Minnesota’s Pivotal Role in Resolving Labor Disputes Between Players Associations and Professional Sports Leagues: A Tale of Forum Shopping?

Posted By E. Jayson Nayagam, J.D. Candidate, Class of 2014, Jan 23, 2012

Research Assistant: Hovannes G. Nalbandyan, J.D. Candidate, Class of 2014

Professional sports leagues have been all too familiar with labor disputes in recent history. Just recently, the National Basketball Association (NBA) ended a half-season long lockout to salvage half of its season. Deep into the summer of 2011, the National Football League (NFL) narrowly averted the cancellation of games after reaching an agreement with the NFL Players Association (NFLPA). Major League Baseball (MLB), and the National Hockey League (NHL) lost entire seasons in the not too distant past; MLB lost the entire 1994-1995 season while the NHL lost the entire 2004-2005 season. Such disputes, whether they result in the loss of games or merely elicit turmoil in the sport, test the mettle of fans and can potentially harm the brand name of sports leagues. Die-hard and casual fans alike undoubtedly have numerous avenues on which to spend their discretionary income: average citizens often have little sympathy for the squabbles between millionaire athletes and billionaire owners.

Aside from the obvious economic losses (in the form of lost salaries, revenue, and profits) that result from extended labor disputes, both the players associations and owners face increased pressure to maintain their sports and brands in the crowded twenty-first century entertainment landscape. In trying to resolve these disputes, players associations have sought relief from the Minnesota federal courts (in the 8th Circuit), a forum that historically has handed down favorable decisions to them. Relying primarily on anti-trust law, players associations have attacked owners’ regulation of topics from free agency to salary caps, arguing that such devices restrict trade. The Court’s opinions in Mackey v. NFL and Reynolds v. NFL spurred the implementation of more liberal free agency rules while also promoting trades between teams [1].

The NFLPA did, however, suffer a setback in 1982 in Powell v. NFL. The 8th circuit, reversing the Minnesota District Court’s ruling, held that the Sherman Act would not be applicable because the NFLPA was a union [1]; the NFL’s restrictive free agency rules were thus not held to be in violation of the Sherman Act. Ten years later, the Minnesota Federal Court revisited the issue in McNeil v. NFL. However, in this case, the NFLPA decertified its status as a bargaining unit representative and was able to secure a favorable ruling; the court in McNeil found the NFL’s free agency rules to be too restrictive. Since the NFLPA was no longer a labor union, the player’s association and league did not have a collective bargaining relationship [1]. Again, the Minnesota Federal Court came to the rescue of the NFLPA.

The NFLPA and the NFL’s latest battle came in 2011 in Brady v. NFL: again, the NFLPA decertified itself as union. This case, not surprisingly, was filed in Minnesota Federal Court. However, the case was settled after the NFLPA was certified as the official bargaining representative of NFL players; after the certification, the NFLPA negotiated with the NFL a new collective bargaining agreement set to last until 2021 [1].

But, what else makes the Minnesota Federal Court so attractive to player’s associations? One judge in Minnesota has been especially sympathetic to players associations; Judge David S. Doty, appointed by President Ronald Reagan in 1987, has played a pivotal role in shaping the NFL labor landscape. Judge Doty issued favorable rulings for the NFLPA in 1988 (although this particular ruling was overturned on appeal) and in 1992. Judge Doty has also not been shy in expressing his views towards the owners, saying that “all [the owners have] done is make tons of money” [2]. The NFL tried to have Doty removed for his public views but the venerable Judge withstood their protests [3]. Judge Doty’s sympathetic views towards the NFLPA undoubtedly have played their part in the forum selection process for attorneys of players’ associations.

We turn next to the NBA and the league’s most recent labor dispute: a dispute that resulted in the cancellation of half of the league’s season. Owners in the NBA locked out the players after their collective bargaining agreement expired. Similar to most sports related labor disputes, the two parties disagreed on profit sharing, the salary cap, and direct compensation in player contracts [4].

In the most recent labor dispute, NBA players filed two antitrust lawsuits in both California and Minnesota. In an effort to bring about a quicker resolution, the lawsuits were merged in the Minnesota court. The NBA players union, like the NFLPA, disbanded so as to assert antitrust claims against the NBA. Without a players union, the NBA and the players union could no longer collectively bargain. As such, the owners’ lockout of the players could be in violation of the Sherman Antitrust Act. Minnesota, in particular, may have been selected because it has a less congested docket, allowing resolution of the case to occur sooner [5].

Some have argued that the Minnesota Court’s use of magistrate judges has made it a favorable forum [6]. The Court forces the parties to come together and negotiate with magistrate judges acting as mediators. In some instances, both parties just need to be brought to the bargaining table to hash out a deal.

Favorable precedent, a less congested docket, the court’s use of magistrate judges, and presence of the sympathetic circuit court judges seem to contribute to Minnesota’s preferred status among player’s associations today. While the relationship between players and owners remain nebulous and strained, the forum in which they will settle their future disputes remain fairly certain.

Sources:

[1] Marth, Ryan W. and Jennifer K. Ciresi. Law360. “Revisiting Football Labor Disputes Decided in Minn.” 3 Aug. 2011. <http://www.rkmc.com/files/Revisiting%20Football%20Labor%20Disputes%20Decided%20In%20Minn%20.pdf>.

[2] Sandomir, Richard. “Minnesota Judge is Giving the N.F.L. the Chills.” The New York Times. 12 Mar. 2011. <http://www.nytimes.com/2011/03/13/sports/football/13judge.html?pagewanted=all>.

[3] Weiner, Jay. “How Minnesota Became the Center of the NFL Labor Universe.” The Minnesota Post. 2 Mar. 2011.

<http://www.minnpost.com/stories/2011/03/02/26250/how_minnesota_became_the_center_of_the_nfl_labor_universe>.

[4] “League Locks Out Players Until New Collective Bargaining Agreement is Reached.” 1 Jul. 2011. ESPN.com News Services. <http://sports.espn.go.com/nba/news/story?id=6723645>.

[5]Beck, Howard. “N.B.A. Players Merge Lawsuits.” The New York Times. 21 Nov. 2011. <http://www.nytimes.com/2011/11/22/sports/basketball/nba-players-merge-lawsuits.html>.

[6] Cohen, Rachel. “Minnesota court expected to mediate NBA lawsuit.” Aberdeen News. 23 Nov. 2011. <http://www.aberdeennews.com/sports/aan-2b.11-23-11.nbalabor-20111123,0,5049550.story>.