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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2172%3A18

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1996
- **Citation:** 518 U.S. 231

## Text

‘OcrToper Term, 1995

ANTONY Brown, ef al.,
oe Petitioners,

Pro FooTBALL, INc.,

d/b/a WASHINGTON REDSKINS, et ai.,

Respondents.
On Writ of Certiorari to the

United States Court of Appeals
for the District of Columbia Cireuit

BRIEF OF AMICI CURIAE OFFICE OF THE
COMMISSIONER OF BASEBALL AND MAJOR LEAGUE
BASEBALL PLAYER RELATIONS COMMITTEE, INC.
IN SUPPORT OF RESPONDENTS

RANDY L. LEVINE

(Counsel of Record)

MAJOR LEAGUE BASEBALL PLAYER
RELATIONS COMMITTES, INC.

850 Park Avenue

New York, New York 10022

(212) 389-7404

THOMAS J. OSTERTAG

General Counsel

OFFICE OF THE COMMISSIONER
OF BASEBALL

350 Park Avenue

New York, New York 10022

(212) 839-7820

Attorneys for Amici Curiae
Office of the Commissioner
of Baseball and Major League
Baseball Player Relations
Committee, Inc.

Winson - Eras Prxtine Co., Inc. - 769-0096 - WASHINGTON, D.C. 20001

BEST AVAILABLE COPY: ®

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TABLE OF CONTENTS

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INTEREST OF AMICI CURIAB ....00.......00.0...ccecsseeeeeees

i 8 ee ge aS i |, 5 ee

Fs REREREES Sie NA AS ean A ORC SEE OP OT
I. BASEBALL’S ANTITRUST EXEMPTION HAS

II.

Il.

NOT HAMPERED OR DISRUPTED THE
PROCESS OF FREE COLLECTIVE BAR-
GAINING FOSTERED BY THE NATIONAL
LABOR RELATIONS ACT ....22..000.......... jabpianditees

A. The History of Labor Relations in Baseball
Is Similar to That in Other Industries and
Provides No Indication That the Process of
Collective Bargaining Has Been Adversely
Affected by Baseball’s Antitrust Immunity....

B. The Course of Baseball’s Labor Relations Has
Been Dictated by Historical and Economic
Factors Unrelated to Baseball’s Antitrust
| SEER aa ARO AARR a oe ihc Da aera

THE KIND OF UNILATERAL ACTION THAT
PETITIONERS MAINTAIN SHOULD BE
SUBJECT TO ANTITRUST SCRUTINY HAS
NOT PLAYED A SIGNIFICANT ROLE IN
BASEBALL’S COLLECTIVE BARGAINING...

APPLICATION OF THE ANTITRUST LAWS
IN THE MANNER ADVOCATED BY PETI-
TIONERS WOULD DESTROY MULTIEM-
PLOYER BARGAINING IN PROFESSIONAL
SPORTS AND CREATE CHAOS .......0000000........

UT scrilasmscigdpniidlnensnalosaietblaccapetittoninalitnbiiieeniestideiaeti

Page

11

ii

TABLE OF AUTHORITIES

Cases: Page
Charles D. Bonanno Linen Serv. v. NLRB, 454 U.S.

GE CED hintiictchciniccictnsntinteaahchinicindiilat he aii hates 16, 18
Federal Baseball Club v. National League, 259 U.S.

SI EID Givsins se visicesietiirstecnpeciccieanitnenladinnal aintiaianiias cade 2, 4,5
First Nat’l Maintenance Corp. v. NLRB, 452 U.S.

Ga CEP inkcickihiinntanmekitne te eee 7
Flood v. Kuhn, 407 U.S. 258 (1972) -...222......-.-00000- 2, 3, 4,5
H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970) ......... 17
Keogh v. Chicago & Northwestern R. Co., 260 U.S.

BE COED cicasieccnstilinasebctianiecntatnn tial tea ciaha pre entails 5

Lodge 76, Int'l Ass’n of Machinists v. Wisconsin
Employment Relations Comm’n, 427 U.S. 132

CRP OEE <iniicssscininijeiisdianiaiinasichcsshasaiiatanmiaietame ates stir catia 18
Major League Rodeo, Inc., 246 N.L.R.B. 748

b , en a RR ENE Cae TUNG ee ACRES See CAI 15
NLRB v. Brown, 380 U.S. 278 (1965) ...202.20......... 18
NLRB v. Insurance Agents’ Int’l Union, 361 U.S.

gt, PMs cere esi oy Le RNS Ro 3, 7, 8,17
NLRB v. Katz, 369 U.S. 786 (1962) ........................ 16
NLRB v. Truck Drivers Local Union No. 449

(“Buffalo Linen”), 353 U.S. 87 (1957) ................ 14,17

National and American Leagues of Professional
Baseball Clubs v. Major League Baseball Players
Ass’n, 66 Lab. Arb. Reps. (BNA) 101 (1976)
CTROTER, GAMO cick cininescnaritibdimintiopietae ae. 9,11
National Basketball Ass’n v. . Williams, 45 F.3d 684
(2d Cir. 1995), pet. for cert. filed, No. 95-137

(Dali 96, TO vain ode 17
National Football League v. North American Sec
cer League, 459 U.S. 1074 (1982) ..........000000.. 15

North American Soccer League, 236 N.L.R.B. 1317
(1978), later proceeding, 241 N.L.R.B. 1225
(1979), enf’d, 613 F.2d 1879 (5th Cir.), cert. de-
ated, 460 US. GED Ce wceacnisntaisncinicclsincsinns 15

Silverman v. Major League Baseball Player Rela-
tions Comm., Inc., 516 F. Supp. 588 (S.D.N.Y.

