Labor Exemption from Antitrust

Alternative Ways to Define the Scope of the Labor Exemption

1) no protection for otherwise anticomp CBAs2) exempt only those restraints contained in the

agreement at the behest of the union3) exempt any agreements actually made by union

and mgt4) exempt any employment practices during the

pendency of a collective bargaining relationship5) complete protection under literal language of §6

for any agreement that restrains trade in the labor market

Eliminating Alternatives• Why doesn’t the literal language of §6 compel

the adoption of Option #5?– Suppose the union agreed that the standard

player contract would include a promise not to sign with a club in a rival league for 3 years after expiration of the contract?

• Why should multi-employer agreements EVER be protected by the labor exemption?– Courts are supposed to accommodate antitrust

and labor policy

The Mackey Test

1) Restraint primarily affects only the parties to the CBA

2) Topic is a mandatory subject of bargaining under the NLRA

3) Restraint is the result of bona fide arms’ length bargaining

Applying Mackey

• Suppose NBA players, as part of revenue sharing/ salary cap, agreed w/ owners on minimum ticket prices or price of jackets?

• How does Mackey’s prong (1) apply if fans are injured?

• Why should the highly restrictive NHL By-law challenged in McCourt [230] be exempt, under Jewel Tea’s test [226] that the restriction be part of “arms’ length bargaining in pursuit of their own union policies”?

Wood

• Rookie challenges NBA CBA that limits his salary due to the cap; 2nd Circuit rejects

• Agree with Winter J that accepting rookie’s challenge to cap provisions of CBA is fundamentally at odds with federal labor policy?

• Suppose court held rookie cap to be illegal; what would resulting CBA look like?

Clarett

• Should NFL be required under labor law to negotiate with the union about eligibility for draft?

• Should unions be allowed to negotiate on behalf of potential members of bargaining unit?

• Is the NFL’s eligibility rule the result of good faith bargaining?

2nd Cir. approach

• Rejects Mackey

• Suggests unionized players should have NO antitrust rights

When Does the Labor Exemption Expire?

• NHL has rigid salary cap– By barring rich/lousy teams from

improving and not sharing revenue, harms competitive balance and thus violates §1

– CBA will expire in 60 days and NHLPA is opposed to the cap

• Hypo: What would you advise the NHL Before Brown? – After Brown?

After Brown: Options for NFLPA

• Suppose impasse occurs, and your negotiation skills not going to persuade NFL Mgt Council to agree to a CBA that does not unreasonably restrain trade

What are the union’s options?

/2 Brown

• Do you agree with Justice Breyer that it would be “odd to fashion an antitrust exemption that gave additional advantages to professional football players … that transport workers, coal miners, or meat packers would not enjoy” [246]?

• Has the Court appropriately accommodated consumer/fan interests?

• Suppose a consumer class action challenged a labor restraint?

Brady: claims

• Lawsuit seeks injunction against lockout, correctly noting that an agreement among employers to refuse jointly to employer non-union workers is a clear Sherman Act violation

• NFL offers 3 defenses:– Norris-LaGuardia Act bans federal court injunctions– Court should stay hand pending resolution of unfair

labor practice complaint– Labor exemption continues where decertification is

just a tactic

Brady: 8th Circuit decision

• Applies literal language of N-LGA Act, depriving federal courts of jurisdiction to issue injunctions “in a case involving or growing out of a labor dispute”

• Rejects limit to unionized employees

• Rejects limit to injunctions against workers– Dissent claims this was clear purpose– Cf. Mackey interpretation of §6

Brady: analysis

• DOJ recently won injunction against agreement among Silicon Valley firms not to poach each other’s key tech employees (who had never been unionized)– Is this inconsistent with Brady?

• Should players be able to use “decertification” option? When, if ever, should the labor exemption expire in professional sports?