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Tuesday, July 05, 2016
The Second Circuit Doubles Down On Its Deflategate Ruling in a New Opinion Overruling Judge Berman (Yet Again!), But It Could Help Brady This Time

As June turns into July (with no decision from the Second Circuit), this is fast becoming the "Summer of Deflategate." With so much additional time to ponder the fate of Brady's petition for reheating en banc, I have resorted to the legal equivalent of reading tea leaves. In recent weeks, I have analyzed other rehearing grants (a potentially positive development for Brady and the NFLPA) and also broke the story of two Second Circuit judges assuming "senior" status this summer and what that means for Brady's chances of success.

And now in the third installment of "Waiting for Deflategate," I present a new Second Circuit opinion involving judicial review of a labor arbitration award (and Judge Berman too!). And while the result in that case may be deflating to Brady's supporters, portions of the Court's decision could also be seen as boosting (inflating?) Brady's slim chances for success. In New York City & Vicinity District Council of the United Broth. of Carpenters & Joiners of Amer. v. Association of Wall-Ceiling & Carpentry Indus. of New York, Inc., Case No. 15-574, 2016 WL 3383737 (2nd Cir. June 20, 2016), the Second Circuit, in an opinion authored by Judge Gerard E. Lynch, concluded that a labor arbitration award "was properly grounded" in the arbitrator's application of the parties' collective bargaining agreement, and, consequently, reversed an earlier order entered by Judge Richard Berman (yes, the same judge who sided with Brady at the district court level!) which had vacated the arbitration award on the basis that it did not "draw its essence" from the CBA.

In so holding, Judge Lynch quoted extensively from the Second Circuit's Deflategate decision, reiterating that "'[a] federal court's review of labor arbitration awards is narrowly circumscribed and highly deferential--indeed, among the most deferential in the law.'" Opinion, p. 17 (quoting Nat'l Football League Mgmt. Council v. Nat'l Football League Players Ass'n2016 WL 1619883, at *1 (2d Cir. 2016)). Judge Lynch, quoting from Deflategate, described the limited role of the judiciary in reviewing labor arbitration awards as follows:
A court is "not authorized to review the arbitrator's decision on the merits"; its role is simply to determine "whether the arbitrator acted within the scope of his authority as defined by the collective bargaining agreement." Id at *6. Thus, as long as "the arbitrator was even arguably construing or applying the contract and acting within the scope of his authority and did not ignore the plain language of the contract," the award should ordinarily be confirmed. Id.
(Opinion, at pp. 17-18). Potentially troubling for Brady and the NFLPA is Judge Lynch's statement that "for our [the Court's] purposes, the CBA means what the arbitrator said it means" and that a court "may not" replace the arbitrator's interpretation of the CBA "with its own." (Opinion, at p. 22) (emphasis added)

But Judge Lynch Acknowledges Several Critical Exceptions to Judicial Deference

Despite reaffirming the legal principles underlying the Court's Deflategate decision AND reversing Judge Berman's vacatur of a labor arbitration award (the second time that's happened in less than two months), Judge Lynch's opinion in New York City & Vicinity District Council offers some potential silver linings for Brady and the NFLPA. This is because Judge Lynch identified several circumstances (none of which are identified in the Deflategate ruling) where a federal court "should" vacate a labor arbitration award. He wrote:
Conversely, a court should vacate an award if it "contradicts an express and unambiguous term of the contract or . . . so far departs from the terms of the agreement that it is not even arguably derived from the contract," United Bhd. of Carpenters v. Tappan Zee Constructors, LLC, 804 F.3d 270, 275 (2d Cir. 2015)--in other words, if the award does not "draw[] its essence from the collective bargaining agreement" but reflects instead "the arbitrator's own brand of industrial justice." NFL, 2016 WL 1619883, at *6 (internal quotation ,arks omitted)
(Id., at p. 18)

Judge Lynch also acknowledged that the United States Supreme Court recognizes a "public policy" exception to the traditional judicial deference to labor arbitration awards, stating:
The Supreme Court has also recognized a second circumstance warranting vacatur of a labor arbitration award: "[i]f the contract as interpreted [by the arbitrator] violates some explicit public policy," such as obedience to judicial orders." W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber, Cork, Linoleum & Plastic Workers, 461 U.S. 757, 766 (1983). 

But Judge Lynch cautioned that the "public policy" ground for vacatur is "extremely limited," characterizing the reviewing court's task in applying that principle as "limited to determining 'whether the award itself, as contrasted with the reasoning that underlies the award, creates aexplicit conflict with other laws and legal precedents and thus clearly violates an identifiable public policy.'" Id. (citing Local 97, Int'l Bhd. of Elec. Workers, A.F.L.-C.I.O. v. Niagra Mohawk Power Corp., 196 F.3d 117 (2d Cir. 1999)). [In the Niagra Mohawk Power case, the Second Circuit explained that "[p]ublic policy . . . is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests." Id. at 125]

