Posted: Thursday March 3, 2011 3:14PM ; Updated: Friday March 4, 2011 12:04PM
Michael McCann
Michael McCann>SPORTS LAW

Ten things you need to know about a potential NFL lockout

Story Highlights

Decertification would prompt players to file an injunction request to stop a lockout

Negotiations could continue even after decertification and after a lockout

If a lockout goes into effect, players would be paid around $60,000 per year

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Peter King: How did owners, players get to this point?
Source: SI
SI.com's Peter King takes a look at how the NFL owners and players got into this labor dispute.

The NFL and the Players Association agreed Thursday to extend the expiration of the collective bargaining agreement by 24 hours, until 11:59 p.m. Friday, as they try to hammer out a new agreement. Here are some issues to keep in mind as the situation unfolds.

1) Is the 24-hour extension a good sign?

According to SI.com's Don Banks, sources confirmed to him in Washington, D.C., that "both sides agreed to a one-day extension to consider a longer extension of the CBA deadline. The NFL wants a longer extension, lasting a week or two, while the union is wary of losing any leverage due to NFL delay tactics. Friday is more about determining if there's reason enough to continue negotiations, rather than a new round of negotiations per se."

2) The NFLPA is considering decertifying. Why would they do that and what would it mean?

Assuming the NFLPA decertifies, the NFLPA will no longer represent NFL players as a bargaining unit and will transform from a union to a trade association. The primary significance of that transformation is that NFL players will file an immediate injunction request, most likely with U.S. District Judge David S. Doty, to block the NFL from locking out the players. Judge Doty has jurisdiction over NFL-NFLPA labor disputes and earlier this week held that NFL owners violated the collective bargaining agreement when they secured guaranteed payments from television networks in the event the 2011 NFL season is canceled or reduced.

When coupled with an indefinite stoppage in negotiations, decertification will also mean that various rules that the NFLPA and NFL have agreed to through collective bargaining would lose the protection of the "labor exemption".

The labor exemption immunizes collectively-bargained rules from federal antitrust law, which bars agreements unilaterally imposed by competitors -- in this case, NFL teams, which compete on the field and in many ways off the field -- that are more anticompetitive than procompetitive. Antitrust law is particularly threatening because in private antitrust lawsuits, such as in one brought by NFL players against the NFL in a post-NFLPA decertified world, damages are automatically multiplied by three.

Under antitrust scrutiny, the NFL salary cap, free agency limitations and the NFL draft could be deemed illegal, since they are agreements by competing NFL teams to limit competition for players' services and they harm players' salaries and employment autonomy. The logic is that players are in the best position to maximize their earnings if they are not limited by external constraints, such as salary caps or restrictions on when they may become free agents.

That logic also holds true for the NFL draft, since college players would prefer to have multiple teams bidding for their services and to be able to sign with the team they most prefer, as opposed to the team that drafts them.

3) How would the NFL respond to NFLPA decertification?

The NFL would take several immediate actions.

First, it would challenge the NFLPA's decertification to the National Labor Relations Board as an act in bad faith and in contravention of both the collective bargaining agreement and federal law. The NFL would portray the NFLPA's decertification as an opportunistic device designed to both commence a cascade of antitrust lawsuits against NFL owners and to block NFL owners from instituting a lockout, which would bar employees of NFL teams from showing up for work and getting paid. Expect the NLRB to act quickly in such a scenario, and whatever the agency decides could be appealed to a federal appeals court.

Second, the NFL would protest the NFLPA's injunction request with Judge Doty. The NFL would argue that it is within its rights to impose a lockout. The league would also question why Judge Doty would have jurisdiction over labor matters involving NFL players following decertification, since the players would have ended their NFLPA bargaining relationship with the league and Judge Doty has overseen NFLPA-NFL labor matters. Without an NFLPA representing NFL players, his jurisdiction would be challenged by the NFL.

Third, and unless the NLRB or Judge Doty rules otherwise, the league's lockout would come with instructions that employees not show up for work. There would be some risk to that maneuver, however, for if the league proceeds with a lockout without judicial authorization and if the lockout is later deemed illegal, players could receive substantial damages under antitrust law.

4) This all sounds dire. Is there any hope that the crisis can be averted?

Yes. The parties could continue to negotiate after decertification and after a lockout (including through court or government-agency sponsored negotiations or if the NFLPA recertifies). One incentive for NFL players to stop negotiating, however, is that a court may reject their antitrust lawsuits until negotiations have reached an impasse.

5) Is the whole dispute about money?

There are several other issues at play, including the Personal Conduct Policy (which empowers commissioner Roger Goodell to issue sanctions of players without independent review of his decisions) and an 18-game season, but clearly the driving issue is money.

