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Sunday, August 16, 2015
Lowering the Bar on Brady's "No Notice" Argument

Has the NFLPA overlooked a key argument in its quest to have Tom Brady's four-game suspension overturned by a federal court? In its recent court filings, the NFLPA argued, among other things, that Commissioner Goodell's arbitration decision (upholding Brady's suspension) "violated the essence of the CBA by disregarding the 'law of the shop' requirement of advance notice of discipline." To bolster this point, the NFLPA draws upon a series of prior arbitration decisions (e.g., Ray Rice and Bountygate) and one judicial decision that is still on appeal (Adrian Peterson) as establishing the "law of the shop" that the NFL is required to give its players "advance notice of disciplinary policies, standards and penalties to be imposed." Specifically, the NFLPA argues that Rice, Peterson and Bountygate establish that the CBA affords players "advance notice of discipline," and that arbitrators are not free to disregard this "essence-of-the-CBA" requirement. While this argument is likely a winner (and I have been on record as predicting a Brady victory based on this specific issue, as have Michael McCann, Alan Milstein, Mike Florio, Steph Stradley, and Dan Werly), it may face a key federal court obstacle: that arbitrators are free to determine (and then reject) whether a prior arbitral decision is the 'law of the shop.'" Along those lines, the NFL has argued that Commissioner Goodell (in his role as the arbitrator) considered Brady's law of the shop argument on "prior notice" (centered on the prior decisional law) and rejected it, and that federal courts are not free to second-guess that decision. The NFL cited case-law authority from virtually every federal circuit court as giving an arbitrator such free reign, and, as such, Brady's notice argument is not necessarily a sure-fire winner. (But query whether Goodell could be an impartial arbitrator in that context when he was on the losing side in each of those prior rulings).

But, instead of tying the "advance notice" requirement to prior arbitral decisions (and thus risk having Judge Berman apply the above legal principle in the Commissioner's favor), might a better approach be to argue that the punishment meted out by Goodell was not drawn from the "essence of the CBA" (a key legal requirement) because it was based (at least certainly in part) on policies and rules outside of the CBA (such as the Competitive Integrity Policy, which is applicable only to teams and not players)? A series of Second Circuit opinions from the late 1980's and early 1990's (but still good law) spell this out quite clearly. In In re Marine Pollution Serv., Inc., 857 F.2d 91 (2d Cir. 1988), the Second Circuit wrote:
An arbitrator's decision is entitled to substantial deference, and the arbitrator need only explicate his reasoning under the contract "in terms that offer even a barely colorable justification for the outcome reached" in order to withstand judicial scrutiny, Andros Compania Maritima, S.A. v. Marc Rich & Co., 579 F.2d 691, 704 (2d Cir. 1978). Nevertheless, "[t]his is not to say that simply making the right noises--noises of contract interpretation--an arbitrator can shield from judicial correction an outlandish disposition of a grievance," Ethyl Corp. v. United Steelworkers, 768 F.2d 180, 187 (7th Cir. 1985), cert. denied, 475 U.S. 1010, 106 S.Ct. 1184 (1986). When it is clear that the arbitrator "must have based his award on some body of thought, or feeling, or policy, or law that is outside the contract (and not incorporated in it by reference . . ., the arbitrator has failed to draw the award from the essence of the collective bargaining agreement.
Id. at 94 (emphasis added); accord, New York Typographical Union No. 6 v. Printers League Section of Ass'n of Graphic Arts, 878 F.2d 56, 60 (2d Cir. 1989) (same); Leed Architectural Prods., Inv. v. United Steelworkers of Am., Local 6674, 916 F.2d 63, 65 (2d Cir. 1990) (where the arbitrator has derived his authority from sources outside the collective bargaining agreement, his award cannot stand).

This argument (which is still in play because the NFLPA's recent federal court submission raises the broader "essence of the CBA" argument and even cites the Marine Pollution decision, though not for that precise point) affords the players' union and Brady an important substantive advantage: it would overcome the NFL's argument that Goodell can consider AND reject prior arbitral decisions in his vast discretion as arbitrator. But one thing an arbitrator can NEVER do in the labor context is base his or her award on policies that are outside of the CBA, and, hence, never the subject of collective bargaining. In this context, the NFLPA would argue that Goodell based his punishment on the team-based Competitive Integrity Policy, which is outside of the CBA and was never even given to the players.

But is that what happened here? As some have pointed out, the NFL's response to that argument is that Brady was punished under Article 46 of the CBA, not the Competitive Integrity Policy, that he had actual notice of the rule about PSI levels and "constructive notice" of the Competitive Integrity Policy, and that he was also aware of the 'conduct detrimental' language in the CBA and the standard player contract. But the Wells Report and the arbitration hearing transcript paint a different picture. Page 1 of the Wells Report, under the heading of "Executive Summary," plainly states that "[t[he investigation was conducted pursuant to the Policy on Integrity of the Game & Enforcement of Competitive Rules." That statement is repeated on page 22 of the Wells Report under the heading of "Scope of Investigation." Further, during NFLPA attorney Jeffrey Kessler's direct examination of Troy Vincent, Mr. Vincent cited the "Game-Day Operations Manual" as the policy which prohibits altering the pressure of footballs.

