What a difference a year makes. In 2015, Jeff Kessler and the NFLPA had used litigation to reform the NFL-NFLPA Collective Bargaining Agreement (“CBA”). Binding arbitration before the NFL Commissioner was apparently no longer binding, and aggrieved players could scoot to court and have a sympathetic federal judge impose his own brand of industrial justice on the parties, indifferent to the bargained-for agreement. In Adrian Peterson v. NFL, U.S. District Court Judge David Doty set aside the arbitrator’s decision, and District Court Judge Richard Berman followed in the Tom Brady case. Thus it seemed, the players could bargain, give away rights in return for other concessions, and then rip back what they had conceded through litigation. Kessler was flying high.
Then the adults took over, specifically, the U.S. Court of Appeals. The Second Circuit overturned Berman’s order, and rejected subsequent entreaties for hearing en banc.
The Eighth Circuit reversed Judge Doty on August 4, 2016. The decision is virtually a 19-page beating.
The NFL has long had a provision for disciplining players for conduct detrimental to the League. In 2013, the policy did not impose a maximum punishment; it stated that discipline would depend on the specific facts in each incident. In August 2014, NFL Commissioner Roger Goodell sent a memorandum that actually limited the potential punishment to a six-week suspension for a first offense.
Adrian Peterson was subsequently indicted by a Texas grand jury for using a tree branch to beat his four-year old son. There were “cuts and bruises to the child’s back, buttocks, ankles, legs, and scrotum, along with defensive wound to the child’s hands” (NFL Player’s Association and Adrian Peterson v. NFL, No. 15-1438, (Eighth Circuit, August 4, 2016) at 4). Peterson pled nolo contendere to reckless assault. Commissioner Goodell then suspended him for six weeks. The NFLPA appealed and Goodell designated former NFL VP Harold Henderson as the arbitrator. The NFLPA asked that Henderson recuse himself due to his close ties to the NFL and his role in assisting the NFL in creating the policies. Mr. Henderson denied the request, noting that he had often served as a hearing officer without objection.
The NFLPA made a variety of arguments before Arbitrator Henderson, including the notion that NFL custom and practice only allowed for a two-game suspension, that the prior policy in place at the time of the offense required a reduced penalty, that process and conditions of reinstatement were flawed and that the League was essentially making it all up as it went along. Henderson rejected those arguments. He stated that the 2014 communications were not a change in policy as much as it reinforced the old policy and made it clear. Moreover, the policy in 2013 did not impose a maximum penalty but the nature of the penalty would be based on the specifics of the incident, that the Commissioner had broad powers under Article 46 of the CBA, that a prior decision involving Miami Dolphins players stated that the Commissioner has such broad powers and was not bound by prior arbitration rulings based on wholly different facts.
The NFLPA also argued that the Ray Rice fiasco limited the suspension to two weeks. Henderson did not agree, as, if the Rice case was “a matter where the first discipline imposed was an indefinite suspension, an arbitrator would be hard pressed to find that the Commissioner had abused his discretion” (Id. at 7). He further stated that it was unnecessary to find whether the various communications were one policy or two because the result was the same in either case, and that the suspension was justified because the “severe beating of a four year old child” was “arguably one of the most egregious cases of domestic violence in this Commissioner’s tenure” (Id.). Finally, Henderson rejected the claim that Peterson lacked fair notice of the potential punishment, as there was no evidence that Peterson was aware of the discipline imposed in prior domestic violence cases. Furthermore, comparing the beating of a child to fines for being late to practice was irrelevant. He upheld the suspension, and the NFLPA ran to Judge Doty.
The NFLPA made four arguments to their favorite judge. It claimed that: (i) Peterson was punished retroactively under a new policy; (ii) the arbitrator exceeded his authority in “hypothesizing” whether the punishment was proper under the old policy; (iii) the arbitrator was not impartial; and (iv) the award violated the principle of fundamental fairness. Judge Doty accepted the first two arguments. He ruled Peterson was punished retroactively in violation of the CBA, that the award was based on hypothetical reasoning, that there was “no valid basis” for distinguishing the Rice case and that the arbitrator exceeded its authority as he was limited to deciding only the issues presented by one side – the NFLPA – so that nothing that the League submitted could frame any issues for the arbitrator. This is not the law. Commissioner Goodell had reinstated Peterson, so the case became about the six-week fine, and the law. The most charitable explanation is that Judge Doty simply forgot the law. The League appealed.
The Eighth Circuit began its analysis by stating in labor cases, “the role of the courts is very limited” (Id. at 9). This limited role is mandated by Congress in the Labor Management Relations Act of 1947, and by the Supreme Court in MLPPA v. Garvey, 532 U.S. 504, 509 (2001). The reviewing court does not determine what it would have done or whether the arbitrator “correctly” interpreted the CBA. It was the “arbitrator’s construction which was bargained for” (Id.). The correct legal standard is very low: if the arbitrator “is even arguably construing or applying the contract and acting within the scope of his authority” then “the arbitral decision must stand” (Id.). Vacatur is only appropriate when the decision “does not ‘draw its essence from the (CBA)’” (Id.).
The Court stated that the NFLPA’s position is that the arbitrator ignored the “law of the shop,” and that the 2014 communication was a new policy that was not in effect at the time Peterson severely beat his son. Judge Doty used the Rice decision to claim that the arbitrator “simply disregarded the law of the shop” (Id. at 10). The “law of the shop”—prior arbitration decisions involving the parties is part of the CBA. However, as with express terms, the arbitrator need only “arguably” construe or apply prior decisions to be upheld.
