NBA Considering Location Change for All-Star Game as a Result of North Carolina Bathroom Bill

North Carolina Governor Pat McCory has come under fire recently for his support of House Bill 2 (HB2), the Public Facilities Privacy & Security Act.[1]  The bill, which was pushed through the General Assembly by virtue of a special session[2], was a reaction to Charlotte’s recent ordinance[3] that expanded civil rights to individuals on the basis of martial status, sexual orientation, and gender identity.

imgresAs might have been expected, the public outcry in response to HB2 has been deafening.  American Airlines and Wells Fargo[4], among others, have already been outspoken in their condemnation of HB2, and Bruce Springsteen[5] canceled his scheduled concerts in North Carolina.  But what could be the most financially relevant response to North Carolina is what the National Basketball Association (NBA) will decide to do with regards to its 2017 All-Star Game, which is scheduled to take place next February in Charlotte.

Why HB2 Is Controversial

Governor McCrory touted HB2 as a bipartisan bill[6] that combated the Charlotte ordinance that “defied common sense.”  So what could be the problem?

First off, “bipartisan” is a bit of an overstatement.  Although the bill passed through the Senate by a vote of 32-0[7], the unanimity was a direct result of Senate Democrats walking out of chambers rather than casting a vote.

The crux of the problem with HB2 lies with the bathroom aspect of the bill.  HB2 requires that individuals use the public bathrooms that correspond to their biological sex.[8]  The argument made by Governor McCrory and his defenders is that to allow transgender people to choose their restroom would open the door to sexual assaults in women’s restrooms.[9]  Proponents contend that there is a privacy issue as well as the issue of sexual predators.

However, the transgender community sees a bigger and more pressing problem by enacting HB2.

“If I were to walk into a men’s bathroom, I would either be told that I’m in the wrong bathroom or I’d be outed as a transgender woman,”[10] Lara Nazario, a trans woman from Charlotte, told NPR.  “This can often lead to violence or harassment, especially when there’s no protection in place for people like me.”[11]

In addition to the bathroom problem, HB2 also prevents any future laws like the one in Charlotte, blocking local governments and cities from extending nondiscrimination rights to LGBT (Lesbian, Gay, Bisexual, Transgender) individuals in the future.

Why Should the NBA Care?

Aside from the basic human instinct to care for those individuals who are being taken advantage of, the NBA has a reputation for being an extremely LGBT-friendly organization.

In 2013, the NBA became the first major American sports league to have a homosexual player on an active roster, when Brooklyn Nets center Jason Collins came out.  Former NBA center John Amaechi also came out as gay, though he did so after his playing career concluded, and has gone on to be a very vocal and influential figure in his native Great Britain.

In light of HB2, the NBA released a statement which read in part:  “We are deeply concerned that this discriminatory law runs counter to our guiding principles of equality and mutual respect and do not yet know what impact it will have on our ability to successfully host the 2017 All-Star Game in Charlotte.”[12]

Notables in the NBA community have come out and said the league should move its All-Star Game.  Basketball Hall-of-Famer, 1992 Dream Team member, TNT commentator, and Capital One commercial star Charles Barkley has been one of the most vocal opponents of holding the All-Star game in North Carolina.

“As a black person, I’m against any form of discrimination—against whites, Hispanics, gays, lesbians, however you want to phrase it,” Barkley said.[13]  “It’s my job, with the position of power that I’m in and being able to be on television, I’m supposed to stand up for the people who can’t stand up for themselves.”[14]

Seeing an opportunity to facilitate the NBA’s moving of the All-Star Game, the city of Atlanta introduced a resolution[15] requesting a relocation of the weekend festivities to Atlanta.

“We just wanted to say:  `If you guys are going to take a look at other places, consider us,’”[16] Council President Ceasar Mitchell said.  “We wanted to assure the NBA that Atlanta is open for business, and open to (all) people.”[17]

The prospect of the NBA taking the All-Star Game away from North Carolina is so plausible that when a fake ABC News story ran in early April stating that NBA Commissioner Adam Silver had given North Carolina a thirty-day window to repeal the law or else the game would be moved, multiple reputable sites quoted the fake NBA press release.

What Is Likely To Happen?

Ultimately, the economic and societal backlash that is facing North Carolina should be enough to force Governor McCrory to reconsider HB2 before the NBA needs to make a firm decision.  The threat of losing out on the lucrative February event will give Governor McCrory plenty to think about when considering the future of HB2.  The All-Star Game alone could represent a $200 million windfall to North Carolina, as the game brought $195 million[18] to New York back in 2015.  The business sports provide to states has proven to be a very influential authority when it comes to state laws.  The National Football League was seen as a major force behind compelling Georgia Governor Nathan Deal to veto a similar anti-LGBT[19] law in March.

It is notable that Governor McCrory has already started his retreat, issuing an executive order designed to “reinstate the right to sue in state court for discrimination.”[20]  However, his executive order has not quieted the discontent with HB2.  The American Civil Liberties Union (ACLU), which has already filed a lawsuit, called Governor McCrory’s order, “a poor effort to save face.”[21]  North Carolina Attorney General Roy Cooper has publicly derided HB2 as flatly, “unconstitutional.”[22]

As pressure builds for Governor McCrory, it too is building for Commissioner Silver.  On Thursday April 14, Senators Jeff Merkley (D-OR), Mark Kirk (R-IL), Patrick Leahy (D-VT), Cory Booker (D-NJ), Tammy Baldwin (D-WI) and Patty Murray (D-WA) penned an open letter to Commissioner Silver imploring he move the All-Star Game from Charlotte.  “We cannot condone nor stand idly by as North Carolina moves to legalize and institutionalize discrimination against the LGBT community,” the letter reads.  “Nor should the NBA allow its premier annual event to be hosted in such a state.”[23]

With the public pushback increasing seemingly every day and the economic losses mounting, the most likely outcome here is that the ACLU’s case will never make it to a courtroom, and that Governor McCrory will have to water down his law before the NBA needs to make a final decision on February’s All-Star Game.

[1] Public Facilities Privacy and Securities Act, N.C. Sess. Laws 2016–3, http://www.ncleg.net/Sessions/2015E2/Bills/House/HTML/H2v4.html.

[2] Sandhya Somashekhar, Backlash Builds Against N.C. Law on Transgender Bathroom Use, Washington Post (Mar. 24, 2016), https://www.washingtonpost.com/news/post-nation/wp/2016/03/23/north-carolina-passes-bill-blocking-lgbt-protections/.

[3] Id.

[4] Id.

[5] Tom Kludt, Bruce Springsteen Cancels North Carolina Concert over ‘Bathroom Law’, CNN (Apr. 8, 2016, 6:16 PM), http://money.cnn.com/2016/04/08/media/bruce-springsteen-north-carolina-show-canceled/.

[6] Tal Kopan & Eugene Scott, North Carolina Governor Signs Controversial Transgender Bill, CNN (Mar. 24, 2016, 11:12 AM), http://www.cnn.com/2016/03/23/politics/north-carolina-gender-bathrooms-bill/.

[7] Id.

[8] Id.

[9] Id.

[10] Camila Domonoske, North Carolina Passes Law Blocking Measures to Protect LGBT People, NPR (Mar. 24, 2016, 11:29 AM), http://www.npr.org/sections/thetwo-way/2016/03/24/471700323/north-carolina-passes-law-blocking-measures-to-protect-lgbt-people.

[11] Id.

[12] Dan Klepal, N.C. Governor Takes Aim at Atlanta’s Attempt to Steal 2017 NBA All-Star Game, Atlanta J. Const. (Mar. 30, 2016, 10:04 AM), http://www.ajc.com/news/news/local-govt-politics/atlanta-city-council-bring-2017-nba-all-star-game-/nqt3Y/.

[13] Susanna Kim, Charles Barkley Wants NBA to Move All-Star Game Due to ‘Anti-LGBT’ Law, ABC News (Apr. 7, 2016, 4:51 PM), http://abcnews.go.com/Business/charles-barkley-nba-move-star-game-due-anti/story?id=38229090.

[14] Id.

[15] Klepal, supra 12.

[16] Id.

[17] Id.

[18] Kavitha A. Davidson, Was NBA All-Star Weekend a Financial Winner?, BloombergView (Feb. 18, 2015, 2:52 PM), http://www.bloombergview.com/articles/2015-02-18/was-nba-all-star-weekend-a-financial-winner-.

