Mountain Law: The local lessons of Deflategate (column)
August 30, 2016
The so-called "Deflategate" matter is all but over in court. In case you don't follow the National Football League (NFL), the case started when the quarterback for the New England Patriots, Tom Brady, was accused of involvement in a scheme to deflate the pressure of footballs used in a playoff game. The incident — which occurred before the Denver Broncos knocked the Patriots out of the playoffs on their way to winning the Super Bowl — was at best a rule violation and, at worst, cheating because it could have given Brady a competitive advantage. The subsequent legal proceedings hold lessons for even non-football players concerning the nature of arbitration agreements.
NFL players are members of a union and parties to a collective bargaining agreement (CBA) with the League under the Labor Management Relations Act (LMRA). In basic terms, the LMRA is a federal statute that regulates the ability of unions to bargain collectively on behalf of their members with employers such as the League. In this case, the CBA has a provision that allows the commissioner of the league, Roger Goodell, to investigate possible rule violations and impose sanctions as warranted. If a player disputes the commissioner's decision, then he can appeal to, yes, the commissioner himself. The commissioner then acts as an arbitrator to decide whether his own decision was correct.
In Deflategate, the commissioner found that Brady had violated a rule relating to the deflated footballs and imposed the sanction of a four-game suspension. When Brady appealed the decision to the commissioner, Goodell unsurprisingly upheld his own decision. Brady and the union then filed suit in federal court challenging the decision.
Brady argued in court that the CBA unfairly allows the commissioner to consider an appeal of his own decision. Brady won the case at trial, and the league then appealed to the Second Circuit, which reversed the trial court on a 2-1 split decision. The Second Circuit conceded that the arrangement in the CBA is unorthodox. However, it stressed that arbitration is a voluntary process under which the parties agree in advance to the ground rules for any arbitration. In this case, the CBA was negotiated many years ago and provides that the commissioner will handle appeals by a player and thereby be reviewing disciplinary action that he has already taken. Because the parties to the CBA agreed to the process at the outset, the Second Circuit said that the court should not intervene and decide whether it was fair. Put differently, in the absence of fraud or overreaching (which occurs when one side abusively takes advantage of the other), parties are free to enter into contracts that outsiders might view as unfair to one of the parties.
Either Brady or the union could petition the U.S. Supreme Court to grant certiorari to review the Second Circuit's decision. However, Brady has announced that he won't pursue a further appeal, and the union appears likely not to appeal either. The commissioner's power to review his own decisions will likely be an issue when the CBA expires after the 2020 season and is renegotiated. Even if Brady or the union did file a petition, the Supreme Court would not be required to take the case and would be unlikely to do so.
Arbitration provisions can be found in many types of contracts, including employment contracts such as the CBA, construction contracts, cellphone plans and equipment rental contracts. One legal lesson from Deflategate is that parties should not agree to such arbitration provisions lightly because the court is likely to enforce them as written.
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In any event, Brady will serve his four-game suspension and will not face the Denver Broncos this year in the regular season.
Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.
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