Appeals Court Recognizes Non-Statutory Exemption, Stuffing Clarett at the Line

Jun 5, 2004

Finding that the NFL’s eligibility rules represent a non-statutory exemption to antitrust laws, the 2nd U.S. Circuit Court of Appeals has reversed a district court holding that would have made Maurice Clarett eligible to play in the NFL this year.
“This lawsuit reflects simply a prospective employee’s disagreement with the criteria, established by the employer and the labor union, that he must meet in order to be considered for employment,” wrote the panel of judges. “Any remedies for such a claim are the province of labor law.”
The above passage represented a common theme throughout the 35-page opinion, as the panel veered dramatically away for the district judge’s application of relevant case law and reasoning.
The lower court had concluded that the non-statutory exemption did not apply because the eligibility rules:
“1) are not mandatory subjects of collective bargaining,
2) affect only ‘complete strangers to the bargaining relationship,’ and
3) were not shown to be the product of arm’s-length negotiations between the NFL and the players union.” Clarett v. NFL, 306 F.Supp.2d 379, 382 (S.D.N.Y. 2004)
The panel began its analysis of the district court’s opinion by noting “that it has long been recognized that in order to accommodate the collecting bargaining process, certain concerted activity among and between labor and employers must be held to be beyond the reach of antitrust laws. U.S. v. Hutcheson, 312 U.S. 219 (1941)”
It then embarked on a review of several cases, the most relevant of which was Local No. 189, Amalgamated Meat Cutters & Butcher Workmen v. Jewel Tea Co., 381 U.S. 676 (1965). In Jewel Tea, the union sought “to diminish the threat posed to members’ job security by evening sales of pre-packaged meat and the nighttime use of unskilled labor.” The court applied the non-statutory exemption.
This emphasis on Jewel Tea contrasted with the weight the district court placed on Mackey v. NFL, 543 F2d 606 (8th Cir. 1976). The panel pointed to subsequent case law where “players’ claims that concerted action of a professional sports league imposed a restraint upon the labor market for players’ services and thus violated the antitrust laws.” In each of those cases, the court recognized a non-statutory exemption, defeating each respective claim.
“Clarett’s argument that antitrust law should permit him to circumvent this scheme established by federal labor law starts with the contention that the eligibility rules do not constitute a mandatory subject of collective bargaining and thus cannot fall within the protection of the non-statutory exemption,” wrote the panel, in addressing the first of three contentions made by the plaintiff.
In disagreeing, the panel wrote that the rules are a mandatory bargaining subject “because they have tangible effects on the wages and working conditions of current NFL players.” It added that many such “arrangements in professional sports that, at first glance, might not appear to deal with wages or working conditions are indeed mandatory bargaining subjects.
“The eligibility rules in other words cannot be viewed in isolation, because their elimination might well alter certain assumptions underlying the collective bargaining agreement between the NFL and its players union.”
Turning to the second contention, the panel wrote that “Clarett is no different from the typical worker who is confident that he or she has the skills to fill a job vacancy, but does not possess the qualifications or meet the requisite criteria that have been set.”
Finally on the last contention, the panel noted that the union’s “agreed to waive any challenge to the Constitution and Bylaws and thereby acquiesced in the continuing operation of the eligibility rules.”
In summary, it wrote that “the disruptions to federal labor policy that would be occasioned by Clarett’s antitrust suit, moreover, would not vindicate any of the antitrust policies that the Supreme Court has said may warrant the withholding of the non-statutory exemption.” Clarett v. NFL, Docket No. 04-0943
2nd Cir., 5/24/04


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