Case Name: Marvin POWELL; Brian Holloway; Michael Kenn; Michael Davis; James Lofton; Michael Luckhurst; Dan Marino; George Martin; Steve Jordan and the National Football League Players Association on behalf of themselves and all class members, Appellees, v. NATIONAL FOOTBALL LEAGUE; et al., Appellants
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1989-11-01
Citations: 888 F.2d 559
Docket Number: No. 89-5091
Parties: Marvin POWELL; Brian Holloway; Michael Kenn; Michael Davis; James Lofton; Michael Luckhurst; Dan Marino; George Martin; Steve Jordan and the National Football League Players Association on behalf of themselves and all class members, Appellees, v. NATIONAL FOOTBALL LEAGUE; et al., Appellants.
Judges: Before JOHN R. GIBSON, and WOLIr MAN, Circuit Judges, and HEANEY, Senior Circuit Judge.
Reporter: Federal Reporter 2d Series
Volume: 888
Pages: 559–574

Head Matter:
Marvin POWELL; Brian Holloway; Michael Kenn; Michael Davis; James Lofton; Michael Luckhurst; Dan Marino; George Martin; Steve Jordan and the National Football League Players Association on behalf of themselves and all class members, Appellees, v. NATIONAL FOOTBALL LEAGUE; et al., Appellants.
No. 89-5091.
United States Court of Appeals, Eighth Circuit.
Submitted May 12, 1989.
Decided Nov. 1, 1989.
Rehearing and Rehearing En Banc Denied Jan. 17, 1990.
See also, D.C., 711 F.Supp. 959.
Paul J. Tagliabue, Washington, D.C., for appellants.
Carol T. Rieger, Minneapolis, Minn., for appellees.
Before JOHN R. GIBSON, and WOLIr MAN, Circuit Judges, and HEANEY, Senior Circuit Judge.

Opinion:
JOHN R. GIBSON, Circuit Judge.
The National Football League appeals from a district court order which denied the League's motion for partial summary judgment, ruling that the nonstatutory labor exemption to the antitrust laws expires when, as here, the parties have reached "impasse" in negotiations following the conclusion of a collective bargaining agreement. This antitrust action was brought by Marvin Powell, eight other professional football players, and the players' collective bargaining representative, the National Football League Players Association (hereinafter the "Players"). Although this action also includes claims that both the League's college draft and its continued adherence to its uniform Player Contract constitute unlawful player restraints, the only League practice at issue in this interlocutory appeal is that provision of the Players' collective bargaining agreement establishing a "Right of First Refusal/Compensation" system. These employment terms restrict the ability of players to sign with other teams, a right commonly termed "free agency." On appeal, the League contends that the challenged practices are the product of bona fide, arm's-length collective bargaining and therefore are governed by federal labor law to the exclusion of challenge under the Sherman Act, 15 U.S.C. § 1-7 (1982). The Players, on the other hand, argue that the labor exemption to the antitrust laws expires when parties reach "impasse" in negotiations, and that the First Refusal/Compensation system therefore may be challenged as an unlawful restraint of trade. As we conclude that this action is at present governed by federal labor law, and not antitrust law, we reverse.
In 1977, the League and the Players entered into a collective bargaining agreement containing a new system governing veteran free agent players. The First Refusal/ Compensation system provided that a team could retain a veteran free agent by exercising a right of first refusal and by matching a competing club's offer. If the old team decided not to match the offer, the old team would receive compensation from the new team in the form of additional draft choices. This system was substantially modified and incorporated into a successor agreement executed in 1982, which was reached at the end of a 57-day strike.
After the 1982 Agreement expired in August, 1987, the League maintained the status quo on all mandatory subjects of bargaining covered by the Agreement, including the First Refusal/Compensation system. In September, 1987, after intermittent negotiations on a successor collective bargaining agreement proved unsuccessful, the Players initiated a strike over veteran free agency and other issues. The strike ended in mid-October, 1987, without producing a new agreement. The Players commenced this antitrust action immediately thereafter, attacking the League's continued adherence to the expired 1982 Agreement.
