No Excessive Celebration

If the National Football League Players Association, a union re-purposed as a trade association so it could sue its employers, was dancing in the streets when Judge Susan Richard Nelson lifted the NFL imposed lockout, they'll dance no longer.

In a stunning but not unexpected rebuke of Judge Nelson's ruling lifting the lockout, the 8th circuit court of appeals not only kept in place the stay of her order that it issued a few weeks ago, it let the union know that their chance of winning in court is even less than the Browns' chances of winning back-to-back Super Bowls the next two seasons.

Ok, they didn't quite use that analogy but they might as well have. What the appeals court did in no uncertain terms is let the players and their trade association know is that their strategy of negotiation avoidance in favor of antitrust litigation was as ill-conceived as a Fox sitcom.

And while it's probably coincidental, how interesting is it that the appeals court issued its decision on the day the owners and the union returned to the mediation table? Very. What likely started out Monday morning as a strut by union leader DeMaurice Smith, who has been all full of himself since Judge Nelson's initial decision, ended up with Smith once again demonstrating the dignity and grace that has marked his short tenure in the job by deliberately misstating the nature of the owners' position.

Informed of the appeals court decision, Smith issued a snide congratulations to the owners for being the first sports league to sue its players in order to avoid playing the game. It was a repeat performance of the same lie he told just last weekend and was just as helpful to the underlying process.

Let's recap and throw in a little civics lesson as well by starting with the beginning of this particular lawsuit.

Just prior to the collective bargaining agreement expiring, the NFLPA filed a petition with the National Labor Relations Board disclaiming its status as a “union” serving as the exclusive bargaining representative of the players. Immediately thereafter, a group of players, backed by the NFLPA and its lawyers, sued the owners, claiming that the collective action of locking them out constituted a violation of federal antitrust law. They asked the judge to issue an injunction preventing the lockout.

The owners didn't file any lawsuit of their own or otherwise sue the players. All they've done is exercise their right under federal labor law to exert economic pressure on the workers by locking them out. Regarding the various lawsuits, all the owners have done is respond to the litigation initiated by the players and their union. First, the owners filed a charge with the National Labor Relations Board claiming that the decertification petition filed by the NFLPA was a sham. Next, they responded to the players' lawsuit by claiming that the district court lacked the legal authority under federal law to stop the lockout.

As we now know, the owners' weren't initially successful. Judge Nelson issued an injunction to prevent the lockout. In order to reach that decision, she had to reach two key legal conclusions. First, she ruled that a specific federal statute, known as the Norris-LaGuardia Act, didn't apply in this case. Under the Norris-LaGuardia Act, courts generally are prohibited from imposing an injunction to halt a labor dispute. Thus, if employees go on strike an employer can't get an injunction to prevent it. If an owner locks out its employees, a court generally can't grant an injunction to prevent that either.

Judge Nelson felt the Norris-LaGuardia Act didn't apply because the union's decertification meant that this was no longer a labor dispute but a commercial dispute.

Second, Judge Nelson ruled that she had jurisdiction to hear the dispute even though the owners were contesting the validity of the decertification before the NLRB. The owners contended the NLRB had the sole jurisdiction to determine if the decertification petition filed with them by the union was valid. Judge Nelson essentially ignored this argument and found that the union had validly withdrawn as the collective bargaining representative of the players. As a result, she said, it appeared likely that the owners were engaging in a violation of federal antitrust law. In order to prevent what she deemed to be irreparable harm to the players caused by the lockout, she issued an order preventing the lockout from taking place.

These rulings were always on very shaky legal ground, from the labeling of the dispute as commercial and not labor to the supposed irreparable harm by the players, and now the 8th circuit court of appeals has agreed. When the owners filed an appeal of Judge Nelson's underlying decision, they also asked the court to issue a stay of that decision, meaning that they wanted to put her decision on hold until the court of appeals could decide whether or not it she was legally correct. It's similar to a criminal defendant asking to halt the imposition of his sentence while he pursues his appeal to a higher court.