[19] Jon Schuppe, Georgia Governor to Veto ‘Religious Freedom’ Law as N.C. Is Sued for LGBT Bias, NBC News (Mar. 28, 2016, 5:29 PM), http://www.nbcnews.com/news/us-news/georgia-governor-veto-religious-freedom-law-n-c-sued-lgbt-n546636.

[20] Bill Chappell, N.C. Governor Signs Order That ‘Clarifies’ Controversial Gender Identity Law, NPR (Apr. 12, 2016, 3:03 PM), http://www.npr.org/sections/thetwo-way/2016/04/12/473982918/n-c-governor-signs-order-that-clarifies-controversial-gender-identity-law.

[21] Id.

[22] Id.

[23] Senator Jeff Merkley, A Letter to NBA Commissioner Adam Silver, Medium (Apr. 12, 2016), https://medium.com/@SenJeffMerkley/a-letter-to-nba-commissioner-adam-silver-902e23b61a05#.nndg4wpcx.

Why the NFL Should Re-Consider Goodell’s Role as Judge, Jury, and Executioner

GoodellAmidst the firestorm surrounding the Tom Brady “Deflategate” saga and fallout from highly publicized domestic violence suspensions involving National Football League (NFL) players such as Ray Rice, many have scrutinized Roger Goodell and the broad scope of his power as commissioner of the NFL.[1]  Goodell represents the thirty-two NFL owners’ business interests (to the tune of a $44 million per year salary)[2] and has the authority to suspend players for “conduct detrimental” to the team or league, and then act as mutual arbiter in disputes involving the NFL Players Association (NFLPA) and league.[3]  While the NFL touts that penalties and suspensions are made “for the good of the game,”[4] some challenge Goodell for playing the role of “judge,” “jury,” and “his own executioner”.[5]  This blog highlights where the commissioner’s power comes from, his roles and responsibilities, and how a player may challenge the commissioner’s rulings.  It proposes that it is in the NFL’s best interest to limit Goodell’s authority to act as mutual arbiter.

Where Does the Commissioner Get His Power?

The commissioner’s authority is different with regards to the teams and the players.  Whereas Goodell’s authority to govern and discipline the teams is expressly granted to him by the league constitution,[6] the authority to discipline players for conduct offenses is generally limited to what has been agreed upon in the Collective Bargaining Agreement (CBA).[7]  As the CBA functions as a mutually agreed upon document bargained for by the players (via representation by the NFLPA) and league, the players have granted Goodell such authority.  Goodell’s “unlimited powers of adjudication,”[8] was a concession made during bargaining by the players in order to end the 2011 lockout and achieve other health and safety goals including limiting two-a-day practices.[9]  As Deflategate—which involves challenges to Goodell’s role as mutual arbiter under Article III of the CBA—continues, time will tell how the courts interpret Goodell’s impartiality.  In the meantime, the NFLPA may have to wait to equally bargain for the right to limit Goodell’s authority when the current CBA expires after the 2020 season.[10]

The Commissioner’s Role

A commissioner is necessary to enforce uniform rules and ensure a level playing field.  Without one, there would be no guarantee as to the uniformity and fair adherence to NFL rules.  Deflategate provides an example where Goodell had the authority to discipline the Patriots and Tom Brady for allegedly purposefully under-inflating footballs as it provided a “competitive advantage” on the field.[11]  While the Second Circuit is still deliberating as to whether Brady’s four-game suspension was precedential and made with appropriate advanced notice,[12] it is unchallenged that the commissioner’s has authority to ensure adherence to NFL policies by levying fines, suspensions, and et cetera.

Major League Baseball’s (MLB) collective bargaining agreement is different in a variety of ways, [13] but the MLB’s authority to implement punishments in cases of owner tampering of player trades[14] and player assignments[15] has provided a comparable context of commissioner authority.[16]  In these contexts, federal courts have held that the scope of the commissioner’s authority was broad enough to regulate team and player decisions.[17]  This same rationale has been applied to punishments involving steroid use in the MLB (competitive advantage),[18] and cases involving off the field drug use[19] and domestic violence in the NFL.[20] 

Challenging a Commissioner’s Ruling

While the NFL and NFLPA collectively bargained for Goodell’s power, it gives the commissioner an ability to review his own decisions without third-party oversight.  This differs significantly from the typical arbitration process where a neutral third-party arbiter is appointed by both parties to make a binding decision without preferential treatment to one side.

A player may challenge the commissioner’s ruling in a court of law under the Federal Arbitration Act (FAA),[21] but the U.S. Supreme Court has made clear that “[t]he refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements.  The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards.”[22]  While arbitration decisions are given deferential treatment in a court of law, they may be overturned in the event of “evident partiality” on the part of the arbitrator.[23]  “Evident partiality” involves “an arbitrator’s appearance of bias, requiring the arbitrator to disclose to the parties any dealings that might create an impression of bias.”[24]  Courts are reluctant to interfere with private organizations interpreting their own rules, but will intervene in response to “legitimate allegations of bad faith or illegality.”[25]

“Evident partiality” has been the major challenge to Goodell’s decision making, and has been successful in a number of overturned suspensions.  Both the Deflategate and “Bountygate”[26] cases have relied upon the argument made in Morris v. N.Y. Football Giants, Inc.,[27] where the Supreme Court of New York held that the NFL commissioner is not exempt from arbitration requirements, and can lack the neutrality necessary to arbitrate after formerly advocating against the players.[28]  Following an arbiter’s overturning of MLB player Steve Howe’s lifetime ban from baseball in 1992, mutual arbiters place the burden of proof on the commissioner to establish that punishments are “appropriate (and carefully fashioned) given the circumstances and that there is “just cause” for the chosen discipline.[29]

Changes To Come?

Whereas a typical arbiter’s decision is given broad deference in challenges in a court of law, Goodell’s decisions have been overturned a number of times.  Since 2010, Goodell and the NFL have been overruled in indefinite suspensions (Adrian Peterson),[30] one-game bans (Ndumukong Suh),[31] multi-game suspensions (Ray Rice)[32] and in all of the suspensions of the New Orleans Saints involved in Bountygate.[33]  As courts continue to overturn unilateral player suspensions made by Goodell acting in the “best interest” of the league, the NFLPA and NFL should be driven to revise its current “circular system of justice.”[34]

In fact, it is in the NFL’s best interest to do so to improve the credibility of internal proceedings, consistency of penalties, and to avoid similar gaffes of bad publicity.  As the commissioner’s authority has been overturned in a variety of contexts, it has undermined the commissioner’s authority to implement punishment.  A revised system that grants a truly mutual arbiter (or arbiters) authority would likely ensure that the NFL does not continue to have its authority questioned in open court.  Should the NFL adopt a system like the tripartite arbitration panel used in the MLB,[35] both the NFLPA and NFL could appoint an arbitrator while allowing for a third neutral arbiter to have the deciding vote.  This would significantly limit what has become the inevitable challenging of Goodell’s adjudicative decisions.

About the Author

Zachary Paiva is a first-year law student at Fordham University School of Law.  Prior to attending Fordham Law School, Zachary graduated from the University of Michigan with a degree in Sport Management.

 

[1] Jack Dickey, Why so Serious, Roger Goodell?, TIME (Dec. 10, 2014), http://time.com/3628892/roger-goodell/.

[2] Ken Belson, In N.F.L.’s Trying 2014, Roger Goodell Earned $34.1 Million, N.Y. Times (Feb. 16, 2016), http://www.nytimes.com/2016/02/17/sports/football/nfl-paid-commissioner-roger-goodell-34-1-million-in-2014.html?_r=0.

[3] Nat’l Football League Personal Conduct Policy, Nat’l Football League (2013), https://nfllabor.files.wordpress.com/2013/06/personal-conduct-policy.pdf.

[4] NFL Rules Enforcement, NFL.com, http://operations.nfl.com/football-ops/nfl-rules-enforcement/ (last visited Apr. 15, 2016).

[5] Jack Shafer, Roger Goodell, the NFL’s Judge and Jury, Becomes His Own Executioner, REUTERS (Sept. 11, 2014), http://blogs.reuters.com/jackshafer/2014/09/11/roger-goodell-usually-the-nfls-judge-and-jury-becomes-his-own-executioner/.

