NFL Labor Battle: The Scenarios Going Forward

KristiDosh.com is the place to stay updated on the NFL labor battle as we approach the last hours of the current agreement.  Here is the latest:

The eleventh hour has arrived. The NFL’s collective bargaining agreement will expire tomorrow. Despite meeting with mediator for the better part of the last two weeks, reports have indicated the two sides are nowhere near reaching an agreement. And as of last night, the players have some leverage.

Yesterday, U.S. District Court Judge David Doty ruled in favor of the NFL Players Association with regards to their claim that the NFL established a lockout fund by securing $4 billion in payments from television contracts, even in the event of a lockout.  The players contended that the NFL left money on the table in negotiating the television contracts in return for provisions allowing for the NFL to receive full payment even in the event of a lockout.

The judge ruled that the NFL enhanced its “long-term interests at the expense of its present obligations.” The ruling oveturns the decision of Special Master Stephen Burbank, who found the NFL could act in its own self-interest.

Greg Aiello, spokesman for the NFL, said the “ruling will have no effect on our efforts to negotiate a new, balanced labor agreement.” He also indicated no decision has been made on making an appeal of the decision.

Meanwhile, a statement from George Atallah, the NFLPA’s Assistant Executive Director for External Affairs, said Doty’s ruling “means there is irrefutable evidence that owners had a premeditated plan to lockout players and fans for more than two years.”

If you don’t think this decision affects negotiations going forward, think again. An upcoming hearing (yet to be scheduled) in front of Judge Doty will determine if the television money receievd by the NFL during a lockout will have to be placed in escrow. This would deprive owners of the war chest they’re accused of setting up. Which could perhaps force their hand at the negotiation table.

Which begs the question, what’s next? Here are the possible scenarios going forward:

1. New collective bargaining agreement is reached by March 3. This is the least likely to happen, in this humble sports analyst’s opinion.

2. Lockout. If no agreement is reached by March 3, the owners can institute a lockout. A lockout is when an employer does not allow employees to perform their duties, which also means the employees are being paid. If there is a lockout, there will be no activities involving players, which would mean no minicamps, practices, games, etc. It also means that teams will not be negotiating with players for their services.

This offseason nearly 25% of players are unrestricted free agents. If there is a lockout, teams will not be negotiating contracts with those players, or any other players.

One thing that could happen, however, is the use of replacement players. In 1987, the NFL used replacement players during a strike (which is when the players refuse to report to work), so it’s not completely out of the question. I hear Herschel Walker claims he can still play the game, so maybe he’ll be getting a call.

Bottom line: a lockout means there will be no football being played with current players.

3. Lockout with a decertification of the players association. Another scenario is where there is a lockout by the owners and a decertification of the players association. Decertification is when the members of a union (like the players association) decide that the union can no longer collectively bargain on their behalf. This happened in the NFL in 1989 and remained the situation until 1993 when the players association reorganized following a successful court battle with the NFL. After decertification, the players association would become a trade association that players could be a member of voluntarily (the current players association is not voluntary).

Players from each team have already voted to give the players association the power to decertify. The players association went around to each team during the season to collect the votes. This was smart, because it’s incredibly difficult to get to all of the players after the season is over.

Only 30% of players have to vote in favor in order for the players association to file a decertification petition with the National Labor Relations Board (NLRB). The NLRB then holds a vote and if 50% or more of the players vote to decertify, the players association is decertified.

There are a number of advantages and disadvantages to the players association making this move. Here are the biggest in each category:

Advantage: The biggest advantage, and the only real reason the players association would decertify, is the ability to file an antitrust lawsuit. Antitrust laws are meant to encourage competition within industries and promote fair business practices. A number of practices in the NFL could be challenged on the grounds that they violate antitrust law: restricted free agency, the franchise tag and the salary cap, to name a few. Basically, any practice that could be seen as restricting a player’s ability to earn money or change teams.

So, why does the players association have to decertify to challenge these practices? Because the “non-statutory labor exemption” in labor law protects collective bargaining agreements from attack under the antitrust laws. In fact, even if the current collective bargaining agreement has expired, as long as a “bargaining relationship” exists, the practices are immune from attack under the antitrust laws. By decertifying, the players are ending the collective bargaining relationship.

An interesting part of the current collective bargaining agreement is a provision that prohibits an antitrust case from being filed until six months after the current agreement expires if the players association decertifies after its expiration. Also, the owners cannot challenge the decertification as a sham.

Note, however, that the NFL has already filed a claim with the NLRB claiming the players association is not bargaining in good faith. The NFL contends the players association has planned to decertify all along and thus is not actively engaging in negotiations. (As a side note, I find this somewhat laughable because the owners built “lockout clauses” into the television contracts they negotiated long before the players association started taking decertification votes. These lockout clauses provide for the NFL to receive full payment from the networks even if there is a lockout and no football is being played.)

Because of the filing of this claim, the NLRB, under its “blocking charge” rule, will not accept a decertification petition from the players association until it has investigated all the issues. That leaves the players association with only the ability to “disclaim interest” in the players. Essentially, the players association will walk away from the players. The NLRB will then look to see how the association’s officials acted before and after disclaiming interest to assess whether or not the association really stopped representing and guiding players.

Disadvantage: There are also disadvantages to decertifying. The players would lose all of the benefits that are collectively bargained, such as their pension and medical insurance. It would also affect their group licensing efforts.

Bottom line: a lockout with a decertification would mean no football being played by current players.

4. Lockout with a strike (and with or without decertification). In addition to everything under #2 and #3 above, there could also be a strike by the players. The players association has stated that they will not strike, but it’s still a remote possibility.

Bottom line: a lockout with a strike would mean no football being played by current players.

5. NFL implements last and best offer. The alternative to a lockout for the owners if no agreement is reached when the current agreement expires is to implement what is called their “last and best offer.” This is where the NFL owners would unilaterally implement the last offer they gave players association before reaching an impasse.

Bottom line: football would be played under the “last and best offer” provisions until a new collective bargaining agreement is reached.

6. NFL implements last and best offer and players strike. The players could strike if the “last and best offer” is unilaterally implemented.

Bottom line: there would be no football with current players.

7. NFL implements last and best offer and players association decertifies. The players could still choose to decertify and attack the “last and best offer” on antitrust grounds.

Bottom line: football would be played under the “last and best offer” provisions while the court case is pending. This is what happened in the NFL in 1989.

As you can see, not every possible outcome results in no football being played.

Follow Kristi on Twitter @SportsBizMiss.

This article offers the personal observations of Kristi Dosh, and does not represent the views of her law firm or its clients. Any information contained herein does not constitute legal advice. Consult your own attorney for legal advice on these matters.