The Lesson of the 2011 Nfl and Nba Lockouts: Why Courts Should Not Immediately Recognize Players' Union Disclaimers of Representation

• Publication year: 2021

THE LESSON OF THE 2011 NFL AND NBA LOCKOUTS: WHY COURTS SHOULD NOT IMMEDIATELY RECOGNIZE PLAYERS' UNION DISCLAIMERS OF REPRESENTATION

Ross Siler

Abstract: The NFL and NBA lockouts of 2011 challenged the limits of the balance courts have struck between collective bargaining protections and antitrust liability. In each lockout, the respective players' union argued that the bargaining relationship with team owners ended once the union disclaimed interest in continuing as its players' bargaining representative. The players further argued that with the bargaining relationship terminated, the nonstatutory labor exemption no longer shielded owners from antitrust liability for their cooperative agreements and activity. Ultimately, both lockouts settled without courts deciding whether a disclaimer of representation marks what the Supreme Court has described as an "extreme outer boundary" that is "sufficiently distant in time and in circumstances" from the bargaining process such that the nonstatutory labor exemption might no longer protect employers from antitrust liability. This Comment argues that courts should be wary of recognizing disclaimers as terminating the exemption in the wake of the 2011 lockouts. Instead, courts should extend the exemption for a reasonable period following disclaimer. By doing so, courts would reduce the possibility of introducing instability and uncertainty in the bargaining process, which the Court has recognized in the past as a significant concern. Such an extension also would help separate deserving antitrust claims from mere bargaining tactics while allowing the economic pressures facing both sides to shape their ultimate agreement.

INTRODUCTION

For professional football and basketball fans, 2011 will be remembered as the "Year of the Lockout." After collective bargaining agreements (CBAs) in the National Football League (NFL) and National Basketball Association (NBA) expired, team owners in each league locked out their players for months until new CBAs could be reached.(fn1)

With hundreds of millions of dollars at stake in these bitter labor battles, players in both leagues followed the same legal game plan- dissolving their unions and accusing the owners of antitrust violations.(fn2) The players' union in each league-the National Football League Players Association (NFLPA) and National Basketball Players Association (NBPA)-disclaimed its interest in continuing to serve as its respective players' bargaining representative.(fn3) Although the disclaimers were not formal decertifications, the players asserted that the disclaimers dissolved their unions in identical fashion.(fn4) Accordingly, the players said, labor law no longer shielded the owners from antitrust litigation.(fn5)

Following the disclaimers, players in each league filed class-action antitrust suits, claiming that the owners had engaged in group boycotts and attempted price-fixing in violation of the Sherman Act.(fn6) The players argued that by dissolving their unions, they had abandoned collective bargaining and the owners were now liable under antitrust law.(fn7) The players could have achieved the same result by decertifying their unions, but decertification brings additional logistical and legal consequences.(fn8) By disclaiming, the players dissolved their unions through a less demanding and more immediate process, but one with less certainty in litigation.(fn9) The resulting legal battles in both leagues involved some of the biggest stars in each sport, as well as several of the country's most prominent lawyers.(fn10)

The biggest difference between each lockout was the timing of each union's disclaimer. The NFLPA disclaimed representation the day before the CBA was set to expire; its players filed suit concurrently as the football owners imposed a lockout.(fn11) Ultimately, the Eighth Circuit rejected a U.S. District Court judge's injunction of the lockout.(fn12) However, the Eighth Circuit offered no opinion on the merits of the players' antitrust claims or the effectiveness of the disclaimer of representation.(fn13) The Eighth Circuit held only that the District Court could not enjoin the lockout under the Norris-LaGuardia Act,(fn14) which restricts courts from issuing injunctions in cases involving or growing out of a labor dispute.(fn15)