RITE) scccestisninsiinessiscdcnsociuabaibanpaaeeniiia emai: aeebriiecs 12

iii

TABLE OF AUTHORITIES—Continued

Page
Silverman v. Major League Baseball Player Rela-
tions Comm., Inc., 880 F. Supp. 246 (S.D.N.Y.),
aff'd, 67 F.3d 1054 (2d Cir. 1995) -.............. 8, 10, 14, 15
Square D Co. v. Niagara Frontier Tariff Burzau,
ee RR i eee 5
Toolson v. New York Yankees, 346 U.S. 356
ar tae acsinisihiademiaidignsciahiniibinennemmntinnrintninaves 2,4, 5
Wood v. National Basketball Ass’n, 809 F.2d 954
I ds camavcnlamisinnehneiniianekananil 8,9, 10
Statutes:
29 U.S.C. §§ 101 et seq. ........... IEE SERN t DP 18
I I i CN i iiecscesaser ver sinntwndcavininrennsiniel 6, passim
Other Authorities:
James B. Dworkin, Owners Versus Players: Base-
ball and Collective Bargaining (1981) ................ 10, 11
John P. Hoerr, And the Wolf Finally Came: The
Decline of the American Steel Industry (1988) .... 6
Marvin Miller, A Whole Different Ball Game
Loe cal psinhetinesenearnivetinaen 10
Charles R. Perry, Collective Bargaining and the
Decline of the United Mine Workers (1984) ....... 6
Paul D. Staudohar, The Sports Industry and Col-
lective Bargaining (2d ed. 1989) -......................... 9,12

New Leadership Elected At AFL-CIO, End Of
Major Labor Disputes Lead 1995 Events, Daily
Lab. Rep. (BNA) No. 7, at C-1 (Jan. 11, 1996)... 7

IN THE
Supreme Cowt of the United States

OCTOBER TERM, 1995

No. 95-388

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

BRIEF OF AMICI CURIAE OFFICE OF THE
COMMISSIONER OF BASEBALL AND MAJOR LEAGUE
BASEBALL PLAYER RELATIONS COMMITTEE, INC.
IN SUPPORT OF RESPONDENTS

Pursuant to Rule 37 of the Rules of this Court, the
Office of the Commissioner of Baseball and the Major
League Baseball Player Relations Committee, Inc. submit
this brief as amici curiae in support of respondents. Re-
spondents and petitioners have both consented to the filing
of this brief, and the letters of consent have been lodged
with this Court.

2

INTEREST OF AMICI CURIAE

The players in the four major professional sports in the
United States, baseball, basketball, football and hockey,
are unionized, and the members of each league have a long
history of engaging in multiemployer collective bargaining.
In professional baseball (“Baseball”), the history extends
over 30 years. The Major League Baseball Player Rela-
tions Committee, Inc. (“PRC”) is the collective bargain-
ing representative of the 28 Major League clubs
(“clubs”). The Office of the Commissioner of Baseball
(“Commissioner’s Office”) is responsible for the central-

ized administration of the game and oversees the activities
of the PRC.

If petitioners succeed in their effort to overturn the
decision of the court of appeals, labor relations in Base-
ball are likely to be adversely affected. The fact that
Baseball’s status under the antitrust laws is different from
that of the other major professional sports, see Flood v.
Kuhn, 407 U.S. 258 (1972); Toolson v. New York
Yankees, 346 U.S. 356 (1953); Federal Baseball Club
v. National League, 259 U.S. 200 (1922), will not elimi-
nate this impact.

Collective bargaining in professional sports, as in many
other industries, is strongly influenced by pattern bargain-
ing. The results of collective bargaining in the National
Football League (“NFL”), the National Basketball As-
sociation (“NBA”) and the National Hockey League
(“NHL”) have a serious impact on the course of nego-
tiations in Baseball. As the court of appeals recog-
nized, the legal standard advocated by the petitioners
would give “unions a powerful new weapon.” Appendix
to petition for certiorari (“Pet. App.”) at 20a. This, in
turn, undoubtedly would alter the content of the agree-
ments negotiated not only by the NFL but also by the
NBA and the NHL. Thus, although this Court’s decisions
piace Baseball in a different legal posture, the Court’s
resolution of the important issues presented by this case can

3

alter the course of future labor relations in all professional
sports, including Baseball, by changing the patterns estab-
lished in collective bargaining. For this reason, the Com-
missioner’s Office and the PRC have a strong interest in
the Court’s consideration of the issues raised in this case.