In late November, 1987, the Players moved for a preliminary injunction to bar the League's twenty-eight constituent football clubs, as members of a multi-employer bargaining unit, from continuing to abide by the terms of the 1982 Agreement on veteran free agent salaries and movement among clubs. The Players also moved for partial summary judgment on the issue of whether the League's continued imposition of the First Refusal/Compensation system was protected by the labor exemption to the antitrust laws, or instead violated sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. § 1, 2.
On January 29, 1988, the district court held that, after expiration of a bargaining agreement, the labor exemption from the antitrust laws terminates with respect to a mandatory subject of bargaining when employers and a union reach a bargaining impasse as to the contested issue. Powell v. National Football League, 678 F.Supp. 777, 788 (D.Minn.1988) ("Powell I"). The court further stated, however, that it would not determine whether a negotiating impasse then existed between the parties until the National Labor Relations Board had passed upon a pending charge by the League asserting that the Players were not bargaining in good faith. Id. at 789. On February 1, 1988, one day after the district court filed its opinion setting forth the impasse standard, the Players advised the League that, in their view, the parties had indeed reached impasse on the free agency issue.
On April 28, 1988, the Office of the General Counsel of the National Labor Relations Board issued two Advice Memoranda declining to issue a complaint against the Players for either bad faith bargaining or failure to meet, and finding that the parties had been at impasse since October 11, 1987. This prosecutorial judgment was based on staff analysis, not on an adversarial hearing on the record. The League nevertheless withdrew its unfair labor practice charge against the Players.
The Players then renewed their motion for a preliminary injunction, contending that the district court should adopt the decision of the General Counsel of the National Labor Relations Board that impasse existed. The district court granted the Players' motion for summary judgment on June 17, 1988, holding that the parties had reached an impasse on the free agency issue as of that date. This ruling opened the doors for a trial on whether the League, in adhering to the First Refusal/Compensation system, had violated the Sherman Act's Rule of Reason. The court declined to issue a temporary injunction, however, reasoning that it lacked jurisdiction to grant injunctive relief in a labor dispute governed by the Norris-LaGuardia Act, 29 U.S.C. § 105-15 (1982). Powell v. National Football League, 690 F.Supp. 812, 814-15 (D.Minn.1988) ("Powell II").
This court granted the League permission to appeal the district court's grant of summary judgment under 28 U.S.C. § 1292(b). The League argues that federal labor laws control exclusively where the challenged "restraint" relates to a mandatory subject of collective bargaining, the restraint has been developed and implemented through the lawful observance of the collective bargaining process, the employees are represented by a union vested with collective bargaining authority, and the restraint affects only a labor market involving the parties to the collective bargaining agreement. According to the League, such circumstances exist in this case and recourse to antitrust sanctions by a bargaining party such as the Players is incompatible with the purpose and operation of the federal labor laws.
I.
This is not the first time that this court has considered whether a labor exemption shields the League from antitrust liability for the restraints it imposes on its players. In Mackey v. National Football League, 543 F.2d 606 (8th Cir.1976), cert. dismissed, 434 U.S. 801, 98 S.Ct. 28, 54 L.Ed.2d 59 (1977), the League appealed from a district court ruling that the "Rozelle Rule," a restraint on competition for player services, violated section 1 of the Sherman Act. We first analyzed the statutory labor exemption to the application of the antitrust laws, observing that while the exemption applies to legitimate labor activities unilaterally undertaken by a union in furtherance of its own interest, it does not extend to concerted action or agreements between unions and nonlabor groups such as employers. Id. at 611. We further held, however, that employer groups such as the League may invoke the nonstatutory labor exemption to their benefit where there has been an agreement between management and labor with regard to the challenged restraint. Id. at 612.
