Apr 7, 2011

NFL Case Judge Offers Mediation in Player-Owner Labor Fight

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(Updates with antitrust lawyers' comments in eighth paragraph.)
April 6 (Bloomberg) -- National Football League players and owners, embroiled in a dispute over a new labor contract, got an offer from a judge to send the case to federal mediation.
U.S. District Judge Susan Richard Nelson in St. Paul, Minnesota, after hearing attorneys argue today for five hours over an NFL owner-imposed labor lockout, told lawyers for each faction they should return to the bargaining table and that the court would be willing to assist them in reaching an agreement.
"Both sides are at risk. This is a good time to come back to the table," the judge said. "This is really a matter to be resolved, in my view, with the services of the federal court."
Nelson said she wouldn't decide, possibly for weeks, whether to issue a player-sought order forcing the owners to end the lockout. During the lockout, players aren't paid and teams can't practice, sign new players or make trades.
Super Bowl-winning quarterbacks Tom Brady, Drew Brees and Peyton Manning, plus groups of current and retired pro football players, first asked Nelson to bar the owners from imposing the lockout in a lawsuit filed March 11.
Draft Scheduled
Owners of the NFL's 32 teams declared the lockout after negotiations to create a new collective bargaining agreement failed and the NFL Players Association on March 11 said it would no longer function as a union.
The labor dispute involves the formula by which the New York-based league and its players would divide about $9 billion in annual revenue. The NFL draft of college players is still scheduled to start April 28.
Two antitrust lawyers who aren't involved in the case said in separate phone interviews that the type of mediation contemplated by the judge is an informal process aimed at forging a consensus.
"Mediators are not interested in accomplishing justice. They just want to get the parties to agreement," said Robert Schwinger, a partner in New York-based Chadbourne & Parke LLP.
Court mediators are often attorneys and retired judges who will gather the parties in a single room to present their positions then separate each side for isolated discussions with the goal of discovering areas of agreement, said antitrust lawyer Bruce Hoffman in the Washington office of Richmond, Virginia-based Hunton & Williams LLP.
"Mediation is not a terribly formal process," he said.
'Shuttle Diplomacy'
Schwinger called it "shuttle diplomacy," where the intermediary's objective is "to figure out two zones that the sides can live with that intersect."
The league and players are also at odds over health-care provisions, a rookie salary cap and whether to extend the season to 18 games from 16. Talks collapsed weeks after the Super Bowl championship game drew the largest television audience in U.S. history.
"The NFL calls on the union to return to negotiations immediately," the league said in a March 11 statement. "NFL players, clubs, and fans want an agreement."
"We are here to get your honor to lift the illegal lockout so that these players can go back to work," James Quinn, an attorney for the players, told the judge. "They've given up the right to file grievances, the right to strike. They don't even have health insurance for their families because the NFL has cut that off."
"The NFL has a long history of violating federal antitrust law in an effort to minimize its labor costs," the players said in their March 11 complaint.
Wage Reductions
The lockout is meant to force them to agree to massive wage reductions and anticompetitive restrictions, they said.
Arguing that the dispute is the purview of federal labor regulators, the league has asked Nelson to deny the players' request for a court injunction. NFL lawyers have called the players' disavowal of their union a legal sleight of hand.
"One party to a collective bargaining relationship cannot, through its own tactical and unilateral conduct, instantaneously oust federal labor law or extinguish another party's labor law rights," league owners said in a court filing.
David Boies, the league's attorney, reiterated that point as he addressed the court today.
"The question is not whether the union exists today. It is whether this case grows out of a labor dispute," Boies said. "The question is do you flip a switch and immediately the antitrust exemption is gone? The union says yes, and we say no."
Labor Rights
"The players have chosen to use their antitrust rights over their labor rights," their attorney, Quinn, told the judge.
The antitrust exemption to which Boies referred was specific to collective bargaining talks and not to unique to pro football, the non-party antitrust lawyer Hoffman said in his phone interview.
Labor unions are exempt from antitrust laws that otherwise prohibit collusion between those who would otherwise be competitors that results in restraint of trade, he said. Courts balanced that labor exemption by deeming management to be exempt too while the parties are crafting an agreement.
Disavowing the union allowed the players to sue the NFL "for doing all the things they were just bargaining over, and get the court to resolve the issues that had just been on the table," he said.
U.S. appellate courts have not expressly said how much time is required between abandonment of a collective-bargaining effort and accusing management of antitrust violations from which it was previously shielded, said Hoffman.
He said his "gut reaction" is that there must be some minimum time between which an attempt to bargain collectively ends and an antitrust lawsuit can begin.
"It stands the non-statutory exemption on its head if the players can de-certify, sue and re-certify," their union, he said.
The case is Brady v. National Football League, 11-cv-00639; the retiree and rookie case is Eller v. National Football League, 11-cv-00748, U.S. District Court, District of Minnesota (St. Paul).
--Editors: Michael Hytha, Charles Carter
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