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Union Dissolution and the Nonstatutory Labor Exemption

By [Monday, June 17th, 2013]

Although it already seems like ancient history to sports fans, the 2011 NFL and NBA lockouts are still generating their share of legal scholarly attention.  Three recent law review articles offer differing perspectives on the players’ efforts to dissolve their unions to be able to invoke the antitrust laws against the leagues, and thereby gain bargaining leverage. 

The Washington Law Review features a student comment that focuses on the distinction between the two methods of dissolving a union — disclaimer of interest and full-fledged decertification — and its significance to the nonstatutory labor exemption as articulated in Brown v. Pro Football Inc..  The nonstatutory labor exemption is a judge-made doctrine that holds that unions and employers should not be exposed to antitrust liability for the duration of the collective bargaining relationship, even after expiration of the CBA and even if the parties’ negotiations are at impasse.  Although the exact contours of the exemption are still fuzzy, the  Brown Court suggested that the nonstatutory labor exemption lasts until the “collapse” of the collective bargaining relationship.  The open question has been whether and what type of dissolution of the union qualifies as “collapse.”  Decertification is a lengthy process requiring the players to round up at least 30% of their members to file a formal petition with the NLRB, followed by a formal election that achieves a majority vote in favor of decertification.  Disclaimer of interest merely requires the union to announce it is terminating its right to represent the players, and can be done simply by sending a letter to the league declaring it is no longer the players’ bargaining agent.  The student comment opines that disclaimer does not satisfy the “collapse” standard because of its informal nature and instantaneous effect.  The comment further argues that courts should extend the nonstatutory labor exemption in the event of a disclaimer for the length of a “business cycle” in the subject industry, to ensure it is not being used merely as a bargaining tactic.

Posing an interesting counterpoint to this argument is an article in the U.C. Davis Law Review, contending that extending the nonstatutory labor exemption to cover post-dissolution agreements would subvert both federal labor and antitrust policy.  To this author the issue is not whether the players dissolved the union simply as a bargaining tactic, but whether employees are entitled — whatever their motives — to unilaterally return at any time to a labor market under free competition principles.  

An article in the Vanderbilt Journal of Entertainment and Technology Law makes the point that dissolution of a players’ union, by either disclaimer of representation or full-fledged decertification, marks a new era in sports industry labor battles, confounding the expectations of commentators and requiring a second look at league lock-out strategies.  

If the leagues pull back from that strategy, the courts may not get the chance to further define the nonstatutory labor exemption any time soon.

NBA Players Playing Overseas

By Elliot Solop [Friday, March 30th, 2012]

This past summer as the NFL was gearing for life after their latest lockout, the NBA was in the midst of their very own.  During the ensuing 149-day lockout before the NBA’s owners and players agreed on a new CBA, players feared that the 2011-2012 season would never come to fruition.  When negotiations seemed most bleak, this fear resulted in some big-name NBA players looking to bolt for overseas play while the NBA was in a potential catastrophic meltdown. Well-known players such as Deron Williams (Beskitas), Danilo Gallinari (Olimpia Milano), Nicolas Batum (SLUC Nancy), Ty Lawson (Zalgiris), Aaron Brooks (Guangdong Southern Tigers), Wilson Chandler (Zhejiang Guangsha), J.R. Smith (Zhejiang Chouzhou), and Kenyon Martin (Xianjiang) joined the unofficial overseas coalition.  All the players mentioned above besides Martin, Smith, Chandler, and Brooks signed with overseas leagues that included an opt-out clause in their contracts to allow for a return to the NBA once the lockout concluded. Martin, Smith, Chandler, and Brooks signed with the Chinese Basketball Association (“CBA”), a league that passed a mandate to disallow escape provisions in their contracts with NBA players and to deny any letters of clearance from the NBA. In fact, officials from the CBA threatened the NBA players not to hold out or diminish their level of play because a letter of clearance was not going to be signed until their contracts were fully honored. To coincide with the CBA’s ruling,  the condensed form of FIBA’s regulations 42 and 43 states that a letter of clearance must be obtained from the league the player is currently playing with before the player can be licensed to play for the league the player hopes to join. Basically, the four CBA signed players could not go anywhere without the CBA’s permission.

With the CBA’s playoffs concluded and with the NBA playoffs near, Smith, Martin, and Chandler have all found homes with potential playoff contenders. It will be interesting to see the impact the three former Nuggets have on their respective teams. Even more interesting will be to see if any players look to pursue a career in China for contract leverage or even in anticipation of the next lockout.

 


Another NHL Lockout Possible?

By Lawrence Fox [Thursday, March 1st, 2012]

NHL Logo

With the NHL season in full bloom and the playoff race heating up, fans across  the league are focused on the ultimate prize; Lord Stanley’s Cup. The players and owners, however, must consider the bigger picture of the NHL’s viability down the road as another potential lockout threatens to tear the hearts out of us puck heads.

Having dealt with a lockout a few years back, the players acknowledge that both preparation and understanding of the legal issues are the biggest obstacles in this negotiation. However, the players are placing their faith in a man that’s as well prepared to do the job as any.  With Donald Fehr, the superstar labor negotiator best known for his work with Major League Baseball, the players feel they are in good hands. As Jason Labarbera, Phoenix Coyotes Goalie and union rep, stated, “As soon as he steps up, everyone shuts up and listens. He’s just got this presence about himself. He’s obviously a smart guy. I mean, he knows negotiations. He knows labor.” Read More…