Why Highly Paid Athletes Deserve More Antitrust Protection Than Ordinary Unionized Workers

AuthorStephen F. Ross,Robert B. Lucke
Published date01 September 1997
Date01 September 1997
DOI10.1177/0003603X9704200306
Subject MatterSymposium: Antitrust in the Sports Industry
The Antitrust Bulletin/Fall 1997
Why highly paid athletes deserve
more antitrust protection than
ordinary
unionized workers
BY STEPHEN F. ROSS* and ROBERT B. LUCKE**
641
Our
nation's
broad consensus about how the American economy
should
function
is
expressed
in large
part
through two
sets
of
statutes enacted by
Congress-our
antitrust and labor laws.
The
Sherman Act
and
its statutory progeny mandate ageneral prin-
ciple
of
unrestrained competition in the marketplace as the
best
mechanism
for
efficiently
allocating
resources, preventing
un-
justified
use
of
economic
power,
and
generally
improving
the
economic welfare of American citizens.
The
National Labor Rela-
tions Act and its statutory progeny mandate ageneral principle
permitting workers to engage in a regulated restraint of competi-
tion in the labor market and collective bargaining with employers,
as the best mechanism for equalizing bargaining power between
workers
and
management,
limiting
industrial
disruption,
and
enhancing the economic welfare
of
millions
of
American workers
(and thereby the American economy generally).
*
**
Professor of Law, University of Illinois.
Director, Ernst &Young.
©1997 by Federal Legal Publications. Inc.
642
The antitrust bulletin
In Brown v. Pro Football, Inc.,' the Supreme Court held that
federal
labor
laws
completely
shield
from
antitrust
challenge
agreements
among
the owners
of
professional football teams to
implement, over the union's objection, a plan that restrains com-
petition among teams that would otherwise exist in the labor mar-
ket. The decision will adversely affect consumers (sports fans) in
two
ways-neither
of
which is discussed by the Court in Brown.
First, the decision increases the likelihood that efforts by man-
agement
to
impose
unreasonable
trade
restraints
will
result
in
strikes or
other
industrial disruption. We recognize the opposing
argument-that
the decision minimizes the risk that management
will lock out its players to force them to agree to a labor-exempt
collective bargaining
agreement-but
on balance we believe that
management is more sensitive to public relations and less likely to
engage in a lockout than players are to strike. Moreover, decisions
finding player restraints to be unreasonable trade restraints in vio-
lation
of
the
antitrust
laws
have
traditionally
been
followed
quickly
by
collective
bargaining
agreements
that
restore
labor
peace.?
Thus,
to
the
extent
that
the
opinion
was
based
on
the
implicit
judgment
that permitting unions to bring antitrust litiga-
tion results in greater transactions costs in achieving the goal
of
a
collective
bargain," we
believe
the
evidence
to date would
not
support that judgment.
116 S. Ct. 2116 (1996).
See Reynolds v. NFL, 584 F.2d 280 (8th Cir. 1978) (upholding
collective bargaining agreement entered into as
part
of
settlement
of
Mackey v. NFL, 543 F.2d 606 (8th Cir. 1976»; Wood v. NBA, 809 F.2d
954 (2d Cir. 1986) (upholding portion of collective bargaining agreement
entered into as part of settlement of Robertson v. NBA, 72 F.R.D. 64
(S.D.N.Y. 1976), aff'd, 556 F.2d 682 (2d Cir. 1977»; White v. NFL, 822
F. Supp. 1389, 1412-16, 1435-36 (D. Minn. 1993) (describing settlement
of antitrust litigation after jury verdict against NFL).
As Judge Patricia Wald noted in her dissent to Brown on the court
of appeals, the rule adopted by her colleagues on the D.C. Circuit (and
now by the Supreme Court):
creates new incentives, none of them helpful to the bargaining
process. First, some
employees-especially
those in a weak bar-
Highly
paid
athletes
643
Most importantly, the decision facilitates club owners' agree-
ment on trade restraints that reduce the quality and entertainment
value
of
their product, reductions that are economically justifiable
for members of a monopoly sports league because their fans have
no
reasonable
substitutes for
their
patronage. Specifically, we
believe that restraints imposed by owners that would be subject to
successful antitrust challenge but for Brown reduce the competi-
tive balance among teams in a league, and thus the excitement
and interest in the championship season.
The fundamental flaw in the Brown majority opinion, written
by Justice Stephen Breyer, lay in its failure to appreciate or fully
analyze the unique economics of professional sports that distin-
guish this industry from the typical unionized industry.
Labor
gaining
position-are
under pressure not to enter into collective
bargaining at all, lest the existence of a bargaining relationship
license unilateral employer imposition of anticompetitive terms.
See Lee Goldman, The Labor Exemption to the Antitrust Laws as
Applied
to Employers' Labor Market Restraints in Sports
and
Non-sports Markets, 1989 UTAH L. REv. 617,
658-59
(describing
disincentives to collective bargaining if
unilaterally-imposed
terms are exempt from antitrust coverage). Second, as the major-
ity recognizes, some employees will be encouraged to decertify
their unions rather than risk unilateral multiemployer imposition
of terms at impasse. See also Goldman, supra, at 658-59. Such a
consequence is not mere speculation, but represents the actual
upshot of the Eighth
Circuit's
decision in Powell upholding a
broad
nonstatutory
labor
exemption like
that
of
the
majority
here. . . . New incentives for employees not to engage in col-
lective
bargaining-and
the
bizarre
prospect
of
employers
attempting to force employees to remain in a union so as to pre-
serve the employers' valuable antitrust
exemption-run
directly
contrary to the overarching purpose
of
the labor laws to encour-
age bona fide collective bargaining.
* * *
A rule that ousts antitrust law only to encourage fewer collective
bargaining agreements seems contrary to the purposes
of
both
the labor laws and the antitrust laws.
Brown v. Pro Football, Inc., 50 F.3d 1041, 1065 (D.C. Cir. 1995), rev'd,

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