Amicus Curiae Brief — Brown v. Pro Football, Inc.

JAN 19 1996

No. 95-388

In the Supreme Court of the United States

OCTOBER TERM, 1995

ANTONY Brown, et al.,

- Petitioners,

PRO FOOTBALL, INC., d/b/a

WASHINGTON REDSKINS, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

MOTION OF THE NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION, NATIONAL FOOTBALL

LEAGUE PLAYERS ASSOCIATION, MAJOR LEAGUE

BASEBALL PLAYERS ASSOCIATION AND NATIONAL

BASKETBALL PLAYERS ASSOCIATION FOR LEAVE

TO FILE BRIEF AS AMICI CURIAE AND

BRIEF AMICI CURIAE IN SUPPORT OF PETITIONERS

TED SASKIN

NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION

One Dundas West, Suite 2300

Toronto, Ontario, Canada

M5G1Z3

RICHARD BERTHELSEN

NATIONAL FOOTBALL LEAGUE

PLAYERS ASSOCIATION

2021 L Street, N.W.

Washington, D.C. 20036

JAMES W. QUINN

(Counsel of Record)

JEFFREY L. KESSLER

WEIL, GOTSHAL & MANGES

767 Fifth Avenue

New York, New York 10153

(212) 310-8000

Attorneys for Amici Curiae

National Hockey League

Players Association and

National Football League

Players Association

DONALD M. FEHR

MAJOR LEAGUE BASEBALL

PLAYERS ASSOCIATION

12 East 49th Street

New York, New York 10017

SIMON P. GOURDINE

NATIONAL BASKETBALL

PLAYERS ASSOCIATION

1775 Broadway, Suite 2401

New York, New York 10019

LAURENCE GOLD

(Counsel of Record)

VIRGINIA A. SEITZ

BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 833-9346

Attorneys for Amici Curiae

Major League Baseball

Players Association and

National Basketball Players

Association

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

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Iu the Supreme Court of the United States

OCTOBER TERM, 1995

No. 95-388

ANTONY Brown, et al.,

Petitioners,

v.

Pro FOOTBALL, INC., d/b/a

WASHINGTON REDSKINS, ef ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

MOTION OF THE NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION, NATIONAL FOOTBALL

LEAGUE PLAYERS ASSOCIATION, MAJOR LEAGUE

BASEBALL PLAYERS ASSOCIATION AND NATIONAL

BASKETBALL PLAYERS ASSOCIATION FOR LEAVE

TO FILE BRIEF AS AMICI CURIAE

Pursuant to Rule 37 of the Rules of this Court, The

National Hockey League Players Association, National

Football League Players Association, Major League Base-

ball Players Association and National Basketball League

Players Association respectfully move for leave to file

the accompanying brief as amici curiae in support of

Petitioners. Petitioners have consented to the filing of the

brief; Respondents have not.

INTEREST OF THE NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION, NATIONAL FOOTBALL

LEAGUE PLAYERS ASSOCIATION, MAJOR LEAGUE

BASEBALL PLAYERS ASSOCIATION AND NATIONAL

BASKETBALL PLAYERS ASSOCIATION

The NHLPA, NFLPA, MLBPA and NBPA are the

sole and exclusive collective bargaining representatives

of players in, respectively, the National Hockey League

(“NHL”), National Football League (“NFL”), Major

League Baseball, (“MLB”) and National Basketball As-

sociation (“NBA”). As a result, they are regularly en-

gaged in multi-employer bargaining in professional team

sports—a process that is being seriously undermined as

a result of the decision of the United States Court of

Appeals for the District of Columbia Circuit.

The NHLPA, NFLPA, MLBPA, and NBPA’s analysis

of the practical significance and consequences of the

decision below thus provides an important perspective

which they believe will assist the Court. As representa-

tives of unionized employees in professional team sports,

in which bargaining over salaries and other significant

terms of employment is reserved by the unions for in-

dividual employees, they have a unique familiarity with

collective bargaining and the application of the nonstatu-

tory labor exemption in this context. As set forth in the

accompanying amicus brief, they are concerned that the

decision of the court below will severely damage both

labor and antitrust policies and will, if not reversed, sig-

nificantly impede the ability of employers and employees

in professional team sports, entertainment and similar

multi-employer industries to reach collective bargaining

agreements.

In submitting the acompanying amicus brief supporting

the Petitioners, the NHLPA, NFLPA, MLBPA, and

NBPA wish to explain how, based on their experience,

the decision below adversely affects both antitrust policy

and collective bargaining. They believe that this perspec-

tive will assist the Court in its consideration of this case

and therefore respectfully move for leave to file the ac-

companying brief as amici curiae.

TED SASKIN

NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION

One Dundas West, Suite 2300

Toronto, Ontario, Canada

M5G1Z3

RICHARD BERTHELSEN

NATIONAL FOOTBALL LEAGUE

PLAYERS ASSOCIATION

2021 L Street, N.W.

Washington, D.C. 20036

JAMES W. QUINN

(Counsel of Record)

JEFFREY L. KESSLER

WEIL, GOTSHAL & MANGES

767 Fifth Avenue

New York, New York 10153

(212) 310-8000

Attorneys for Amici Curiae

National Hockey League

Players Association and

National Football League

Players Association

January 19, 1996

Respectfully submitted,

DONALD M. FEHR

MaJor LEAGUE BASEBALL

PLAYERS ASSOCIATION

12 East 49th Street

New York, New York 10017

SIMON P. GOURDINE

NATIONAL BASKETBALL

PLAYERS ASSOCIATION

1775 Broadway, Suite 2401

New York, New York 10019

LAURENCE GOLD

(Counsel of Record)

VIRGINIA A. SEITZ

BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 833-9346

Attorneys for Amici Curiae

Major League Baseball

Players Asseciation and

National Basketball Players

Association

he Al AT RRR

TABLE OF CONTENTS

TABLE OF AUTHORITIES ............. Rin beeeAtiey Bie None oes OP

INTEREST OF AMICI ......................... se auicivcnavsthoneusicions

SUMMARY OF ARGUMENT .......................... RANG

PL 5: |. 5 SOOM DOE CNIS, SMES Op Ate Semis aa We

I. THE EXPERIENCE IN PROFESSIONAL

II.

TEAM SPORTS DEMONSTRATES THAT

THE VASTLY EXPANDED ANTITRUST

EXEMPTION CREATED BY THE DECISION

BELOW SEVERELY UNDERMINES BOTH

ANTITRUST AND LABOR LAW POLICY .......

Ba, FRCTMMIOUIE TOT siscstitnn corres cbc ceremsinnioce

B. Professional Basketball and Hockey ........... ete

CS Beall Te ioc ssi c sitecca dca eacesnatiesarvas

ANTITRUST AND LABOR LAW POLICIES

ARE PROPERLY ACCOMMODATED BY LIM-

ITING THE NON-STATUTORY LABOR EX-

EMPTION TO TERMS OF EMPLOYMENT

WHICH ARE CONTAINED IN_ UNION-

EMPLOYER AGREEMENTS, ESPECIALLY

IN INDUSTRIES IN WHICH INDIVIDUAL

BARGAINING OVER SALARIES AND

OTHER SIGNIFICANT TERMS OF EMPLOY-

BEREIOT TS PPI Be ocean cscsnsccecincvccsuasinnnenneces

CONCLUSION .............. cae alas cdiepesiia ie ctaembnaniasie

(i)

18

ii

TABLE OF AUTHORITIES

Cases Page

Bridgeman V. National Basketball Association, No.