In Mackey, we proceeded to analyze the principles which undergird the nonstat-utory labor exemption, and the determinative issue of whether relevant federal labor policy was déserving of preeminence over federal antitrust policy under the circumstances of a particular case. In resolving these competing labor and antitrust interests, we found the proper accommodation to be:
First, the labor policy favoring collective bargaining may potentially be given preeminence over the antitrust laws where the restraint on trade primarily affects only the parties to the collective bargaining relationship. Second, federal labor policy is implicated sufficiently to prevail only where the agreement sought to be exempted concerns a mandatory subject of collective bargaining. Finally, the policy favoring collective bargaining is furthered to the degree necessary to override the antitrust laws only where the agreement sought to be exempted is the product of bona fide arm's-length bargaining.
Id. at 614 (citations omitted).
In Mackey, we determined that the Rozelle Rule satisfied the first two of these factors but not the third. We held that the Rule affected only the parties to the labor agreements sought to be exempted from the antitrust laws, and that it constituted a subject of mandatory bargaining within the meaning of the National Labor Relations Act. Id. at 615. The district court found that the Rule, although it was later incorporated into two labor agreements, was not the product of bona fide, arm's-length bargaining, but rather was unilaterally promulgated by the League. Upon review, we concluded that the district court's finding was supported by substantial evidence. We therefore held that the labor agreements between the football clubs and their players did not qualify for the labor exemption. Id. at 615-16.
In so doing, we rejected the League's argument that the Rozelle Rule was exempt from Sherman Act scrutiny as a restraint which affected only player services and not a traditional product market. Distinguishing Apex Hoisery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940), we held that the Rule's restraints on competition within the market for player services were subject to the scrutiny of the antitrust law. Mackey, 543 F.2d at 616— 18.
Turning to the issue of whether the Rozelle Rule violated the Sherman Act, we rejected the district court's conclusion that the Rule was per se illegal, reasoning that the challenged restraints were not between business competitors in the traditional sense. Id. at 619. We therefore proceeded under a Rule of Reason analysis to hold that the Rozelle Rule was, for many reasons, far more restrictive than necessary to fulfill the legitimate needs of the League, and that it unreasonably restrained trade in violation of section 1 of the Sherman Act. Finally, after carefully noting the limitation of our holding, we urged the League and Players to resolve problems of interteam player transfers through collective bargaining. The result was the 1977 Agreement.
The Players contend that the League in essence asks this court to overrule Mackey. The Players argue that although in the case before us the Players' collective bargaining agreement has expired, the Mack-ey court conditioned its application of the labor exemption upon the existence of an agreement between the union and management and specifically referred to the existence of an agreement in two of its three requirements for invoking the labor exemption. See Mackey, 543 F.2d at 614. We cannot accept this interpretation. Our discussion in Mackey was couched in terms of "agreements" because in that case we were presented with unlawful restraints which, although initiated years before football players had been represented by a union, had been incorporated by two bargaining agreements. Against those facts, we held that the mere incorporation of unlawful restraints into a collective bargaining agreement without bona fide bargain ing was not sufficient to place them beyond the reach of the Sherman Act. Id. at 616.
The district court accordingly found that the present case was distinguishable from Mackey because the player restraints challenged here were the result of collective bargaining. See Powell II, 690 F.Supp. at 815 n. 7. Furthermore, Mackey itself expressly reserved the question now before us, stating that "we need not decide whether the effect of an agreement extends beyond its normal expiration date for purposes of the labor exemption." 543 F.2d at 616 n. 18. While we agree with the district court that Mackey is not controlling, we feel that the analytic framework which it adopts with respect to the nonstatutory labor exemption must be employed in this case.
On appeal, the parties do not dispute that the terms of the 1977 and 1982 Agreements establishing the First Refusal/Compensation system: (1) primarily affected only the parties in the collective bargaining relationship; (2) concerned a mandatory subject of collective bargaining; and (3) were the product of bona fide, arms'-length bargaining. Under Mackey, therefore, the nonstatutory exemption precluded an antitrust challenge to those restraints while the Agreements were in effect. Now that the 1982 Agreement is terminated, however, we must decide whether the nonstatutory labor exemption has also expired or, alternatively, whether under the circumstances of this case the exemption continues to protect the League from potential antitrust liability.
II.
