it does not impede the
parties' freedom to arrive at terms. It may even serve
as an inducement for the parties to reach agreement.
It is also true that the NLRA gives the parties
considerable room to choose economic tactics during
the collective bargaining process, as well as after
impasse, by freeing them from other regulatory
constraints. See, e.g., Golden State Transit Corp. v.
City of Los Angeles, 475 U.S. 608 (1986). But it is not
accurate to analyze an antitrust cause of action as

___________________(footnotes)                  
             
8 Indeed, even after the Eighth Circuit ruled in Mackey
that the NFL's "Rozelle Rule," restricting players' ability to
sign with different teams after the expiration of their con-
tracts, violated the Sherman Act, the players' union agreed to
significant restrictions on free agency in subsequent collective
bargaining agreements. See Schneider, Unsportsmanlike Con-
duct: The Lack of Free Agency in the NFL, 64 S. Cal. L. Rev.
797,814-815 (1991)-

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23

"imposing additional restrictions on economic wea-
pons of self-help, such as strikes or lockouts." Id. at
614. Employers may act individually to impose (at.
least interim) terms of employment after impasse, and
thus they may engage in "the exercise of economic
self-help." Id. at 615. It is only concerted action
among the employers that creates the potential for
liability under the Sherman Act..
Finally, after the point of impasse, when it becomes
possible to apply fully both the labor laws and the
antitrust laws, the relation between the NLRA and
the Sherman Act is basically no different from the
relation between the NLRA and other federal stat-
utes affecting the balance of power between labor and
management.  The Fair Labor Standards Act (29
U.S.C. 201 et seq.), for example, prohibits employers
from imposing wages below the federal minimum or
hours (at regular compensation) above the federal
maximum. The Occupational Safety and Health Act
(29 U.S.C. 651 et seq.) similarly bars management
from maintaining working conditions that, in the
absence of that statute, they might wish to maintain.
Yet the NLRA does not require that employees
decertify their unions to pursue their remedies under
those statutes; nor does it suggest that unionized
employees must be willing to strike over violations of
the statutes if they deem the violations important.
Whether or not these statutes give unions weapons
that courts might think are too powerful in the
context of collective bargaining, employers can, and
so must, obey them.
4. The district court expressed concern about an
impasse standard for the termination of the implied
immunity on the grounds that the precise point of
impasse may be uncertain, and that different courts

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24

(and the NLRB) might reach different determinations
as to whether the parties had reached impasse. Pet.
App. 75a, 83a.  The district court also noted this
Court's observation that impasse is often only a tem-
porary deadlock, eventually resolved through eco-
nomic force or a-change in mind leading to the re-
newal of negotiations. Id. at 82a (citing Bonanno
Linen Service, 454 U.S. at 412). It is possible, in fact,
that impasse could occur more than once within the
course of a single labor dispute, which might create
uncertainty in determining at any particular point
whether an antitrust cause of action existed.
While those concerns are not without some sub-
stance, we nonetheless believe that impasse is the
logical point of reference for termination of the
implied labor exemption, given that employers can
then comply with both labor law and antitrust law and
the implied exemption is therefore no longer needed
to resolve a conflict between, the two regimes. There
may, however, be justification for the implied exemp-
tion to endure after impasse for such time as would be
reasonable in the circumstances for employers to
take steps to ascertain, upon advice of counsel, that
impasse has in fact occurred and to adjust their
business operations to eliminate any previously
immunized restraint that could give rise to antitrust
liability. But in no event should immunity continue
when employers have acted jointly to make a
unilateral, post-impasse change in terms of employ-
ment to implement the provision at issue, as occurred
in this case. Adoption of such a change is, in effect, an
assertion by the employers that impasse has oc-
curred, since the change would constitute an unfair
labor practice if made prior to impasse. There is no
reason for concern about possible uncertain y in

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25

determing the point of impasse if employers have
taken action in reliance on their own conclusion that
the parties have reached impasse in their negotia-
tions.
In cases in which employers have acted in concert
to continue in force a restraint that was embodied in
an expired collective bargaining agreement, the
courts will have to  examine  whether impasse has in
fact occurred. Notwithstanding the district court's
expressed concerns, that inquiry is well within the
competence of the courts and should not unduly delay
the progress of the antitrust litigation. Cf. Jewel
Tea, 381 U.S. at 686 (opinion of White, J.) (in antitrust
suits, district court may consider in first instance
whether restraint in collective bargaining agreement
touched on mandatory bargaining subjects); id. at 710
n.18 (opinion of Goldberg, J.) (agreeing with Justice
White's opinion on that point). Nor, in such cases, is
there likely to be a danger of conflict between the
courts and the NLRB, since the employer's continua-
tion of the status quo is not an unfair labor practice.
5. We recognize that it is a much debated issue of
policy whether employers, and especially the owners
of professional sports league teams, should have
immunity from the antitrust laws that lasts as long
as the collective bargaining relationship, including
periods of impasse. Congress has not extended the
antitrust immunities based in the labor laws so far as
the employers would wish, however, and it is for Con-
gress to resolve the relevant policy issues. As a prac-
tical as well as constitutional matter, Congress, not
the courts, has the expertise to decide the economic
and political questions inherent in respondents' claim
to immunity. Congress has been attentive to con-
cerns that the unique characteristics of professional

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 26

sports leagues require modification of otherwise
strict requirements of the antitrust laws.9 There is
little reason to believe, therefore, that the policy
arguments made in this case about the need to temper
antitrust enforcement in the professional sports
context will go unheeded in Congress, whether or not
those arguments eventually succeed in that forum.

___________________(footnotes)

9 In 1961, Congress gave the NFL, as well as professional
baseball, basketball," and hockey leagues, a limited antitrust
exemption for pooled broadcasting rights agreements.  See
Sports Broadcasting Act of 1961, Pub. L. No. 87-331, 75 Stat.
732, codified at 15 U.S.C. 1291 et seq. In 1966, when the NFL
sought to merge with the American Football League, it sought
and obtained from Congress another antitrust immunity
allowing the combining of the two leagues into a single
professional football league. Pub. L. No. 89-800, 80 Stat. 1508,
codified at 15 U.S.C. 1291 (second sentence). Legislative efforts
are currently underway to give the NFL yet another antitrust
immunity that would eliminate its antitrust liability if, under
certain circumstances, it were to prevent member teams from
relocating.  See Fans Rights Act of 1995, S. 1439, 104th Cong.,
1st Sess.; Fan Freedom and Community Protection Act of 1995,
H.R. 2740, 104th Cong., 1st Sess.

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        CONCLUSION

The judgment of the court of appeals should be
reversed,10 and the case should be remanded for futher
proceedings.
Respectfully submitted.

DREW S. DAYS. III
Solicitor General

ANNE K. BINGAMAN
Assistant Attorney General

LAWRENCE G. WALLACE
Deputy Solicitor General

JOEL L KLEIN
Deputy Assistant Attorney
General

STEPHEN CALKINS
General Counsel
DAVID C. SHONKA
Attorney
Federal Trade Commission

JANUARY 1996

PAUL R.Q. WOLFSON
Assistant to the Solicitor
General

ROBERT J. NICHOLSON
ROBERT J. WIGGERS
Attorneys

___________________(footnotes)

10 The National Labor Relations Board concurs that the court of
appeals' expansive formulation of the labor exemption is wrong as
a matter of law, and may do serious harm to the nation's antitrust
and labor policies if not reversed.