What Judge Lynch's Recent Opinion Could Mean for Brady and the NFLPA

While Judge Lynch's opinion in New York City & Vicinity District Council may be viewed in some quarters as implicitly agreeing with the Court's Deflategate ruling (a perception no doubt bolstered by the favorable citation to Deflategate and the involvement of Judge Berman), it is important to remember that Judge Lynch's reiteration of the general legal principles invoked in Deflategate is not quite the same thing as applying those principles to a specific fact-pattern. The similarities between Deflategate and New York City & Vicinity District Council really do begin and end with the utilization of the same standard of judicial review and the coincidental involvement of Judge Berman (who may not be inviting any Second Circuit judges out to the Hamptons anytime soon!). But apart from that, the two cases could not be any more different. In contrast to Deflategate, the New York City & Vicinity District Council case did not involve workplace discipline. Rather, it concerned the more esoteric issue of whether a particular collective bargaining agreement between a regional council of a local unions and an employers' association was "superseded" by a separate agreement between the union and the employers' association's parent company. Given the dramatically different factual setting in New York City & Vicinity District Council, there were quite understandably no issues raised in that case concerning the scope of a labor arbitrator's appellate authority (as in Deflategate), whether principles of "fundamental fairness" were violated by virtue of an arbitrator's evidentiary rulings (as asserted in Deflategate), and whether a labor arbitrator was "evidently partial" (as asserted in Deflategate). Therefore, the precedential effect of New York City & Vicinity District Council (at least factually) may be limited at best.

Nonetheless, the New York City & Vicinity District Council decision could be helpful to Brady and the NFPLA on rehearing, and, ironically, could be interesting fodder for a Rule 28(j) notice of supplemental authority (by Brady and the NFLPA). At first blush, it would seem counterintuitive for Brady and NFLPA to rely on a case which overruled a district court's vacatur of an arbitration award, particularly where it is Judge Berman being reversed. But the real value (at least to Brady and the NFLPA) of New York City & Vicinity District Council lies in the "exceptions" to arbitrator deference recognized by Judge Lynch. As identified by Judge Lynch (and discussed briefly above), the two exceptions requiring a vacatur of a labor arbitration award are where the award: (1) contradicts an express and unambiguous term of the CBA or so far departs from the terms of the agreement that it is not even arguably derived from the contract; or (2) violates public policy.

The "public policy exception" may be the real key here. While the Second Circuit has previously addressed the parameters of that exception in a 1999 opinion (Local 97, Int'l Bhd. of Elec. Workers, A.F.L.-C.I.O. v. Niagara Mohawk Power Corp., 196 F.3d 117 (2d Cir. 1999)), and in several earlier opinions, it has not applied (or discussed) the exception in any post-2000 case. Judges Chin and Parker were not even on the Second Circuit bench the last time the "public policy exception" came into play. Thus, Judge Lynch's invocation of the "public policy exception" (while ultimately not applicable in the New York City & Vicinity District Council case) could serve as a revival of that doctrine in the Second Circuit. Might as well start with Deflategate.

One can easily envision a number of identifiable public policy considerations contravened by Commissioner Goodell's arbitration ruling; i.e., the right to cross-examine material witnesses; the right of access to material, non-privileged evidence in the possession of the other side; the right to a fundamentally fair arbitration proceeding; the right to present evidence to an unbiased tribunal; and the requirement that an arbitrator act impartially and in a manner consistent with the collective desires of both parties, to name just a few. While these policies are encapsulated in case-law or rules of procedure, they may still properly serve as a recognized "public policy" (for purposes of the "public policy exception") under Supreme Court and Second Circuit precedent. See Local 97, Int'l Bhd. of Elec. Workers, A.F.L.-C.I.O. v. Niagara Mohawk Power Corp., 196 F.3d 117, 125 (2d Cir. 1999) ("Public policy . . . is to be ascertained ‘by reference to the laws and legal precedents and not from general considerations of supposed public interests." (citing W.R. Grace, 461 U.S. at 766, 103 S.Ct. 2177 (quoting Muschany v. United States, 324 U.S. 49, 66, 65 S.Ct. 442 (1945)).

While the "public policy exception" was not raised in Brady's and the NFLPA's petition or in any of the amici curiae briefs, its recent mention by Judge Lynch in the Court's first post-Deflategate labor arbitration decision is an intriguing development in a controversy that has no shortage of intriguing developments. It may ultimately be a long-shot, but everything about this case has bucked the odds and defied convention.


1. Adhering to court orders is one of the public policy exceptions that was cited in "Carpenters", and that is clearly why it was relevant to that case. I don't see any relevance to the "Brady" case, especially since it was not raised by the parties.

2. The language "for our [the Court's] purposes, the CBA means what the arbitrator said it means" comes from the public policy exception portion of the opinion. I think the Court is saying that when evaluating whether the public policy exception applies, the Court must accept the arbitrator's interpretation of the CBA as is. It does not say however that the Court must accept the arbitrator's interpretation in other contexts, such as when asked to determine if the arbitrator's decision draws its essence from the CBA. For that reason, I think the quoted language has no relevance to "Brady".

Anonymous Allen -- 7/06/2016 5:16 PM  

I know one thing... In the future I will avoid arbitration agreements. When we enter into an agreement (contract) we used to trust that the arbitrator would have to be fair. This Brady case has shown the damage that a corrupt arbitrator can cause and that we have no recourse.. Period.

When it comes to big money vs. fairness, money will win every time.

Anonymous Anonymous -- 7/10/2016 8:22 AM  

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