87-4001 (D.N.J. 1987). aime 12 :

Brown V. Pro Football, Inc., 50 F.3d 1041 (D.C.

Eau. SEMIN incpadesdb-yeneancbuindcdandbeiontst catamarans tei a ae

Connell Construction Co. V. Plumbers & Steam-

fitters Local No. 100, 421 U.S. 616 (1975) .....19, 20, 22

Denver Rockets v. All-Pro Management, Inc., 825

F. Supp. 1049 (C.D. Cal.), injunction reinstated

sub nom. Haywood Vv. National Backetball Asso-

ciation, 401 U.S. 1204 (1GF1) ..............cccecccccceceese « £8

Federal Baseball Club v. National League, 259 U.S.

E.R IES ER ee ee 6, 15

Flood Vv. Kuhn, 407 U.S. 258 (1972) -........0.-000000..0.... 6, 15

Fort Halifax Packaging Co. Vv. Coyne, 482 U.S. 1

hj RE re eu eee rs tee 22

In re The Twelve Clubs Comprising National

League, et al., 66 LAB.CAS. 101 (1976) ............ 16

Jackson V. National Football League, 802 F. Supp.

RG ee eee ete 9

J 1. Case Co. Vv. Labor Board, 321 U.S. 332 (1944).. 23

Kapp V. National Football League, 390 F. Supp. 73

(N.D. Cal. 1974), aff'd, 586 F.2d 644 (9th Cir.

1978), cert. denied, 441 U.S. 907 (1979) ............. 5, 7

Lanier V. National Backetball Association, 82 Civ.

4965 (S.D.N.Y. 1968) ................... 12

Linseman V. World Hockey Association, 439 F.

| Bh Bei he. . , y Ieee 5,14

Livadas Vv. Bradshaw, 114 S. Ct. 2068 (1994) _...... ' 22

Local No. 189, Amalgamate:’ Meat Cutters v. Jewel

Tea Ce., 361 US. G76 (1965) .............................. 4, 20, 21

Mackey v. National Football League, 543 F.2d 606

(8th Cir. 1976), cert. dismissed, 434 U.S. 801

(1977) ...... SD AOS ORI EN RP Sh AE PEs ORR 5,7

McCourt Vv. California Sports, Inc., 600 F.2d 1193

Ry Sn, ae 14

McNeil Vv. National Football League, 790 F. Supp.

871 (D. Minn. 1992)..................... nl iehlaiaihechniensatieal 9, 10, 11

Metropolitan Life Insurance Co. Vv. Massachusetts, |

471 U.S. 724 (1985) .............. EMER L Stace iat 22

ili

TABLE OF AUTHORITIES—Continued

Molinas v. National Basketball Association, 190 F.

Supp. 241 (S.D.N.Y. I ee

National Basketball Association v. Williams, No.

94 Civ. 4488 (KTD) (S.D.N.Y. 1994)

National Basketball Association vy. Williams, 45

F.3d 684 (2d Cir. 1995) sciiclces tl

National Gerimedical Hospital v. Blue Cross, 452

U.S. 378 (1981) .

Neeld v. National Hockey League, 594 F.2d 1297

(9th Cir. 1979) __

Powell v. National Football League, No. 4-87-917

(D. Minn. 1987) philippines dei a

Powell v. National Football League, 678 F. Supp.

77 (D. Minn. 1988) BE ARTES Se Ore

Powell Vv. National Football League, 930 F.2d 1293

(8th Cir. 1989), cert. denied, 498 U.S. 1040

RO ined = ee SS OF

Robertson v. National Basketball Association, 389

United States v. Women’s S portswear Manufactur-

Page

5, 24

13, 14

13, 24

5, 24

5, 14

10, 24

5, 11

slaedanilenscteiclesebtieinglaniiaibniediniie — > Fe

10, 11

12

iv

TABLE OF AUTHORITIES—Continued

Statutes and Rules Page

Fd 2 RAISERS cee watts Re NN A TAR AN eRe Spar Bat 10

TI ai shes hcrccnssatbiXepdasialicnmhenhiomsaeainn PEPE AS 19

Lk SCI RIT CCE Ae trer pre Sees eee 19

29 U.S.C. §§ 104-105, 113 -.......... cabin va nuaiitadiiateniamtandaniia 19

I ie ND decinntsrttnintenerbieckrnniiecenitsnnmnioninnen’ 1

Other Sources

Joe Gordon, NHLPA Eyes Suit; Owners May Hear

Antitrust Charge, Boston Herald, December 25,

A REI Re PE Pal rer meee A Ae 15

Moneyline (CNN, Decernmber 7, 1995, Transcript

I i a PG cart rete 18

Ix the Supreme Court of the United States

OcTOBER TERM, 1995

No. 95-388

ANTONY Brown, et al..

. Petitioners,

PRO FOOTBALL. INc., d ba

WASHINGTON REDSKINS, ef al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF AMICI CURIAE OF THE NATIONAL HOCKEY

LEAGUE PLAYERS ASSOCIATION, NATIONAL

FOOTBALL LEAGUE PLAYERS ASSOCIATION,

MAJOR LEAGUE BASEBALL PLAYERS

ASSOCIATION AND NATIONAL BASKETBALL

PLAYERS ASSOCIATION IN SUPPORT OF

PETITIONERS

Pursuant to Rule 37 of the Rules of this Court, The

National Hockey League Players Asociation, National

Football League Players Association, Major League Base-

ball Players Association and National Basketball League

Players Association respectfully move for leave to file

the accompanying brief as amici curiae in support of

Petitioners. Petitioners have consented to the filing of

the brief; Respondents have not.

2

INTEREST OF AMICI

The National Hockey League Players Association

(“NHLPA”), National Football League Players Associa-

tion (“NFLPA”), Major League Baseball Players Asso-

ciation (“MLBPA”) and National Basketball Players

Association (“NBPA”) are the sole and exclusive collec-

tive bargaining representatives of players in, respectively,

the National Hockey League (“NHL”). the National

Football League (“NFL”), Major League Baseball

(“MLB”) and the National Basketball Association

(“NBA”). Each of these amici are regularly engaged in

multi-employer bargaining in professional team sports—

a process that is being seriously undermined as a result

of the decision below. Further, the employee members of

amici have repeatedly been the targets of anticompetitive

restraints unilaterally imposed by their employers, seeking

to eliminate the competition over individually negotiated

salaries and other terms of employment which the unions

in these industries have preserved for their members.

Accordingly, amici have a strong interest in the Court's

resolution of the extremely important questions of anti-

trust and labor law policy presented by this case.

SUMMARY OF ARGUMENT

The decision below, which vastly expands the scope of

the non-statutory labor exemption, purports to do so in

order to strike an “accommodation” between the antitrust

laws and the labor laws. In reality, the decision has

exactly the opposite effect. By completely ousting the

antitrust laws from unionized labor markets, the “new”

labor exemption constructed by the Court of Appeals

seriously damages both antitrust and labor law policies.

It permits employer cartels in such industries to violate

the antitrust laws with impunity and, at the same time,

completely undermines multi-employer collective bargain-

ing. This is particularly true in industries like professional

team sports and entertainment, in which the unions have

exercised their rights under the labor laws to leave the

Le a ee ee a ee

3

negotiation of salary and other significant terms of em-

ployment to individual bargaining.

