Labor Exemption from Antitrust

Alternative Ways to Define the

Scope of the Labor Exemption

1) no protection for otherwise anticomp CBAs

2) exempt only those restraints contained in the
agreement at the behest of the union
3) exempt any agreements actually made by union
and mgt
4) exempt any employment practices during the
pendency of a collective bargaining relationship
5) 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?
 2 Cir. approach
nd

• 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?