The district court adopted "impasse" as the point at which the nonstatutory labor exemption expires, holding that "once the parties reach impasse concerning player restraint provisions, those provisions will lose their immunity and further imposition of those conditions may result in antitrust liability." The court reasoned that its impasse standard "respects the labor law obligation to bargain in good faith over mandatory bargaining subjects following expiration of a collective bargaining agreement," and that it "promotes the collective bargaining relationship and enhances prospects that the parties will reach compromise on the issue." Powell I, 678 F.Supp. at 789. The League attacks the district court's standard as providing a union, such as the Players, with undue motivation to generate impasse in order to pursue an antitrust suit for treble damages.
In Charles D. Bonanno Linen Service, Inc. v. NLRB, 454 U.S. 404, 102 S.Ct. 720, 70 L.Ed.2d 656 (1982), the Supreme Court defined "impasse" as:
a temporary deadlock or hiatus in negotiations "which in almost all cases is eventually broken, through either a change of mind or the application of economic force." Furthermore, an impasse may be "brought about intentionally by one or both parties as a device to further, rather than destroy, the bargaining process."
Id. at 412, 102 S.Ct. at 725 (quoting Charles D. Bonanno Linen Service, Inc., 243 N.L.R.B. 1093, 1093-94 (1979)). The Supreme Court characterized impasse as a recurring feature in the bargaining process and one which is not sufficiently destructive of group bargaining to justify unilateral withdrawal. The Court agreed with the National Labor Relations Board that "permitting withdrawal at impasse would as a practical matter undermine the utility of multi-employer bargaining." Id.
The Players contend that we should accept the district court's impasse test as "inherently balanced." For support, the Players cite the language of Bridgeman v. National Basketball Association, 675 F.Supp. 960 (D.N.J.1987), which involved a challenge by professional basketball players to the National Basketball Association's college player draft, salary cap, and right of first refusal:
Impasse is certainly a plausible point at which to end the labor exemption, for by its very definition it implies a deadlock in negotiations, which could in some cases imply that the employees' consent to the restraints of the prior agreement has ended. The moment of impasse in negotiations is significant, for an employer may, after bargaining with the union to impasse, make "unilateral changes that are reasonably comprehended within his pre-impasse proposals."
Id. at 966 (footnote omitted) (quoting Taft Broadcasting Co., 163 N.L.R.B. 475, 476 (1967), aff'd sub nom. American Fed'n of Television & Radio Artists v. NLRB, 395 F.2d 622 (1968)). Bridgeman held that the labor exemption survives "only as long as the employer continues to impose that restriction unchanged, and reasonably believes that the practice or a close variant of it will be incorporated in the next collective bargaining agreement." Id. at 967. The Players argue that Bridgeman rejected the impasse test, at least in part, on a belief that the labor exemption could expire prior to impasse:
Because an impasse occurs only when the entire negotiating process has come to a standstill, the prospects for incorporating a particular practice into a collective bargaining agreement may also disappear before a full impasse in the negotiations is actually reached.
Id. The Bridgeman standard was rejected by the district court as not giving proper regard to the labor law policy promoting the collective bargaining process, in that this standard would encourage employees to exhibit steadfast, uncompromising adherence to stated terms. Powell I, 678 F.Supp. at 787. Instead, the district court suggested that its impasse standard strikes an appropriate balance between labor policy and antitrust policy:
By allowing a labor exemption to survive only until impasse, the law will not insulate a practice from antitrust scrutiny, but will only delay enforcement of the substantive law until continued negotiations over the challenged provision become pointless.
Id. at 789.
The League concedes that agreements among competing employers to impose salary or other restraints in labor markets may be subject to the Sherman Act when they are imposed outside of the collective bargaining process and without regard to the labor laws. See Mackey, 543 F.2d at 617-18 (citing cases where courts have applied the Sherman Act to restraints on competition for players' services imposed by club owners). It argues, however, that the restraints involved in cases supporting this rule were not developed in the collective bargaining process and the employment relationships in those cases were not controlled by the labor laws. The League further recognizes that the antitrust laws may apply to collectively bargained restraints when such agreements directly restrict business competition in product markets. See Connell Constr. Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 625, 95 S.Ct. 1830, 1836, 44 L.Ed.2d 418 (1975). It further contends that product market effects are an essential predicate for applying the antitrust laws, see id. at 622, 95 S.Ct. at 1835, and that the employment terms challenged in this case do not impose any such product market restraints. In short, the League argues that in this lawsuit the Players challenge management practices wholly governed by the federal labor laws, and that the Players' sole remedy against such practices lies in the economic pressure that the Players may exert against the League under the labor laws.