Further, the petitioners and certain amici have made
assertions concerning the impact that Baseball’s antitrust
exemption has had on the collective bargaining process.
Brief for Petitioners at 44; Brief of the National Hockey
League Players Association, National Foctball League
Players Association, Major League Baseball Players As-
sociation and National Basketball Players Association
(collectively the “Players’ Unions”) as Amici Curiae in
Support of Petitioners (“Players’ Brief”) at 15-18. The
Commissioner’s Office and the PRC are uniquely situated
to respond to these assertions, which they believe to be
demonstrably inaccurate, and to provide a perspective
on this topic that will assist the Court in resolving the
issues presented by this case.

SUMMARY OF ARGUMENT

For more than thirty years, Baseball and its players have
engaged in multiemployer collective bargaining. Baseball
has an industry-specific, antitrust exemption reaffirmed by
this Court in Flood v. Kuhn, 407 U.S. at 282-84. Con-
trary to the assertions of petitioners and the Players’
Unions, there is no evidence that the existence of Base-
ball’s antitrust exemption has had an adverse impact on
the bargaining process in Baseball. Although Baseball
(like many other industries) has had strikes and lockouts,
those disruptions should not be viewed as symptomatic of
a problem in collective bargaining. Rather, the use of
economic weapons is “part and parcel of the system that
the Wagner and Taft-Hartley Acts have recognized.”
NLRB vy. Insurance Agents’ Int'l Union, 361 U.S. 477,
489 (1960).

4

Moreover, a review of the history of collective bargain-
ing in Baseball demonstrates that the clubs have not relied
on Baseball’s antitrust exemption as a justification for en-
gaging in conduct outside the normal collective bargain-
ing process. In fact, the course of Baseball’s collective
bargaining has been dictated by historical and economic
factors, unrelated to the industry-specific exemption.

The interpretation of the nonstatutory labor exemption
advocated by petitioners would disrupt the process of
multiemployer bargaining that all professional sports have
used to order their economic affairs.’ The threat of anti-
trust litigation post-impasse would lead to legal posturing
at the bargaining table that would chill negotiations. More-
over, potential antitrust liability would leave employers
with little choice but to lock out their employees before
undertaking any possible antitrust risk, thus increasing
disruptions in the sports industry.

ARGUMENT

I. BASEBALL’S ANTITRUST EXEMPTION HAS NOT
HAMPERED OR DISRUPTED THE PROCESS OF
FREE COLLECTIVE BARGAINING FOSTERED BY
THE NATIONAL LABOR RELATIONS ACT.

More than 70 years ago, this Court first held that the
business of Baseball is not subject to the antitrust laws.
Federal Baseball Club v. National League, 259 U.S. at
208-09. Since 1922, the Court has twice reconsidered
Baseball’s immunity, and on each occasion it has ad-
hered to its earlier decision. In Toolson v. New York
Yankees, 346 U.S. at 357, the Court stated that “Con-
gress had no intention of including the business of base-
ball within the scope of the federal antitrust laws.” In
Flood v. Kuhn, 407 U.S. at 282-84, the Court reaffirmed

1 Multiemployer bargaining is the only appropriate bargaining
construct for a professional sports league, and it is significant
that all of the Players’ Unions insisted on multiemployer bargain-
ing when organizing the leagues.

5

the apparent “anomaly” of exempting the business of
Baseball from antitrust scrutiny, stating that “[w]e con-
tinue to be loath, 50 years after Federal Baseball and al-
most two decades after Toolson, to overturn those cases
judicially when Congress, by its positive inaction, has
allowed those decisions to stand for so long and, far be-
yond mere inference and implication, has clearly evinced
a desire not to disapprove them legislatively.” ”

The antitrust exemption reaffirmed in Flood v. Kuhn
obviously is not an issue before the Court. However, in
an effort to support their argument that the antitrust
laws should be given unprecedented application during
the collective bargaining process, petitioners assert that
the Flood v. Kuhn exemption has caused instability in
Baseball’s labor relations. Brief for Petitioners at 44.
See also Players’ Brief at 16 (asserting that Baseball’s
antitrust exemption has caused “unstable, disruptive labor
relations”). This assertion is not correct.

A. The History of Labor Relations in Baseball Is
Similar to That in Other Industries and Provides
No Indication That the Process of Collective Bar-
gaining Has Been Adversely Affected by Baseball’s
Antitrust Immunity.

Petitioners attempt to create the impression that labor
relations in Baseball have been uniquely problematic.
The fact of the matter is that, during a 30-year bargain-
ing relationship, Baseball has had two significant strikes,
one in 1981 and another in 1994. There were also
shorter disruptions in 1972, 1976 and 1985. These
shorter disruptions, however, did not prevent the season
from being played in its entirety.

* Baseball! is not the only industry in which the Court has re-
affirmed an antitrust exemption because of Congress’ failure to
eliminate the exemption. See, e.g., Square D Co. v. Niagara Fron-
tier Tariff Bureau, Inc., 476 U.S. 409, 423-24 (1986) (exemption
for rate-making by motor freight carriers), reaff’g Keogh v.
Chicago & Northwestern R. Co., 260 U.S. 156 (1922).

