Preliminary Thoughts on the NFL Collusion Lawsuit

As many of you know, on Wednesday May 23, the NFL Players Association filed suit against the 32 NFL teams in the case White v. National Football League, arguing that the NFL teams "engaged in a secret, recently-revealed collusive ... agreement" to suppress player salaries and impose a $123 million salary cap for the uncapped 2010 season.

Michael McCann has already shared his thoughts on the lawsuit in his recent column for Sports Illustrated. However, having written two law review articles on Major League Baseball's history of collusion (see here and here), I wanted to add a few points of importance:

1. The Recent Football Case is a Labor Case, Not an Antitrust Case: Generally when we think about collusion in professional sports, we think about violations of Section 1 of the Sherman Act, which states that "[e]very contract, combination ... or conspiracy, in the restraint of trade or commerce ... is declared to be illegal." However, the recent lawsuit filed by the NFL Players Association is not based on Section 1 of the Sherman Act. Rather, it is filed under labor law, and argues that the NFL teams violated three distinct provisions of their last collective bargaining agreement that relate specifically to disallowing collusion. These provisions include:

• Article XIII(a) (Anti-Collusion): "No Club, its employees, or agents, shall enter into any agreement express or implied, with the NFL or any other Club .... to restrict or limit individual Club decision-making [with regards to] whether or not to negotiate with a player."

• Article XV, Sect. 2: "Neither the parties hereto, nor any Club or player shall enter into an agreement .... to serve the purpose of defeating or circumventing the intention of the parties reflected by [aspects of the agreement related to] Total Revenues, Salary Cap, Entering Player Pool, and Minimum Team Salary ..."

• Article XIX, Sect. 6: "Defendants ... each pledge their best efforts and cooperation ... to implement the provisions of the [collective bargaining agreement] in a manner consistent with good faith and fair dealing."

2. The Labor Law Setup of this Case Makes it Like the Baseball Collusion Claims in the 1980s: The legal claims in the recent NFL collusion suit are shaping up a lot like those in three baseball collusion grievances, filed based on conduct that occurred during the 1985, 1986 and 1987 baseball off-seasons. In those cases, labor arbitrators Thomas Roberts and George Nicolau found the Major League Baseball teams liable for reaching an agreement not to sign other teams’ free agents, and later for creating an information bank to prevent teams from offering more than one another for free agents. Each of these three grievances was ultimately decided in favor of the Baseball players. After the third ruling, the Major League teams settled by agreeing to pay the players $280 million in damages (plus interest).

3. Nevertheless, the NFLPA Claims are Not Identical to Baseball Collusion in the 1980s: Yet, there are at least three important differences between the Football Collusion claims filed this week and the Baseball claims from the 1980s. First, the baseball cases alleged salary suppression on the individual level, whereas the NFL Players Association alleges salary suppression on the team-wide level. In addition, in the baseball cases of the 1980s all teams to some extent participated in the conspiracy (the only team in doubt was the New York Yankees that made a contract offer to White Sox catcher Carlton Fisk); whereas the National Football Players Association alleges in its claim that "the Redskins, Cowboys, Raiders and Saints .... refused, at least to some extent to abide by their collusive conspiracy." Finally, whereas the Major League Baseball collusion cases were decided upon by an arbitrator, the National Football League Players Association has filed its claim in federal court.

4. For the NFL Players, Proving a Conspiracy will be the Biggest Challenge: Most likely, the most difficult part of this case for the NFLPA will be proving that there really was a conspiracy among the NFL teams to enforce a secret salary cap. Presuming a court adopts antitrust law's standard of proving an agreement (even though this is technically not an antitrust case), the NFL Players would have to show sufficient facts to exclude the possibility that defendants were acting independently or in a consciously parallel manner. To prove such an agreement, the NFL Players would not necessarily need a "smoking gun" memo, such as the one that Major League Baseball's Director of the Player Relations Leland S. MacPhail distributed during baseball's 1985 off-season that encouraged teams to “exercise more self-discipline in making their operating decisions and to resist the temptation to give in to the unreasonable demands of ... players." But the NFL Players would still need evidence -- either through documents, testimony or evidence of radical departure from past behavior -- that the NFL teams (or at least 28 of the NFL teams) had a "meeting of the minds" or a "unity of purpose" in refusing to exceed a purported salary cap.

5. Mike Florio's Use of a Confidential Source in his March 12 Article Might Cause Chaos: Finally, although most evidence of collusion emerges in the discovery process of a claim, the NFL Players' initial complaint cites three public statements that they believe help to show collusion. Two of these statements are made by NY Giants owner John Mara and refer to the lack of 2010 salary cap as a "loophole" that has come up several times in owners' meetings. Meanwhile, the third statement comes from Mike Florio's Pro Football Talk website (owned by NBC Sports) in which he cites "a source with knowledge of the situation" as saying that NFL teams were told “at least six times” during ownership meetings that taking advantage of the lack of the salary cap would lead to “serious consequences.” The nature of Florio's source here is critically important; however, he refuses to divulge his source's identity. If the case moves forward, I would fully expect both Florio and NBC Sports to receive a subpoena from the NFL Players Association seeking disclosure of this secret source.
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As the White v. National Football League case progresses, I will continue to share my thoughts on Sports Law Blog. You can also follow me via Twitter at MarcEdelman. (Note: this post has been cross-posted on Above the Law).