Our evaluation of the district court's impasse standard cannot proceed without a firm appreciation of the remedies available under the federal labor laws to the parties involved in labor negotiations or disputes. After the expiration of a collective bargaining agreement, a comprehensive array of labor law principles govern union and employer conduct. For both sides, there is a continuing obligation to bargain. National Labor Relations Act § 8(a)(5), (d), 29 U.S.C. § 158(a)(5), (d) (1982); see NLRB v. Katz, 369 U.S. 736, 742-43, 82 S.Ct. 1107, 1111, 8 L.Ed.2d 230 (1962); Hinson v. NLRB, 428 F.2d 133, 139 (8th Cir.1970). Before the parties reach impasse in negotiations, employers are obligated to "maintain the status quo as to wages and working conditions." Producers Dairy Delivery Co. v. Western Conference of Teamsters Trust Fund, 654 F.2d 625, 627 (9th Cir.1981) (quoting Peerless Roofing Co. v. NLRB, 641 F.2d 734, 736 (9th Cir.1981)). Such conduct is often conducive to further collective bargaining and to stable, peaceful labor relations. Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539, 108 S.Ct. 830, 833 n. 6, 98 L.Ed.2d 936 (1988). After impasse, an employer's continued adherence to the status quo is authorized. At the same time, once an impasse in bargaining is established, employers become entitled to implement new or different employment terms that are reasonably contemplated within the scope of their pre-impasse proposals. Id. 108 S.Ct. at 833 n. 5. If employers exceed their labor law rights in implementing employment terms at impasse, the full range of labor law rights and remedies is available to unions.
The Supreme Court has recognized that disputes over employment terms and conditions are not the central focus of the Sherman Act. For example, in holding that a union did not have standing to assert antitrust claims against a multi-employer bargaining association with which it had a collective bargaining relationship, the Court stated that Congress has developed "a separate body of labor law specifically designed to protect and encourage the organizational and representational activities of labor unions." Associated Gen. Contractors of Cal. v. California State Council of Carpenters, 459 U.S. 519, 539-40, 103 S.Ct. 897, 909, 74 L.Ed.2d 723 (1983). Under these laws, a union "will frequently not be part of the class the Sherman Act was designed to protect, especially in disputes with employers with whom it bargains." Id. at 540, 103 S.Ct. at 909. In this context, we must decide the extent to which a labor union may employ the antitrust laws to attack restraints imposed by management which are derived from an expired collective bargaining agreement.
A collective bargaining agreement is not always essential to a finding that challenged employment terms fall within the labor exemption. In Amalgamated Meat Cutters v. Wetterau Foods, 597 F.2d 133 (8th Cir.1979), employer agreements adopted in response to a strike caused plaintiffs to be denied employment. After first determining that the challenged employer conduct was lawful under the labor laws, id. at 135, this court affirmed the dismissal of plaintiffs' treble damage claims:
Since any injury to [plaintiffs] would flow naturally from the replacement of striking workers, which conduct federal labor policy sanctions, see [NLRB v. Mackay Radio & Tel. Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381 (1938)], the agreement cannot constitute a violation of the antitrust law. Federal labor policy sanctions both the goal of resisting union demands and the method of replacing striking workers and the magnitude and nature of any restraint of trade or commerce in this case directly follows from the sanctioned conduct. The agreement had no anticompetitive effect unrelated to the collective bargaining negotiations.
Id. at 136.
