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Tuesday, December 18, 2012
More on the NHL Lockout

Over the last few weeks, I've been corresponding with James Mirtle, one of the NHL reporter for the Canadian national newspaper the Globe and Mail, regarding the legal issues surrounding the NHL lockout.  Mirtle recently compiled this on-going discussion into a column analyzing the current legal status of the NHL labor dispute.  Here's an excerpt from the piece:
No. 2: Why would dissolving the union give the NHLPA any negotiating leverage if it’s widely held that the litigation they’re about to embark down is unlikely to ever reach its conclusion? Isn't this just another stalemate on top of an existing one?
Grow: “It's a really interesting question (and merits a longer answer than I originally anticipated). Disclaiming interest almost certainly would have given the players significantly more leverage had it been done back in October. If they had dissolved the union at that time, there would still have been plenty of time for a court to issue a preliminary ruling on the legality of the lockout before the entire season was endangered. And had the court actually gone so far as to enjoin the lockout, it obviously would have been a huge win for the players. 
“Now, though, there most likely isn't enough time left to get a preliminary ruling before the league cancels the season (although it would be interesting to see what the league would do if a court enjoined the continuation of the lockout in, say, late-February). 
You can read the entire piece here.  Meanwhile, for more regarding the NHL lockout, check out Sports Law Blog's prior commentary on the dispute.


What do you mean when you say "“At the end of the day, no court has ever decided whether a disclaimer of interest is sufficient for players to file an antitrust suit. No court has definitively stated that a formal decertification is sufficient for that matter."

The first time the NFL players disclaimed interest it certainly was shown to be sufficient for the non-statutory labor exemption to no longer apply. The courts laid out a ground work for every other league to follow for there to be a disclaimer of interest. There has never been a court that has said that a disclaimer is not sufficient for filing an anti-trust suit. there has never been a court that has said a lockout was legal after the disclaimer of interest. It is possible that our legal system is so flawed that it is almost impossible for the players to see an anti-trust suit to the end where they would be owed treble damages but if the players are going to miss an entire season anyway then they should file for disclaimer so they are in line for those treble damages and the owners have far more risk in the matter.

Anonymous Damon -- 12/18/2012 9:23 PM  


I'm not sure if you're referring to the NFL players' actions back in the late-1980s and early-1990s, or if you are talking about the most recent 2011 lockout. It is true that NFL players successfully pursued antitrust litigation in the late-1980s, but that was after a formal decertification of the NFLPA, not a disclaimer of interest.

Meanwhile, the issue of whether the NFLPA's 2011 disclaimer of interest was sufficient to extinguish the non-statutory labor exemption, and thus allow the players to proceed with their antitrust suit, was not specifically addressed in Brady. The courts never reached a final ruling on that question. Rather, the trial and appellate courts only decided whether the NFL players were entitled to a preliminary injunction.

In the 1996 case of Brown v. Pro Football, the Supreme Court suggested that decertification would be sufficient to extinguish the non-statutory exemption, but did not definitively decide the issue. The Court did not address whether a disclaimer would be sufficient. Strong arguments can be made either way as to whether a disclaimer of interest marks a point "sufficiently distant in time and in circumstances from the collective-bargaining process" to allow the NHL players to proceed with an antitrust suit, as Brown requires. On the one hand, a disclaimer does legally end the union's collective bargaining authority. But on the other hand, a disclaimer can be quickly reversed, as we saw in both the NFL and NBA lockouts of 2011, and therefore may not be enough to remove the parties from the non-statutory exemption.

Blogger Nathaniel Grow -- 12/19/2012 9:26 AM  

I am under the impression that back in the late 80's the NFLPA did disclaim interest rather than do a full decertification election.

In reading the McNeil opinion you can see this footnote:

"The court thus rejects defendants' contention that "there was not a single case ... that would have foreshadowed [an] opinion that the NFLPA's unilateral abandonment of collective bargaining rights would be sufficient to nullify the NFL's nonstatutory labor exemptions." Defendant's Brief at 12 n. 5. First, the dissent in Powell III clearly suggested such a result. The court further notes that plaintiffs cited a number of such cases in their motion for partial summary judgment on the labor exemption issue in McNeil. (Plaintiffs' Brief in Support of their Motion for Partial Summary Judgment at 11-15 (Nov. 2, 1990)).

In evaluating the effectiveness of the NFLPA's disclaimer of its status as a labor union, the NLRB also cited various cases in support of that proposition when ruling that:

In order for a union's disclaimer in representing a particular unit to be valid, it must be unequivocal, made in good faith, and unaccompanied by inconsistent conduct. We conclude that there has been no conduct by the NFLPA which is inconsistent with its disclaimer. Moreover, when a union has made a valid disclaimer, no question concerning representation exists and a decertification election will not be held because it would be an unnecessary waste of time and resources. In addition, the fact that the disclaimer was motivated by "litigation strategy," i.e., to deprive the NFL of a defense to players' antitrust suits and to free the players to engage in individual bargaining for free agency, is irrelevant so long as the disclaimer is otherwise unequivocal and adhered to."

I read that to mean that the union disclaimed interest rather than going through the formal decertification process. (looking at the Brady v NFL docs it points to the same conclusion that there was a disclaimer of interest rather than a full decertification)

It seems to me that the way to show that it is a sham decertification would be that the employer could then offer any individual player any contract that they wished to and the players would be unable to go on strike to protest. The problem for the league is that the mechanisms to keep salary down (salary cap, draft, franchise tag, etc) would be on their face illegal without the non-statutory labor exemption to be in place.

And this is why I think that sports athletes are almost certainly better off without a union at this point.

Anonymous Damon -- 12/19/2012 10:06 AM  

Good catch, Damon. I've always understood that the NFLPA went through with a formal decertification in the late-80s, but it appears you are correct.

Ultimately, though, I don't think that resolves the issue of whether a disclaimer of interest is sufficient for the players to pursue antitrust litigation. Powell and McNeil were decided pre-Brown, and as such weren't decided under the current standard. Given the Supreme Court's language in Brown about when the non-statutory exemption terminates, one can certainly argue that a disclaimer isn't sufficiently distant in time to render the exemption inapplicable. But there are obviously arguments on the players' side as well. In short, reasonable minds could disagree about the sufficiency of a disclaimer.

Blogger Nathaniel Grow -- 12/19/2012 1:25 PM  

I just don't see any evidence that the courts have ever treated a legitimate disclaimer of interest as different than a full decertification. In the rest of the economy the employer is happy to see the disclaimer of interest. At that point they are able to negotiate with the workers individually and it only becomes a sham decertification if the workers continue to picket, strike, or take mass actions. As far as I can tell as long as the players are willing to move forward and let the free market set their rates then the non-statutory labor exemption is gone. If a supermajority of the players do not wish to accept the best deal that the union is able to negotiate for them, then how can it be possible that they aren't allowed to dissolve the union and negotiate individually? I simply don't see how its possible that the non-statutory labor exemption would still apply, and no court has ever found that it does still apply after a disclaimer of interest.

Maybe the owners can run out the clock because of how slow our legal system is, but I simply haven't seen a compelling argument that the non-statutory labor exemption would continue to exist once a supermajority of players are willing to give up their rights to collective action.

So from where I sit- if the players are going to lose a season anyway. They are unquestionably better off with a diclaimer of interest where they can be in line to collect treble damages for all paychecks missed.

Anonymous Damon -- 12/19/2012 4:33 PM  

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