CENTER FOR CONTINUING EDUCATION
Self Study Article and Self Assessment Test
Sports Law
presented by Walter T. Champion, Jr. Houston, Texas
© West Group. Permission to reprint, Prof. Walter T. Champion, Jr.
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Chapter 4: Labor Law
A. National Labor Relations Act
Union-management relations in professional sports are controlled under the auspices of the National Labor Relations Act (NLRA), 29 U.S.C.A. Secs. 151-166. However, sports for many years was viewed as an anomaly that was not a business, and it thus escaped the protection of the NLRA during those years. Baseball, for example, in the early days was a classic case of management abuse. Yet, in Federal Base Ball Club, Inc. v. National League of Professional Baseball Clubs (1922), the Supreme Court excepted baseball and the reserve clause from antitrust regulations, thus stagnating any attempts by the players to organize as a union.
But, professional sports include other employees than just athletes. There are also the relatively low-paid club house attendants, bat boys, traveling secretaries, physical therapists, ushers, ticket sellers, etc. Collective bargaining and the umbrella protection of the NLRA finally came to baseball in 1969.
In American League of Professional Baseball Clubs (1969), the National Labor Relations Board (NLRB) moved to take jurisdiction over professional baseball. The NLRB can decline jurisdiction when a particular industry's impact on interstate commerce is deemed to be insubstantial. The NLRB has accordingly declined jurisdiction over some forms of recreational activity, for example, harness racing. Yonkers Raceway, Inc. (1972); See also Centennial Turf Club, Inc. (1971). However, the NLRB will generally take jurisdiction of all organized team sports.
American League of Professional Baseball Clubs involved baseball umpires. The NLRB held that since baseball is an industry that affects commerce it is subject to the coverage and the jurisdiction of the NLRB. The policy of the NLRB is to encourage collective bargaining through the protection of the rights of employees to self-organize and choose the representation of their choice. These goals were felt to be best served by asserting jurisdiction over professional baseball and thus subjecting all labor disputes to determination under the NLRA. The NLRB also specifically took jurisdiction over professional football in National Football League Management Council (1973).
The NLRB's Sec. 7 demands that "employees should have the right to self-organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collectively bargaining or other mutual aid or protection." The NLRB was formed to administer and police these Sec. 7 rights: the NLRA applies to all employers whose business affects commerce, although the NLRB can decline to intervene if the effect on commerce is minimal. Today, there is no question that professional sports and the corresponding collective bargaining relationship between players and management falls firmly under the NLRA's protection.
B. Unions and Management
It was a tough struggle for unions to organize in professional sports: management was especially adamant in the defense of what they considered their personal and private fiefdom. For many years, labor groups were not sufficiently organized to be recognized as unions by the NLRA. Even after recognition, the relationship between unions and management was stormy, with the owners' behavior characterized by a demeanor that was both procrastinating and bullying.
The first question the NLRB must decide when considering if a particular industry is eligible for protection under the NLRA is whether the coverage of the NLRA is broad enough to include that industry. The NLRB answered in the affirmative regarding the sports industry, since the affect of professional sports on commerce is not minimal.
Next, the NLRB must determine the appropriate bargaining unit. In most sports, the unit is determined to be the sport as a whole instead of individual teams or particular positions (e.g., not a union for catchers only). Once a union is recognized it becomes the exclusive bargaining representative for all members of the unit.
North American Soccer League v. NLRB (1980), the court found the bargaining unit to be all professional soccer players on clubs that are based in the United States. The court held that the league and its member clubs are joint employers. The key to the decision was the joint employer status of the individual teams and the league. The court, however, was momentarily swayed by the apparent individuality of each team: "Contrary to our first impression, which was fostered by the knowledge that teams in the League compete against each other on the playing fields and for the hire of the best players, * * *." However after further consideration, the court agreed with the NLRB that there was a joint employer relationship among the league and its member clubs; they then designated the league as the appropriate bargaining unit.
The NLRB is not required to select the most appropriate bargaining unit, but only to choose an appropriate unit under the circumstances. The NLRB's decision not to exercise jurisdiction over the three Canadian clubs did not undermine its evidentiary base for their finding that there was a joint employer relationship between the league and the clubs.
There is one caveat. The duty to bargain requires that both sides must bargain in good faith. Section 8(d) of the NLRA states that both parties must meet at reasonable times and confer on mandatory subjects of collective bargaining. The failure to do so is an unfair labor practice. This duty to bargain in good faith can be defined as a willingness to enter in negotiations with an open and fair mind and with a sincere desire to find a basis of agreement. The duty to bargain calls for sincerity, not results.
