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What we learned from NFL hearing


The legal showdown between the NFL and players took place Friday morning before Judges Steven Collton, William Benton and Kermit Bye of the U.S. Court of Appeals for the Eighth Circuit. Two former U.S. Solicitors General, Paul Clement (for the NFL) and Theodore "Ted" Olson (for the players), each spoke and answered questions from the judges for about 30 minutes. Clement and Olson offered competing arguments on whether U.S. District Judge Susan Nelson was correct in enjoining the NFL's lockout, which bars NFL players from their employment with NFL teams.

What was learned?

1. Disappointing news for players: The judges gave no indication they will change their vote pattern

The players have already lost twice before this three-judge panel, with Judges Collton and Benton voting to stay Judge Nelson's order. In explaining their decision to issue stays, the two judges clearly favored the NFL's legal arguments. Judge Bye, in contrast, dissented and was sympathetic to the players' claims.

While questions posed by judges are not necessarily indicative of how they view a legal dispute, the players were probably hoping for more adversarial or aggressive questioning Friday by Judges Collton and Benton of the league. Instead of a heated exchange that can sometimes arise when judges explore the limits of an oral argument, Friday's proceeding was relatively calm -- perhaps because the three judges have already reached their conclusions.

2. No surprises: The NFL and players stuck to their legal scripts

Oral arguments normally entail a summation of a party's legal arguments, and today was no exception. Clement insisted that the Norris-LaGuardia Act prevented Judge Nelson from enjoining the lockout, while Olson, reiterating the reasoning of Judge Nelson, dismissed the relevance of the Act to the specific dispute at hand while also portraying it as compatible with an injunction. Clement and Olson also disagreed on whether the dispute should be examined under antitrust law (the players' preference) or labor law, and whether the court should wait until the National Labor Relations Board (NLRB) determines if the NFLPA's decertification was a sham. While the arguments forced Clement and Olson to specify some of their clients' more sweeping claims, the arguments did not shed much new light.

3. The NFL regards the lockout as a "self-inflicted" wound

Even though the lockout would seem to most harm NFL players -- it prevents players from receiving compensation they would be owed under their contracts, as well as opportunities to sign and train with teams -- Clement characterized the lockout as causing a "self-inflicted wound," thus implying that owners have been hurt by it. In Clement's view, the pain caused by a lockout is essential to convince the parties to reach a new collective bargaining agreement. In contrast, Clement rejected the idea that the lockout has necessarily caused the players irreparable harm.

If Judge Dye, who last month dissented to Judges Collton's and Benton's decision to temporarily stay Judge Nelson's order, once again dissents, expect him to take issue with Clement's characterization of the harm caused by the lockout. While owners are undoubtedly harmed by the negative attention associated with the lockout as well as by the disruption in their business, the lockout and the corresponding economic harm is clearly directed at the players.

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4. The NFL wants the labor exemption from antitrust laws to last at least until March 2012

When the NFL and NFLPA collectively bargained the salary cap, restrictions on free agency and other restraints on trade as part of a collective bargaining agreement, those restraints were exempt from federal antitrust law. The labor exemption immunizes restraints from antitrust law if they are borne through collective bargaining. Provided the parties remain in good-faith negotiations, the immunity may continue even after a collective bargaining agreement has expired.

When the NFL-NFLPA collective bargaining agreement expired on March 11, and the NFLPA disclaimed its representation of players, the restraints were -- in the view of players -- vulnerable to antitrust scrutiny. The players then filed the Tom Brady et. al v. NFL antitrust lawsuit.

As raised in the NFL's legal briefs, Clement took issue with the applicability of antitrust law. He insisted that since the owners and players continue to try to reach an out-of-court agreement and since the NFL maintains that the NFLPA's decertification was a sham, the exemption should remain in effect. Thus, in Clement's view, the Brady lawsuit should be barred.

Building on his argument, Clement reasoned that the exemption should last at least one "full business cycle" following the collective bargaining agreement's expiration. When asked for clarity as to what he meant by a "business cycle," Clement said one year, which would mean March 11, 2012. The NFL, in other words, wants the three-judge panel to let the league continue with its lockout, during which players are not compensated, into next spring. If the court goes along with the NFL's request, the players, faced with the prospect of no NFL income until at least March, may perceive they have no choice but to acquiesce to NFL labor demands.

In response, Olson portrayed the NFL's interpretation of the labor exemption as without precedential support. He also maintained that the NFLPA no longer represents NFL players, who believe they are acting as individual parties subject to the protections and obligations of federal antitrust law. Along those lines, Olson stressed that the exemption ended when the NFLPA, which signed the collective bargaining agreement, disclaimed its representation of NFL players. Olson also portrayed the NFL as merely trying to escape scrutiny from the area of law it most fears: antitrust law.

5. Judge Bye warned both sides they are better off reaching a deal on their own

Judge Bye informed both sides that the panel would reach a decision in "due course" (meaning the panel won't speed up its process merely because it involves a popular sports league and its players). He also warned the panel could reach a decision that "neither party will like." He further added, with a smile, "We wouldn't be all that hurt if you go out and settle that case" on your own.

Judge Bye's comments highlight that if the owners and players allow three federal judges, who obviously are not in the business of pro football, to dictate the league's future, neither owners nor players may like what's ahead.

One ruling that neither party would probably like is if, as mentioned during today's arguments, the panel allows the NFL to continue the lockout, but only for six months following the March 11, 2011, expiration of the CBA. After those six months are up, the NFLPA decertification could take effect and Judge Nelson's original order enjoining the lockout could be reinstated.

Six months is what the now-expired CBA stipulated the NFLPA had to wait to decertify if it did not decertify before the CBA expired. Six months following March 11, 2011, would be Sept. 11, which in addition to being a day of great historical significance to our country, is also three days after the 2011 NFL season is scheduled to begin. This type of compromise outcome would mean players remain locked out, but only until the start of the 2011 NFL season is scheduled to begin.

In lieu of an unappealing court decision, the owners and players could simply reach a deal on their own. Both sides are well aware of the other's demands. Both sides know the league is profitable. Both sides know that a prolonged lockout -- particularly one that leads to a cancellation of games -- could cause the league irreparable harm, be it in the form of current fans who tune out and don't tune back on, kids who would have become NFL fans this fall but who instead turn to other forms of entertainment, or television networks that no longer offer as much money to broadcast NFL games. Both sides would be worse off if the pie of wealth they are fighting over shrinks because of their fighting. Judge Bye's remarks clearly admonish the owners and players to think about these consequences.