Other courts have concluded that in certain circumstances labor market restraints imposed in a collective bargaining context do not raise Sherman Act issues. In Prepmore Apparel v. Amalgamated Clothing Workers, 431 F.2d 1004, 1007 (5th Cir.1970), cert. dismissed, 404 U.S. 801, 92 S.Ct. 21, 30 L.Ed.2d 34 (1971), the Fifth Circuit held that an employer's refusal to deal with a union with respect to terms of employment was ordinarily governed by the National Labor Relations Act and did not state a claim for violation of the Sherman Act. Similarly, in Mid-America Regional Bargaining Association v. Will County Carpenters, 675 F.2d 881, 893 (7th Cir.), cert. denied, 459 U.S. 860, 103 S.Ct. 132, 74 L.Ed.2d 114 (1982), the Seventh Circuit held that an escrow agreement which was implemented after a collective bargaining agreement expired was protected by both the statutory and nonstatutory labor exemptions. See also Richards v. Neilsen Freight Lines, 810 F.2d 898, 905 (9th Cir.1987) (noting that the nonstatutory exemption is not "limited to restraints imposed by collective bargaining agreements").
While the League invites us to read these cases as establishing a rule to the effect that the Sherman Act is concerned only with product markets and not those for player services, we need not read them so broadly. We do, however, interpret them as precedent supporting the proposition that, in certain circumstances, such as in this case, the nonstatutory labor exemption may be invoked even after a collective bargaining agreement has expired.
Our reading of the authorities leads us to conclude that the League and the Players have not yet reached the point in negotiations where it would be appropriate to permit an action under the Sherman Act. The district court's impasse standard treats a lawful stage of the collective bargaining process as misconduct by defendants, and in this way conflicts with federal labor laws that establish the collective bargaining process, under the supervision of the National Labor Relations Board, as the method for resolution of labor disputes.
In particular, the federal labor laws provide the opposing parties to a labor dispute with offsetting tools, both economic and legal, through which they may seek resolution of their dispute. A union may choose to strike the employer, see, e.g., NLRB v. Washington Aluminum Co., 370 U.S. 9, 82 S.Ct. 1099, 8 L.Ed.2d 298 (1962), and the employer may in turn opt to lock out its employees. See, e.g., American Skip Building Co. v. NLRB, 380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965). Further, either side may petition the National Labor Relations Board and seek, for example, a cease-and-desist order prohibiting conduct constituting an unfair labor practice. See, e.g., Consolidated Edison Co. v. NLRB, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126 (1938). To now allow the Players to pursue an action for treble damages under the Sherman Act would, we conclude, improperly upset the careful balance established by Congress through the labor law.
Both relevant case law and the more persuasive commentators establish that labor law provides a comprehensive array of remedies to management and union, even after impasse. After a collective bargaining agreement has expired, an employer is under an obligation to bargain with the union before it may permissibly make any unilateral change in terms and conditions of employment which constitute mandatory subjects of collective bargaining. Hinson, 428 F.2d at 137. After impasse, an employer may make unilateral changes that are reasonably comprehended within its pre-impasse proposals. Laborers Health, 108 S.Ct. at 833 n. 5 (quoting Taft Broadcasting Co., 163 N.L.R.B. 475, 478 (1967), aff'd sub nom. American Fed'n of Television & Radio Artists v. NLRB, 395 F.2d 622 (1968)). We are influenced by those commentators who suggest that, given the array of remedies available to management and unions after impasse, a dispute such as the one before us "ought to be resolved free of intervention by the courts" where "the union has had a sufficient impact in shaping the content of the employer's offers" and where the challenged restraint is "clothed with union approval." J. Weistart & C. Lowell, The Law of Sports § 5.06, at 590 (1979). In the words of Professors Berry and Gould:
A rule withdrawing immunity because the previous contract expired before a new agreement was reached is contrary to national labor law. The parties would be forced to enter into a collective bargaining agreement to avoid antitrust sac-tions, when labor law is opposed to any such requirement. On the other hand, the employer cannot alter its stance subsequent to an impasse in negotiations and unilaterally impose a package different from that which has been on the bargaining table. Such action would be a refusal to bargain and an unfair labor practice by the employer.