In order to get that stay, the owners had to show a number of things, a key one of which was that they had a likelihood of actually convincing the court of appeals that they would win the underlying appeal. After looking at the case and Judge Nelson's ruling, the court of appeals said just that: the owners have demonstrated that they will likely win their case.

In making that ruling the court of appeals completely undercut Judge Nelson's conclusion that this was not a labor dispute. In language that even Smith and every player could surely understand, the court said: “In sum, we have serious doubts that the district court had jurisdiction to enjoin the League’s lockout, and accordingly conclude that the League has made a strong showing that it is likely to succeed on the merits.”

If there has been an “uh oh” moment in any of this it had to come when Smith and the players learned that their carefully constructed strategy of avoiding difficult negotiations with the owners was falling apart around them. And while the alpha male instincts of Smith and his followers will kick in immediately and make them more defiant, it should sink in rather quickly that the leverage they thought they once had as quickly disappeared and with it their chance of beating back the owners' will to change the economic equation within the NFL.

Sure, Smith will tell the players that there are more cards to play in court and that's true. But they aren't good cards. There's a chance that the court of appeals will reverse course when it issues its final decision, but that isn't likely. The players can ask the court to reconsider its decision, but they rarely do. The players can appeal to the Supreme Court, but it isn't required to hear the case and probably wouldn't because it doesn't present any real novel question of law. That means the lockout, in place now, will stay in place until the owners decide to lift it.

The players still have their main lawsuit, the one alleging violations of antitrust law, pending in district court. But that is likely a non-starter if not legally, then practically. With the lockout hanging over their heads, the players would have to be willing to forgo football and the paychecks it brings for the next few years. How many players would stand for that scenario?

The short answer is, few. The reason the players have never been successful at a strike is because they cannot make a commitment to solidarity. The average 12-year old manages his allowance better than the average football player manages his money. The could no more afford to go without paychecks for years than the average worker at the GM plant. Sure, they make more money, but then again they spend more money, too.

There's no question that the dynamics of this dispute have changed dramatically. Armed with the leverage that comes from beating back the union's ill-conceived strategy, the question for the owners is how exactly they want to use it. If they're smart, they'll follow the rule they've imposed on players when they make a play on the field—avoid any excessive celebration.

These are parties that have to live together for a very long time and just because Smith has pursued a search and destroy approach to the relationship doesn't mean it's necessary to return the favor in kind. This labor dispute always called for an even-handed solution and now is the best opportunity for the owners to use their new found leverage for good and not evil and craft the solution the union could never do for themselves.

Now, It's the Owners' Move

To NFL owners, the U.S. District Court in Minneapolis, Minnesota is what Three Rivers Stadium used to be to Cleveland Browns fans—an automatic loss. With Judge Susan Richard Nelson's decision late Monday to enjoin the owners from locking out the players, the losing streak continues and it isn't looking good for the rest of the legal action the owners are facing in her court, either.

The dispute between the owners and the players is complex but can be boiled down to a few key points in terms of understanding Judge Nelson's ruling.

The owners and the NFLPA were engaged in collective bargaining for a new labor contract. Just before the old contract expired, the NFLPA decertified as the official bargaining representative for the players, meaning that they immediately disclaimed any right to bargain with the owners on the players' behalf. Meanwhile, when the old contract actually expired, the owners imposed a lockout, which is the management equivalent of the employees exercising their right to strike.

In anticipation of the lockout, a group of players, led by Tom Brady, the quarterback for the New England Patriots, filed a lawsuit alleging that the impending (and, ultimately, the actual) lockout constituted illegal concerted action by 32 separate businesses that served to deny the players the economic right to make a living playing professional football. (There were numerous other, similar allegations regarding illegal concerted activity, but for purposes of Judge Nelson's decision, the lockout was at issue.) They also asked the judge to stop the owners from imposing that lockout. The judge granted that request. She hasn't yet ruled on the underlying merits of the players' main contention, that the owners committed numerous other violations of federal anti-trust statutes.

The owners fought that injunction on a couple of fronts, but mainly argued that the players' action in decertifying as a union was essentially a sham. The owners have filed a charge with the National Labor Relations Board, the federal agency with exclusive jurisdiction over those kinds of disputes, making just that claim, that the decertification was a sham. That charge has not yet been resolved.

