By Richard Sheinis, Esq.*
The National Basketball Association (NBA) and the National Basketball Players Association (NBAPA) recently adopted a new Collective Bargaining Agreement. One of the provisions of the Agreement, which has drawn public commentary is the new minimum age requirement. The Agreement states that in order to be eligible for the NBA draft, a player must be one (1) year removed from the graduation of his high school class and must turn nineteen (19) years of age during the calendar year of the draft. Foreign players must only meet the requirement that they turn nineteen (19) during the year of the draft. (http://www.nba.com/news/CBA_050730.html.)
This rule comes on the heels of the Maurice Clarett case in which the National Football League’s (NFL) draft eligibility rules were challenged. The NFL’s eligibility rule is that no one is eligible for the draft unless they are three (3) years removed from their high school graduation, or the graduation date of their high school class. While much has been written regarding the social, moral and political implications of the NBA rule, the purpose of this commentary is strictly to address the legality of “minimum age” rules.
The new NBA minimum age requirement is a departure from what had come to be accepted as just the way things are…any high school player that chooses to enter the NBA draft is free to do so. It was not always this way.
In 1971, Section 2.05, in conjunction with Section 6.03, of the Bylaws of the NBA, provided that no person was eligible to be drafted until four (4) years after he had graduated or four (4) years after his original high school class had graduated. This rule was challenged by Spencer Haywood who claimed it violated the Sherman Antitrust Act. Haywood v. The Denver Rockets, 325 F.Supp. 1049 (C.D. Ca. 1971).
Haywood was a junior college All-American during the 1967-68 season. In 1968 he led the U.S. Olympic Basketball team to a gold medal. He played the 1968-69 season for the University of Detroit, where he was again an All-American. In 1969-70 he played for the Denver Rockets of the now defunct American Basketball Association. In 1970, Haywood signed to play for the Seattle Supersonics of the National Basketball Association. Haywood’s contract with the Supersonics was disapproved by the Commissioner of the NBA on the grounds that Haywood was not four (4) years removed from his high school graduation.
Litigation ensued with the United States District Court ruling in favor of Haywood. The Court found that NBA teams conspired not to deal with players whose high school classes were not four (4) years beyond graduation. This concerted refusal to deal constituted a group boycott in violation of the Sherman Antitrust Act. Since Spencer Haywood broke down the four (4) year barrier, drafting players who had completed four (4) years of college seems to have become the exception, rather than the rule.
The NFL eligibility rules, on the other hand, baring college underclassmen from entering the draft, have been in effect in one form or another for many years. The original rule precluded players from entering the draft until four (4) seasons after his high school class had graduated. In 1990 the rule was shortened to three (3) seasons. See, Clarett v. National Football League, 306 F.Supp.2d 379 (S.D.N.Y. 2004), rev’d by Clarett v. National Football League, 369 F.3d 124 (2nd Cir., 2004).
This rule was challenged in 2004 when Maurice Clarett applied to be eligible for the 2004 NFL draft. Maurice Clarett, a running back for the Ohio State University football team, was prevented from entering the draft by the NFL’s eligibility rule precluding any player from entering the draft unless three (3) seasons had elapsed since his high school graduation. When Clarett was denied permission to enter the draft, he sought legal recourse. Clarett’s suit alleged that the eligibility rule violated antitrust laws.
The NFL asserted that the eligibility rule was immune from the antitrust laws because it is the subject of collective bargaining between the NFL and the NFL Players Association (NFLPA). Certain subjects of collective bargaining are “exempted” from antitrust law under what is known as a non-statutory labor exemption. The exemption is so named because it is inferred from federal labor statutes, which set forth a national labor policy favoring free and private collective bargaining. The exemption is intended to encourage good faith negotiations between an employer and a union regarding terms and conditions of employment without fear of violating antitrust laws. In other words, some restraints on competition may be imposed through the collective bargaining process in order to allow meaningful collective bargaining to take place. When this non-statutory labor exemption is deemed to apply, the legality of the rule at issue is governed by labor law, rather than antitrust law. Labor laws will generally allow an employer (i e., NFL) and a union (i.e., NFLPA) to agree on certain aspects of employment, that would not be allowed if the rule were governed by antitrust laws.
On Motion for Summary Judgment, the District Court ruled in favor of Clarett. The Court stated that the non-statutory labor exemption did not apply. The eligibility rule was governed by antitrust law, not labor law. The rule was deemed to be an unreasonable restraint of trade in violation of antitrust law. The NFL was ordered to allow Clarett to enter the 2004 draft. On appeal to the Court of Appeals for the Second Circuit, this ruling was reversed. A review of the Court of Appeals’ opinion is necessary for a full understanding of its decision.
Many of the terms and conditions of NFL players employment are set through the collective bargaining process that occurs between the NFLPA and the NFL clubs. These terms and conditions of employment are deemed mandatory subjects of collective bargaining. Mandatory subjects of collective bargaining include wages, hours and terms or conditions of employment. The Court of Appeals found that the rules regarding eligibility for the draft were a mandatory subject of collective bargaining as the rules relate to a condition of employment. As a mandatory subject of collective bargaining, the Court stated, the NFL and its players union are free to agree on any rules affecting who can be considered for employment as long as those rules do not violate the federal laws prohibiting unfair labor practices or discrimination. The Court of Appeals decision, therefore, hinges on the classification of the eligibility rule as a condition of employment and a mandatory subject of collective bargaining. If this rule is not found to be a “condition of employment”, it is not a mandatory subject of collective bargaining and is not “protected” by the labor laws. It would then be exposed to scrutiny under the antitrust laws.
