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Friday, July 08, 2011

Injunction Ruling Against NFL Lockout Overturned

The opinion is here.  The Eighth Circuit rescinded the district court's lockout based solely on the Norris-LaGuardia Act.  As to the other arguments, the majority said:

Given our conclusion that the preliminary injunction did not conform to the provisions of the Norris-LaGuardia Act, we need not reach the other points raised by the League on appeal. In particular, we express no view on whether the League’s nonstatutory labor exemption from the antitrust laws continues after the union’s disclaimer. The parties agree that the Act’s restrictions on equitable relief are not necessarily coextensive with the substantive rules of antitrust law, and we reach our decision on that understanding. 

I think this narrow holding preserves the players' longer-term arguments, as I discussed in this earlier post.  This decision only dissolves the injunction.  As I said at the time:

Let's say the court holds that Norris-LaGuardia prohibits the injunction.  Well, that only removes the injunction against the lockout; it does not mean that the NFL won't ultimately be liable for antitrust violations.  In fact, Judge Benton seemed to indicate that antitrust damages would continue to accrue even if the lockout could not be enjoined under the NLA. 

Perhaps these still-open possibilities are pushing the parties to settle.  The named players in the suit may want to blow up the existing system, but it's not clear to me that the lower-paid players want that.  And it would likely take at least a year, and likely two or three, for the antitrust case to render the league crippled from a massive antitrust award.  So the two sides seem to be stepping away from the precipice. 

The fact that the NFL is negotiating at all, however, indicates to me that its lockout strategy was not as effective as predicted.  The typical lockout strategy is to lock out and then wait until workers to come crawling back, after they've missed a big chunk of their salaries.  I don't know how things will end up, but a deal should come soon.  And I expect that the final deal will be much more favorable to the players than most folks would have predicted six months ago.

One final question: why isn't the NBPA pursuing this strategy as well?

Posted by Matt Bodie on July 8, 2011 at 02:43 PM in Corporate, Current Affairs, Sports, Workplace Law | Permalink


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I totally want to hear Matt discussing the Norris-LaGuardia Act on ESPN or some sports-talk-radio show.

Posted by: Joseph Slater | Jul 8, 2011 8:25:25 PM

On the last question, I think it's a combination of:

1. Most NBA players don't start losing paychecks until mid-November, so a lockout isn't imposing a lot of pain right now.

2. They were probably waiting to see how the strategy worked out for the NFLPA, which they had time to do, given #1.

Posted by: Mark McKenna | Jul 8, 2011 4:36:05 PM

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