Reference no: EM131280903

[After their collective bargaining agreement expired, the National Football League (NFL) and the NFL Players Association, a labor union, began to negotiate a new contract. The NFL presented a plan that would permit each club to establish a "developmental squad" of substitute players, each of whom would be paid the same $1,000 weekly salary. The union disagreed, insisting that the 235 individual developmental squad members should be free to negotiate their own salaries. When negotiations reached an impasse in June 1989, the NFL unilaterally implemented the plan. Anthony Brown of the Washington Redskins filed a class action antitrust suit, claiming that the employers' agreement to pay them $1,000 per week restrained trade in violation of the Sherman Act.

A jury granted an award of $10 million to the class, which was trebled by the district court to a $30 million judgment for the players. The court of appeals reversed, holding that the owners were immune from antitrust liability under the federal labor laws. The matter was appealed to the Supreme Court.] BREYER, J.... Labor law itself regulates directly, and considerably, the kind of behavior here at issue-the postimpasse imposition of a proposed employment term concerning a mandatory subject of bargaining. Both the Board and the courts have held that, after impasse, labor law permits employers unilaterally to implement changes in preexisting conditions, but only insofar as the new terms meet carefully circumscribed conditions.

For example, the new terms must be "reasonably comprehended" within the employer's preimpasse proposals (typically the last rejected proposals), lest by imposing more or less favorable terms, the employer unfairly undermined the union's status.... The collective-bargaining proceeding itself must be free of any unfair labor practice, such as an employer's failure to have bargained in good faith. See Akron Novelty Mfg. Co., 224 N.L.R.B. 998, 1002 (1976) (where employer has not bargained in good faith, it may not implement a term of employment); P. Hardin, The Developing Labor Law 697 (3rd ed. 1992) (same). These regulations reflect the fact that impasse and an accompanying implementation of proposals constitute an integral part of the bargaining process....

In these circumstances, to subject the practice to antitrust law is to require antitrust courts to answer a host of important practical questions about how collective bargaining over wages, hours and working conditions is to proceed-the very result that the implicit labor exemption seeks to avoid.

And it is to place in jeopardy some of the potentially beneficial labor-related effects that multiemployer bargaining can achieve. That is because unlike labor law, which sometimes welcomes anti-competitive agreements conducive to industrial harmony, antitrust law forbids all agreements among competitors (such as competing employers) that unreasonably lessen competition among or between them in virtually any respect whatsoever.... If the antitrust laws apply, what are employers to do once impasse is reached?

If all impose terms similar to their last joint offer, they invite an antitrust action premised upon identical behavior (along with prior or accompanying conversations) as tending to show a common understanding or agreement. If any, or all, of them individually impose terms that differ significantly from that offer, they invite an unfair labor practice charge. Indeed, how can employers safely discuss their offers together even before a bargaining impasse occurs?

A preimpasse discussion about, say, the practical advantages or disadvantages of a particular proposal, invites a later antitrust claim that they agreed to limit the kinds of action each would later take should an impasse occur.... All this is to say that to permit antitrust liability here threatens to introduce instability and uncertainty into the collective-bargaining process, for antitrust law often forbids or discourages the kinds of joint discussions and behavior that the collectivebargaining process invites or requires.... The judgment of the Court of Appeals is affirmed. It is so ordered. JUSTICE STEVENS, dissenting... In his classic dissent in Lochner v. New York, 198 U.S. 45, 75 (1905), Justice Holmes reminded us that our disagreement with the economic theory embodied in legislation should not affect our judgment about its constitutionality.

It is equally important, of course, to be faithful to the economic theory underlying broad statutory mandates when we are construing their impact on areas of the economy not specifically addressed by their texts. The unique features of this case lead me to conclude that the Court has reached a decision that conflicts with the basic purpose of both the antitrust laws and the national labor policy expressed in a series of congressional enactments.... Congress is free to act to exempt the anticompetitive employer conduct that we review today.

In the absence of such action, I do not believe it is for us to stretch the limited exemption that we have fashioned to facilitate the express statutory exemption created for labor's benefit so that unions must strike in order to restore a prior practice of individually negotiating salaries. I therefore agree with the position that the District Court adopted below.

Because the developmental squad salary provisions were a new concept and not a change in terms of the expired collective bargaining agreement, the policy behind continuing the non-statutory labor exemption for the terms of a collective bargaining agreement after expiration (to foster an atmosphere conducive to the negotiation of a new collective bargaining agreement) does not apply. To hold that the non-statutory labor exemption extends to shield the NFL from antitrust liability for imposing restraints never before agreed to by the union would ... infringe on the union's freedom to contract....

Case Questions

1. Identify the "non-statutory labor exemption" and explain its significance.

2. Did the non-statutory labor exemption from the antitrust laws expire upon the parties reaching bargaining impasse?

3. If the NFL Players Association decertifies, may NFL players bring suit against NFL owners for antitrust violations for the league's salary cap and employer-imposed uniform salary rates for developmental squad players?