Arbitrator Henderson had construed the Dolphins’ player case. He determined that the policy in effect at the time gave the Commissioner the authority to suspend Peterson for six weeks. Although the NFLPA suggested that the old and new policies were very different, there was other evidence that the 2014 communication reinforced and/or explained the older policy (Id. at 13). The arbitrator ruled, and courts “are not permitted to review the merits of an arbitration decision even when a party claims that the decision rests on factual errors” (Id.).
The NFLPA then made the surprising argument that the arbitrator ignored four utterly irrelevant prior arbitration decisions and this justified vacatur. Henderson had considered those decisions, and found them to be irrelevant. Three involved discipline by the team, not the Commissioner. One dealt merely with the timing of a team weigh-in. Another was regarding team weigh-in policies and a failure by the team to timely publish a list of designated offences. The third case failed to rise to the level of “conduct detrimental” to the club.
Only the Dolphins player case involved Commissioner discipline. It did not involve the severe beating of a child but the inconsistent treatment of the players, selective enforcement, and a failure by the club to prove that the alleged player’s conduct caused misconduct on the field. The Court noted the issue was not whether the arbitrator was correct in his analysis but merely whether he was construing the law of the shop, which he clearly was.
The NFLPA next tried to maintain that Commissioner Goodell conceded in prior testimony in the Rice matter that he could not retroactively apply a new policy. The League responded that the testimony was not the law of the shop and merely meant that Goodell realized that he could not re-discipline the already disciplined Rice. The arbitrator did not agree that the testimony was an admission that related to Peterson. The Court pointed out that the “meaning of Goodell’s statement is a question of fact. Given the context of the Rice testimony, the arbitrator reasonably concluded that Goodell did testify to one belief” and “then act to the contrary two later when he disciplined Peterson. In any case, a federal court may not set aside an arbitrator’s decision based on ‘improvident, even silly fact finding’ so the Associations’ reliance on Goodell’s testimony does not carry the day” (citing Garvey 532 US at 39).
The NFLPA argued that the arbitrator upheld the discipline under the new policy but considered it to have been imposed under the old policy. The Court disagreed. The arbitrator had concluded that there was no new policy and that he thus did not need to decide whether the Commissioner applied an old or new policy. Since there was a single policy, the discipline imposed was permissible under the CBA.
The NFLPA actually claimed that its opening statement alone provided the sole basis for the arbitrator to act. However, no one party dictates the question to be presented as if the other party was legally irrelevant. The League presented a much broader question: whether the discipline was appropriate. Nothing required the arbitrator ignore the League’s position: “The arbitrator was not required to accept the Association’s disputed premise; he properly asserted authority to resolve whether the premise was correct” (Id. at 17). The Court also noted that the NFLPA “raised arguments that required consideration of what discipline was permitted under the June 2014 Personal Conduct Policy” (Id.). Henderson had thus not exceeded his authority.
The NFLPA then asserted two arguments that even Judge Doty rejected. The first was that Arbitrator Henderson was “evidently partial” (Id. at 18). The NFLPA had made a similar argument in Williams v. NFL, 532 F.3d 863 (8th Cir. 2009). In Williams, the NFLPA claimed the NFL general counsel was too partial to be an arbitrator. The Williams court slapped the argument away, because the NFLPA “waived its objection to [the general counsel] serving as arbitrator by agreeing in the CBA that the Commissioner’s designee…could serve as arbitrator” (Id, quoting Williams at 582 F.3d 885-886). The agreement “may present actual or apparent conflict of interest of the arbitrator. But the parties bargained for this procedure and the Association consented to it. It was foreseeable that arbitration under the Agreement sometimes would involve challenges to the credibility of testimony from Goodell or other League employees. When parties to a contract elect to resolve disputes through arbitration, a grievant ‘can ask no more impartiality than inheres in the method they have chosen’” (Id.). This argument “is thus foreclosed by Williams and remand is unnecessary” (Id.).
The final argument was that the arbitration was “fundamentally unfair. Fundamental fairness is not a basis for [V]acatur identified by in the Labor Management Relations Act or the Federal Arbitration Act” (Id. at 19). The Court stated: “our narrow construction of extra-statutory review militates against adopting a fundamental fairness standard” (Id.).
In support of its non-statutory claim, the NFLPA did “not identify any structural unfairness in the Article 46 process for which it bargained. The Association’s fundamental fairness argument is little more than a recapitulation of its retroactivity argument against the merits of the arbitrator’s decision” (Id.). The Court concluded this section by stating that they had “never suggested that when an award draws its essence from the (CBA), a dissatisfied party nonetheless may achieve [V]acatur by showing that the result is ‘fundamentally unfair” (Id.). This did not “fit within the narrow window left open for consideration” and is thus “without merit” (Id.). The Court remanded the case with instructions to dismiss the NFLPA’s petition.
The opinion is consistent with the Second Circuit in Brady and the Supreme Court in Garvey, so it should stand. The result is that Mr. Peterson owes the NFL a lot of money and the NFLPA will have to live by its agreements. For Kessler, it is different. As Boston sports writer put it: “NFL mouthpiece undefeated at the bank but not en banc. Lawyers always win” (Ron Borgers, Twitter, July 13, 2016). That is a sorry state of affairs.