The Clarett Court found that the eligibility rule was a condition of employment because it served to protect the jobs of union members. The Court cited three (3) cases as support for the proposition that preserving jobs for union members is a valid function of unions in the collective bargaining process. A review of these three cases, however, shows that they do not apply to the NFL eligibility rule, which does not preserve jobs for union members.
The Court first cited Fibreboard Paper Products Corp. v. National Labor Relations Board, 379 U.S. 203 (1964) and Intercontinental Container Transport Corp. v. New York Shipping Association, 426 F.2d 884 (2d Cir. 1970) for the proposition that it is within the province of unions to preserve jobs for union members, and such preservation is a mandatory subject of collective bargaining. The Court stated that since the number of jobs open to players in the NFL is capped by the number of teams in the league and the roster limits, eligibility rules preserve the jobs of those players already in the NFL.
Fibreboard and Intercontinental, however, did not involve rules, which prevented a person from becoming a union member. They simply sought to preserve work for the union as a group. In Fibreboard, a union of maintenance workers sought to prevent Fibreboard from contracting out its maintenance work. The union of maintenance workers was seeking to force Fibreboard to have its maintenance work done by union workers, rather than by outside contractors. If Fibreboard were to contract out its maintenance work, the entire group of union maintenance workers would have been out of a job. The Maintenance Workers Union was not seeking to have a class of individuals prohibited from joining the union. They only wanted to prevent the work performed by the union members from “disappearing.” The Court found that Fibreboard could not contract out the work without bargaining with the union.
Similarly, in Intercontinental, the union for International Longshoremen sought to preserve work for the union members as a group. It had nothing to do with what specific individuals would comprise the group of union workers. In Clarett the Court stated that the NFL eligibility rules seek only to do what the unions in Fibreboard and Intercontinental sought to do, which is to preserve jobs for union members. This is a mischaracterization of the NFL eligibility rules.
The NFL eligibility rules do not act to preserve jobs for union members. Clarett does not seek to have the work currently done by NFL players, who comprise the union, move to some other group of players who are not members of the union. No matter who plays in the NFL each year, the players will still be members of the union. This is not a situation where allowing Maurice Clarett to enter the draft will result in the NFL Players Union, as a group, being pushed aside in favor of a group of players who are not members of the union.
Secondly, whether Clarett was in the draft or not, there is no shortage of college players seeking to earn a roster spot at the expense of a player already in the league. To say that Clarett is not eligible for the draft so that the roster spots of veteran players are protected is unrealistic and ignores the competition for roster spots that already exists in the NFL. The NFL eligibility rule does not preserve jobs for the union, as was the case in Fibreboard and Intercontinental, it merely dictates who may compete for those union jobs.
The Court of Appeals then justified the NFL eligibility rules by comparing them to union hiring hall arrangements, which have long been valid. See, Clarett, 369 F.3d 140-141. A hiring hall is a process whereby the hall is the sole source of employees for various employers in a particular field. The union hiring hall selects and refers applicants on the basis of factors such as seniority in employment, length of residence in the area and work experience. There is no discrimination or preference between those who are members of the union and those who are not. The hiring hall thus established a system of seniority rights and job priority. Since it pertained to a term or condition of employment, and was non-discriminatory, it was protected as a mandatory subject of collective bargaining.
The hiring hall arrangement is a far cry from the NFL eligibility rules. The hiring hall was non-discriminatory. It gives everyone an opportunity to compete for a job. The NFL eligibility rules discriminate against anyone not three (3) years removed from high school. The NFL eligibility rule prevents a class of people from competing for a job. It ignores ability and work performance.
In the end, the Court of Appeals stated that the NFL eligibility rules are nothing more than an agreement between the employee (NFL) and the labor union (NFLPA) regarding the criteria a prospective employee must meet in order to be considered for employment. This is a condition of employment which is subject to labor law, not antitrust law. The Court reasoned that allowing Clarett to have his case decided under antitrust law would provide an advantage to professional football players that is not available to transport workers, coal miners, meat packers and the like.
The Court neglects, however, to cite a single case where a “term or condition of employment” was the complete exclusion of an entire class of people based upon nothing more than age. Such a sweeping exclusion is not a condition of employment and does not serve to protect a source of work for union members. It is a discriminatory practice which is not a mandatory subject of collective bargaining. Since it is not a mandatory subject of collective bargaining, the eligibility rule must be evaluated under antitrust law, and may not hide within the protective cloak of labor law. Once the artificial shield of labor law is removed, the NFL eligibility rule can be seen for what it is…a discriminatory and unlawful restraint of trade. The result should have been no different than the result in the Haywood case. (for a much more exhaustive analysis of the NFL’s Draft Eligibility rule, as it existed in 1984, See, “Professional Football’s Draft Eligibility Rule: The Labor Exemption and Antitrust Laws.” 33 Emory L.J. 375 (1984).)
The new NBA eligibility rule should be viewed no differently than the NFL eligibility rule. Recent drafts have shown us that players directly out of high school are often successful in the NBA. The minimum age requirement is a discriminatory restraint of trade that cannot be justified as a condition of employment and cannot be shielded because it is included in the Collective Bargaining Agreement.
*Shemis is an attorney at the law firm of Hall, Booth, Smith & Slover, P.C. in Atlanta. He can be reached at rsheinis@hbss.net
