On March 21, 2011, U. S. District Judge Susan Richard Nelson in an 89-page ruling granted the National Football League players an injunction lifting the owner’s lockout.

Earlier, star quarterback Tom Brady and nine other football players filed a class action lawsuit against the National Football League and each of the 32 clubs seeking the injunction alleging that the owners violated federal anti-trust laws and state contract and tort laws. In addition, they sought an injunction against the lockout as a further violation of those laws.

The owners argued that the labor laws prohibit the court to issue an injunction so long as the case “involves or grows out of a labor dispute” and that this was a labor dispute over which the National Labor Relations Board had primary jurisdiction. The NFL clubs, they argued, are simply exercising their full labor rights, including the right to lockout the players.

In general, a collective bargaining agreement protects the owners from anti-trust lawsuits for the types of actions that the owners have taken regarding the rules, policies, practices and the “lockout.” Or stated in another way, if the labor union and the NFL owners agree to restrictive policies to limit maximum salaries, establish minimum salaries, establish rules relating to compensation and the movement of players among teams, the NFL owners would not be subject to anti-trust claims for such rules, policies and practices.

The Court reviewed the NFL’s history of anti-trust litigation and anti-trust violations dating back to the early 1970’s. These cases collectively suggest that the NFL teams have combined to eliminate competition among themselves for NFL players by various concerted actions, rules, policies and the lockout, all of which have the purpose and effect of preventing players from offering their services to the NFL teams in the competitive market place and have the effect of preventing NFL teams from actively competing for players.

The NFL and the NFL Player’s Union have spent two years attempting to negotiate a new collective bargaining agreement to no avail. Each side utilized strategies to further its cause. A substantial majority of the NFL players voted to end the collective bargaining status of the NFL Players Association and took the position that effective March 11, 2011 this action terminated the Union and the Union’s role as a bargaining agent for the players and removed the owners’ collective bargaining shield and exposing the owners to anti-trust claims. In turn, on March 12, 2011, the owners collectively imposed a lockout prohibiting all competition for players’ services, players’ signing and players’ movement, etc. They also took the position that the labor law trumps the anti-trust laws and that the pending National Labor Relations Board labor dispute under the earlier collective bargaining agreement shields the owners from scrutiny from any anti-trust liability for their actions.

In the ruling, the Court found that it had jurisdiction of the lawsuit even though there was a pending National Labor Relations Board labor dispute. In order to support the injunction, the Court made findings that the players would be irreparably harmed because they have relatively short careers, typically less than four years; that there are ever present career-ending risks of injury; that a loss of a single year in a short professional athletic career cannot be recaptured; that the lack of playing time and lack of practice field availability diminishes their skills. As a result, the Court concluded that a preliminary injunction was necessary to prevent irreparable harm to the players; that the players have suffered and will continue to suffer irreparable harm; that this harm outweighs any harm to the owners; that the players have established a fair chance of success on the merits; and that public interest supports the players’ position.

The Court also determined that it did not have to defer to the National Labor Relations Board because of the NFL Players Association’s unequivocal disclaimer as a negotiating agent and that the players effectively renounced the Union as their collective bargaining agent—and accepted the consequence of doing so—and elected to proceed in negotiating contracts individually. Therefore, the Court concluded that it had jurisdiction to enjoin the lockout. The Court did not pass on any other alleged anti-competitive actions of the NFL owners which it said would have to await another day.

WHAT NEXT?
The owners have already requested Judge Nelson to stay her injunction and have filed an appeal to the Eighth Circuit Court of Appeals requesting that the Appeals Court stay the injunction if the trial Court fails to do so. It is doubtful whether Judge Nelson would stay her own injunction, and it is uncertain whether the Appeals Court would do so. Even if this matter is handled on an expedited basis, the appeal may take several weeks before any definitive rulings on the lockout are issued. The owners will no doubt request a multi-million bond to be deposited by the players in order to have the injunction kept in place. This may be the most difficult issue for Judge Nelson to deal with. Judge Nelson has broad discretion, but if she determines that a multi-million dollar appeal bond is required, it may be difficult for the players to file that bond in order to keep the injunction in place.

In the meantime, while the lockout has been enjoined, the practical implications of the injunction are uncertain. No doubt the owners will wait for the dust to settle before any actions are taken. The players and their agents will push the owners to get the training facilities open for workouts . Agents will push individual NFL owners to negotiate contracts with free agents. Players not under contract would be free to move to any team they choose. While the Eighth Circuit Court of Appeals is generally sympathetic to business interest, this may be a difficult case for them. Under the pure free enterprise concepts, each owner and each player would be free to negotiate for their wages, services, and individual contracts without regard to the franchise player tag, draft restrictions or any limitations on free agency. On the other hand, the owners would claim they must impose reasonable rules and procedures so they may have an orderly market place for the players’ services, which runs somewhat counter to free enterprise principles.

If the injunction is not stayed, it is highly probable that both NFL owners and players will be back in Judge Nelson’s Court on several occasions for future guidance regarding specific actions of the owners and specific rules the owners propose to implement during the period of the injunction. Otherwise, the owners would be exposing themselves to contempt of a court order with large damages and further injunctions.

Lat J. Celmins
lcelmins@mclawfirm.com
480-994-2000