The real life experience of amici and their members

demonstrates the severe and adverse consequences to

antitrust and labor law policies which directly flow from

such an overbroad antitrust exemption. When employers

in professional team sports have claimed to be shielded

from antitrust scrutiny for their unilateral imposition of

labor market restraints, the result has been lockouts,

Strikes, and union decertifications. Indeed, the recent

labor turmoil in professional basketball and baseball, as

well as the three year decertification of the players union

in professional football, can all be linked directly to

efforts by the employers in those industries to claim anti-

trust immunity for unilaterally imposed restraints on com-

petition over employment terms reserved for individual

player bargaining. By contrast, when the antitrust laws

have been properly applied to unionized labor markets

in professional team sports, history shows that collective

bargaining has been successful and resulted in compro-

mises of employer and employee interests which resulted

in labor peace.

To prevent the decision below from undermining both

antitrust and labor law policies, this Court need only

apply its own historic rationale for the non-statutory labor

exemption for restraints on substantive employment

terms: to protect certain union-employer agreements, in

order to effectuate the employee-organizing objectives of

the statutory labor exemption. There is nothing in the

National Labor Relations Act, or in any precedent of this

Court, to support the conclusion that labor policy requires

the implication of an antitrust exemption to protect the

desire of employers, in industries in which individual

bargaining has been preserved, to eliminate competition

among themselves for the services of such employees.

By properly limiting the scope of the non-statutory

labor exemption to the terms of employment contained in

union-employer agreements, both antitrust and labor law

; : ,

4

objectives will be served. Employees will no longer be

forced by the decision below to abandon collective bar-

gaining to assert their antitrust rights; and an implied

antitrust immunity will be properly limited to only that

narrow area where a “clear repugnancy” between the

antitrust and labor laws exists.

ARGUMENT

I. THE EXPERIENCE IN PROFESSIONAL TEAM

SPORTS DEMONSTRATES THAT THE VASTLY

EXPANDED ANTITRUST EXEMPTION CREATED

BY THE DECISION BELOW SEVERELY UNDER-

MINES BOTH ANTITRUST AND LABOR LAW

POLICY

This case involves an agreement by the employer-

members of an industry-wide, multi-employer bargaining

unit to completely eliminate the individual competition

over wages which the NFL players union has lawfully

preserved for its members. There is no dispute that such

an agreement by employers to eliminate all wage competi-

tion in a labor market would violate the antitrust laws if

not subject to some special antitrust exemption. The

Court below implied such an unlikely exemption, for em-

ployers to cartelize their labor markets, from the National

Labor Relations Act, based on its belief that multi-

employer, collective bargaining would be severely dam-

aged if the antitrust laws apply. In fact, the experience

of professional team sports demonstrates that just the

opposite is true. Permitting competing clubs unilaterally

to impose anticompetitive restraints without antitrust re-

view has severely disrupted union-employer relations in

these sports, while the application of the antitrust laws

to scrutinize such anticompetitive agreements has facili-

tated stable and productive collective bargaining.

In 1965, this Court recognized the existence of a non-

statutory (i.e., implied) labor exemption to cover certain

“union-employer agreements” for the purpose of “accom-

modating the coverage of the Sherman Act to the policy

of the labor laws.” Local No. 189, Amalagamated Meat

5

Cutters v. Jewel Tea Co., 381 U.S. 676, 689 (1965);

see also United Mine Workers v. Pennington, 381 U.S.

657 (1965). For more than two decades, the lower

courts adhered to the principles of Jewel Tea and

Pennington and only applied the non statutory labor ex-

emption in professional team sports to restraints contained

in union-employer agreements. In particular, the courts

were careful not to permit the exemption to be used by

competing sports team owners as a shield for unreason-

ably anticompetitive restraints imposed against the will

of their employees. Such restraints, enforced by the

power of sports commissioners to severely punish teams

who depart from league rules, were generally found by

the lower courts to violate the rule of reason because

they were found to be far more restrictive than reasonably

necessary to achieve any legitimate objective." The result,

for almost twenty-five years, was a careful accommodation

of antitrust and labor law policies in the non-statutory

labor exemption, in which unilaterally-imposed unreason-

able restraints of trade were prohibited, while successful

multi-employer bargaining—-yielding compromise agree-

ments in which some restraints were continued, but others

1 See, e.g., Mackey v. National Football League, 543 F.2d 606

(8th Cir. 1976), cert. dismissed, 484 U.S. 801 (1977); Smith v.

Pro-Football, Inc., 420 F. Supp. 738 (D.D.C. 1976), aff'd on other

grounds, 593 F.2d 1173 (D.C. Cir. 1978); Kapp v. National Foot-

ball League, 390 F. Supp. 73, 82 (N.D. Cal. 1974), aff'd, 586 F.2d

644 (9th Cir. 1978), cert. denied, 441 U.S. 907 (1979); Robertson

v. National Basketball Association, 389 F. Supp. 867 (S.D.N.Y.

1975) ; Philadelphia World Hockey Club, Inc. v. Philadelphia Hockey

Club, Inc., 351 F. Supp. 462 (E.D. Pa. 1972); Linseman v. World

Hockey Association, 439 F. Supp. 1315 (D. Conn. 1977); Denver

Rockets vy. All-Pro Management, Inc., 325 F. Supp. 1049, 1057 (C.D.

Cal.), injunction reinstated sub nom., Haywood v. National Basket-

ball Association, 401 U.S. 1204 (1971) (Douglas, J.) (restraints on

competition for players imposed by owners without union agreement

found to violate the rule of reason). Reasonable restraints imposed

by sports leagues, however, have been upheld. See Molinas v. Na-

tional Basketball Association, 190 F. Supp. 241 (S.D.N.Y. 1961);

Neeld v. National Hockey League, 594 F.2d 1297 (9th Cir. 1979).

6

were eliminated—was able to take place. By contrast,

the purest example of the repeated disruptions in labor

relations which occur in professional team sports when

employers believe that they can unilaterally eliminate

competition over individually negotiated contracts without

antitrust scrutiny is provided by professional baseball,

where the anomalous antitrust exemption for Major

League Baseball’s reserve clause, not the non-statutory

labor exemption, has been in effect. See Federal Baseball

Club v. National League, 259 U.S. 200 (1922); Flood

Vv. Kuhn, 407 U.S. 258 (1972).

The first application of an expanded non-statutory

labor exemption, for restraints imposed without union

agreement, occurred in 1989 as a result of the Eighth

Circuit’s decision in Powell v. National Football League,

930 F.2d 1293 (8th Cir. 1989), cert. denied 498 US.

1040 (1991), which held that restraints contained in an

expired collective bargaining agreement (“CBA”) would

continue to be protected by the exemption as long as

there was a union in place. The exemption was then

expanded even further by the decision of the Second

Circuit in National Basketball Ass’n v. Williams, 45

F.3d 684 (2d Cir. 1995) (petition for a writ of certiorari

pending), and the decision of the Court of Appeals below,

which extended antitrust immunity to any restraints on

competition imposed by multi-employer bargainers in a

unionized labor market (whether or not a union ever

agreed to them). The combined effect of these decisoins

has been to cause havoc to labor relations in professional

team sports, where unions have always preserved their

members’ rights to individually negotiate employment con-

tracts. The consequences, as discussed below, are devas-

tating for both antitrust and labor law policies.

A. Professional Football

Professional football provides one of the most dramatic

examples of how an overbroad non-statutory labor exemp-

tion can undermine multi-employer collective bargaining,

7

particularly in industries like professional team sports,

while a narrow exemption, carefully limited to union-

employer agreements, can promote both antitrust and

labor law policy. Specifically, prior to the Eighth Cir-

cuit’s decision in Powell, NFL clubs were unable to impose

unreasonbale restraints on competition for players without

union agreement, due to the application of the antitrust

laws, and the result was the successful negotiation of com-

promise collective bargaining agreements (“CBA”). By

contrast, after the non-statutory labor exemption was ex-

panded in powell to shield the NFL clubs’ unilateral

imposition of anticompetitive restraints that the union

had not agreed to, the NFL players were forced to re-

nounce all collective bargaining in order to protect their

antitrust rights.