6

As a matter of perspective, it is important to evaluate
Baseball's labor relations experience in comparison to the
experience in other industries. In recent memory, the
NFL, the NBA and the NHL have all had labor disrup-
tions with players or referees. Moreover, industries out-
side of sports, such as coal and steel to name just two,
have had extended periods of poor labor relations marked
by strikes that were more frequent, more bitter and more
violent than anything that has ever occurred in Baseball.
See Charles R. Perry, Collective Bargaining and the De-
cline of the United Mine Workers 197-233 (1984) (de-
scribing labor relations in the coal industry); John P.
Hoerr, And the Wolf Finally Came: The Decline of the
American Steel Industry 101-105 (1988) (describing
labor relations in the steel industry). Because Baseball
is the national pastime, its labor problems draw a dis-
proportionate amount of attention. This attention, how-
ever, should not disguise the fact that Baseball’s collective
bargaining has been no worse than that in many other
industries.

More important, the argument that Baseball’s antitrust
immunity has “caused” the work stoppages in Baseball
during the last 30 years starts from the false premise that
a work stoppage represents a failure in the collective bar-
gaining process that must have been “caused” by some
outside force (i.e., the clubs’ antitrust immunity in this
case). As described in detail below, see infra pp. 8-10,
this view has no support in the actual facts of Baseball’s
labor disputes. It is also contrary to the underlying
rationale of the federal labor laws.

Congress did not view strikes and lockouts as collective
bargaining “failures.” Rather, this Court has said that
the premise underlying the National Labor Relations Act
(“NLRA”), 29 U.S.C. §§ 151 et seg. (1994), is that
union and management “proceed from contrary and to
an extent antagonistic viewpoints and concepts of self-
interest. . . . The presence of economic weapons in re-
serve, and their actual exercise on occasion by the parties,

7

is part and parcel of the system that the Wagner and
Taft-Hartley Acts have recognized.” I/nsurance Agents,
361 U.S. at 488-89. Under such a regime, “the use of
economic pressure by the parties to a labor dispute is not
a grudging exception to some policy of .. . the Act; it is
part and parcel of the process of collective bargaining.”
Id. at 495. Indeed, the NLRA collective bargaining
structure “is premised on the belief that collective dis-
cussion backed by the parties’ economic weapons will
result in decisions that are better for both management
and labor and for society as a whole.” First Nat'l Main-
tenance Corp. v. NLRB, 452 U.S. 666, 678 (1981)
(emphasis added ).

Given the NLRA’s theory of free collective bargaining,
it is not surprising that Baseball and the other profes-
sional sports are not the only employers in this country
to experience work stoppages. A review of the Players’
Brief would suggest that only professional sports leagues
—or only industries that utilize multiemployer bargaining
—have had labor disputes. To the contrary, industries
in which collective bargaining takes place on an individ-
ual employer basis have also had tumultuous labor strife
over time and in recent years. The United Auto Work-
ers and Caterpillar, the United Paperworkers and A.E.
Staley, and the United Rubber Workers and Bridgestone ’
Firestone (to name just a few) have been locked in par-
ticularly lengthy and contentious work stoppages over
the last year or more. See generally New Leadership
Elected At AFL-CIO, End Of Major Labor Disputes
Lead 1995 Events, Daily Lab. Rep. (BNA) No. 7, at
C-1 (Jan. 11, 1996) (summarizing conclusions to 30-
month lockout at A.E. Staley, 17-month strike at Cater-
pillar and 10-month strike at Bridgestone /Firestone ).

The fact that Caterpillar, A.E. Staley, and Bridgestone
Firestone (as single employers) do not have to fear a
treble-damage antitrust lawsuit by the unions represent-
ing their employees if they continue terms of an expired
agreement or unilateraily impose new terms after a lawful

8

impasse in bargaining no more “caused” these labor dis-
putes than Baseball’s antitrust immunity “caused” the work
stoppages that Baseball has experienced. Rather, the “ex-
ercise [of economic weapons] . . . by the parties . . . is
part and parcel of the system that the Wagner and Taft-
Hartley Acts have recognized”—not evidence of some in-
appropriate outside force or a “breakdown” of the collec-
tive bargaining process. Insurance Agents, 361 US. at
489.

B. The Course of Baseball’s Labor Relations Has Been
Dictated by Historical and Economic Factors Un-
related to Basebail’s Antitrust Exemption.

Contrary to the assertions of petitioners and the Play-
ers’ Unions, there is no reason to believe that the strikes
and lockouts that have occurred in Baseball were related
to Baseball’s status under the antitrust laws. In fact,
Baseball’s history of labor relations is better explained by
a confluence of special historical and economic factors.