What seems appropriate is that the employer's position emerged from the collective bargaining process. Good faith bargaining must occur, even to the point of impasse, regardless of the lack of substantive influence of the union's proposals in the negotiations. If an impasse occurs and the employer's unilateral terms were offered to the union, the employer should be deemed not to have violated any labor law.
Berry & Gould, A Long Deep Drive to Collective Bargaining: Of Players, Owners, Brawls, and Strikes, 31 Case W.Res.L. Rev. 685, 774 (1981). And as Judge Winter has said, "no one seriously contends that the antitrust laws may be used to subvert fundamental principles of our federal labor policy as set out in the National Labor Relations Act." Wood v. National Basketball Ass'n, 809 F.2d 954, 959 (2d Cir.1987). To allow the claim here asserted by the Players would, we conclude, be inconsistent with federal labor policy. See generally Jacobs & Winter, Antitrust Principles and Collective Bargaining by Athletes: Of Superstars in Peonage, 81 Yale L.J. 1 (1971).
The labor arena is one with well established rules which are intended to foster negotiated settlements rather than intervention by the courts. The League and the Players have accepted this "level playing field" as the basis for their often tempestuous relationship, and we believe that there is substantial justification for requiring the parties to continue to fight on it, so that bargaining and the exertion of economic force may be used to bring about legitimate compromise.
The First Refusal/Compensation system, a mandatory subject of collective bargaining, was twice set forth in collective bargaining agreements negotiated in good faith and at arm's-length. Following the expiration of the 1982 Agreement, the challenged restraints were imposed by the League only after they had been forwarded in negotiations and subsequently rejected by the Players. The Players do not contend that these proposals were put forward by the League in bad faith. We therefore hold that the present lawsuit cannot be maintained under the Sherman Act. Importantly, this does not entail that once a union and management enter into collective bargaining, management is forever exempt from the antitrust laws, and we do not hold that restraints on player services can never offend the Sherman Act. We believe, however, that the nonstatutory labor exemption protects agreements conceived in an ongoing collective bargaining relationship from challenges under the antitrust laws. "[NJational labor policy should sometimes override antitrust policy," Continental Maritime of San Francisco v. Pacific Coast Metal Trades Dist. Council, 817 F.2d 1391, 1393 (9th Cir.1987) (citing Connell Constr., 421 U.S. at 622, 95 S.Ct. at 1835), and we believe that this case presents just such an occasion.
Upon the facts currently presented by this case, we are not compelled to look into the future and pick a termination point for the labor exemption. The parties are now faced with several choices. They may bargain further, which we would strongly urge that they do. They may resort to economic force. And finally, if appropriate issues arise, they may present claims to the National Labor Relations Board. We are satisfied that as long as there is a possibility that proceedings may be commenced before the Board, or until final resolution of Board proceedings and appeals therefrom, the labor relationship continues and the labor exemption applies. Since the matter before us concerns an interlocutory appeal, we need not decide issues left unresolved by this opinion.
III.
In sum, we hold that the antitrust laws are inapplicable under the circumstances of this case as the nonstatutory labor exemption extends beyond impasse. We reverse the order of the district court and remand the case with instructions to enter judgment in defendants' favor on Counts I, II, and VIII of plaintiffs' amended complaint.
. Powell is president of the National Football League Players Association. Brian Holloway, Michael Kenn, Michael Davis, James Lofton, Michael Luckhurst, Dan Marino, George Martin, and Steve Jordan are present or former officials of the Players Association.
. "The Rozelle Rule essentially provides that when a player's contractual obligation to a team expires and he signs with a different club, the signing club must provide compensation to the player's former team. If the two clubs are unable to conclude mutually satisfactory arrangements, the Commissioner may award compensation in the form of one or more players and/or draft choices as he deems fair and equitable." Mackey, 543 F.2d at 609 n. 1.
. Mackey observed that the basic sources of the exemption were sections 6 and 20 of the Clayton Act, 15 U.S.C. § 17 and 29 U.S.C. § 52, and the Norris-LaGuardia Act, 29 U.S.C. § 104, 105, and 113. Mackey, 543 F.2d at 611.