[6] See Const. and Bylaws of the Nat’l Football League, Nat’l Football League (Revised 2006), http://www.vanderbilt.edu/econ/faculty/Vrooman/NFL-bylaws.pdf.

[7]  See id.; see also Nat’l Football League Collective Bargaining Agreement 204 (2011), https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf.

[8] Mark Heisler, How NFL Players Gave Roger Goodell All that Power and Created a Monster, Forbes.com (Sept. 3, 2015, 9:00 AM), http://www.forbes.com/sites/markheisler/2015/09/03/how-nfl-players-gave-roger-goodell-all-that-power-and-created-a-monster/#33851c6a2c13.

[9] Id.

[10] Alternatively, the NFL and NFLPA could mutually agree to amend the commissioner’s authority prior to the CBA’s expiration date in 2020.  However, the commissioner stated at the NFL Annual Meeting on March 22, 2016, that “[w]e are not close to an agreement by any stretch of the imagination on any changes to that as it relates to third party or other individuals making those decisions.” Cameron McDonough, NFL, NFLPA Appear Nowhere Close to Deal Over Roger Goodell’s Discipline Power, NESN.com (March. 23, 2016, 11:17 PM), http://nesn.com/2016/03/nfl-nflpa-appear-nowhere-close-to-deal-over-roger-goodells-discipline-power/.

[11] Clinton Yates, Tom Brady’s Four-Game DeflateGate Suspension Upheld by Roger Goodell, WashingtonPost.com (July. 28, 2015), https://www.washingtonpost.com/news/early-lead/wp/2015/07/28/tom-bradys-four-game-deflategate-suspension-upheld-by-roger-goodell/.

[12] For an interesting piece on the legal implications of the ongoing ‘Deflategate’ saga see Cole Renicker, As the NFL Season Ends, Tom Brady and the NFL Resume ‘Deflategate’ Saga, Fordham Sports L. Forum Blog (April. 4, 2016), http://fordhamsportslawforum.com/lawsuit/as-the-nfl-season-ends-tom-brady-and-the-nfl-resume-deflategate-saga/.

[13] As per Article XI of MLB’s CBA, the commissioner’s authority to issue fines and suspensions is shared with the MLB Executive Vice President and Senior Vice President.  Appeals of decisions made by the three executives are reviewed by an arbitration panel composed of an impartial arbiter or a panel of three impartial arbiter.  Major League Baseball Collective Bargaining Agreement 38, 44 (2012), http://mlb.mlb.com/pa/pdf/cba_english.pdf.

[14] Atlanta Nat’l League Baseball Club, Inc. v. Kuhn, 432 F. Supp. 1213 (N.D. Ga. 1977).

[15] Charles O. Finley & Co. v. Kuhn, 569 F.2d 527 (7th Cir. 1978).

[16] See Major League Const. art. II (2005), http://www.ipmall.info/hosted_resources/SportsEntLaw_Institute/League%20Constitutions%20&%20Bylaws/MLConsititutionJune2005Update.pdf (granting the commissioner authority to investigate acts not in the “best interest of the national game of baseball”).

[17] See Atlanta Nat’l League Baseball Club, 432 F. Supp. at *1220; see also Charles O. Finley & Co., Inc., 569 F.2d at *539.   

[18] George J. Mitchell, Report to the Commissioner of Baseball of an Independent Investigation into the Illegal Use of Steriods and other Performance Enhancing Substances by Players in Major League Baseball (a.k.a. the “Mitchell Report”), (Dec. 13, 2007), http://files.mlb.com/mitchrpt.pdf.

[19] See NFL Personal Conduct Policy, supra note 3; see also Nate Jackson, The N.F.L.’s Absurd Marijuana Policy, N.Y. Times (Sept. 8, 2014) http://www.nytimes.com/2014/09/09/opinion/the-nfls-absurd-marijuana-policy.html.

[20] See, e.g., Bethany P. Withers, Note, The Integrity of the Game:  Professional Athletes and Domestic Violence, 1 Harv. J. of Sports & Ent. L. 145 (2010) (discussing professional sports leagues off-the-field domestic violence issues and related suspensions); see also Nat’l Football League Collective Bargaining Agreement, supra note 7, at app. A. §15.

[21] 9 U.S.C. §§ 1 et seq (2012).

[22] United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960).

[23] 9 U.S.C. § 10(a)(2) (2012).

[24] 94 Am. Jur. 2d Trials 211 §136 (2004)

[25] M’Baye v. World Boxing Ass’n, 429 F. Supp. 2d 660 (S.D.N.Y. 2006).

[26] See Paul Tagliabue Vacates Penalties, ESPN.com (Dec. 12, 2012), http://espn.go.com/nfl/story/_/id/8736662/paul-tagliabue-vacates-new-orleans-players-bounty-penalties. “Bountygate” refers to the 2012 suspensions of a number of New Orleans Saints players and coaches following an NFL report of a bounty system used to incentivize players to injure opposing players for monetary rewards.

[27] 575 N.Y.S.2d 1013 (Sup. Ct. 1991).

[28] Id. at 1017.

[29] PATRICK K. THORTON, SPORTS LAW 687-89 (2010) (discussing In re Major League Baseball Players Ass’n v. Comm’r of Major League Baseball, Suspension of Steve Howe (1992) (Nicolau, Arb.)); see also Jason M. Pollack, Note, Take my Arbitrator, Please:  Commissioner “Best Interests” Disciplinary Authority in Professional Sports, 67 Fordham L. Rev. 1645, 1696 (1999)

[30] NFL Players Ass’n v. Nat’l Football League, 88 F. Supp. 3d 1084, 1091 (D. Minn. 2015).

[31] Ken Belson, Suh Wins Appeal and Will Be Able to Face Cowboys, N.Y. Times (Dec. 30, 2014),

[32] Summary of Decision, in re Ray Rice (Nov. 18, 2014) (Jones, Arb.), http://espn.go.com/pdf/2014/1128/141128_rice-summary.pdf (involving an original two-game suspension that was increased to an indefinite suspension before being overturned by arbiter Judge Jones).

[33] See Paul Tagliabue Vacates Penalties, supra note 25.  While Roger Goodell recused himself from the appeals panel, the evident partiality of former commissioner Paul Tagliabue was challenged and the case demonstrates the inconsistency of NFL suspensions and the frequency that they have been overturned.

[34] See Michael McCann, Overturning of Bounty Suspensions Backs Goodell into a Corner, Sports Illustrated (Sept. 7, 2012, 9:33 AM), http://www.si.com/more-sports/2012/09/07/saints-suspensions-overturned.

[35] The MLB tripartite arbitration panel allows for the MLB and MLBPA to both delegate an arbiter and the third arbiter to be neutral.  This panel has been utilized in a variety of appeals, notably the overturning of the MLB reserve clause (decision upheld by the Eighth Circuit in Kansas City Royals Baseball Corp. v. Major League Baseball Players Ass’n, 532 F.2d 615, 632 (8th Cir. 1976)).

As the NFL Season Ends, Tom Brady and the NFL Resume ‘Deflategate’ Saga

Deflategate-PatriotsBeing an immensely popular and public entity has created serious drama for, and within, the National Football League (NFL).  In what has come to be known as “Deflategate,”[1] the NFL and New England Patriots quarterback Tom Brady, one of its marquee players, have clashed in federal courts for over a year.  After Brady’s initial four-game suspension (for his alleged involvement with the under-inflation of game-used footballs) was upheld by the NFL’s Commissioner, Roger Goodell,[2] the Southern District of New York overturned his four-game suspension,[3] prompting the NFL to appeal the district court’s reversal.  The U.S. Court of Appeals for the Second Circuit held oral arguments on March 3, 2015,[4] with the rumor out of the hearing being that Brady looks to be in trouble, as his suspension may be reinstated.[5]

One thing about the Second Circuit’s review is not in question:  this is not a review to determine if Brady participated in the deflation of footballs.[6]  The Second Circuit’s review is focused on determining if the lower court overstepped its boundary in reversing the NFL’s arbitration decision, pursuant to the NFL’s Collective Bargaining Agreement (CBA).[7]  This is primarily a procedural determination, rather than a substantive one.

