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United States Court of Appeals for the Sixth Circuit
October 19, 1978, Argued ; May 22, 1979, Decided
Nos. 78-1462, 78-1463, 78-1464
[*1194] The reserve system, 1 in professional athletics, has been the subject of exhaustive and spirited discussion both in the sports and [**2] in the legal world. Its supporters urge that it stimulates athletic competition between the teams of a sports league; its opponents urge that it stifles economic competition among those same teams. We have no doubt that there is a measure of truth in both claims.
[**3] I. NHL RESERVE SYSTEM
Involved in this appeal is the validity, under federal antitrust laws, of the reserve system currently in effect in the National Hockey League. In its present form, the system has been termed a "modified Rozelle Rule" because it closely resembles the rule promulgated for the National Football League by its commissioner, Pete Rozelle, but has been modified to the extent that arbitration is not by the commissioner himself but by a professional and independent arbitrator.
At the heart of the NHL reserve system is By-Law Section 9A, which is attached as Appendix A. This section provides the rules governing the acquisition of free agents of other clubs in the league and is specifically made applicable to the players in the league by paragraphs 17 and 18 of the Standard Players Contract, 2 [**4] which each player in the NHL is required to sign. Further, [*1195] the Standard Players Contract, expressly including Paragraph 17, was approved by both the NHL team owners and the National Hockey League Players Association (NHLPA) in the current collective bargaining agreement, Sections 9.03(a) and (b). 3
As can be seen from its terms, By-Law Section 9A mandates that when a player becomes a free agent and signs a contract with a different club in the league, his original club has the right under the By-Law to exact an "equalization payment" from the acquiring club. That payment may be by the assignment of contracts of players, by the assignment of [**5] draft choices, or "as a last resort," by the payment of cash. If mutual agreement is not reached, each club submits a proposal to a neutral arbitrator, selected by majority vote of the Board of Governors of the League, who then must select, without change, one of the two proposals submitted.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
600 F.2d 1193 *; 1979 U.S. App. LEXIS 14514 **; 87 Lab. Cas. (CCH) P11,570; 1979-1 Trade Cas. (CCH) P62,649
DALE McCOURT, Plaintiff-Appellee, v. CALIFORNIA SPORTS, INC., and the Los ANGELES KINGS, INC., Defendants-Appellants. DALE McCOURT, