Court Opinion

ID: 8989833
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:04:46.496976+00
Date Added: 2024-06-11T17:10:53.122102
License: Public Domain

HEANEY, Senior Circuit Judge,
dissenting.
Today, the majority permits the owners to violate the antitrust laws indefinitely. Because such a result is not justified by the labor laws, I dissent.
After carefully reviewing the record and the briefs, it seems clear to me that we improvidently granted the owners permission to file an interlocutory appeal. The owners conceded at oral argument that the district court has yet to determine whether the parties have reached an impasse on the college draft issue.1 Because the college draft is an essential element of the package of player restraints, it is difficult to understand how either the district court or this Court can determine whether an impasse has, in fact, been reached on the important question of player restraints.2
Moreover, the interests of justice will be served if we permit the district court to try the case and to reach a decision on the question of whether the player restraints, considered collectively, violate the antitrust laws under the rule of reason.3 If an ap*1305peal then were taken, we would have a complete record. It is also likely that the parties will resolve all contractual disputes during the course of the litigation, a result that should be encouraged. As long as both parties are uncertain about the ultimate result, they are apt to find it in their mutual interest to agree rather than to have a decision imposed on them by the court. There is no reason why the case cannot be fully heard and decided by the district court before the 1990-91 NFL football season opens.
Because, and only because, the majority reverses the district court and holds that the nonstatutory labor exemption to the antitrust laws does not expire at impasse, do I state my agreement with the district court that the exemption ends when the parties have reached an impasse in negotiations.4
The district court’s opinion is well reasoned and fully consistent with this Court’s holding in Mackey v. National Football League, 543 F.2d 606 (8th Cir.1976). In Mackey, we held that only those collective bargaining agreements which are the products of bona fide arm’s length bargaining are immune from the application of the antitrust laws. While Mackey left open the question of when the labor exemption expires, the clear implication of that case is that the exemption should protect illegal restraints only as long as such restraints are part of bona fide collective bargaining. Mackey, 543 F.2d at 614 (“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”) (emphasis added).5 The logic of Mackey as applied to this case is clear. The labor exemption will not immunize restraints which are unilaterally continued after impasse because such restraints are not agreed to during good faith bargaining. Similarly, new restraints, unilaterally implemented, are not protected by the labor exemption. Union approval is a prerequisite to the application or continuation of the exemption.
The majority purports to reject the owners’ argument that the labor exemption in this case continues indefinitely. The practical effect of the majority’s opinion, however, is just that — because the labor exemption will continue until the bargaining relationship is terminated either by a NLRB decertification proceeding or by abandonment of bargaining rights by the union.
The majority asserts that the players can seek a cease and desist order from the NLRB to prohibit conduct constituting an unfair labor practice. Implicit in this assertion is the idea that it may be an unfair labor practice for employers to insist on a package of player restraints which violate the antitrust laws. The problem is that the NLRB will not decide that question. The NLRB will say that it is for the courts to decide whether the antitrust laws are being violated. We should accept our responsibil*1306ity and direct the district court to make that determination.6