This post discusses the district court’s reversal of the NFL’s hearing officer,[8] the Second Circuit’s review of that decision, and the labor law principles that courts generally apply in reviewing a disciplinary decision stemming from a collective bargaining agreement between an employer and a union.  This post concludes with a prediction as to how the Second Circuit will rule on the NFL’s appeal.

Why Is Brady Appealing?

After Tom Brady’s initial four-game suspension was upheld by Commissioner Goodell on appeal, Brady decided to file a lawsuit pursuant to Article III of the NFL’s CBA.  Under Article III, a player may bring a lawsuit against the NFL to challenge the impartiality of the arbitrator in hearing any player’s appeal.[9]

Here, Brady was alleging that the Commissioner was not impartial, as required under Articles XV and XVI of the CBA.  Additionally, Brady argued that he was not provided notice of a possible four-game suspension for such a violation.  Brady also argued that he did not have access to the unfiltered report itself during the appeal hearing, or access to key witnesses involved in the preparation of the report.[10]

Eventually, district court Judge Richard Berman agreed with Brady, and overturned his suspension on September 3, 2015.[11]  Judge Berman decided that the NFL did not meet the procedural requirements in Brady’s appeal, holding that they failed to provide him the requisite notice and access to key information during the appeal process.[12]  The NFL subsequently filed its appeal to the Second Circuit.

What Will the Second Circuit Be Analyzing On Appeal?

At issue in the Deflategate dispute is whether or not Commissioner Goodell’s affirming of Brady’s suspension was in compliance with the NFL’s CBA.  As stated above, Judge Berman ruled that it was not, after Brady argued that he did not have notice of the punishment, and access to the report and key witnesses.  Under the Labor Management Relations Act though, the power to interpret a CBA generally belongs to the agreed upon body as set forth in the CBA at issue.[13]  In the NFL’s CBA, the Commissioner may appoint himself as hearing officer, if he chooses, and is entitled to interpret the application of the CBA.[14]

In hearing a case in which an arbitrator would have already ruled on the issue (which is the case in the NFL because a hearing officer oversees the appeal of player discipline), courts will rarely overturn the decision of an arbitrator or hearing officer.  The arbitration procedural step is mutually agreed upon, and in general labor law, there is a “private association” principle that many courts follow in declining to interrupt a private agreement between parties.[15]  The primary thinking behind this principle is that the agreements between private parties should mean something, and should not be overturned or interfered with.[16]

This “private association” principle presents a dilemma for judges in deciding cases where an arbitrator has already made a ruling.  Although a judge may have a strong opinion in certain cases, they typically are precluded from being able to overturn an arbitrator’s decision.  This is why Judge Berman’s overturning of Brady’s suspension was fairly surprising from a legal perspective.[17]  Many laypeople in opposition of Brady’s suspension were against the suspension because of the lack of concrete evidence against Brady.  Judge Berman did not overturn the suspension due to the evidence presented though; he overturned it due to the procedural steps that were not provided to Brady—notice and access to key information.[18]

How the Second Circuit decides the NFL’s appeal will not be based on whether Brady was involved in the football under-inflation, the evidence against him, or the report itself.  Its decision will be based on whether Judge Berman overstepped his bounds in overturning the hearing officer as set forth in the CBA; and in rendering its decision, the Second Circuit will be applying a de novo standard of review.[19]  Thus, while many people will see this decision as vindicating one of the two parties’ arguments, it is truly a procedural issue to be determined by the Second Circuit, and does not ultimately reveal anything about Brady’s guilt or innocence in Deflategate.

How Will the Second Circuit Decide?

The oral arguments that took place on March 3, 2016, started by focusing on Brady’s lack of cooperation in the initial investigation, and his destroying of his cell phone.[20]  When Brady’s attorney, Jeffrey Kessler, presented Brady’s oral argument, Judge Denny Chin had remarked that “the evidence of the ball tampering is compelling, if not overwhelming[,]”[21] and followed that question up by asking “why the three-judge panel should ‘second-guess’ the arbitration, meaning Goodell.”[22]

Due to the weight that courts have typically given to arbitrators, and the deference they have usually shown them, it was surprising to see Judge Berman overturning the NFL.  As such, it is likely—based on historical precedent and reports of the types of questions the Second Circuit panel asked of Brady—that the district court’s vacation of Brady’s suspension will be overturned.

Even if the Second Circuit rules against Brady, the case can still be remanded back down to the district court, instead of an outright reversal.  Kessler, arguing on behalf of Brady, stated that it should be remanded, because Judge Berman intentionally declined to rule on three alleged missteps by the NFL:  whether Goodell was ‘evidently partial’ by delegating his authority to NFL executive vice president Troy Vincent; whether Goodell unlawfully made factual conclusions that were outside the scope of the Wells Report and Brady’s appeal; and whether Goodell expressing support for the Wells Report after its publication prejudiced Brady’s chances for a fair appeal and thus prevented Goodell from lawfully serving as the arbitrator for the appeal.[23]

An order should be coming in the next few months, which will then shape how Deflategate will progress from here.

 

 

Cole Renicker is a second-year law student at Fordham University School of Law and staff member of the Fordham Intellectual Property, Media & Entertainment Law Journal.  Prior to attending Fordham Law School, Cole graduated from Penn State University with a degree in Business Management.

[1] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *1 (S.D.N.Y. Sept. 3, 2015).

[2] Barry Wilner, Roger Goodell Upholds Tom Brady’s 4-Game Suspension, The Big Story (A P) (July 29, 2015, 12:33 AM), http://bigstory.ap.org/article/3a1406e0d40a4cb19a8d836c465843f8/bradys-suspension-upheld-nfl-commissioner-roger-goodell.

[3] See Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *20.

[4] Michael McCann, Tom Brady Could Be in Trouble After Deflategate Appeal Hearing, Sports Illustrated, http://www.si.com/nfl/2016/03/03/deflategate-appeal-nfl-tom-brady-roger-goodell (last updated March 4, 2016).

[5] See id.

[6] See id.

[7] See E. Associated Coal Corp. v. United Mine Workers, Dist. 17, 531 U.S. 57, 67 (2000) (holding that there should be deference to a collectively bargained arbitrator’s decision in construing or applying a contract); Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (2001) (ruling that the Court of Appeals’ decision to overturn the arbitrator and decide the case on the merits was at odds with governing law); see also Nat’l Football League Collective Bargaining Agreement, art. XLVI §2 [hereinafter 2011 NFL CBA], https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf (providing for an agreed upon hearing officer, whose decision is final and binding over the parties, to hear players’ appeals regarding a disciplinary decision).

[8] Under art. XLVI § 2 of the NFL’s CBA, the NFL selects a hearing officer to rule on player disciplinary appeals.  The Players’ Union may suggest, or provide input into the selection of, a hearing officer, but the choice is ultimately made by the NFL.  The NFL Commissioner retains the power to appoint himself as the hearing officer for any particular appeal. See 2011 NFL CBA, supra note 7, art. XLVI §2.

[9] See 2011 NFL CBA, supra note 7, art. III.

[10] Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *11–20 (S.D.N.Y. Sept. 3, 2015).  Judge Berman determined that notice of potential punishments for certain violations needed to be conveyed to the players, and it was not provided to Brady. See id. at *15–16 (“A player’s right to notice is at the heart of the CBA and, for that matter, of our criminal and civil justice systems.”).  Additionally, Judge Berman determined that the Commissioner’s failure to permit Brady to cross-examine material witnesses, and not permit Brady access to the primary investigative files ran contrary to fundamental arbitral procedures. See id. at *16–20.

[11] See Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *1.

[12] Id. at *20.

[13] See Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 88 F. Supp. 3d 1084, 1089–90 (D. Minn. Feb. 26, 2015).

[14] See 2011 NFL CBA, supra note 7, art. XLVI §2.

[15] “A most dramatic illustration of this principal occurred in Carr v. St. John’s University, 17 A.D.2d 632, 231 N.Y.S.2d 410 (1962), where the court refused to interfere with a university’s decision to expel Catholic students who had participated in a civil marriage ceremony.” Jan Stiglitz, Player Discipline in Team Sports, 5 Marq. Sports L.J. 167, 174 n.38 (1995). See generally Jeffrey A. Durney, Fair or Foul?  The Commissioner and Major League Baseball’s Disciplinary Process, 41 Emory L.J. 581 (1992); Christopher J. McKinny, Professional Sports Leagues and the First Amendment:  A Closed Marketplace, 13 Marq. Sports L. Rev. 223, 236–37 (2003).