To fully appreciate Baseball’s special bargaining history,
one must begin with the proposition that collective bar-
gaining agreements in professional sports represent a
“unique bundle of compromises.” Wood v. National Bas-
ketball Ass'n, 809 F.2d 954, 961 (2d Cir. 1987); Silver-
man v. Major League Baseball Player Relations Comm.,
Inc., 880 F. Supp. 246, 256 (S.D.N.Y.), aff'd, 67 F.3d
1054 (2d Cir. 1995). This point is well illustrated by the
NFL and the NBA. In both of these sports, the collective
bargaining parties have reached the same essential compro-
mise. The players received free agency, which increased
individual bargaining power and player salaries. See
Wood, 809 F.2d at 861. In return, the owners received
an entry-level draft and a salary cap, which served “the
interests of the employers in stabilizing salary costs and
spreading talent among the various teams.” /d.

Unfortunately, Baseball missed the opportunity to reach
the kind of fundamental compromise achieved in the
NBA and the NFL. In 1976, the players in Baseball

9

secured free agency rights through an arbitration. See
National and American Leagues of Professional Baseball
Clubs v. Major League Baseball Players Ass'n, 66 Lab.
Arb. Reps. (BNA) 101 (1976) (Seitz, Arb.).* Since
1976, Baseball, despite its special status under the anti-
trust laws, has had the most open and competitive free
agency system in professional sports. See generally Paul
D. Staudohar, The Sports Industry and Collective Bar-
gaining 38 (2d ed. 1989) (characterizing Baseball’s free
agency system as “wide open”). Beyond the basic reserve
system (which limits the ability of young players to
change teams), Baseball’s collective bargaining agree-
ment, without a salary cap or similar mechanism, con-
tains few, if any, provisions that reflect “the interests
of employers in stabilizing salary costs and spreading
talent among the various teams.” Wood, 809 F.2d at 961.

Moreover, Baseball has certain unique economic char-
acteristics that, when combined with its “wide open”
system of free agency, have placed the smallest-market
clubs in constant peril. Most important, there is great
disparity in the revenues generated by the clubs. Be-
cause Baseball plays far more games than professional
football, basketball or hockey, gate revenue—which is
often closely correlated with local population—is a very
important revenue source. Also because of the number of
games, Baseball sells television rights not only nationally
(like the NFL) but also locally. As one would expect,
local television rights are much more valuable in large
population centers. Due to these and other factors, Base-
ball has clubs that generate local revenues more than three
times those of some of their competitors on the field.

The wide revenue disparity among the clubs causes
difficulties because there is a single market for Baseball
players. In that single market, the clubs with the most
revenue set the price for free agent players. Clubs with

* The right to arbitrate disputes over contract matters, of course,
was a right that the players had won in collective bargaining.

10

less revenue are faced with the difficult choice of paying
the market rate or losing their talent.*

The combination of Baseball’s player compensation sys-
tem and the revenue disparity in the industry has created
serious economic issues in the game. In every round of
negotiations since 1976, the clubs have sought changes
designed to serve their interests in “stabilizing salary costs
and spreading talent among the various teams.” Wood,
809 F.2d at 961. Unfortunately, the players have viewed
these efforts as an attempt to “roll back players’ free
agency rights. Players’ Brief at 16.

It is a fundamental tenet of labor relations that the most
difficult and contentious type of collective bargaining oc-
curs when a union is asked to respond to changed or
difficult economic circumstances in an industry. See James
B. Dworkin, Owners Versus Players: Baseball and Collec-
tive Bargaining 35 (1981) (describing typical union
reaction to effort to reform a collective bargaining agree-
ment). The instability that petitioners perceive in Base-
ball’s labor relations has not been caused by the fact that
the industry is exempt from the antitrust laws but rather
by the fact that, since 1976, the clubs have felt compelled
repeatedly to seek fundamental reforms of Baseball’s col-
lective bargaining agreement in an effort to protect the
weakest members of the industry. Given these factors and
the extraordinary financial stakes involved, it is hardly
surprising that Baseball has had difficult negotiations with
its players’ union, regardless of the industry’s status under
the antitrust laws.

*A similar problem exists with respect to many of the players
who are not eligible for free agency. Under Baseball’s player com-
pensation system, many non-free agents are eligible for the process
of salary arbitration. A principal purpose of the salary arbitration
process is to eliminate club-to-club variations in salary. See Marvin
Miller, A Whole Different Ball Game 109 (1991). In fact, Base-
ball’s salary arbitration system precludes the arbitrator from con-
sidering the financial position of a club in setting a player’s salary.
See Silverman, 67 F.3d at 1057-58.

11

Il. THE KIND OF UNILATERAL ACTION THAT PETI-
TIONERS MAINTAIN SHOULD BE SUBJECT TO
ANTITRUST SCRUTINY HAS NOT PLAYED A SIG-
NIFICANT ROLE IN BASEBALL’S COLLECTIVE
BARGAINING.

A review of the history of collective bargaining in
Baseball demonstrates that the process has worked in the
manner that Congress envisioned when it passed the
NLRA. The clubs and players often have bargained hard.
At times, economic force has been used. But in the end,
the parties have reached new agreements. There is simply
no evidence that Baseball’s exemption from the antitrust
laws has caused the clubs to have a special proclivity for
unilateral action. In fact, history demonstrates that the
clubs have not relied on Baseball’s antitrust exemption as a
justification for engaging in conduct outside the normal
collective bargaining process:

* In 1972, the players engaged in a brief early-season
strike in an effort to secure additional contributions to
their pension plan. After just 13 days, “[a]s is true in
most effective collective bargaining situations, both sides
had to compromise to reach agreement. . . .” Dworkin,
Owners Versus Players at 33. There was no threat or
talk of unilateral implementation in 1972.