. I favor the impasse test even though a persuasive argument can be made for ending the exemption at the expiration of the collective bargaining agreement. See Lock, The Scope of the Labor Exemption in Professional Sports, 1989 Duke LJ. (forthcoming). The author concludes that the expiration of the collective bargaining agreement is the only endpoint that promotes collective bargaining and labor law principles without subverting federal antitrust policy.
The test adopted in Bridgeman v. NBA, 675 F.Supp. 960 (D.N.J.1987), that the labor exemption survives only as long as the employer continues to impose the restriction in question unchanged and reasonably believes that the practice or some variant will be incorporated in the next agreement, is impractical, permits the labor laws to trump the antitrust laws without any labor law justification, and is inconsistent with Mackey in much the same as the majority's decision.
. We stated:
We note that our disposition of the antitrust issue does not mean that every restraint on competition for players' services would necessarily violate the antitrust laws. Also, since the Rozelle Rule, as implemented, concerns a mandatory subject of collective bargaining, any agreement as to inter-team compensation for free agents moving to other teams, reached through good faith collective bargaining, might very well be immune from antitrust liability under the nonstatutory labor exemption.
Mackey, 543 F.2d at 623.
. We differ with the dissent's argument that the logic of Mackey applied to this case would end the labor exemption at impasse. We believe its language referring to the "agreement sought to be exempted," 543 F.2d at 614, applies to the "product of bona fide arm's-length bargaining," id., before termination and continues afterward, whether to impasse or to some other point in time.
. Indeed, in Reynolds v. National Football League, 584 F.2d 280 (8th Cir.1978), we affirmed the district court's approval of a settlement in a class action by which the Players challenged the 1977 Agreement and its "First Refusal/Compensation" system, stating that it was "a near certainty that the collective bargaining agreement was the result of 'bona fide arms-length negotiations.' " Id. at 288.
. As the dissent suggests, there may well be no impasse at this time. The district court carefully defined its determination as to impasse as to the single issue of player restraint provisions, even though, as the dissent points out, negotiations continue as to other issues.
. The dissent assumes that the contractually created "Right of First Refusal/Compensation" system is a violation of the antitrust law. This contractual provision was spawned in collective bargaining, and as it is the product of a labor relationship, we cannot agree that it should be considered a violation of antitrust laws.
. On November 17, 1988, the League delivered two proposals to the Players. The first of these modified player benefits but maintained the First Refusal/Compensation system for all players, and strongly resembled a management proposal of September 7, 1987, that the players had rejected before striking. The second proposal, which offered free agency to some players but retained the First Refusal/Compensation system for many others, was similar to a management proposal offered to the Players in September and October of 1987. After the Players had rejected both proposals, the League implemented a new "free agency" system effective February 1, 1989, which was substantially identical to the terms of the second proposal.
. The dissent argues that the court's action today deprives the union of the threat of antitrust laws, "the antitrust lever" and removes this issue from the bargaining table. This is precisely the thrust of the nonstatutory labor exemption to the antitrust laws.
. The League concedes that the Sherman Act could be found applicable, depending on the circumstances, if a challenged restraint related to a permissive rather than a mandatory subject of bargaining; if the restraint had been imposed on employees outside the collective bargaining process or had not originally been proposed in good faith; or if the affected employees ceased to be represented by a certified union. None of these circumstances are presented by this case.
.The dissent places great stress on Professor Lock's article, The Scope of the Labor Exemption in Professional Sports, 1989 Duke L.J. 339. Much of Lock's reasoning is based upon the "significant mismatch in relative bargaining positions" and, in addition to the labor exemption, addresses other issues, such as television revenues and restriction on movement of franchises as well as repeal of existing antitrust exemptions. As a court, we have a limited issue before us as to the temporal extent of the nonstat-utory labor exemption. We acknowledge the many policy issues that exist in the League/Players dispute that may be addressed by Congress but not by us. Interestingly, while not in the record before us, Professor Lock states that television revenues now exceed gate revenues which possibly may explain the dissent's reference to the change in percentage of gross revenues that player salaries represent.