[16] See Stiglitz, supra note 14, at 174 n.38.

[17] See Lester Munson, NFL Appeal of Brady Decision Could Lead to Precedent-Setting Court Ruling, ESPN (Sept. 3, 2015), http://espn.go.com/espn/otl/story/_/id/13572474/nfl-appeal-tom-brady-decision-lead-precedent-setting-court-ruling-lester-munson-writes. But see Nat’l Football League Mgmt. Council, 88 F. Supp. 3d at 1090–92.  The difference between Deflategate, and past situations where NFL arbitrators have been affirmed or reversed, is that the Commissioner was the one to hear Brady’s appeal, after having significant involvement in his initial punishment. See generally Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 2015 WL 5148739, at *1 (S.D.N.Y. Sept. 3, 2015).

[18] Nat’l Football League Mgmt. Council, 2015 WL 5148739, at *11–20.

[19] Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 89–90 (2d Cir. 2005) (“Where a district court denies confirmation of an arbitral award, we review its findings of fact for clear error, and its conclusions of law de novo.”).  The de novo standard of review is the most lenient standard, and makes it more likely that a lower court’s decision will be overturned.

[20] McCann, supra note 4.

[21] Id.

[22] Id.

[23] Id.

Turf Wars: The Players’ Fight for Equality in the 2015 Women’s World Cup

I remember watching the championship game of the 1999 Women’s World Cup (WWC) with my parents, sitting in awe and feeling inspired. For non-soccer fans, it was the game in which United States’ defender Brandi Chastain scored the fifth penalty kick in a shootout to lead the U.S. to victory over China. Perhaps what people remember most, however, is how Chastain celebrated: she ripped off her jersey, fell to her knees in her sports bra, and flexed her arms. Critics labeled her celebration as somewhat controversial and inappropriate, notwithstanding the fact that removing a jersey was (and continues to be) a common goal scoring celebration among men. Ten-year-old me – and probably thousands of other aspiring soccer players – did not care; we saw our hero lift our team on the grandest stage. Fifteen years later, as a soccer player turned aspiring lawyer, I can’t help but continue to be inspired by the women in the 2015 World Cup. And not because of their in-game heroics – rather, because they have launched an uphill legal battle against FIFA, the international governing body of soccer.

In October 2014, a group of about sixty women soccer players filed a complaint against the Canadian Soccer Association (CSA) and FIFA, alleging that FIFA’s decision to host the 2015 Women’s World Cup on turf fields violates the Ontario Human Rights Code (the “Code”). In their claim, the players state that playing on turf rather than grass attacks their dignity, as men have never played a World Cup game on turf. Additionally, they claimed, playing on turf fundamentally alters the way that soccer is played, and increases the risk of player injury. The players have asked the CSA and FIFA to replace the artificial turf with real grass, but both parties have declined to act.

To make matters worse, some players have dropped out of the lawsuit due to fear of reprisal, such as being cut from their teams or compromising a national bid to host future World Cups. U.S. Soccer President Sunil Gulati, also a member of the FIFA Executive Committee, allegedly warned that he believed players risked suspension for taking legal action. However, the contingent supporting the soccer players is strong – with thirteen U.S. Senators, Tim Howard, Kevin Durant, Kobe Bryant, and Mia Hamm Garciaparra in support of the mission to “protect our athletes.”

Canadian laws seem to be more progressive than American laws on gender discrimination in sport. The Code, which broadly states that all people have the right to be free of discrimination when “receiving services” or “using facilities,” bars discrimination on the basis of gender (among other classifications) and has been applied to professional sports in the past.. (To put it into perspective, Title IX, which is probably the closest corollary under U.S. law and commands gender equality in college sports, does not apply to professional sports and Title VII of the Civil Rights Act has not been applied in this context before.)

After filing the claim under the Code, players must await a decision from the Human Rights Tribunal of Ontario, an administrative court, which determines whether the players established a prima facie case for discrimination. If so, the CSA and FIFA are given the chance to respond to allegations in writing. If unsettled, the matter will be sent to mediation. If mediation is unsuccessful, the matter is sent to the Tribunal for an administrative hearing, where the Tribunal will offer a remedy. As of November 7, 2014, the Tribunal sent the matter to mediation. With the WWC eight months away, the players have asked the Tribunal to accelerate the process.

The women want to play the WWC on grass fields, and FIFA won’t budge. FIFA Secretary General Jerome Valcke maintains that the decision to host the tournament on turf was not motivated by gender: “It would be very difficult to ensure natural grass pitches at all venues,” he stated, adding that “this is not a question of money, or differences between men’s and women’s events, but it is a matter of the natural conditions in Canada.” Even so, natural conditions have been overcome before in the interest of sport. In the 2013 UEFA European Women’s Championship, a turf field was converted to grass in just two weeks to comply with UEFA’s requirement that the final game be played on grass. Considering the timing and that the conversion costs about $300,000 USD per field, FIFA could easily convert these fields for $3 – $4 million USD a month before the event.

FIFA’s decision to use turf is not without merit, however. Four Major League Soccer stadiums and more than twenty European soccer clubs play on turf. The U.S. Women’s National Team Players Association also approves of the use of turf for regular season games, provided that it is of a certain quality. Turf is more cost efficient and easier to maintain than grass. However, the surface has been linked to increased injuries and overheating while playing. A recent study showed that players who played on turf were seven times more likely to get “turf burns” in a game than players who played on natural grass. It is not unreasonable to think that players might alter their style of play to avoid injury, which detracts from the integrity of the game.

With just eight months left before the WWC, action is needed. Canadian legal experts have opined that the players are fighting an uphill battle. While the players have valid safety concerns, they have not alleged an overwhelmingly strong case for gender discrimination, primarily because they have not alleged a discriminatory animus. Moreover, the Tribunal cannot offer injunctive relief over the parties involved, but only damages. Timing is also an issue, as the players waited until nine months before the tournament to file with the Tribunal, who normally takes over a year to offer a remedy. Alternatively, FIFA’s governing statutes provide for a dispute resolution process adjudicated by the Court of Arbitration for Sport – an impartial tribunal in Switzerland – which the players bypassed.

Despite these strong points in their favor, FIFA and CSA should do the right thing. They should protect our players. They should not force the players to boycott the WWC if they are forced to play on turf. If not for the players, FIFA should act to protect its public image: if the public believes that women players are being treated differently than their male counterparts, FIFA’s business and reputation could take (more of) a hit. Put simply, it should not allow the beautiful game to turn ugly.

 

Paid in Peanuts & Cracker Jacks – Class Action Provides Insight into the Low Wages of Minor League Baseball

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imgresMinor league ballplayers have always been characterized for their grit, sacrifice, and love of the game. Indeed the frequently dramatized romance of interminable bus trips and watching players “play for peanuts” has become as much tradition as it is a right of passage. But is it fair to tax these ballplayers dreams by compensating them below even fast food standards?

In a recently filed class action lawsuit, 32 former minor leaguers allege that Major League Baseball has violated federal and state labor laws for failing to pay minimum wage and overtime. More specifically, the ballplayers allege that minor league compensation violates the Fair Labor Standards Act (the “Act”) – requiring that any employee’s pay not fall below minimum wage and that all employees receive time-and-a-half for work done beyond a standard 40-hour week. The lawsuit, fashioned as Senne v. MLB, was originally filed in February, but is tentatively scheduled for trial in 2016. Here are the issues:

Baseball’s Exploited Under Class

The Minor League system is enormous. Each MLB organization is represented by a club at every level of Minor League Baseball, which includes Rookie, Short-Season A, Single-A, Advances Single-A, Double-A, and Triple-A. MLB organizations pay the salaries of Minor League players, coaches, and managers even though the majority of Minor League teams are owned by individuals and companies independent of the Major League organizations. The MLB club also makes the ultimate decision as to who is on what Major League-level roster and determines which players to assign, promote, and release.

