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Home | Blog | Behind the Lockout, Part IV

Behind the Lockout, Part IV

April 25, 2011

A few hours ago, US District Judge Susan Richard Nelson granted a preliminary injunction in Brady v. National Football League, apparently halting the “lockout” announced by NFL franchise operators over a month ago. It’s not immediately clear what happens next. Nelson did not stay her motion pending the NFL’s inevitable appeal to the US 8th Circuit Court of Appeals, and unless such a stay issues from Nelson or the appellate court, the league will, in effect, be compelled to re-open for business while the underlying antitrust lawsuit is litigated.

Nelson’s decision is an 89-page orgy of case law and jurisdictional analysis. The NFL, advised by the finest legal minds, never bothered to argue that its “lockout” wasn’t an illegal “group boycott” under the Sherman Act. Instead the league complained, over and over again, that the players were wrong — WRONG — to decertify their union and file an antitrust lawsuit instead. As long as the union existed — as a union, that is, not a “trade association” — antitrust action was off-limits, because government labor regulation trumps government antitrust regulation.

This is an important conceptual argument. We commonly heard, from the left, that big business is anti-union. Yet here we have a big business desperate to reanimate a dead union. The league wants the National Labor Relations Board to force the players to reform as a union and deal with the league under the terms of federal labor regulation. As Judge Nelson correctly noted today, however, if players have the right to form and participate in a union, they have an equal right to dissolve and not participate in one. Accordingly, Nelson rejected the league’s demand that she defer to the NLRB, which is holding the league’s charge of “unfair labor practices” against the former union in bureaucratic purgatory.

Now, the merits of Nelson’s injunction are troublesome, at least from a libertarian standpoint. From a non-libertarian, football-dependent-mainstream-media standpoint, all that matters is the result: Nelson is a hero to every football writer and NFL sycophant in the country.

One of the more bizarre reactions I read came from Mike Freeman of CBS Sports: “When you read Judge Nelson’s opinion she makes [one] thing clear: she cares about the fans. She makes that abundantly clear.” Now I went back and re-skimmed Judge Nelson’s ruling just to be crystal clear on this— the “fans” are not a party to this lawsuit. Their interests shouldn’t count for anything.

Actually, Freeman may have oversold Judge Nelson’s love for “the fans.” She only refers to them in a single paragraph near the end of her decision, in a brief discussion of whether the “public interest” favors an injunction of the lockout:

[B]ecause the Union’s [decertification] is valid and effective, the labor law policies of collective bargaining must give way to the antitrust policies in favor of competition. On an economic level, the public has an interest in the enforcement of the Sherman Act, which, by seeking to ensure healthy competition in the market, has a broad impact beyond the immediate parties to this dispute. Moreover, the public ramifications of this dispute exceed the abstract principles of the antitrust laws, as professional football involves many layers of tangible economic impact, ranging from broadcast revenues down to concessions sales. And, of course, the public interest represented by the fans of professional football — who have a strong investment in the 2011 season — is an intangible interest that weighs against the lockout. In short, this particular employment dispute is far from a purely private argument over compensation.

Speaking as a member of the public, I neither have an interest in seeing the antitrust laws enforced nor do I particular care whether this lockout continues. Speaking objectively, the mere fact that third parties might have some economic or “intangible” interest in the outcome of the case does not alter the nature of the dispute. This is, in fact, a “purely private argument over compensation” — even if there are dozens of reporters covering it like a presidential election.

And the average football fan doesn’t care about enforcing the goals of the Sherman Act either. Indeed, I suspect many fans would be disconcerted to learn the specifics of the players’ antitrust complaint — such as their claims that the NFL Draft and restricted free agency are antitrust violations. If the court ultimately declares these policies null and void, some fans will be shocked to learn that their poorly performing team won’t have exclusive rights to next year’s top college player, or their championship-caliber team will lose a player they would’ve otherwise retained through some “restricted” free agency rule. Fans don’t care about maximizing competition for player services; they only care about having football on Sundays in some shape or form.

But I digress. The “public interest” analysis was slightly more than a footnote to Judge Nelson’s decision. The substance is her finding that the “lockout” was already causing “irreparable harm” to the plaintiff players. Her argument can be summed up thusly: NFL players have short careers, any time lost to this lockout is time they can never get back, ergo there’s irreparable harm. I don’t buy it. There’s no natural right to an NFL career — of any length — and if the league voluntarily suspends operations, that by itself does not deprive the players of their property or liberty. It may be unfair, but it’s not inherently unjust.

The antitrust logic here is players are somehow being deprived of the opportunity to maximize their potential economic value. The lockout “restrains” what would otherwise be robust competition for player services. But again, this presupposes a right to an NFL career in the first place. The injunction is forcing an employer to engage in business against its better judgment. By itself this is most un-libertarian.

But there is a mitigating factor here, which is largely unaddressed by Judge Nelson. While there are several hundred players who are not under contract to any NFL team — and thus have no real “rights” to speak of — several hundred more are under individual contract to a club. I reviewed the model player contract. It does not provide for termination or suspension in the event of a “lockout.” Thus, the league and its clubs are in breach of those contracts. The league claims it has a right to breach those contracts under federal labor law — which, again, assumes there’s a government-recognized union in place. As Judge Nelson conclusively argued, there is no such union anymore. There’s nothing to “lockout” in that sense. So from a libertarian standpoint, it is just to enjoin the lockout with respect to the players currently under contract.

The takeaway from all this is that Judge Nelson hasn’t actually solved the underlying problem. Even assuming her injunction is affirmed by the 8th Circuit, the league and its players are no closer to a resolution of their “argument over compensation.” The league will go forward in 2011 under yet-to-be-determined rules that may or may not be legal under the Sherman Act. The league will also likely continue pressing for the union to revive itself. The players may or not pursue their antitrust claims to a jury trial, which will open up a whole new can of worms. And just as has been the case since the early 1990s, when the players first hid behind antitrust law to avoid the Big Meanie that is labor law, they will remain dependent on the charity of a federal district judge. It’s hard to see how either the players or the league benefit from any of this. Of course, their lawyers aren’t complaining.

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