There is also the related issue of whether Article 46's "conduct detrimental" language can be used as a magic wand by the Commissioner to punish any and all conduct detrimental to the game in any manner that he sees fit. Mike Florio of Pro Football Talk makes a compelling case that it does not. He points to the fact that the NFL and NFLPA previously "negotiated a long list of specific rules spelling out specific punishment for a wide variety of situations where player behavior otherwise could be deemed conduct detrimental to the integrity of the game of professional football." For example, as Florio points out, the NFL's fine schedule "contains many specific instances of behavior that the Commissioner, given his extremely broad powers, could otherwise deem to be 'conduct detrimental.' But the Commissioner can't, because the NFL has already agreed that only a fine is justified for a first and second offense." Florio then uses the example of a player caught using "stickum" to help him catch the footballs thrown to him (a situation which he posits is "more aligned" with the Brady case). Would the receiver be committing "conduct detrimental" to the integrity of the game, Florio asks, if he "knew" that the equipment managers were applying stickum to his gloves? He answers "perhaps," but stresses (and this is his main point) that the "NFL has already agreed that the fine for a first offense would be $8,681."

In its Friday court filing, the NFLPA made a similar argument, noting that the Player Policies "expressly provide that for equipment violations affecting the 'integrity of competition,' "First offenses will result in fines." The mere fact that Brady has notice that an equipment infraction might be deemed 'conduct detrimental,' the NFLPA reasons, "does not give [him] notice about the potential penalty of a four-game suspension when the Player Policies [provide only for fines]. As the NFLPA aptly puts it, "a specifically applicable disciplinary policy necessarily controls over a general provision that certain behavior might be deemed 'conduct detrimental.' . . . The mere fact that players generally know they can be punished for conduct detrimental is insufficient when, as here, there is a specifically applicable policy."

This is a key argument by the NFLPA because it employs basic principles of contract interpretation (and the CBA is a contract): namely, that the specific terms in a contract will "override" the more general provisions. See Barclays Bank PLC v. Giddens (In re Lehman Bros. Holdings Inc.), 761 F.3d 303, 313 (2d Cir. 2014) (“To the extent that there appears to be conflict between these provisions, the specific governs the general.”); Rosewood Apartments Corp. v. Perpignano, 2001 WL 649824, at *4 (S.D.N.Y. June 11, 2001) ("If there is an inconsistency between a general provisions and a specific provision of a contract, the specific provision controls."). Here, the "general provision" is the 'conduct detrimental' language, while the more specific provisions are the Player Policies, which are incorporated into the CBA. If Judge Berman can be persuaded that the Player Policies for "equipment violations" can be read as covering ball tampering/deflation (and not just equipment/uniform violations), the NFLPA could prevail based on this longstanding contract law principle. But, the NFLPA should also consider using the Marine Pollution case to argue that the arbitration award did not draw from the "essence of the CBA" because it relied on non-CBA policies. This ultimately may prove to be the key to a Brady victory.

-- Daniel Wallach


Thanks for the analysis, Daniel.

I have a question that it seems like many analysts aren't addressing in depth. There's a lot of talk about how "broad" Goodell's powers as arbitrator are, and how much deference arbitrators are typically afforded in the courts. However, doesn't that all go out the window when the arbitrator is "evidently partial" (via 9 U.S.C. Sec. 10)?

When the NFL cites all these cases where awards were upheld, how many of them involved a contention by the losing party that the arbitrator was "evidently partial"? Did any of them result in awards being confirmed, while at the same time having the judge agree that the arbitrator was partial to the party seeking confirmation?

Kessler has argued pretty forcefully that the process was not fair/consistent and that Goodell was a biased arbitrator. Is the NFL contesting that?

Anonymous Anonymous -- 8/16/2015 5:44 PM  

It seems to me that Judge Berman is looking beyond procedure and considering the overall case against Brady - stating clearly that he see's no evidence of any infraction.

While the NFLPA appears to have a very strong case based upon the "Law of Shop" and other aspects of Collective Bargaining Agreements (for which the NFL/NFLPA CBA is so unique, that some might contend this decision won't set a major precedent) the bottom line for Judge Berman might be this:

Even IF Goodell followed procedure - that doesn't give him the right to conduct a blatantly unfair investigation/punishment/appeal and affirmative ruling (changing the nature and findings of the so-called investigation)

Judge Berman, it would seem, has already established that the NFL is acting in an unfair manner. He has a chance to show the world that Justice is the paramount concern of the US Judicial system, rather than one focused solely on the nuances of procedure

Anonymous Anonymous -- 8/17/2015 11:27 AM  

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