Additionally, MLB inserts a “reserve clause” into player contracts that allows teams to retain the contractual rights to players and restrict their ability to negotiate with other teams for their baseball services and compensation. The uniform contract typically grants an MLB team an exclusive right to a minor leaguer for 7 years. During that time, the player cannot voluntarily leave one team to play for another; even outside MLB or the country. Although players are also eligible for salary arbitration after 3 years of service, it offers little to no help for most minor league players. By the expiration of the contract, much of the value of the minor leaguer as a young prospect has expired.

Mandatory in-season workouts, fielding drills, batting practice, travel and games typically occupy about eight or more hours per day, and players commonly work 6 or 7 days per week. The complaint estimates that minor leaguers work about 60-70 hours per week during the season and receive no compensation at all for their required attendance at spring training and post-season mandatory instructional leagues.

Salaries during the 6-month regular season range from $1,100 a month for Rookie and Short-Season A, to $2,150 a month for Class-AAA. Minor League salaries are “open to negotiations” after the first season, but players do not have much leverage. The Major League Baseball Players Association (MLBPA) does not currently represent, and has no obligation to the vast number of players performing for their respective organization’s farm systems. Ultimately, the interests of those Minor Leaguers without proper representation at the negotiating table have been disregarded or ignored when collective bargaining agreements are established. Even at the highest level of the Minor League System, ballplayers are making far less than minimum wage.

In comparison, Major League players continue to see their salaries rise to historic heights. The Major League mandatory minimum salary is $84,000 a month, rising to $4.6 million a month that Dodgers’ pitcher Zach Greinke will make in 2015. Major League Baseball stars routinely command eight-figure annual salaries; even journeymen with a few years’ major-league experience bring home millions every year.

But the majority of professional players don’t get huge signing bonuses and spend most of their careers in the minors. According to a survey by Baseball America, only 17% of players drafted and signed from 1987 through 2008 played at least one game in the major leagues.

A History of Legal Protection

Baseball has been allowed to pay minor leaguers low wages partly because of its historic exemption from antitrust laws. In perhaps the most mocked opinion in the Supreme Court’s history, Justice Blackmun upheld MLB’s exemption to antitrust scrutiny. The Court reasoned that Congress is in the best position to decide this matter. And instead included a juvenile, rhapsodic ode to the glories of national pastime, with comments about legendary ballplayers and references to the doggerel poem, Casey at the Bat. The complaint goes out of its way to reference MLB as a “cartel”, and to consistently remind the court that drafted players often have little bargaining power. Without this exemption, minor league players could theoretically sue under the Sherman Act, and argue that big league and minor league owners have conspired to unreasonably limit salaries.

New Legal Argument: Violations of the Fair Labor Standard Act

The player’s new legal argument is novel: Does the language of the Act reach the peculiar job of baseball? The Act requires minimum wage and overtime pay, but it does not specifically address minor leaguers. Section 213(a) of the Act provides an exemption from minimum wage and overtime laws if the employees are seasonal amusement, recreational, or professional employees. MLB has asserted this defense in its response, but the courts are split in regards to whether a ballplayers employment is seasonal.

Defenses for MLB

The Sarasota White Sox and Detroit Tigers have both succeeded by using the seasonal exemption. If a judge agrees with this outcome, it could mean that team owners – like owners of a water park in summer – are exempt from the need to pay a federal minimum wage.

But, an Ohio court of appeals came to the opposite conclusion on a different case by the maintenance staff of the Cincinnati Reds. This issue is one reason why the defendants are opting to change venue from California to the more employer friendly courts of Florida.

Another appealing defense raised is that some of the hours claimed by the plaintiffs are not actual work under federal or state laws. The MLB argues that some of the work, like personal fitness and training, is arguably a mixture of employment and personal advancement. If the MLB wins this argument, ballplayers would be analogous to an intern trying to advance their careers. The result would be that the number of hours worked per week would exclude the training, workouts, batting practice, bullpen sessions, and travel that the plaintiffs have defined as work; instead it would cover only the three hour games. But experts argue that MLB will not win this argument in its entirety because a great deal of the time spent training is supervised and required as a condition of employment.

MLB will also argue that the plaintiffs have no basis for a class action claim because “the types of claims alleged by Plaintiffs are inherently individualized.” Under this defense, MLB plans to argue that the hours worked and salaries of players are not uniform and therefore should be considered by the court on an individual bases.

Probable Outcome: Settlement

Like most lawsuits, this will probably settle out of court. The Fair Labor Standard Act is an intimidating law for employers because violators can be ordered to pay substantial amounts of back pay and other damages. If baseball is found liable, it will have to pay current and former minor leaguers for their claims of uncompensated and under-compensated labor. The amount could be substantial given that virtually every player spends time in the Minor Leagues. Moreover, MLB would love to limit its potential maximum liability and avoid any unfavorable strict legal standards.

Regardless of the outcome, the lawsuit puts into writing what anybody who has spent time around the minor leagues already knows: Minor League ballplayers are grossly underpaid for the amount of work they do.

Don’t Race to Resolution: NASCAR as an Example of Respectful Restraint

Of late, the NFL has been as difficult to turn away from as a car crash. Between Ray Rice, Adrian Peterson, Greg Hardy, Roger Goodell, ESPN, and sponsor dissatisfaction– to list just a few hot-button issues – the American public has been unable to stop talking about the challenges the league finds itself facing. And the tide of constant attention shows no signs of stopping, as the outrage over Husain Abdullah’s unsportsmanlike conduct penalty for post-touchdown prayer demonstrates.

But amidst the focus levied on the NFL, one very real car crash has received a relative fraction of public scrutiny: the August 9, 2014 sprint car accident that resulted in the death of twenty-year-old driver Kevin Ward, Jr. at Canandaigua Motorsports Park in upstate New York. Ward was killed when he climbed out of his stalled vehicle and was struck by the right rear tire of a car driven by celebrated NASCAR driver Tony Stewart. On September 24, 2014, an Ontario County grand jury found no basis to indict Stewart on charges of both second-degree and criminally negligent homicide. Ontario County District Attorney Michael Tantillo also revealed that toxicology reports showed that Ward “was under the influence of marijuana” at the time of the race at levels sufficient “to impair judgment.” Stewart, who will likely face a civil suit from Ward’s family, was not subjected to a toxicology test after the race. Although he voluntarily sat out for three NASCAR Sprint Cup races after the incident, Stewart faced no formal punishment from NASCAR, in part because the Canandaigua race was not a NASCAR-sanctioned event. NASCAR allowed Stewart to make his own decision as to whether to compete, although it did promptly change its own race rules to curb drivers’ ability to walk on the track after a crash. Stewart finished in the top ten in four subsequent races, and indicated at a recent press conference that he has no plans to leave racing.

NASCAR’s restraint stands in sharp relief to the NFL’s reaction to criminal claims involving its own athletes. Although it faced questions of serious delay in the Ray Rice matter, the NFL was quick to impose severe game-day penalties upon other players after they were charged with criminal behavior. Most recently, Adrian Peterson was placed on the exempt/commissioner’s permission list following multiple allegations of child abuse, and may not be able to return to the Vikings at all this season. NASCAR certainly had similar latitude to punish Stewart under its broad contractual behavioral policy, which prohibits engaging in activities “detrimental to the sport.” However, rather than suspend Stewart even out of an abundance of caution, the organization instead chose to wait out the formal investigation into the Canandaigua accident

Of course, there are obvious differences between the Stewart matter and the Rice, Peterson and Hardy cases: all three NFL players faced criminal charges at the time of their suspension. But despite the accidental nature of Ward’s death and the absence of a criminal indictment, Stewart has not emerged as beyond reproach. Stewart is characterized as one of NASCAR’s most divisive drivers, known for his aggressive racing style. Indeed, the driver faced criticism after Ward’s death from industry professionals and fans alike after an amateur video documenting the accident was released; these individuals argued that Stewart drove too close to Ward to intimidate him, with unintended horrific results. “Tell me how a NASCAR star totally forgot what caution means,” proclaimed Ward’s aunt in an open letter after Tantillo released his statement. Clearly, enough concern existed about the incident to prompt a formal grand jury investigation. And yet, NASCAR took the ostensible risk of allowing Stewart to make his own participation decisions regarding future formal organization events.

