By Robert J. Romano, JD LLMS, sports law professor at St. John’s University, with assistance from Emily Constanza of Quinnipiac Law School
The United States District Court for the District of Oregon has enjoined, albeit temporarily, the National Women’s Soccer League (NWSL) from enforcing its rule that all rostered players must be at least 18 years of age (Age Rule). With this decision, 15-year-old soccer prodigy Olivia Moultrie, who currently scrimmages with the Portland Thorns squad, now has the opportunity to compete for a position as a professional free from the age restriction.
The District Court’s ruling is a result of Ms. Moultrie’s filing a Complaint and Temporary Restraining Order (TRO) request on May 4, 2021 against the NWSL, claiming that the League’s Age Rule is a violation of the Sherman Antitrust Act, 15 U.S.C. § 1. The Plaintiff’s argument that the Age Rule violates the Sherman Act was based on the following:
“The ten teams that make up the NWSL have agreed among themselves, and with the League, not to contract with soccer players under the age of 18, without regard to their talents or ability to compete in the League.”
“That the Age Rule serves no legitimate business justification or procompetitive purpose.”
“There is an absence of any age restrictions for male soccer players.”
Section 1 of the Sherman Act prohibits any “contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce, is intended to prohibit actions that unreasonably restrain competition.” In order for a plaintiff to establish that the defendant’s actions violate the Sherman Act, the following three elements must be established: “(1) the existence of a contract, combination, or conspiracy among two or more separate entities that (2) unreasonably restrains trade and (3) affects interstate or foreign commerce.”
The NWSL’s defense against the antitrust claim was that no contract, combination, or conspiracy among two or more separate entities existed, because the NWSL is a single entity. This argument, however, was rebuffed by the Court.
Section 1 of the Sherman Act targets only “concerted action” between separate entities and does not apply to anticompetitive actions taken by a single entity acting unilaterally. The determination of whether targeted activity is “concerted action” between separate entities is a “functional consideration of how the parties involved in the alleged anticompetitive conduct actually operate and does not turn simply on whether the parties involved are legally distinct entities.” Instead, “the crucial question is whether the entities alleged to have conspired maintain an ‘economic unity,’ and whether the entities were either actual or potential competitors.”
Here, the District Court found that based upon the record, although limited, the NWSL was not a single entity for the purposes of this Section 1 analysis. The Court based its ruling on the fact that the various NWSL teams compete for players on the open market, and because the Age Rule, even though adopted in 2013 when the NWSL was arguably a single entity, has now been agreed upon and enforced by separate entities in an anticompetitive manner.
In continuing with its antitrust analysis, the court found that the NWSL’s Age Rule “unreasonably restrains trade” because a) Ms. Moultrie has been injured by being excluded from the market, b) competition in the market is injured by the exclusion of otherwise qualified players, and c) the NWSL and its members have pooled their market power to “in effect, establish their own private government.” The District Court reasoned its findings on the fact that the NWSL has what it referred to as ‘market power’ based on the fact that it is the only professional women’s soccer league in the United States and therefore has no real competition in the labor market for female professional soccer players. In addition, the District Court relied on the case of Haywood v. National Basketball Association, wherein the Plaintiff, Spencer Haywood, successfully challenged the NBA’s rule prohibiting a player from negotiating with any NBA team until four years after his high school class graduation, as determinative as to why the NWSL’s Age Rule unreasonably restrains trade in violation of the Sherman Act.
Finally, the District Court found unequivocally that the business of the NWSL “affects interstate commerce,” since it has ten teams in ten states and each team travels to each of those states regularly to play games. In addition, the District Court stated, “[m]any of those games are broadcast around the United States on TV, radio, and the internet pursuant to contracts entered into by the NWSL or its teams.”
In concluding that the Plaintiff met her burden by making a sufficient showing that all three elements have been satisfied, the District Court then determined that the “Defendants offered no legitimate procompetitive justification for treating young women who want an opportunity to play professional soccer differently than young men.” In fact, the Court noted that, “Lifting the rule will promote gender equity in athletics.”
Note, however, that Ms. Moultrie’s win may be short-lived, as the TRO expires after fourteen days unless extended by a further ruling of the court. In addition, the District Court’s order only prevents the NWSL from enforcing the Age Rule up until the time that the rule is adopted by both the League and players union in a collective bargaining agreement, which is currently being negotiated between the two parties.