* The 1976 negotiations took place against the back-
drop of the arbitration decision that granted baseball play-
ers free agency after essentially two seasons of service.
See National and American Leagues, 66 Lab. Arb. Reps.
(BNA) 101. The central issue in the negotiations was
the length and contours of the new reserve system. See
Dworkin, Owners Versus Players at 34. The clubs locked
out the players during spring training “in the hopes of
forcing them to reach a quick agreement.” /d. Commis-
sioner Kuhn, however, opened the camps, play com-
menced, and a negotiated agreement was reached in July.
Again, there was no threat of a declaration of impasse or
unilateral implementation.

12

* If the clubs had ever been inclined to act unilaterally,
the 1980-81 negotiations provided a perfect opportunity.
The collective bargaining parties engaged in protracted
negotiations and, by May of 1980, it was clear that the
parties were deadlocked on the single issue of “direct
player compensation.” ° Silverman v. Major League Base-
ball Player Relations Comm., Inc., 516 F. Supp. 588, 591
(S.D.N.Y. 1981). Despite these developments, the clubs
made no effort to act unilaterally. Rather, they reached
an agreement with the Major League Baseball Players
Association (“Players Association”) that allowed the 1980
season to be completed uninterrupted and created a joint
committee to attempt to resolve the direct player compensa-
tion issue. 7d. at 591-92. The agreement also provided
that, if the joint committee failed to resolve the player
compensation issue, a proposal previously made by the
clubs would become effective during the 1981 season
and the Players Association would have the right to re-
open the contract. /d. It was this reopener that led to the
long strike in 1981.

* On August 6, 1985, after protracted negotiations, the
players struck. As one commentator observed, however,
“no one really wanted a strike . .. ,” and a settlement
was reached in just one day. Staudohar, The Sports In-
dustry and Collective Bargaining at 57. There was no
talk of unilateral implementation during the 1985 negotia-

tions.

* In 1990, the clubs again attempted to use the leverage
of a spring training lockout to force a quick agreement.
The strategy was successful in 1990 in the sense that an
agreement was reached without the loss of any regular-

5 Direct player compensation is an aspect of the free agency
system in a number of professional sports. Under a direct player
compensation provision, a team that signs a free agent who
formerly played for another team is required to “compensate” the
player’s former team by providing that team with another player
or, in some cases, a draft choice.

13

season games. Moreover, there was no threat of impasse
or unilateral implementation.

* 1994 was the one round of collective bargaining in
Baseball where impasse and unilateral implementation ar-
guably played a role. While the clubs eventually took
unilateral action, it came only after the Players Associa-
tion had already been out on strike for four months. As
such, it is clear that the unilateral implementation did
not cause the strike. Moreover, the Players Association
used its rights under the NLRA and the NLRB enforce-
ment mechanism to reverse the clubs’ 1994 unilateral
implementation.

As the foregoing amply demonstrates, Baseball’s anti-
trust exemption has had little or no impact upon collective
bargaining. Under the system of industrial relations fos-
tered by the NLRA, the clubs and the players have en-
gaged in collective bargaining and, when necessary, ex-
erted economic leverage in order to reach agreements.
There is no evidence that Baseball’s antitrust exemption
made the clubs more prone than other employers to try
to act unilaterally.° Equally important for present pur-
poses, there is no reason to believe that injecting the
threat of antitrust litigation into the bargaining process
would have made Baseball’s labor situation more “stable.”

6 Certain amici have gone to rather unusual lengths to convince
the Court that there is some relationship between Baseball’s labor
disruptions and its antitrust exemption. One group of amici
actually attached the transcript of a television show where the
President of the NFL, Neil Austrian, made certain comments
about the impact of Baseball’s exemption on the players’ 1994
strike. See Players’ Brief, Appendix at 2a. With all due respect
to Mr. Austrian, he has no particular knowledge of Baseball, the
events surrounding the 1994 strike, or labor relations. The amici’s
reliance on an offhand comment on a television show to support
their argument shows how speculative that argument js.

14

Ill. APPLICATION OF THE ANTITRUST LAWS IN
THE MANNER ADVOCATED BY PETITIONERS
WOULD DESTROY MULTIEMPLOYER BARGAIN-
ING IN PROFESSIONAL SPORTS AND CREATE
CHAOS:

As Congress and this Court have previously recognized,
there is “cogent evidence that in many industries . . .
multi-employer bargaining . . . [is] a vital factor in the
effectuation of the national policy of promoting labor
peace through strengthened collective bargaining.” NLRB
v. Truck Drivers Local Union No. 449 (“Buffalo Linen’’),
353 U.S. 87, 95 (1957) (referring to congressional de-
bates on Taft-Hartley amendments to NLRA). In every
major professional sport, multiemployer collective bargain-
ing agreements establish uniform terms and conditions of
employment such as roster sizes, scheduling rules and
playing rules that are crucial to the competitive character
of the enterprise.