The only basis for NLRB action thus would appear to be a petition for decertifi-cation. Certainly, the owners will not file such a petition knowing full well that, if they do, they will subject themselves to antitrust scrutiny. Certainly, the Union will not file such a petition when the price will be the loss of collective bargaining rights. The only likely source for a petition to decertify is a group of high-salaried, highly skilled players who believe that they could do better without a union.7 It follows that the end result of the majority opinion is that once a union agrees to a package of player restraints, it will be bound to that package forever unless the union forfeits its bargaining rights. Certainly, Mackey does not suggest such a result.
The majority also suggests that the union can strike to eliminate or modify the player restraints. This is, of course, an alternative, but should players be forced to strike to alter owner conduct which violates the antitrust laws? I think not.8
Neither scenario, decertification nor economic strife, harmonizes the antitrust laws with the labor laws. See Mackey, 543 F.2d at 613-14 (“Although the cases giving rise to the nonstatutory exemption are factually dissimilar from the present case, certain principles can be deduced from those decisions governing the proper accommodation of the competing labor and antitrust interests involved here.”) (footnotes omitted).
The majority opinion will, moreover, discourage collective bargaining. Players will be considerably less likely to enter into any agreement with respect to player restraints because of the certainty that the terms of the agreement will become the terms of employment ad infinitum, unless they strike and win. See National Labor Relations Act § 1, 29 U.S.C. § 151 (“experience has proved that protection by law of the *1307right of employees to organize and bargain collectively ... promotes the flow of commerce ... by encouraging practices fundamentally to the friendly adjustment of industrial disputes”).
In practical terms the majority has eliminated the owners’ fear of the antitrust lever; therefore, little incentive exists for the owners to ameliorate anticompetitive behavior damaging to the players. See National Labor Relations Act § 1, 29 U.S.C. § 151 (the NLRA is aimed at promoting “actual liberty of contract” by redressing the unequal balance of bargaining power between employers and employees); Norris-LaGuardia Act § 2, 29 U.S.C. § 102 (the Norris-LaGuardia Act is aimed at redressing the unequal balance of bargaining power between employers and employees); see also NLRB v. Insurance Agents Int’l Union, 361 U.S. 477, 506-07, 80 S.Ct. 419, 436, 4 L.Ed.2d 454 (1960) (Frankfurter, J., separate opinion) (“main purpose of the Wagner Act was to put the force of law behind the promotion of unionism as the legitimate and necessary instrument ‘to give laborers opportunity to deal on equality with their employer’ ”) (citation omitted).
To argue that continuing the exemption beyond impasse is conducive to a stable bargaining environment and judicial nonintervention, as the majority has done, is untenable. See Lock, The Scope of the Labor Exemption in Professional Sports, 1989 Duke L.J. (forthcoming). Rather, the majority’s view undercuts the labor law principles of freedom to contract and the promotion of bona fide, arm’s length negotiations. Under the majority’s rule, an agreement to a particular restraint for a finite period of time operates to waive, indefinitely or permanently, a union’s right to challenge that restraint after the expiration of the agreement under the antitrust laws. The ultimate result is that the majority has intervened to remove the players’ rights under the antitrust laws from the bargaining table and has unjustifiably given the owners a continuing right to circumvent the antitrust laws.9
It may be argued that both successful and unsuccessful strikes and lockouts are normal parts of the collective bargaining process and that this Court should not give the players through court action what they are unable to win at the bargaining table or through economic action. I subscribe to that view, but this view cannot be controlling where the employers are engaging in practices which may well be illegal. There must be a point at which the validity of the package of player restraints can be tested without the union resorting to a strike or terminating its collective bargaining rights. In my view, impasse is the appropriate point at which to do this.