Stewart’s culpability for Ward’s death is, without question, a far cry from the intent behind the injuries inflicted by Rice, Peterson and Hardy. And certainly, NASCAR’s hands are cleaner than the NFL’s when it comes to making information about a star’s behavior public. But this case, combined with current NFL controversies, begs a very important question: how and when should professional sports associations respond to allegations of criminal conduct by their athletes off the field? And, as technology improves, should governing bodies wait for the wheels of justice to begin turning before they take action themselves?

While it is easy to characterize NASCAR’s refusal to suspend Stewart as a lapse in judgment or hand-wringing inaction – particularly because Stewart’s ability to drive safely was under investigation – the Stewart matter may in fact represent an admirable expression of restraint and confidence. As much as they may like to do so, professional sports associations cannot control the behavior of athletes when they are “off the clock.” Further, they walk a fine line when reacting to activities that take place beyond league-sanctioned activities, even when that behavior affects the organization’s public image. Suspension – with or without a corresponding loss in income – represents a valuable tool in projecting what kind of behavior such associations will tolerate. But knee-jerk official punishment for behavior not undertaken during a sanctioned event, particularly where no criminal charges have been imposed, also represents a slippery slope of encroachment into the often-limited private lives of employees. NASCAR, like the NFL, was presented with indisputable video evidence of questionable behavior by one of its athletes outside of the scope of a sponsored activity. NASCAR’s inaction, though, unlike the NFL’s, turned out to be the right move; the Ontario County grand jury investigation returned both a lack of culpability for Stewart and shifted some of the responsibility for the tragedy onto Ward. Suspending Stewart right away, as NASCAR rightly recognized, could have alienated both a popular driver and fans from the league once the investigation concluded. NASCAR followed its gut and let independent forces handle independent behavior, with positive results and without unnecessary regulation of Stewart’s private matters. Regardless of the result, both Stewart’s case and the NFL’s personnel problems represent a valuable opportunity. Fans of any professional sport can and should hope that the media attention for NASCAR and the NFL will prompt the formulation of clear, fairly applied league standards regarding athlete participation during an independent investigation for off-field (or track) behavior.

 

Appalling or Appropriate? An Analysis of the Merits of Ray Rice’s Appeal

On September 15, 2014, it was announced that Ray Rice plans to appeal both his indefinite suspension and termination from the Ravens in the wake of domestic violence charges. While Rice is not currently with a club, he is still a member of the NFL Players Association (NFLPA); therefore, the NFLPA will be assisting Rice in his appeal. Previous grievances and suspensions provide a valuable illustration of the potential merits of Rice’s appeal.

The facts are still unclear in the entire situation. But, as we can gather, the timeline of events and evidence are as follows:

  • February 19, 2014: A video emerges of Ray Rice dragging his unconscious fiancé (and now current wife) Janay, out of an elevator in a hotel in February.
  • June 16, 2014: Rice and his fiancé both have a meeting with Roger Goodell to discuss the circumstance of the situation.
  • March 27, 2014: Rice is indicted on third-degree aggravated assault charges. He pleads not guilty May 1, 2014.
  • July 24, 2014: Rice is punished by Goodell and must serve a two game suspension. Rice is not punished by his team.
  • August 28, 2014: The NFL announces a new standardized penalties for domestic violence and sexual assault by any league personnel: a six-game suspension and indefinite suspension for first-time and repeat offenders, respectively. On the topic of the Rice suspension, Goodell announced “he didn’t get it right.”
  • September 8, 2014: A second video emerges, detailing exactly what happened in the elevator, including a full view of Ray striking his fiancé. Roger Goodell increases the suspension from two games to an indefinite suspension. The Baltimore Ravens terminate Rice’s contract.
  • September 10, 2014: The Associated Press reports that, while Goodell levied a new suspension in light of new evidence, and because the video was “starkly different” than Ray’s account of the situation, Goodell or his office had knowledge of the second video tape since April.

Ray Rice’s appeal will likely be centered primarily on two claims. First, he may assert that his suspension constitutes double jeopardy, or stated otherwise, that he being punished twice for the same transgression. Section 4, Article 46 of the NFL Collective Bargaining Agreement (CBA) states that “the Commissioner and Club will not both punish a player twice for the same act or conduct. The Commissioner’s action will preclude or supersede disciplinary action by any Club for the same act or conduct.” The language does not explicitly prohibit double jeopardy by the Commissioner or the Club separately, but there is reason to believe this clause precludes it.

One of the most prominent double jeopardy arbitration decisions was issued by arbitrator John Feerick, a Fordham University School of Law professor and former dean. The case concerned the suspension and contract termination of Golden State Warriors player Latrell Sprewell for choking coach P.J. Carlesimo. Feerick found that the suspension and the termination of the remainder of Sprewell’s three-year contract was “excessive” in combination. While Feerick reinstated Sprewell’s contract, he recognized that the Commissioner’s suspension was necessary, and reduced Sprewell’s suspensions from 82 to 68 games (the remainder of the current season). Beyond the question of double jeopardy, the Sprewell holding creates an interesting discussion about the potential reinstatement of Rice’s contract with the Ravens. NFL and NBA contracts differ in a crucial way: NBA contracts are guaranteed, whereas NFL contracts are not. Therefore, the Warriors did not have the flexibility to part ways with players that the Ravens have right now.

The double jeopardy facet of Rice’s appeal will ultimately turn on whether or not the second video tape is considered “new evidence.” Some lawyers feel this concept is erroneous in this case simply because even if the Commissioner’s office only saw the second video recently, it does not affect what anyone suspects of Rice. Rice was punished for striking his fiancé, which the second video only confirms.

The second argument that Rice will likely assert in his appeal is that the NFL failed to follow its own precedent for instances of domestic abuse. As sports law scholar Marc Edelman points out, Rice’s suspension is clearly in line with other instances of domestic disputes under former commissioner, Paul Tagliabue.

Rice could draw support for his precedent argument from the case of Steve Howe. The arbitrator in that case stated, “[d]eterrence, however laudable an objective, should not be achieved at the expense of fairness.”Howe challenged a lifetime suspension by Major League Baseball due to failed drug tests. Baseball promised to test Howe a certain way because he suffered from Attention Deficit Hyperactivity Disorder, but the MLB failed to adhere to the agreed-upon testing policy. Like the Sprewell case, arbitrator George Nicolau found the lifetime suspension to be an excessive punishment, holding that Howe’s 119 day already-served suspension was sufficient. Rice may argue that his increased suspension is, like Howe’s, excessive and merely a result of public criticism, as opposed to past precedent and the terms of the CBA.

In dealing with Ray Rice, the NFLPA has been very quiet. In any statements made publically, Demaurice Smith (NFLPA Executive Director) and the union have stayed neutral. However, like it or not, the NFLPA cannot remain neutral in this scenario. No matter how abhorrent the NFLPA considers Rice’s actions, they are a union and bargaining representative of the players, and are therefore charged with a duty of fair representation. This duty does not, however, mean that the NFLPA must file a grievance on Rice’s behalf if Rice requests it (generally, this duty is unenforceable for independent workers). Rather, it only means that the NFLPA cannot act arbitrarily, discriminatorily, or in bad faith. Courts have generally given deference to union decisions because the bargaining process necessarily involves compromises, including some that come at the expense of some workers over others. In this instance, the NFLPA cannot simply decide not to file a grievance on Rice’s behalf without any reason at all; but, the union must only assert a reasoned decision to omit filing.

Bad precedent is what truly renders the NFLPA’s reaction a moot point. The NFLPA exists precisely to prevent due process violations, something Rice risks experiencing during his appeal. There is, as the union contends, a distinction between supporting a player’s right to due process under the CBA and supporting the action underlying the league’s concern. The greater problem would arise if the union failed to respond to an actual due process violation committed by the NFL. The league may be free to intensify suspensions because of public outcry, or where different information comes to light during a player’s suspension. If Rice and the union fail to persuade the arbitrator that Rice should not be suspended or should receive a lesser punishment, they will likely appeal to federal court to challenge the decision.

Speculation regarding Rice’s suspension and appeal has already caught the eye of both teams and the Commissioner. After a second allegation of child abuse surfaced, Minnesota Vikings running back Adrian Peterson was very recently placed on the “Exempt List/Commissioner’s Permission List.” The Commissioner has the authority to place a player on this list under particular circumstances. Placement allows that the player not count against the 53-man active roster, and it also allows the player to get paid, which distinguishes it from a suspension. Peterson is not the first player to be added to this list; Michael Vick was placed on it 2009, and the Carolina Panthers will most likely add defensive lineman Greg Hardy to the list prior to his appeal of a domestic violence conviction.