Perhaps the most important component of the economic
arrangements reached through collective bargaining in
professional sports is the free agency/reserve system. See
Silverman, 67 F.3d at 1061-62." A free agency/reserve
system is nothing more than a method of regulating the
timing and circumstances under which players (i.e., em-
ployees) can move from one team (i.e., employer) to
another. There are many reasons why such a system is
vital to the stability of ali professional sports: (1) the
free agency’reserve system often determines the share of
revenues going to teams and players; (2) the free agency/
reserve system preserves a degree of roster continuity,
which is important to maintaining fan interest; (3) the
free agency/reserve system helps to ensure high-quality
play by requiring that individuals practice and play with
the same teammates for a certain period of time; and

TAs noted above, supra p. 8, in two major sports—football
and basketball—the free agency/reserve system is accompanied
by a salary cap.

15

(4) the free agency/reserve system allows teams to re-
coup development costs. /d. at 1061.

Because a free agency/reserve system regulates the inter-
change of employees among different employers, it would
be difficult, if not impossible, to establish such a system
in bargaining between groups of players and each single
team.* Conversely, if multiemployer bargaining is dis-
rupted in professional sports, it is difficult to imagine
how the industry will be able to operate and what mecha-
nism will perform the crucial functions now handled by
the free agency/reserve system.

The unprecedented interjection of the antitrust laws
into the collective bargaining process advocated by pe-
titioners would destroy multiemployer bargaining in pro-
fessional sports. Key components of the agreements
commonly reached in the sports industry, including the
free agency/reserve system and the salary cap system,
would provide fertile ground for potential antitrust plain-
tiffs. The potential for antitrust liability would not only
provide “unions with a powerful new weapon,” Pet. App.
at 20a, but it would also inevitably lead both bargaining
parties to alter their conduct at the bargaining table to

8 In fact, there is a line of authority indicating that professional
sports leagues are joint employers, rather than multiemployer-
groups. See Major League Rodeo, Inc., 246 N.L.R.B. 743 n.2 (1979)
(holding that Major League Rodeo and its constituent members
constituted a joint employer bargaining unit); North American
Soccer League, 236 N.L.R.B. 1317, 1819 (1978) (holding that
soccer league and its member clubs were joint employers for
bargaining purposes), later proceeding, 241 N.L.R.B. 1225 (1979),
enf’d, 613 F.2d 1379 (5th Cir.), cert. denied, 449 U.S. 899 (1980).

Consistent with this line of authority, the current Chief Justice
has expressed the view that sports leagues have some of the charac-
teristics of a “single enterprise.” National Football League v.
North American Soccer League, 459 U.S. 1074, 1077 (1982)
(Rehnquist, J., dissenting from denial of certiorari). A finding
that a sports league is a single enterprise would provide an
alternative basis to conclude that the antitrust laws do not apply.

16

prepare for the inevitable onslaught of litigation. This
kind of posturing cannot help but impede productive col-
lective bargaining.

The fact that under the theory advocated by the United
States and the Federal Trade Commission, the antitrust
laws would become applicable only at impasse provides
little solace.’ Brief of the United States and the Federal
Trade Commission as Amici Curiae Supporting Petition-
ers at 9. As the Court has recognized, impasse is a
state of affairs that can be brought about intentionally by
one or both parties. Charles D. Bonanno Linen Serv. v.
NLRB, 454 U.S. 404, 412 (1982). Under the interpre-
tation of the nonstatutory exemption advocated by peti-
tioners, a professional sports union could force the bar-
gaining process to impasse and thereby create an impos-
sible dilemma for the teams. At the point of impasse,
the teams would have to choose between: (1) exposing
themselves to potentially massive antitrust liability by
continuing key collective bargaining provisions such as
the free agency/reserve system; and (2) operating with
no uniform arrangements with respect to the interchange
of players among the various teams.

In fact, if petitioners’ theory were accepted, there
would necessarily be more, not less, “labor strife” or
“chaos” in collective bargaining in professional sports.
Despite the Players’ Unions’ generous advice to the leagues
that “all that [they] need to do is to comply with the
rule of reason and the antitrust laws in implementing
their proposals,” Players’ Brief at 24, no league would

* As an alternative, petitioners contend that the nonstatutory
exemption should end upon expiration of a collective bargaining
agreement. No federal court of appeals has ever accepted this
position. This is hardly surprising given that, until impasse, em-
ployers are required by the labor laws to maintain the status quo
on a!i mandatory topics of bargaining. See NLRB v. Katz, 369 U.S.
736, 742-43 (1962). It is hard to imagine how conduct required
by the federal labor laws would also violate the federal antitrust
laws.