An example of the above process was revealed in NFLPA v. NLRB (1974). In the case, various National Football League owners and their management council unilaterally promulgated and implemented a rule that provided for an automatic fine against any player who left the bench while there was a brawl or altercation on the playing field. The unilateral enactment of this rule without the benefit of collective bargaining was an unfair labor practice. This rule was an unfair labor practice since it involved a mandatory subject of collective bargaining and should have been sifted through the collective bargaining process. Also, the c.b.a. itself provided that any change in current practices that affect the players' employment conditions shall be negotiated in good faith.
The union has the responsibility to fairly represent all members of the bargaining unit, even those who are not members. This is the duty of fair representation. In order to prove a violation of this duty one must show that the union acted arbitrarily or in bad faith. For example, a union always defends any of its players when they are disciplined for clubhouse brawls, but then the union ignores one particular player who happened to be anti-union. This case would reflect a violation of the duty of fair representation.
C. Collective Bargaining Generally
Collective bargaining is the process under the NLRA where owners and the players' union participate in a give-and-take that produces a document which is called the collective bargaining agreement (c.b.a.). This document establishes the rules and regulations of their relationship. Once they have entered into collective bargaining, they are obliged to bargain in good faith. The failure of either party to bargain in good faith is an unfair labor practice.
The subject matter of collective bargaining, that is, what must be discussed at the bargaining table, includes wages, hours and conditions of employment. There are also permissive subjects of bargaining which include anything other than wages, hours and conditions. The parties must bargain in good faith about mandatory subjects, but they may refuse to bargain about permissive subjects. A party may insist that the other party agree to their proposal on a mandatory subject, even to the point of impasse. If an agreement does not materialize, a party then may resort to economic pressure, i.e., strikes or lock-outs, without risking NLRA Secs. 8(a)(5) or 8(b)(3) unfair labor practice charges. This is important because if a strike is an unfair labor practice, it can be enjoined.
D. The Collective Bargaining Agreement
Collective bargaining agreements express the complete range of relationships between management and their athlete employees. This document will specify the scope of the union-management agreement and will prohibit the use of either strikes or lockouts. Although the collective bargaining agreement will vary with the sport, it will cover at a minimum the following: club discipline, non-injury grievances, commissioner discipline, injury grievances, the SPK, college draft, option clauses, waivers, base salaries, access to personnel files, medical rights, retirement, insurance and the duration of the c.b.a.
E. Concerted Actions
The process of collective bargaining only works because of the threat of concerted action that each party can legally invoke if negotiation reaches an impasse. This is especially true in professional sports where the season is only so long and the athlete's career is limited in duration. Even though the history of collective bargaining in professional sports is not very long, there is an almost annual ritual in the major sports of either concerted actions, the threat of concerted actions or accusations of unfair labor practices.
1. Strikes
The NLRA guarantees employees, and thus professional athletes, the right to engage in strikes and in other concerted activities. If collective bargaining reaches an impasse then the players' union is legally allowed to strike. A strike is the failure to report to training camp or to the playing field. The strike is the players' primary weapon in coercing the owners to either adhere to the players' demands, compromise, or at least get back to the bargaining table and continue to negotiate in good faith. All strikes are a double-edged sword with the "winner" being the side that can most easily withstand the economic hardships that concerted actions by nature bring.
This right to strike cannot generally be diminished or thwarted and will receive considerable legal protection. Even though there is a right to strike, the union must still continue to bargain in good faith. The union will also lose their legal right to strike if it agrees to a no-strike clause in the c.b.a., if the players' union engages in an activity that has an unlawful objective or if the union uses improper means. The owners can impose sanctions on the strikers; however, they are still employees and cannot be punished for any unfair labor practices committed by management during a strike.
2. Lockouts
On the other hand, the owners have the ability to lockout the players, that is, to not allow the athletes to report to training camp. The lockout is the owners' primary economic weapon; it is the power to withhold employment. It is used as a means to economically coerce the players to either return to the bargaining table and/or rekindle their desire to continue good faith negotiations. Lockouts are legal as long as bargaining continues in good faith and the lockout occurs only after impasse.
F. Arbitration and Mediation
The arbitration and mediation procedures in professional sports are probably the most important result and ingredient in the collective bargaining process. In fact, in baseball, the grievance procedure which began in the 1970 c.b.a. helped to end the reserve clause; and salary arbitration which began in the 1973 c.b.a. is perhaps the greatest additive to the players' quest for higher salaries.
