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Tuesday, May 25, 2004

Appeals Court Rules Against Clarett: Following its preliminary ruling against Maurice Clarett, a panel of the 2nd Circuit Court of Appeals issued its formal ruling against the prospective NFL prospect today.

The court rejected both the reasoning and the holding of the District Court opinion and focused its opinion on the fact that antitrust rules could not be used to relations better left to labor law.

    This lawsuit reflects simply a prospective employee's disagreement with the criteria, established by the employer and the labor union, that he must meet in order to be considered for employment. Any remedies for such a claim are the province of labor law.

The unanimous opinion focused on several key issues. One, even though the "three year rule" does not appear in the text of the Collective Bargaining Agreement (CBA), it nonetheless formed an important part of the collective bargaining process, and thus, should be afforded the same weight.

In his post, Visible Hand focuses largely on the absence of the agreement from the CBA. But I think the court got this one right. The agreement appears prominently in the NFL Bylaws, which are explicitly referenced in the CBA as being provided for in the agreement. It would be a bad policy to require that every rule be included in the actual CBA for the exemption to apply. Then, negotiating parties would have to re-copy the entire Bylaws and other rules into the CBA, creating a wasteful doubling effect. This cross-reference placed the players union on notice that the bylaws were part of the deal, and the NFLPA acknowledged this in debating some aspects of the "three year rule" in the early 1990s.

The court also took a more holistic approach in applying the non-statutory labor exemption to antitrust law. The panel specifically rejected the three-prong Mackey test used by the District Court, saying that the test was not appropriate in the wake of the Supreme Court's decision in Brown v. NFL. Relying on that decision, the court stated that this was not a case of an employer using a union relationship to disadvantage competitors (i.e., another professional football league), but rather a multi-employer bargaining unit. As a result, the non-statutory exemption could be used, even if the limitation was imposed unilaterally after negotiations had broken down. To hold otherwise, the Court reasoned, would "call into question a great deal of conduct, such as multi-employer bargaining, that federal labor policy promotes and for which labor law provides an array of rules and remedies."

Thus, the rule only needed to concern a "mandatory bargaining subject" in order to fall within the non-statutory exemption. Despite Clarett's arguments to the contrary, the court found this easily satisfied:

    Contrary to the district court, however, we find that the eligibility rules are mandatory bargaining subjects. Though tailored to the unique circumstance of a professional sports league, the eligibility rules for the draft represent a quite literal condition for initial employment and for that reason alone might constitute a mandatory bargaining subject.


    But moreover, the eligibility rules constitute a mandatory bargaining subject because they have tangible effects on the wages and working conditions of current NFL players. Because the unusual economic imperatives of professional sports raise "numerous problems with little or no precedent in standard industrial relations," we have recognized that many of the arrangements in professional sports that, at first glance, might not appear to deal with wages or working conditions are indeed mandatory bargaining subjects....

Thus, in order to prevent "antitrust courts from usurping" established practices of labor law, the court found the rule to fall within the nonstatutory labor exemption.

Finally, the court dismissed Clarett's policy argument that the eligibility rule represents merely an arbitrary line, without any real justification.

    Clarett, however, stresses that the eligibility rules are arbitrary and that requiring him to wait another football season has nothing to do with whether he is in fact qualified for professional play. But Clarett is in this respect no different from the typical worker who is confident that he or she has the skills to fill a job vacancy but does not possess the qualifications or meet the requisite criteria that have been set. In the context of this collective bargaining relationship, the NFL and its players union can agree that an employee will not be hired or considered for employment for nearly any reason whatsoever so long as they do not violate federal laws such as those prohibiting unfair labor practices or discrimination.

As readers of this blog know, I feel the court got this one correct, for many of the reasons stated above. The NFL has a product, and it has a right to protect that product in reasonable ways that it sees fit. If the NFLPA does not like the "three year rule," then I am sure it can be exchanged in the next bargaining process. If, however, the union likes it, then Clarett and others must abide by it, because they too will benefit as future union members.

You can read the court's opinion here.


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