. The following colloquy occurred at oral argument:
THE COURT: And as to the college draft issue, Judge Doty has made a specific finding that there was no impasse; is that correct?
COUNSEL FOR OWNERS: He has not addressed that question yet * * * and that issue is not before the court on this certification.

. Had I been the original factfinder, I would not have found impasse. Not only is the college draft issue still open, but it appears that the parties continue to meet on grievances, drug testing, and other matters of importance. See Henry Miller Spring Co., 273 NLRB 472, 472 (1984) (no impasse where parties are still negotiating over significant issues). The NLRB, however, found the question of free agency to be an issue of such overriding importance that no agreement could be reached as long as there was disagreement on that issue. NFL Players Association, No. 2-CB-12117 (as amended), Advice Memo, at 7-8 (Apr. 28, 1988). The NLRB thus found impasse. See Bell Transit Co., 271 NLRB 1272, 1273 (1984) (impasse in negotiations exists if impasse exists on issues of supreme importance); E.I. DuPont & Co., 268 NLRB 1075, 1076 (1984) (impasse in negotiations if impasse exists on issue of overriding importance). Neither party asked for a review of that decision. The district court relied on the NLRB’s decision to find impasse.

.Player restraints agreed to by the owners and the players in the 1982 collective bargaining agreement did not provide an opportunity for players to become free agents. In the five years during which the 1982 agreement was in effect, only one player received an offer from another club. Under the restraint package initiated unilaterally by the owners in February 1989, after the NLRB found that an impasse had occurred in negotiations, each club was permitted to protect 37 players. Thus, none of the top 37 players on each team has had the opportunity to become a free agent and establish his worth in the open market. The remaining 619 players were unprotected and able to enter into the free agency market. Of that number, 229 were signed by other teams. Of the 229, 149 were under contract with an NFL team as of the start of this season. For a discussion of the application of the antitrust laws to professional football and other sports, see Monopoly Sports Leagues, 73 Minn.L.Rev. 643 (1989).

. 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 L.J. (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 manner as the majority's test.

. This view of Mackey is also consistent with Supreme Court decisions addressing the scope of the labor exemption. See, e.g., Connell Constr. Co. v. Plumbers & Steamfitters Local 100, 421 U.S. 616, 621-22, 95 S.Ct. 1830, 1834-35, 44 L.Ed.2d 418 (1975) ("nonstatutory exemption has its source in strong labor policy favoring the association of employees to eliminate competition over wages and working conditions”); Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 689, 85 S.Ct. 1596, 1601, 14 L.Ed.2d 640 (1965) (“exemption for union-employer agreements is very much a matter of accommodating the coverage of the Sherman Act to the policy of the labor laws”).

. I find no support in Consolidated Edison Co. v. NLRB, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126 (1938), for the majority's position. In that case, the United Electrical Workers contended that Consolidated Edison was interfering with the right of Consolidated's employees to form, join, or assist labor organizations of their own choosing and were contributing financial and other support to the International Brotherhood of Electrical Workers. The NLRB found that the company had violated sections 8(a)(1), (2) and (3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), (2) and (3). It entered an order designed to correct the effects of the unfair labor practices, including an order for the company to cease and desist giving effect to a contract that had been entered into by Consolidated and the International Brotherhood of Electrical Workers. The Supreme Court concluded that the NLRB was without authority to enter the cease and desist order because the NLRB neither alleged nor proved that those persons who joined the International Brotherhood of Electrical Workers did so because of the unfair labor practices. Thus, it reasoned that a majority of the employees may well have approved the collective bargaining agreement. Try as I may, I am unable to see how that case is relevant to the matter at hand.

. A judicial determination that challenged restraints are exempt from the antitrust laws by virtue of the union's existence might induce the players to decertify the union. Lock, The Scope of the Labor Exemption in Professional Sports, 1989 Duke L.J. (forthcoming).

.See Lock, The Scope of the Labor Exemption in Professional Sports, 1989 Duke LJ. (forthcoming). Lock notes that there are several features that distinguish the professional athletes’ unions from the great majority of industrial unions. First, professional athletes do not possess homogeneous skills; a wide range of ability and expertise exists among players. Thus, different players have dramatically different needs from a union. Second, the nature of professional sports presumes that the owners retain nearly complete discretion to make necessary personnel changes to produce a winning team. Typically, a professional athlete has virtually no job security. For example, the NFL standard player contract contains no injury protection beyond the season in which the injury occurs and grants the team sole discretion to terminate a player’s contract at any time for lack of skill. Only five percent of all NFL players have been able individually to limit this discretion. In addition, the professional life of an athlete is short, resulting in high turnover of union members. The NFL Players Association experiences an average yearly turnover of twenty-five percent. Thus, a strike jeopardizes a significant portion of the career and earning potential of many athletes. Moreover, most professional athletes possess highly specialized skills that are rarely marketable in any other industry. As a result, players are extremely vulnerable to explicit and implicit management pressure.

. In 1961, Congress passed legislation permitting the NFL to sell its television rights in a package and to allocate the revenues on a pro rata basis, thus authorizing what otherwise would have been a clear violation of the antitrust laws.
In 1966, Congress enacted legislation sanctioning the merger between the NFL and the AFL, a merger which otherwise would have violated the antitrust laws.
Each of these actions by Congress weakened the players and their unions in the collective bargaining process vis-a-vis the owners. In 1966, when the AFL was a bona fide competitor of the NFL, salaries accounted for 67% of gross revenues. In the years following the merger, the percentage decreased. In 1972, the percentage was 42%. In 1980, salaries accounted for 30% of league revenues. Certainly, the courts should not tilt the scales further in favor of the owners by permanently legalizing violations of the antitrust laws.