Prior to 1989, the NFL clubs on several occasions,

imposed unreasonable restraints on competition in the

labor market without union agreement, but the lower

courts consistently limited the non-statutory labor exemp-

tion to its proper confines and applied the antitrust laws

to strike down these unreasonable restraints. See, e.g.,

Smith v. Pro Football Inc., 593 F.2d 1173 (D.C. Cir.

1978); Mackey v. National Football League, 543 F.2d

606 (8th Cir. 1976), cert. dismissed, 434 US. 801

(1977); Kapp v. National Football League, 390 F. Supp.

73 (N.D. Cal. 1974), aff'd, 586 F.2d 644 (9th Cir.

1978), cert. denied, 441 U.S. 907 (1979). In that con-

text, the NFL clubs thus came to realize that they could

not unilaterally impose such restraints, and the collective

bargaining relationship improved. As a result, in 1977,

and, again, in 1982, the NFL players and owners were

able to negotiate successive five year CBAs (with the

players getting certain improvements, but agreeing to

continue various restraints for a limited period of time).

In 1987, however, the NFL clubs’ determination to con-

tinue what turned out to be extremely severe restraints on

the market for player services, under a claim of antitrust

immunity, made it impossible for the players and owners

8

to engage in productive collective bargaining. Under the

two CBAs that were in effect during the ten years prior

to the 1987 season, only one NFL player who was subject

to draft choice compensation moved to another team at

the expiration of his player contract, even though thou-

sands of players supposedly were eligible to market their

services to other teams under the “right of first refusal’

compensation” rules of the expired CBA. The NFLPA

attempted to negotiate a new CBA in which players would

have the opportunity to market their services to NFL

clubs without unreasonable restriction. The NFL clubs re-

fused and, as a result, the football players engaged in a

brief unsuccessful strike.*

Thereafter, the NFL clubs—competitors in the market

for player services—continued to impose, over the union’s

objection, various unreasonable restraints in that market.

A group of NFL players and the NFLPA commenced an

antitrust class action against the NFL and its clubs, to

challenge the continued unilateral imposition of these un-

reasonable restraints on competition for player services.

Powell v. National Football League, No. 4-87-917 (D.

Minn. 1987) (Doty, J.) The district court in Powell held

that a multi-employer groups’ continued imposition of

unreasonable restraints contained in an expired CBA were

not shielded by the non-statutory labor exemption after an

“impasse” had been reached in the negotiations over a

new agreement. Powell v. National Football League, 678

F. Supp. 777, 788 (D. Minn. 1988). On November 1,

1989, however, a divided panel of the United States Court

of Appeals for the Eighth Circuit reversed, holding that

the non-statutory labor exemption from the antitrust laws

immunizes anticompetitive restraints previously agreed

to in an expired CBA as long as there is a continuing

“labor relationship.” Powell v. National Football League,

2The NFL used “replacement” players in games that were

broadcast by the television networks, and, after four weeks, the

players reported back to work without a new CBA.

9

930 F.2d 1293 (8th Cir. 1989), cert. denied, 498 U.S.

1040 (1991).

As a direct result of the Eighth Circuit’s decision in

Powell, the NFL players were faced with the Hobson’s

choice of either surrendering their antitrust rights to chal-

lenge the employer-imposed unreasonable restraints, or

giving up their labor law rights to engage in collective

bargaining and other union-related labor activities. Forced

to make this choice, the NFL players overwhelmingly

voted, in November of 1989, to renounce their collective

bargaining rights, effectively terminating the NFLPA as

their collective bargaining representative. Individual NFL

players then commenced new suits against the unreason-

able labor market restraints imposed by the NFL and its

clubs, in which the players asserted their individual rights

under the antitrust laws. See, e.g.. McNeil v. National

Football League, 790 F. Supp. 871 (D. Minn. 1992);

Jackson v. National Football League, 802 F. Supp. 226

(D. Minn. 1992).

Beginning with the 1989 season, the NFL clubs imple-

mented “Plan B,” which continued an anticompetitive

right of first refusal/compensation system for the vast

majority of players and significantly reduced player

benefits.2 Plan B also threatened to eliminate indivicual

bargaining by players altogether, and to implement a

leaguewide wage scale covering all players beginning with

the 1993 NFL season. For four consecutive seasons,

from 1989 to 1992, the NFL players suffered the adverse

effects of Plan B, without any collective bargaining or

labor law rights.

3In addition to imposing unreasonable restraints in the market

for player services, Plan B attempted to terminate and replace

the players’ collectively bargained pension plan; terminated the ac-

crual of severance; froze playoff money; froze injury protection

pay for veterans and reduced it for rookies; froze termination pay;

lowered minimum salaries; reduced life, health and dental insur-

ance; froze expansion bonuses; and froze pre-season player per

diems.

10

In September 1992, after a three-month trial, the

jury verdict in McNeil found that the NFL’s right of first

refusal/compensation restrictions were unreasonable re-

Straints of trade in violation of § 1 of the Sherman Act.

Subsequently, a new class action was filed on behalf of

all NFL players, challenging the continued implementa-

tion of these or similar unreasonable restraints on com-

petition for player services. White v. National Football

League, No. 4-92-906 (D. Minn. 1992). In January

1993, faced with the prospect of an imminent preliminary

injunction decision in White, the NFL and its member

clubs agreed to a global settlement of the White class

action and other player suits which granted NFL players,

for the first time, the opportunity to be unrestricted free

agents (at present, after four years of NFL service).

The NFL clubs also agreed to pay out a total of $195

million to settle class actions and the more than twenty

different player lawsuits filed against them. In exchange

for these substantial benefits, the players compromised

by agreeing to a salary cap system (limiting, in accord-

ance with specified rules, the total amount of salaries for

each NFL team).

It was only in the Spring of 1993—following the

White antitrust settlement and more than three years after

the decertification of the NFLPA—that a majority of

NFL players signed authorization cards to reconstitute

their union, and collective bargaining resumed. On May

6, 1993, the NFL clubs and the NFLPA agreed to a

new CBA which among other things, incorporated the

free agency/salary cap system of the White settlement

and provided for long-delayed increases in pension, termi-

nation pay, playoff money and other benefits for players.

Just this past December, the NFLPA and the NFL clubs

announced a proposed extension of their collective bar-

gaining agreement until at least the year 2000.

The experience of professional football in the wake of

Powell provides a stark example of how collective bar-

gaining is completely destabilized by an overbroad inter-

11

pretation of the non-statutory labor exemption. The

clubs’ unilateral imposition of anticompetitive restraints

in the belief that they were protected from antitrust

scrutiny resulted first in labor strife and then in union

decertification. Neither result served any conceivable na-

tione! labor policy. If not for the application of the anti-

trust laws to owner-imposed, unreasonable restraints in

McNeil and White, the NFL players would still have no

union, and multi-employer bargaining would have no

place in professional football.

B. Professional Basketball and Hockey

The history of collective bargaining in professional

basketball and hockey also demonstrates that the applica-

tion of the antitrust laws to unreasonable labor market

restraints imposed without union agreement serves both

antitrust and labor law objectives. In each sport, when

the multi-employer group has unilaterally implemented

unreasonable anticompetitive restraints, believing itself to

be immune from the antitrust laws, the result has been

a disruption in labor relations. Applying the antitrust

laws to employer-imposed restraints, by contrast, has

fostered collective bargaining.