NFL players believe there is a wide gulf between what the league is demanding in concessions and league justification for those demands. As George Atallah, NFLPA Assistant Executive Director of External Affairs, tells SI.com, "The league continues to ask for $1 billion in concessions without any corresponding concessions on their part. We are not going to negotiate against ourselves. We are not going to concede a penny without a justification from the league justifying that penny. The league can't point to a single team that has lost money -- we asked them, and they had no answer. The league claims that the economics of the league do not work and yet they have no proof of that claim. No financial records or economic studies corroborate what they are saying. They keep making the same assertion over and over and can't support it."

The NFL, however, maintains that the economics of the league do not work, particularly given uncertainties in the national economy and particularly given that as much as 90% of NFL revenue is shared evenly by teams.

6) If the NFL has to litigate antitrust challenges over restrictions on competition, how would it do so?

The NFL would argue that free agency rules, the salary cap and the draft, among other restrictions on competition, actually promote competition for the league as a whole and are thus more procompetitive than anticompetitive. Indeed, without a salary cap or a draft, certain teams could stock up on star players in a way that prevents other teams from effectively competing. Still, antitrust litigation would cause serious concern for NFL owners and also likely mean a lengthy work stoppage.

7) With the NFLPA decertified, could college players skip the NFL draft and sign with NFL teams?

No, at least not yet. First off, if the league, as expected, shuts down operations, it could cancel the 2011 NFL Draft, which is scheduled to take place between April 28 and 30. The NFL is unlikely to cancel the draft, however, due to language in Article XVI of the collective bargaining agreement and since teams have prepared for it and doing so would only elevate the chaos of the labor crisis. Therefore, absent a legal challenge, the draft will likely remain the exclusive process by which amateur players join the NFL.

Once the NFLPA decertifies, however, a college player or a group of college players could bring an antitrust challenge against the NFL over the draft. The lawsuit would likely argue that the draft harms them economically, and harms competition in general, since college players could earn more income and play on their preferred teams if they were free agents and not subject to the draft. If a court were sympathetic to the argument, it could issue an injunction postponing the draft until after an evaluation of the antitrust challenge.

Alternatively, star freshman or sophomore players could challenge the NFL's draft eligibility restriction that players be three years removed from high school before they are draft eligible. Without the labor exemption protecting the eligibility restriction, a court may reason that certain players are good enough to attract NFL teams before they are three years removed from high school and thus the restriction against them harms competition for players, since players "good enough" to turn pro are denied the chance.

8) After a lockout, would players earn nothing?

That's right. Once a lockout began, paychecks from NFL teams would stop; players' contractual relationship with their teams would be placed in indefinite suspension.

The NFLPA, however, has created a fund that would pay players around $60,000 for a year. Players would get paid the same amount regardless of how much they earn in their NFL contracts. The fund has several sources, including withheld portions of Players Inc. checks for sponsorships and group licensing and increased union dues.

Keep in mind, a good portion of the $60,000 will go towards paying health care costs. The NFLPA has calculated that a player who has a family of four will pay about $3,000 a month in health care costs through COBRA, a federal law that ensures that persons who lose employment can continue their existing health care coverage for 18 months, albeit at their own expense.

9) Following the lockout, can players continue to receive treatment by their team doctors?

No. The player will need to get a new doctor and one who is not employed by an NFL team.

10) Following a lockout, can players join teams in other leagues like the United Football League, the Arena Football League or the Canadian Football League?

Yes. Players could join such leagues because their NFL contracts would be suspended and the NFLPA assures that they would continue to receive their $60,000 lockout compensation regardless of other income. It is also worth noting that the CFL has instituted The Ricky Williams Rule, which bars CFL teams from signing NFL who are players under suspension; it is unclear if the Rule bars NFL players who are locked out.

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However, there would not be enough roster spots in those leagues for all NFL players. Most NFL players, moreover, would probably resist the temptation of joining a league that does not pay nearly as well as the NFL.

For example, the salary cap is about $4.25 million for each team in the CFL, whose season runs from June 30 to Nov. 27. To put that number in perspective, the salary cap for each NFL team in the last capped season -- 2009 -- was $130 million. Also, the average CFL salary is about $50,000; the average NFL salary is $1.9 million and the minimum NFL salary is $325,000 (NFL practice squad players normally earn $88,400). While $50,000 would be a good salary for many employees, it would probably seem low for someone who is exposing his body to potentially catastrophic injury on every play, particularly for someone who is accustomed to earning much more for that risk.

The lack of viable alternatives for NFL players to play professional football highlights a key difference in bargaining leverage between them and NBA players, who may also be subject to a lengthy work stoppage later this year. Some NBA players, particularly stars, would be able to recoup a substantial portion of their lost NBA income by playing in Europe, whereas few NFL players can recoup a substantial portion by playing pro football elsewhere.

President Obama reacts to NFL labor issue
Source: SI
The President of the United States comments on the NFL labor dispute.

Michael McCann is a sports law professor and Sports Law Institute director at Vermont Law School and the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law. He also teaches a sports law reading group at Yale Law School.

 
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