17

risk bankrupting its franchises by following such a fool-
hardy course of conduct. If, several years later when
the antitrust action finally went to trial, an antitrust jury
concluded that the implemented collective bargaining pro-
posals were not “reasonable” terms, the treble-damage
award would probably put some teams in the league out
of business.” Nor would a league attempt to operate un-
der the chaos that would exist if there were no uniform
contract negotiating and signing rules or player allocation
system. Therefore, petitioners’ proposed rule of law
would leave sports leagues with one and only one plaus-
ible course of action at the expiration of each collective
bargaining agreement—to lock out the players until a
new labor agreement is reached.

The Players’ Unions acknowledge that, even under
their misguided view of the antitrust laws’ role in the col-
lective bargaining process, a lockout (i.e., a concerted re-
fusal to employ a certain group of workers) by a multi-
employer group would be lawful. Players’ Brief at 24.
As the court below, Pet. App. at 27a-28a, and the Second
Circuit in National Basketball Ass'n v. Williams, 45
F.3d 684, 691-92 (2d Cir. 1995), pet. for cert. filed,
No. 95-137 (July 24, 1995), pointed out, this Court’s
decision in Buffalo Linen, 353 U.S. at 94-96, mandates

The absurdity of petitioners’ view of the role that the anti-
trust laws should play in the collective bargaining process may be
best illustrated by the Players’ Unions’ acknowledgment that anti-
trust courts and juries would be judging the “reasonableness” of
employer collective bargaining proposals if petitioners prevail in
this case. Of course, this Court has held that Congress determined
that the NLRB—the government agency in charge of enforcing
the federal collective bargaining laws—would have no authority
to pass on the reasonableness of a party’s bargaining proposals.
See Insurance Agents, 361 U.S. at 488: H.K. Porter Co. v. NLRB,
397 U.S. 99, 108 (1970). Under petitioners’ theory, as the Players’
Brief freely acknowledges, federal courts and juries that may
have no particular labor relations expertise would be doing precisely
what Congress expressly determined would not be done by any
governmental! body.

18

such a result. See also NLRB v. Brown, 380 U.S. 278,
285 (1965). In fact, the Players’ Unions opine that “a
lockout [is a] particularly powerful weapon[] for em-
ployers in professional team sports.” Players’ Brief at
24 n.10. Regardless of whether the Players’ Unions are
right about the effectiveness of lockouts in this industry
—and there is substantial reason to doubt their assess-
ment—the lockout would certainly become the only ra-
tional employer response to the expiration of a collective
bargaining agreement.

Thus, the “havoc to labor relations in professional team
sports,” Players’ Brief at 6, that petitioners and the Players’
Unions decry and purportedly seek to remedy through
their petition to this Court would, in fact, be the state of
affairs mandated by their proposed interjection of the anti-
trust laws into matters that Congress either regulated
through the federal labor laws or “left for the free play
of contending economic forces.” Lodge 76, Int'l Ass’n of
Machinists v. Wisconsin Employment Relations Comm'n,
427 U.S. 132, 150 (1976) (internal quotation marks
omitted ).

In addition to passing on the reasonableness of collective
bargaining proposals, the federal courts, under the inter-
pretation of the nonstatutory exemption advocated by
petitioners, would also have to make determinations as to
the existence of an impasse. As the Court has recognized,
impasse is a transitory state of affairs. Charles D. Bo-
nanno Linen Serv., 454 U.S. at 412. If petitioners’ theory
were adopted, courts would be forced into the unenviable
position of evaluating when an impasse existed in order
to determine whether a particular antitrust claimant has
a cause of action. This in-depth involvement by the fed-
eral courts in labor disputes would again run contrary
to fundamental policies underlying the NLRA and the
Norris-LaGuardia Act, 29 U.S.C. §§ 101 et seg. (1994).

Finally, the notion that an individual sports franchise
could avoid potential antitrust liability by imposing, at

19

impasse, terms and conditions of employment separate
from the rest of the teams in the league is absurd. The
entire purpose of a free agency/reserve system is to regu-
late the conditions under which individual players may
move from team to team. It would simply be impossible
for each team to impose its own version of a free agency/
reserve system because those versions inevitably would
not be compatible.

In sum, the entire professional sports industry has
ordered its affairs in reliance on the long-standing federal
labor policy that encourages multiemployer collective bar-
gaining. To interject the antitrust laws into multiemployer
bargaining would have severe structural repercussions in
professional sports and other industries in which multi-
employer bargaining has long been the norm. To avoid
this result, the Court should reject petitioners’ effort to
seek a treble-damage antitrust recovery based on conduct
authorized under the labor laws.

20

CONCLUSION

The judgment of the court of appeals should be
affirmed.
Respectfully submitted,

RANDY L. LEVINE

(Counsel of Record)

MAJOR LEAGUE BASEBALL PLAYER
RELATIONS COMMITTEE, INC.

350 Park Avenue

New York, New York 10022

(212) 339-7404

THOMAS J. OSTERTAG

General Counsel

OFFICE OF THE COMMISSIONER
OF BASEBALL

350 Park Avenue

New York, New York 10022

(212) 339-7820

Attorneys for Amici Curiae
Office of the Commissioner
of Baseball and Major League
Baseball Player Relations

February 16, 1996 Committee, Inc.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2172%3A18. Public record. Not legal advice.