I’m a huge fan of pro football, but labor law is not my area of expertise, and the mainstream press has done a terrible job of explaining to the general public how the NFL and its players find themselves in the midst of the first NFL work stoppage since 1987. As far as I can tell, after picking through dozens of stories about the dispute, the following is the CliffNotes version of what is going on. Also, after doing so, I no longer blame the press so much. It probably would be easier to describe how the Large Hadron Collider works.
• In 2006, NFL team owners and the NFL Players Association signed a five-year collective-bargaining agreement (CBA) that significantly increased player pay and benefits over the prior contract. Under the 2006 CBA, players' salaries accounted for roughly 60 percent of total revenue.
• As time passed, the owners came to the conclusion that they had struck an unfavorable deal. They certainly were not going broke, but debts for stadium construction, other costs, and a slumping economy that was not allowing revenues to keep pace with costs were taking a toll. They longed for a "healthier" deal to allegedly “promote league growth.”
• In early 2011, the owners proposed a new contract allegedly having three main parts:
(1) Upward Revenue Adjustment for Owners
The primary goal for owners is to keep more of the total NFL revenue for operating and investment expenses, which amounts to about $1 billion off the top of the league’s annual revenue of over $9 billion, before salaries and other expenses were paid. Players would continue to get a 60-percent share of the remaining dollars. In real terms, however, without a dramatic increase in revenue, that would mean an estimated 18% reduction in the total amount of money available to pay player salaries. The NFLPA rejected this proposal, instead wanting to keep the status quo.
(2) 18-Game Regular Season
Owners want to add two regular-season games and eliminate two preseason games, thus generating hundreds of millions more dollars in TV and attendance revenue. Players argue that their bodies take enough of a toll as it is. Owners are prepared to increase roster limits and decrease mandatory offseason workouts to accommodate the extra pounding.
(3) Rookie Wage Scale
Owners want an NBA-like rookie wage scale, whereas 1st-round draft choices are assigned salaries according to their draft position. The first overall pick receives more than the second pick, the second more than the third, and so on. Each contract would be for two years, with a team option for the third and fourth seasons, with built-in raises every year to compensate for increases in the average salary. Reportedly, the NFLPA is open to this.
• On February 15th, the owners filed a claim with the National Labor Relations Board, seeking damages and arguing that the NFLPA, a union, had failed to bargain in good faith.
• On March 11th, the ’06 CBA ended, and no new CBA had yet been agreed to. As a result, the owners imposed a 45-day lockout, i.e., they would not allow the players to work or enter the owners’ facilities for any reason.
Further, the NFLPA immediately decertified itself as a union and became a trade organization. That tactical maneuver facially allowed ten named players, including Tom Brady, Drew Brees, and Peyton Manning, to commence an anti-trust lawsuit against the owners in the USDC, Minneapolis. That suit seeks, among other things, (1) an injunction against the lockout, which stands to cause irreparable harm to their careers, (2) treble damages potentially worth hundreds of millions of dollars for alleged wrongdoing by the owners going back years, and (3) the ability of players to declare their existing contracts null and void if the NFL fails to pay them. In response, the owners claim that the suit has no merit and, more importantly, that the suit is an improper legal ruse designed to avoid jurisdiction over the NFLPA by the NLRB.
• On April 25th, US District Judge Susan Richard Nelson issued the injunction lifting the lockout, finding no evidence in support of the owners’ claims that the lockout would not cause irreparable harm. The owners immediately sought and received an expedited appeal.
• On April 29th, in a 2-1 decision, the 8th Circuit Court of Appeals, located in more conservative St. Louis, reversed the lower-court’s order and issued a temporary stay of the injunction. As a result, the owners reinstated the lockout. On June 3rd, that court again will hear oral argument and then decide whether the stay should be permanent. Analysts expect the owners to present two primary arguments, i.e., (1) that the players are not irreparably harmed, by presenting opinions from players who might welcome the lockout as a break from training camp and (2) that in tossing the lockout, the owners are denied an economic option allowed by law, just as employees can choose to strike.
• In the meantime, the parties are under court order to return to Minneapolis on May 16th and participate in court-sponsored mediation before U.S. Magistrate Judge Arthur Boylan.
The first preseason game is scheduled for Aug. 8, and all parties have voiced a strong desire to resolve their differences well before then. I, for one, hope that happens. It’s an incredible travesty to see millionaires and billionaires fight light this. Also, no one has mentioned the real irreparable harm that will be done if the season is cancelled: Hundreds of NFL cheerleaders will be forced to sit home, pom-poms in hand, and have no one to cheer to. As Americans, we simply cannot let that happen. Finally, I can only collect a year’s worth of tears for so long. If my San Diego Chargers again fail to reach the Super Bowl, all will be well, and I can unleash those tears as I do annually and profusely. If the season does not happen, however, I’ll be forced to watch Marley & Me several times in December.
Bill Staar is a partner in the Boston office of Morrison Mahoney LLP. He concentrates in the areas of product liability, construction disputes, toxic torts, and general business litigation. He is a member of DRI's Product Liability, Construction Law, and Commercial Litigation, Committees, vice chair of DRI's Sports Law, Specialized Litigation Group, and member of the Sporting Goods Manufacturers Association Legal Task Force.