If there is an applicable clause, arbitration will be the exclusive remedy for achieving peace. Courts rarely reverse an arbitrator's decision if the party seeking arbitration makes a claim that on its face is governed by the arbitration provisions of the c.b.a. The basic issue in arbitration is whether the dispute is arbitrable, that is, is it within the range of matters that were intended to be arbitrated through the grievance procedure.
The seminal case of Kansas City Royals Baseball Corp. v. MLBPA (1976), is a good illustration of how grievance arbitration works in sports. In this case, a major league baseball team brought an action against the players' association to overturn an arbitration award that ruled in favor of two professional baseball players who played out their option years and then sought to be declared free agents. The court's review was limited to the legitimacy of the arbitration process. The court's favorable ruling was predicated on the following: The arbitration provision of the c.b.a. was broad enough to cover the dispute in question; there was nothing in the history of their collective bargaining relationship that showed a strong intent not to arbitrate grievances that involved the reserve clause, that is, there was nothing to overcome the presumption that the question of free agency was arbitrable; that the documents in question (e.g., the c.b.a.) were at least susceptible of the arbitration panel's interpretation; that the decree was not impermissible against other entities that were not party to either the arbitration or the court proceedings; and that the decree was not vague and indefinite as regards the granting of free agency.
In an SPK a party has certain rights. The question becomes how to enforce these rights; the answer generally is arbitration. An agreement to arbitrate is a promise to resolve disputes by non-judicial means. Arbitration is preferred to judicial remedies because it is more informal, less costly and less time-consuming. It is also more private, which is important in an industry which is concerned with its public image and constantly under intense media scrutiny. The parties can pick the person who will hear the case which can guarantee that that person is at least familiar with the peculiarities of the particular sport.
As regards determining what controversies are subject to arbitration, one must look to the actual wording of the SPK. Most sports contracts contain a very broad arbitration clause: it will cover nearly all disputes. However, in most agreements the club will still retain the right to seek judicial redress as regards the players' promise to perform exclusively for that club during the term of the contract. Clubs want the power of an injunction to stop players from club or league jumping.
Matters that are not subject to arbitration include controversies not covered in the agreement, situations when the breaching party waived his arbitration rights (e.g., initiating a law suit instead of proceeding with arbitration) and cases where the court recognizes certain claims that they believe require direct judicial enforcement because of public policy reasons (e.g., equal employment or antitrust).
There are few grounds for vacating an arbitrator's award. A court will set aside awards only in extreme cases; therefore, agents should not approach arbitrations with a cavalier attitude. The rationale behind the "finality" of the award is that the parties have freely bargained away their rights to seek judicial remedies and presumably each party has received something in return. Therefore, the parties should be made to keep their bargain. Also, arbitration is deemed to be a desirable mechanism for dispute resolution and as a result, arbitration decisions should be maintained and honored.
1. Grievance
The standard grievance arbitration clause will usually stipulate that all problems that arise out of a dispute or grievance that emanates from an interpretation or misinterpretation of the c.b.a. or SPK must be handled through agreed upon arbitration procedures.
Arbitration procedures are relatively standard in most SPK's and c.b.a.'s. Usually they deal only with grievance or contract disputes, but, as in professional baseball, they can be formulated to deal with other concerns, such as salary disputes.
The grievance arbitration procedure as usually stipulated in the c.b.a. is an extremely practical method for both parties to settle their differences. The purpose of this clause is to provide an orderly and expeditious procedure for the handling and resolving of certain disputes, grievances and complaints. Although it is similar to all other sports, baseball's arbitration procedure specifically excludes the benefit plan, union dues check-off and complaints involving the integrity of the sport.
2. Salary
In baseball, a player or a club is allowed to submit a dispute over a player's salary to binding arbitration without the consent of the other party after a certain number of years in service have been accumulated by the player. (It was two years, then it was three, now, it falls between two and three years; more precisely, as a result of the 1990 lockout, 17% of the two to three year players are eligible for salary arbitration). The technique that is used in this type of arbitration is called "high-low," which means that both parties must submit proposed salary figures to the arbitrator who then must choose only one figure, without modification or compromise. The tool of the arbitrator and also the tool for both the players and owners, is statistics: the player's statistics covering productivity, longevity, potential and comparable worth as compared to like-situated players. Each party will offer statistics in order to prove their contention that their salary figure is most correct. The arbitrator must then decide the significance of mutually contradictory figures and choose the one that he feels is most correct. A major complaint about this type of arbitration is that the arbitrator who is chosen (under mutual agreement by both the union and the owners) is often lacking in the requisite baseball expertise to properly decipher the often confusing statistics.
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