By contrast, the locked-out NBA players attempted to negotiate a new CBA with owners for four-and-a-half months after their CBA expired before the NBPA disclaimed representation.(fn16) The basketball players filed suit the following day.(fn17) By then, NBA Commissioner David Stern already had canceled the season's first month.(fn18) In the end, the NBA players never progressed beyond the filing stage in their suit.(fn19) With the league facing the possibility of a lost season, the owners and players settled the suit and reached agreement on a new CBA two weeks after the NBPA's disclaimer.(fn20)

Both unions' suits challenged the balance that courts have attempted to strike in labor jurisprudence between laws encouraging collective bargaining and laws discouraging anti-competitive behavior by either side. To strike this balance, courts have endorsed a so-called nonstatutory labor exemption, which allows employers some freedom to act in cooperation without violating antitrust laws.(fn21) Even in cases where employers and unions have taken entrenched positions, courts have refused to expose employers to antitrust liability given what they cite as a congressional preference for collective bargaining-even strained and stalled bargaining.(fn22) In its most significant ruling on the subject, the Supreme Court in 1996 held in Brown v. Pro Football, Inc.(fn23) that NFL owners could impose salary restrictions for a new subclass of players after bargaining to an impasse with the NFLPA on the subject.(fn24) In an 81 decision, the Court sided with the owners, expressing concern about the potentially destabilizing effect that antitrust liability could have on collective bargaining in such circumstances.(fn25)

However, the Court held that such protection from antitrust liability does not continue indefinitely for employers negotiating with a union.(fn26) The Court held that "an agreement among employers could be sufficiently distant in time and in circumstances from the collective-bargaining process that a rule permitting antitrust intervention would not significantly interfere with that process."(fn27) The Court suggested that the nonstatutory labor exemption would last until the collapse of the collective bargaining relationship.(fn28) But the Court expressly declined to define the limits where the nonstatutory labor exemption no longer would shield an employer from antitrust liability.(fn29)

After dissolving their unions by disclaiming representation in 2011, the NFL and NBA players argued that the collective bargaining relationship had ended and therefore the nonstatutory labor exemption no longer protected the owners from antitrust liability.(fn30) As support, the players looked to Brown, in which the Court signaled that the formal decertification of a union would mark the collapse of collective bargaining.(fn31) However, the 2011 lockouts failed to resolve several significant questions based on the players' contention. Does a union's disclaimer of representation suffice as a collapse of the collective bargaining relationship? Is a disclaimer of representation "sufficiently distant in time and in circumstances" from the bargaining process such that the nonstatutory labor exemption no longer should shield employers from antitrust liability?(fn32) Does a disclaimer of representation amount to one of the "extreme outer boundaries" noted in Brown where the line between collective-bargaining protections and antitrust liability should be drawn?(fn33) Although a U.S. District Court judge issued a favorable ruling for the NFL players, the Eighth Circuit reached no conclusion, leaving these questions unanswered.(fn34)

Although the 2011 lockouts had particular importance in the sports world, this Comment argues that courts should be wary of accepting disclaimers of representation as extinguishing the nonstatutory labor exemption. Courts should either defer to the National Labor Relations Board (NLRB) in determining whether a disclaimer amounts to a good-faith termination of collective bargaining, or extend antitrust protection to employers for a reasonable period following a union's disclaimer. The destabilizing effect on collective bargaining that concerned the Court in Brown is just as apparent when a union's unilateral and instantaneous disclaimer can expose employers to antitrust liability. Much as the NFL owners argued in 2011, Brown represents a "fundamental recognition that the labor laws cannot function unless collective bargaining is given significant room to operate, even after one side unilaterally asserts that the relationship is over."(fn35) A union's instantaneous renunciation of collective bargaining through a disclaimer-as opposed to a formal decertification-threatens the collective bargaining and antitrust balance that courts have attempted to strike.

Part I of this Comment offers background about both leagues' lockouts in 2011. Parts II, III and IV examine the background of the nonstatutory labor exemption, the Supreme Court's Brown decision, and the differences between disclaimers and decertification of unions respectively. Part V recounts the NFL players'...