Thus, the gist of the owners' argument, and stripping away the legalese, is that unless and until the NLRB rules on their charge, federal labor law prevents the judge from issuing such an injunction.

Because this is professional sports, it seems as if the issues become unnecessarily complex and harder to grasp. A better way to think about the arguments taking place is to put the dispute in a more typical scenario.

If the owners of a local steel mill were bargaining with their employees for a new contract and then the union struck once the contract expired, federal labor law under almost all circumstances would prohibit a judge from issuing an injunction to stop that strike. The same rules apply when there's a lockout.

So why is this dispute any different? Well, it isn't and it is.

It isn't any different because the same laws govern the NFL's labor problems as the labor dispute at the local mill. It is because the union here did something that no other union would typically contemplate—it decertified. As soon as that happened, at least according to the judge, it turned this into more of a commercial and less of a labor dispute and hence, in her view, the governing labor laws preventing injunctions didn't apply.

Not surprisingly, the owners are going to immediately appeal this ruling to the Eighth Circuit Court of Appeals. Whether that court grants the owners an expedited review of the case isn't yet known, but it's certainly not a given. What is certain, though, is that eventually that court will have to issue a decision on all of this litigation is the parties continue down this insane path of self destruction much longer.

Although some commentators suggest that the owners stand a better chance at the court of appeals then they ever did in the district court, the real problem the owners face is the death grip control the Minnesota courts have over the league in the first place. For this the owners have essentially only themselves to blame when they agreed to allow the court to maintain that control as part of the settlement the last time these parties went to the mattresses to resolve their differences.

The other problem for the owners is that they really have very little room to maneuver from a legal standpoint, even if their arguments make practical sense. Federal labor law supports the ability of a certified bargaining representative to give up that status at their discretion, assuming it's done in good faith. In the past, good faith has been defined to mean simply that the members of the union unequivocally voted to decertify. That was certainly the case here.

So much of the owners' position before the NLRB and hence in the district court as well hinges on trying to make the argument that despite the players voting to decertify, the decertification wasn't in good faith. If the decertification is a sham, the argument, goes, then the law absolutely prohibits a judge from enjoining a lockout.

Unfortunately for the owners, there's very little authority for their view, as the judge noted. Thus, she didn't believe the federal labor law preventing injunctions applied.

As the judge noted in her opinion, past strikes have failed the players, although such a finding is of dubious legal relevance. Nonetheless, given that the only effective way for the players to balance the perceived imbalance of power between them and the owners is for them to bargain and, failing that, decertify to prevent the owners from imposing new working conditions. If the owners know that the union can decertify at any time, they will effectively be forever precluded from locking out the players again. In the judge's view, this is a perfectly acceptable strategy. She's right, but so what?

This is where the short-sightedness of all this really bubbles to the surface. The threat of decertification to prevent a lockout only works when it's the owners trying to extract economic concessions. It is of no consequence and indeed harmful if it's the union seeking economic gains because the owners in that situation would love nothing more than to preserve the status quo.

Issues change over the years and eventually what does around does come around. When the economy does improve, the players will want a bigger piece of the pie and it will be the owners that will sit back and not lift a finger to give it to them.

Moreover, and perhaps more to the point, the union's pursuit of legal leverage is ultimately what is preventing these parties from reaching a meaningful agreement. As long as the players continue to live under the misguided notion that a court will force the owners to withdraw their demands for economic realignment they will never sit down and engage in meaningful bargaining. Indeed, they players and their representatives have yet to approach these negotiations in a meaningful way.

The legal machinations between the owners and their employees here are about as exciting as watching televised chess to the average fan. What fans want to know is whether or not there will be football come this fall. Right now it's looking better but that could change with the next pawn-to-queen's-rook-four move that gets made in the form of the owners' next legal filing.

Keep in mind, though, that however long any or all of this legal process takes, the ultimate truth is that NFL football being played each and every fall is only possible for as long as reasonable parties with shared interests want to see that happen and that can only happen with a new agreement The owners grasp that point. I'm not so sure the players or their misguided advisers ever will.