Regardless of the result of Rice’s appeal, it is abundantly clear that public sentiment is driving the NFL to make policy changes. These changes will, at the very least, start with a panel on domestic violence and sexual assault established by Goodell. This panel is currently comprised of three experts (out of what is expected to be four experts in total). The experts, Lisa Friel, Jane Randel and Rita Smith, will “help lead and shape the NFL’s policies and programs relating to domestic violence and sexual assault.” Although it risks committing due process violations, the NFL may finally be responding to the problem of domestic disputes in a proactive and meaningful manner.

Reshaping the NCAA Market Power Discussion Post-O’Bannon

Ed O’Bannon was a member of the 1995 UCLA Championship Basketball Team, and the Tournament’s Most Outstanding Player. O’Bannon, now a car salesman, noticed something one day while watching a child play “NCAA Basketball” produced by Electronic Arts. What he noticed was a player, wearing the same number as he did, same height, and near identical attributes as himself, playing for UCLA. While his name wasn’t used, Ed wondered why he isn’t, or hasn’t been, compensated for someone else using his image and likeness in the video game.

O’Bannon, along with 20 other plaintiffs (including Hall of Famers Oscar Robinson and Bill Russell), brought suit in Northern District of California alleging the NCAA violated antitrust law by fixing player compensation, for usage of their image and likeness rights (“ILR”), at $0. At the time of the suit, players were barred from receiving any money generated from their ILR. This includes endorsements, merchandise sales, video games, or television exposure. The NCAA argued that in order to maintain a model of amateurism, these “student-athletes” are barred from profiting of their ILR.

Judge Claudia Wilken delivered a favorable holding for the players in early August. She ruled that the NCAA regulations prohibiting players from profiteering off of their ILR’s is an unreasonable restraint on trade violating Section 1 of the Sherman Act. Judge Wilken did not extend the holding to allow players from collecting their share of profits during their tenure as a player or in school. However, Wilken found delayed payment, held in trust, for the players and disbursed upon graduation or withdrawal, to be a reasonable restraint on trade, due to the a pro-competitive justification by the NCAA.

The NCAA has been characterized as a classic “cartel.” A cartel, in the eyes of antitrust law, is defined as a combination of producers of any product joined together to control its production, sale, and price, as to obtain a monopoly and restrict competition in any particular industry or commodity. The NCAA itself functions as a trade association that prescribes rules for its membership, comprised of over 1000 schools.

In bringing a Section 1 claim, the claimant must hurdle the threshold issues of 1) showing an agreement between two or more parties; and 2) that the alleged restraint affects interstate commerce. Both threshold issues are easily satisfied when analyzing rules prescribed by the NCAA. It has been clearly established, by the Supreme Court, due to the nature of sporting leagues, that the appropriate rule for viewing restraints of trade is the Rule of Reason, and not the Per Se rule. In a very basic explanation, the Rule of Reason, first looks to “Market Power” (Geographic and Product), and affords the ability to justify the restraint as a “reasonable” restraint because it is pro-competitive and is as least restrictive as possible.

Most significantly, in these instances, the NCAA holds complete market power in the services for Division 1 Basketball and FBS group licensing ILR. This is so simply because there is no reasonable alternative available. All member schools must assent to NCAA rules or face sanctions, and even expulsion from membership. Both measures demonstrate classic cartel behavior.

The NCAA has very recently dropped the rules prohibiting compensation beyond the stipends offered by teams. To counter the impending ramifications of being enjoined from enforcing these restraints, the “Big Five” Conferences, comprised of the ACC, Big 12, Big Ten, Pacific-12, and the Southeast Conference (SEC) have been given the autonomy to make their own rules regarding ILR compensation. While a loosening of the rules by the NCAA may seem on its face a big win for the players, it isn’t exactly the “no-strings attached” kind of a gift by the NCAA.

Going back to the Rule of Reason, the claimant must show that the alleged competitors have market power. Courts have generally held that in order to fall within the scope of Section 1, market power must near or above a 33% market share. Again, established in the NCAA O’Bannon case, the NCAA as 100% market power. However, by delegating the rulemaking to the Big Five, without further analysis, would appear that when each conference enacts a rule that it’s member schools agree on, they will fall below the a 33% market power share because each conference will, absent further analysis, account for only 20% market power.

What is most interesting is that not all conferences are created equal. Merely allowing 5 separate actors to make rules autonomously doesn’t necessitate equal market shares. Firstly, Conferences don’t all have the same amount of teams (ACC, Big Ten, and SEC each have fourteen; Pac-12 has twelve teams; Big 12 has ten teams). On its face, based solely on the amount of teams in each conference, the ACC, Big Ten, SEC would each have approximately 21.8%. The Pac-12, and Big 12 would have 18.7% and 15.6%, respectively. Further, the past 8 FBS Championship games have all featured teams from the SEC, with the SEC team winning all those contests except 2013. This seems to show more than just mere coincidence; it tends to show that in the market for elite player services, the SEC may control more of the market. A more detailed inquiry into the allocation of top recruiting classes may shed even more light onto actual market power, as opposed to the assumption of 20% per conference.

The market power determination will play an integral role in the rulemaking of the Conferences. In the past, some courts have tended to struggle with the economic analysis of antirust cases. It will be interesting to see how courts may come to grapple with this determination and also what new rules the Big Five will enact.

 

New NBA Commissioner Adam Silver Begins Push To Raise Age Requirement

Within hours of becoming the new NBA commissioner, Adam Silver made it clear that raising the age requirement to enter the NBA draft would be a key piece of his agenda.  Currently, the league requires that players be at least 19 years old to join.  Silver argues that raising the age requirement to 20 would deliver more mature players that are easier to evaluate, resulting in a more competitive league.  Silver has many prominent supporters, but his unexpected push has revived an age-old debate.

Given that the NBA has a monopoly in professional basketball, antitrust law would apply to any proposed age restrictions.  In 1971, the leagues requirement that players had to be four years removed from high school to enter the league was challenged and struck down as a “restraint on trade” and violation of antitrust law.

How then, did the NBA’s present-day age restriction of 19 come about?  The league cleverly qualified for an exemption to the antitrust law by obtaining the age restriction through a collective bargaining agreement with the NBA players union.  This “non-statutory labor exemption” trumps applicable antitrust law.  Thus, the only way Silver could obtain his new age requirement is via collective-bargaining with the union once again.

The players union opposes raising the age requirement, primarily because as a labor union they legally owe a “duty of fair representation” to all future players.  For those prospective players, an increased age limit would mean a vastly reduced market for their labor, lower career earning potential, and higher risk of career-ending injury prior to securing a contract.  The law here is unsettled, and the unions legitimate concern is that they will be sued for violating their duty of representation by the next prospective superstar that is NBA-ready but under 20 years old.

Given the union’s concerns, the most likely outcome is that Silver will be unable to raise the age requirement until the next major collective bargaining agreement in 2016.  If at that time the NBA is prepared to make significant concessions, such as in revenue sharing or player pensions, an increased age restriction may indeed happen.

NFL Lawsuit Off To Mediation

The Honorable Anita B. Brody of the District Court for the Eastern District of Pennsylvania announced Monday that the National Football League and the approximate 4,000 individuals suing the League must go to mediation.  Former NFL players who suffered or fear permanent brain damage due to football-related concussions are suing the League for negligence and claim that the League concealed information.  According to one NFL.com reporter, the Judge’s “decision to move the case to mediation likely signals a belief that a settlement is possible with continued negotiations.”  ESPN.com also puts faith in the mediator, Layn Phillips, who used to be a federal judge in Oklahoma.

Back in August, the NFL filed a motion to dismiss with Judge Brody, claiming that the collective bargaining agreement covers safety and health rules and that it is up to each individual team to determine whether a player is fit to return to the field.

At the end of the day, since mediation is non-binding, Phillips may propose a settlement or conclude that a settlement is not feasible and therefore must return to Judge Brody.  If the latter is the case, then she will rule on the NFL’s motion.