Professional basketball never experienced a work stop-

page prior to the 1994 decision in Williams, which held

the antitrust laws inapplicable to all unreasonable re-

straints imposed by the members of a multi-employer

bargaining group, as long as the employees in that indus-

try are represented by a union. Prior to that time, when

NBA clubs had unilaterally imposed anticompetitive re-

straints on the market for player services, those restraints

had been scrutinzed under the antitrust laws. See

Robertson v. National Basketball Ass'n, 389 F. Supp.

867 (S.D.N.Y. 1975) (holding that various restraints

on competition for players which were imposed without

union agreement, were not covered by the non-statutory

labor exemption and were likely to constitute antitrust

violations). See also Denver Rockets v. All-Pro Manage-

12

ment, Inc., 325 F. Supp. 1049 (C.D. Cal.), injunction

reinstated sub nom. Haywood v. NBA, 401 U.S. 1204

(1972). As a result, the NBA owners came to realize

that they could not unilaterally impose restraints which

would violate the antitrust laws, and that an agreement

with the players was in their best interests. A ten year

class action settlement in the Robertson litigation, modify-

ing the league’s player restraints, was signed in 1976.

This, in turn, led to the successful negotiation of com-

panion collective bargaining agreements embodying,

among other things, the terms of the Robertson class

action settlement, which covered the 1976 through 1986

NBA seasons.

In 1982, the NBA clubs threatened to change uni-

laterally the Robertson system of player restraints to in-

clude a so-called salary cap system. The players filed a

lawsuit in response under both the antitrust laws and

the Robertson settlement agreement, which led to a

Special Master decision that the owners could not impose

such restraints unilaterally. Lanier v. National Basketball

Ass'n, 82 Civ. 4935 (S.D.N.Y. 1982). Faced with this

ruling, which prevented them from imposing any anti-

competitive restraint they desired, the NBA clubs instead

engaged in good faith negotiations, which culminated in

a new salary cap/free agency system agreed to by the

players and the NBPA in 1983. See Wood v. National

Basketball Assn’, 809 F.2d 954 (2d Cir. 1987) (non-

Statutory labor exemption held to cover this system of

restraints agreed to by the players’ union).

At the end of the 1986-87 season, the NBA clubs

again sought to impose anticompetitive labor market re-

Straints without union agreement, renewing their argu-

ment for an expanded application of the non-statutory

labor exemption. In response, a class of professional

basketball players filed a new antitrust lawsuit, Bridgeman

Vv. National Basketball Association, No. 87-4001 (D.N.J.

1987). Once again, it was only after the district court

13

rejected the clubs’ blanket assertion of antitrust immunity

(leaving the exemption issue open for factual findings at

trial), that the owners and the players were able to nego-

tiate a new seven year class action settlement, continuing

the salary cap, but significantly increasing the free agency

opportunities for players to market their services. This

class action settlement, in turn, again made it possible for

the players and clubs to agree upon a new seven year

collective bargaining agreement, incorporating, among

other things, the terms of the Bridgeman settlement.

The successful accommodation of antitrust and labor

policy was disrupted when, on June 17, 1994, the NBA

clubs filed a lawsuit against seventeen NBA players and a

defendant player class in the United States District Court

for the Southern District of New York, styled National

Basketball Association v. Williams, No. 94 Civ. 4488

(KTD) (S.D.N.Y. 1994). The clubs sought to continue

a set of labor market restraints without union agreement.

A group of then-current and prospective NBA players

counterclaimed under the Sherman Act. Thereafter, the

United States Court of Appeals for the Second Circuit,

affirming the result reached by the district court below,

held that all labor market restraints imposed by the mem-

bers of a multi-employer bargaining unit are exempt from

the antitrust laws unless and until the workers in these

markets decertify their unions. See Williams, 45 F.3d

684 (2d Cir. 1995).

As a direct result of the Williams decision, labor rela-

tions in the NBA were thrown into chaos. This past

summer, the NBA experienced its first lockout in history,

as the clubs insisted on anticompetitive restraints which

they believed they could impose with antitrust immunity.

At the same time, a heated election among NBA players

was initiated before the NLRB to determine whether a

majority of players wished to decertify the players’ union

in order to assert their individual antitrust rights against

the clubs’ unilateral imposition of player restraints. The

14

entire NBA season was jeopardized because the clubs

threatened to continue their lockout indefinitely if a ma-

jority of players voted to decertify the union. In Septem-

ber, a majority of NBA players voted not to decertify their

union and a new collective bargaining agreement was

reached. However, the fact that the NBA clubs publicly

opposed union decertification in order to protect their

antitrust exemption illustrates how an overbroad interpre-

tation of the non-statutory labor exemption can turn

national labor policy on its head.

With respect to professional hockey, prior to the deci-

sion in Williams and the decision below, the antitrust laws

were applied to labor market restraints unilaterally im-

posed by the NHL clubs at the same time that successful

collective bargaining was taking place. For example, uni-

laterally imposed, unreasonable restraints on competi-

tion for hockey players were found subject to antitrust

scrutiny in Philadelphia World Hockey Club, Inc. v. Phila-

delphia Hockey Club, Inc., 351 F. Supp. 462 (E.D. Pa.

1972) and Linseman v. World Hockey Ass'n, 439 F.

Supp. 1315 (D. Conn. 1977). By contrast, when the

NHLPA and the NHL clubs included certain player re-

straints in an unexpired CBA, the non-statutory labor

exemption was held to apply. See McCourt v. California

Sports, Inc., 600 F.2d 1193 (6th Cir. 1979). As a result,

the labor market in professional hockey remained free

from unilaterally imposed unreasonable restraints, while

successful collective bargaining also took place.

The decision below apparently misconstrued the recent

labor history in professional hockey as somehow support-

ing the view that collective bargaining is facilitated by the

absence of antitrust protections for the labor market.

Brown, 50 F.3d 1041, 1057-58 (D.C. Cir. 1995). In

fact, this history illustrates the contrary point. After ex-

piration of the last CBA in the NHL in September 1993,

the NHL clubs made it clear that they wanted a new

“salary cap” or salary tax to eliminate price competition

for player services—a demand which the NHLPA and its

CO

15

nomic weapon not Prohibited by the antitrust laws in a

unionized industry) and a new CBA was eventually

reached which did not include a Salary cap or tax. The

collective bargaining process worked only because the

NHL clubs believed that the antitrust laws prohibited

C. Professional Baseball

For more than a century, the clubs comprising the

American and National Leagues operated under an agree-

ment that, once a player entered into an employment

until his club no longer wished to employ him. That

agreement, known as the “reserve system,” precluded com-

petitive bidding for players’ services. And, because the

clubs jointly had monopoly power in the market for play-

ers’ services, the agreement also effectively fixed prices in

that labor market. The legality of this multiemployer

group’s agreement to impose labor market restraints was

Challenged under the antitrust laws. But in Federal

Baseball Club v. National League, 259 US. 200 (1922),

and Flood v. Kuhn, 407 U.S. 258 (1972), this Court

held, in an acknowledged “anomaly,” that Major League

‘Harry Sinden, the President-Genera] Manager of the Boston

Bruins admitted publicly to just these antitrust concerns, stating

that “[a]t the moment we have no plans to implement anything the

of trade.” See Joa Gordon, NHLPA Eyes Suit; Owners May Hear

Antitrust Charge, Boston Herald, December 25, 1994, at B24.

16

Baseball’s nearly century old reserve system was exempt

from scrutiny under those laws.

Profesional baseball thus provides the purest example

of the unstable, disruptive labor relations that result when

a multiemployer group believes itself to be operating in

an area beyond the reach of the antitrust laws. Since July

1966, Major League baseball players have been repre-

sented by the MLBPA, an exclusive bargaining represen-

tative within the meaning of section 9 of the NLRA.

There has been a work stoppage in each of the last eight

collective bargaining negotiations between the clubs and

the MLBPA—player strikes in 1972, 1980, 1981, 1985,

and 1994-1995, and club lockouts in 1973, 1976 and

1990. And, at least since 1976, this conflict and dis-

ruption has been generated, virtually in its entirety, by

the clubs’ attempt to impose anticompetitive restraints

in the market for players’ services.

In 1976, Major League players for the first time suc-

cessfully challenged the clubs’ anticompetitive reserve

system. Following a victory in arbitration, the players

secured a limited right of free agency—that is, the right

to offer their services on the market consisting of clubs

in both leagues. See In re The Twelve Clubs Comprising

National League, et al., 66 LAB.CAS. 101 (1976)

(“Messersmith Arbitration”). Since that time, believing

the antitrust laws to be no barrier to their imposition of

anticompetitive restraints in the labor market, the clubs

have regularly attempted to roll back players’ free agency

rights and regain the power to fix or otherwise restrain

prices in the market for players’ services. Each time, the

players and the MLPBA have strongly resisted, and dis-

ruptive confrontations have resulted:

* In 1976, the clubs locked out the players. Their

goal was to re-establish the purity of the reserve system

which had been lost in the Messersmith case and again

to eliminate competition in the market for players’

Services.

Sores acini 8 ae

17

* The player strikes in 1980 and 1981 were likewise

caused by club initiatives designed to eliminate free

agency and the resulting competition in the labor market.

The clubs attempted to require that a club which success-

fully bid for the services of a free agent player “com-

pensate” the player’s former club for its loss with a player

from the successful bidder’s roster. The clubs also sought

to eliminate individual salary negotiations and replace

them with an industry-wide compensation schedule.

* In 1985, and again in 1990, the clubs proposed that

players’ compesnation be limited to a defined percent-

age of revenues—that is, the clubs proposed a salary

cap system. Through this system, the clubs sought to

restrict price competition in the market for players’ serv-

ices by artificially limiting the amount that each club was

permitted to spend on player compensation. These at-

tempts by the clubs to undermine free agency resulted

in a brief player strike in 1985 and a lockout by the

clubs in 1990.

* Finally, the player strike that began in 1994-1995

was the direct result of the clubs’ renewed attempt to im-

pose a salary cap system on the market for players’ serv-

ices, without the agreement of the union. The strike

resulted in the cancellation of the 1994 post-season, in-

cluding the World Series. There is still no collective bar-

gaining agreement in Major League Baseball today.

The history of disruptive labor relations in baseball

can thus be traced to the clubs’ repeated attempts to use

their monopoly power to eliminate or restrict competition

in that market. The clubs made these attempts as a direct

result of their perception that they are uniquely immune

from application of the antitrust laws and that they can

legally agree to and unilaterally impose on the market

for player services whatever restraints they can obtain

in a contest of strength. The stakes are high, so the

clubs have a strong incentive to test the players’ resolve

On any occasion that presents itself and the players have

18

an equally strong incentive to resist. The result is a

chaotic, hostile, nonproductive labor relationship that

lurches from work stoppage to work stoppage, disrupting

and damaging the careers of players, the business of base-

ball (and related businesses in the communities affected),

and the welfare of consumers. By contrast, if the baseball

clubs perceived that their unilateral agreement to and

imposition of restraints would be subject to the antitrust

laws, their labor relations, like those in other professional

sports industries where the antitrust laws have been ap-

plied, would stabilize.®

II. ANTITRUST AND LABOR LAW POLICIES ARE

PROPERLY ACCOMMODATED BY LIMITING THE

NON-STATUTORY LABOR EXEMPTION TO

TERMS OF EMPLOYMENT WHICH ARE CON-

TAINED IN UNION-EMPLOYER AGREEMENTS,

ESPECIALLY IN INDUSTRIES IN WHICH INDI-

VIDUAL BARGAINING OVER SALARIES AND

OTHER SIGNIFICANT TERMS OF EMPLOYMENT

IS PRESERVED

The non-statutory labor exemption, which has been

implied by this Court in order to effectuate the collective

bargaining and union organizing objectives of the statu-

tory labor exemption, is properly limited to restraints on

substantive employment terms contained in union-employer

agreements. Any broader antitrust immunity would con-

travene the Congressional intent manifest in the statutory

labor exemption, and undermine antitrust and labor law

policies. Indeed, in no industry is the need for this limi-

tation clearer than in professional team sports, where

salaries and other significant employment terms have al-

ways been set by individual negotiations between individ-

5 Indeed, even the President of the National Football League,

Neil Austrian, recently stated in a television interview that base-

ball’s antitrust protection “really precipitated and prolonged the

[1994-1995] strike.” Moneyline (CNN, December 7, 1995, Tran-

script #1565) (Appendix, p. 2a).

19

ual employees and employers. At the same time, the

clubs in these sports have repeatedly sought to suppress

competition among themselves over such contracts. There

is no basis in national labor policy for implying an anti-

trust immunity for these competing employers, who car-

telize their labor markets, to impose such anticompetitive

restraints.

Congress has pasesd only one law granting antitrust

immunity in the labor context. The statutory labor ex-

emption is contained in those Provisions of the Clay-

ton Act® and the Norris-Laguardia Act,’ which de-

clare that labor unions are not combinations or conspira-

cies in restraint of trade and which specifically exempt

certain union but not employer, activities from the reach

of the antitrust laws. The “non-statutory” labor exemp-

tion was found by this Court to be implied from the stat-

utory labor exemption and the need to protect certain

union-employer agreements reached as a result of collec-

tive bargaining under the National Labor Relations Act.

It “has its source in the strong labor policy favoring the

association of employees to eliminate competition over

wages and working conditions.” Connell Construction

Co. v. Plumbers & Steamfitters Local No. ] 00, 421 USS.

616, 622 (1975). As this Court has explained:

The basic sources of organized labor’s exemption

from the antitrust laws are $§ 6 and 20 of the Clay-

ton Act, and the Norris-LaGuardia Act. These stat-

utes declare that labor unions are not combinations

Or conspiracies in restraint of trade, and exempt

specific union activities, including secondary picket-

ing and boycotts, from the operation of the antitrust

laws. They do not exempt concerted action or agree-

ments between unions and nonlabor parties. The

Court has recognized, however, that a proper accom-

modation between the congressional policy favoring

°15 U.S.C. $17; 29 U.S.C. § 52.

729 U.S.C. §§ 104-105, 113.

20

collective bargaining under the NLRA and the con-

gressional policy favoring free competition in busi-

ness markets requires that some union-employer

agreements be accorded a limited nonstatutory ex-

emption from antitrust sanctions.

Connell, 421 U.S. at 621-22 (emphasis added).

The proper scope of the non-statutory labor exemption

was first fully articulated by this Court in Jewel Tea,

supra, and Pennington, supra. A careful reading of these

decisions confirms that union agreement is a necessary

and critical prerequisite of the exemption.

In Pennington, a small coal operator alleged that the

United Mine Workers had agreed with a group of large

companies in the industry to impose a high wage scale

on smaller, relatively labor intensive operators in order

to drive them out of business. The union argued that

such an agreement between a union and an employer was

exempt from the antitrust laws. Writing for the Court,

Justice White stated that a union has an implied non-

statutory labor exemption from the antitrust laws to enter

into labor agreements with a multiemployer bargaining

group, and may, if acting in furtherance of the employees’

interests, seek to enter into similar agreements with other

employers. Jewel Tea, 381 U.S. at 665. The Court ex-

plicitly held, however, that the labor laws did not pre-

empt the application of the antitrust laws and that the

union had forfeited the protection of the non-statutory

labor exemption by pursuing the anticompetitive interests

of the employer group. 7d. at 668-69.

By contrast, in Jewel Tea, issued the same day as

Pennington, the Supreme Court applied the non-statutory

labor exemption to shield a collective bargaining agree-

ment designed to protect the interests of employees by lim-

iting late night hours. Justice White, writing for Chief

Justice Warren and Justice Brennan, set forth what have

come to be recognized as the established parameters of

the non-statutory labor exemption; no antitrust liability

PLEIN CON 1 oe Sale D0

21

shall attach to labor market restraints embodied in a

union-employer agreement if those restraints advance

legitimate employee goals in a labor market and restrain

trade no more than is necesary to achieve those goals.

Jewel Tea, 381 U.S. at 688-89.

In articulating the limited scope of the non-statutory

labor exemption in these two cases, the Supreme Court

expressly rejected the argument, set forth in Justice Gold-

berg’s opinion (concurring in Jewel Tea and dissenting in

Pennington) for three members of the Court, that any

employer-union agreement concerning mandatory subjects

of collective bargaining should be immune from antitrust

challenge, even if the agreement primarily restricts com-

petition in a product market and is designed to further

the interests of employers, not employees. As Justice

White explained:

This is not to say that an agreement resulting from

union-employer negotiations is automatically exempt

from Sherman Act scrutiny simply because the nego-

tiations involve a compulsory subject of bargaining,

regardless of the subject or the form and content of

the agreement... . [T]here are limits to what a

union or an employer may offer or extract in the

name of wages, and because they must bargain does

not mean that the agreement reached may disregard

other laws.

Jewel Tea, 381 U.S. at 664-65. Thus, a majority of the

Court refused to extend the non-statutory labor exemp-

tion even to restraints contained in union-employer agree-

ments which primarily advance anticompetitive employer

interests, let alone to employer restraints being imposed

without any union agreement at all.

Fundamental principles of statutory interpretation set

forth by this Court, which only permit an antitrust exemp-

tion to be judicially implied to the minimum extent nec-

essary, and then only where there is a “clear repugnancy”

between the antitrust laws and a competing statute, under-

22

score the fact that the scope of the non-statutory labor

exemption for restraints on substantive employment terms,

must be limited to those restraints contained in union-

employer agreements. See, e.g., National Gerimedical

Hospital v. Blue Cross, 452 U.S. 378, 388 (1981); Silver

v. New York Stock Exchange, 373 U.S. 341, 357

(1963). As this Court has ruled, there is nothing in the

legislative history of the NLRA which would justify a

broad implied pre-emption of the antitrust laws from

unionized labor markets. See Connell, 421 U.S. at 634

(“[t]here is no legislative history . . . suggesting that. . .

Congress thought allowing antitrust remedies . . . would

be inconsistent with the remedial scheme of the [labor

laws]”), see also Pennington, 381 U.S. at 668-69.°

Certain union-employer agreements are afforded an

implied, non-statutory antitrust immunity only because it

is essential to do so in order to preserve a union’s statu-

tory ability to engage in collective bargaining, i.e., both

parties to a labor agreement must be protected from

antitrust liability for entering into such agreements if any

meaningful bargaining is to take place. By contrast, a

broader immunity for restraints unilaterally imposed by

employers is clearly not necessary to resolve any “repug-

nancy” between antitrust and labor policy. As this Court

held in an early labor-antitrust dispute: “[BJenefits to

8 To the contrary, as repeatedly explained by this Court, the

existence of federal labor law rights does not create a blanket

immunity for employers from other federal or state statutes:

Nor has Congress <ver seen fit to exclude unionized workers

and employers from laws establishing federal minimum em-

ployment standards. ... It would turn the policy that animated

the Wagner Act on its head to understand it to have penalized

workers who have chosen to join a union by preventing them

from benefiting from state labor regulations imposing minimal

standards on nonunion employers.

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 755-56

(1985) (emphasis added). See also, Livadas v. Bradshaw, 114 S. Ct.

2068, 2081 (1994); Fort Halifax Packaging Co. v. Coyne, 482 U.S.

1, 20-22 (1987).

23

organized labor cannot be utilized as a cat’s-paw to pull

employers’ chestnuts out of the antitrust fires.” United

States v. Women’s Sportswear Mfrs. Ass'n, 336 U.S. 460,

464 (1949). :

Applying these principles, the entire rationale for im-

plying a limited antitrust immunity for restraints on sub-

stantive terms of employment contained in certain union-

employer agreements disappears when the restraints are

being unilaterally imposed by employers. In that situation

—which is clearly presented here—the fundamental policy

underlying the statutory labor exemption—to protect the

rights of employees to act in combination and bargain

collectively—would be undermined, rather than furthered,

by permitting employers to shield their unilaterally-

imposed restraints from antitrust scrutiny.

This limited scope of the non-statutory labor exemption

is particularly warranted in industries like professional

team sports and entertainment, where, unlike in manu-

facturing industries, unions have always preserved for

their members the right to individually negotiate salaries

and other significant terms of employment. As this Court

recognized long ago:

where there is great variation in circumstances of

employment or capacity of employees, it is possible

for the collective bargain to prescribe only minimum

rates or maximum hours or expressly to leave certain

areas open to individual bargaining.

J.1. Case Co. v. Labor Board, 321 U.S. 332, 338 (1944)

(emphasis added). This is precisely the situation in pro-

fessional team sports, where the great variation in the

circumstances and abilities of individual players has

caused unions to preserve for their members the right to

individually negotiate their contracts. The employers in

these industries understandably desire to eliminate com-

petition among themselves over such contract terms, but

there is nothing in the NLRA which grants them anti-

24

trust immunity to unilaterally impose such anticompetitive

restraints.

Nor is there any merit to the argument adopted by

the Court of Appeals below that confining the non-

statutory labor exemption to terms of employment agreed

to by a union would impede collective bargaining by

giving too strong a weapon to employees. First, all that

multi-employers need to do is to comply with the rule of

reason and the antitrust laws in implementing their pro-

posals “—just as they must comply with antiduscrimina-

tion, health, safety and other laws in implementing terms

of employment. Second, employers in a multi-employer

bargaining unit are free to engage in lockouts and similar

tactics directed at securing a CBA as long as a union

is in place. See Brown, 50 F.3d at 1066-68 (Wald, J.,

dissenting).’” As the experience in professional team

sports demonstrates, applying the antitrust laws to unilat-

erally imposed labor market restraints simply levels the

playing field so that stable and productive collective

bargaining can take place.

In sum, this Court should reverse the decision below,

as well as the holdings in Williams and Powell, to make

it clear that the non-statutory labor exemption is depend-

ant upon continued union agreement and that employees

do not have to decertify their unions to assert their anti-

trust rights. By doing so, the Court will be adhering to

basic principles of statutory construction and judicial

restraint and effectuating both antitrust and labor law

policies.

* See Molinas Vv. National Basketball Association, 190 F. Supp.

241 (S.D.N.Y. 1961); Neeld v. National Hockey League, 594 F.2d

1297 (9th Cir. 1979) (reasonable restraints survive antitrust

scrutiny).

10 Tactics such as a lockout are particularly powerful weapons for

employers in professional team sports because the careers of profes-

sional athletes are extremely short, usually lasting only a few years.

25

CONCLUSION

For all of the above reasons, as well as those stated in

the Petitioners Brief, this Court should reverse the judg-

ment of the Court of Appeals.

TED SASKIN

NATIONAL HOCKEY LEAGUE

PLAYERS ASSOCIATION

One Dundas West, Suite 2300

Toronto, Ontario, Canada

M5G1Z3

RICHARD BERTHELSEN

NATIONAL FOOTBALL LEAGUE

PLAYERS ASSOCIATION

2021 L Street, N.W.

Washington, D.C. 20036

JAMES W. QUINN

(Counsel of Record)

JEFFREY L. KESSLER

Respectfully submitted,

DONALD M. FEHR

MAJOR LEAGUE BASEBALL

PLAYERS ASSOCIATION

12 East 49th Street

New York, New York 10017

SIMON P. GOURDINE

NATIONAL BASKETBALL

PLAYERS ASSOCIATION

1775 Broadway, Suite 2401

New York, New York 10019

LAURENCE GOLD

(Counsel of Record)

VIRGINIA A. SEITZ

BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 833-9346

Attorneys for Amici Curiae

Major League Baseball

Players Association and

National Basketball Players

Association

WEIL, GOTSHAL & MANGES

767 Fifth Avenue

New York, New York 10153

(212) 310-8000

Attorneys for Amici Curiae

National Hockey League

Players Association and

National Football League

Players Association

January 19, 1996

APPENDIX

la

APPENDIX

Moneyline (CNN) December 7, 1995

Transcript #1565

* * * *

NFL PRESIDENT CHEERS CURRENT PRO

FOOTBALL CONDITIONS

LOU DOBBS, Anchor: The NFL now facing the major

vacancy in Los Angeles and the prospect of disappoint-

ing its loyal fans in Cleveland. What can the league do

to bring back a measure of stability? The question to-

night for my guest the president of the NFL Neil

Austrian.

Neil, good to have you with us.

NEIL AUSTRIAN, President, National Football League:

Nice to be here, Lou.

LOU DOBBS: I think we should start at the out set

by pointing out that while there’s a great controversy sur-

rounding teams moving, a lot about players’ pay and so

forth, you guys aren’t doing too badly financially, are

you?

NEIL AUSTRIAN: No, I think this will be a record

year for the National Football League. We’re into the

second year of the largest television contract in sports

history with five networks. Our occupancy rate, or fan

interest, in the sport has never been higher as evidenced

by our ratings on television and by attendance in the

stadiums. It'll be a good year.

LOU DOBBS: A reasonable backdrop on my thing for

NFL executives to say—well if we're going to move

teams this is the year to do it. Does that play any part

in those decisions?

NEIL AUSTRIAN: It doesn’t any part at all. I think

the reality is that we’ve had franchise stability until this

year to a great extent, and we view it on that basis.

2a

There’s a couple of new realities though that are facing

teams.

LOU DOBBS: Right.

NEIL AUSTRIAN: One is escalating player costs and

the other is the sort of Damocles of anti-trust legislation

where cities who don’t get teams threaten to sue us, and

I think if you look back in the ’80s, we fought the

Raiders from moving from Oakland to Los Angeles.

LOU DOBBS: One of the great—one of the great fights

in sports history. i.

NEIL AUSTRIAN: It was. It was a great fight unless

you had to pay the piper, and it cost us $50 million to

do it. Commissioner Tagliabue was in Washington last

week talking with a congressional committee about pro-

posals for new limited anti-trust exemption whereby the

league if it intended to try and to have realistic standards

for franchise relocation couldn’t be sued.

LOU DOBBS: This coming at a time, though, in all

reality, in which Congress is looking more at the prospect

of removing baseball’s anti-trust exemption rather than

applying it to other sports. At least that’s my under-

standing of the mood on Capitol Hill.

NEIL AUSTRIAN: To some extent, but I think that

what we're talking about is not an anti-trust exemption

for labor, which is what baseball’s enjoyed—

LOU DOBBS: Right.

NEIL AUSTRIAN: —and which really precipitated and

prolonged the strike. We don’t want one in labor. We

really just it on relocation and the ability to interpret

and administer our own internal rules.

LOU DOBBS: Your ratings are up. Your revenues are

up. Cleveland is up in arms. Baltimore is obviously

rejoicing. Are we going to see more of this, a la Houston

and moving to Nashville, that sort of thing?

3a

NEIL AUSTRIAN: Well, as I said earlier, I think that

the new reality really is that player costs have escalated

dramatically. Under our new salary cap that was nego-

tiated in 93, cash is king. Teams that have excess cash

from non-shared revenue, which is stadium revenue, have

the ability, as Jerry Jones did, to go out and pay large

signing bonuses both to keep their own team and to

attract free agents. So, what you have right now is

decaying stadiums and a scenario where teams are really

facing a different set of economics.

LOU DOBBS: So, you're Suggesting that Jerry Jones’

model might be the model of the future?

NEIL AUSTRIAN: Not at all.

LOU DOBBS: I didn’t think so.

NEIL AUSTRIAN: Not at all.

LOU DOBBS: Well, that situation in which he is SO—-

calling you a cartel. What is going to be the outcome

there?

NEIL AUSTRIAN: Basically, we sued Jerry to start

the process, given what we really felt was egregious

behavior in terms of breaking faith and some commit-

ments he had with NFL properties. The simple fact is

Jerry says the pie is going to grow if every team markets

their own logos and marks. The pie is not going to

grow. This is really about money. Jerry and the Dallas

Cowboys have the largest revenue in the league by signifi-

cant measures.

LOU DOBBS: Right.

NEIL AUSTRIAN: He doesn’t want to share it and

would like to increase it. He wants a greater share of the

pie. When you think of what NFL properties does in

terms of the benefits for all its member clubs, marketing

a club, but more than that, Lou, marketing the league.

We're national. We're not local.

4a

LOU DOBBS: He owns the stadium, however.

NEIL AUSTRIAN: Correct.

LOU DOBBS: Other owners don’t. That’s—but that’s

an economic and business advantage that he should—

should he not enjoy and take advantage of?

NEIL AUSTRIAN: The league was founded on some

revenue sharing principles. When I go back and look

what happened in the late ’50s and early ’60s, when the

Maris [sp.] from New York, when the Halas in Chicago,

when Art Modell [sp.] in Cleveland when the Redskins

all gave up their own television contracts and said we'll

turn it back to the league and share equally, that’s the

principle the league was founded on.

LOU DOBBS: Right.

NEIL AUSTRIAN: That’s what promotes the great

competition we’ve got on the field.

LOU DOBBS: And it doesn’t sound like quick resolu-

tion as between the NFL and Jerry Jones and it sounds

like a future with not great stability for a lot of teams.

NEIL AUSTRIAN: I’m not certain about that. I think

we had a very good meeting today with Mayor White

and the people from Cleveland and I think we might—

might well work toward some resolutions.

LOU DOBBS: Favorable to Cleveland?

NEIL AUSTRIAN: At this point we haven't finished

with their application in terms of why they want to move

and we’ve got a lot more work to do with Cleveland

before we can answer that.

LOU DOBBS: So, that deal is far from done?

NEIL AUSTRIAN: That’s correct.

LOU DOBBS: All right. Neil Austrian, thanks for

being with us.

NEIL AUSTRIAN: Thank you, Lou.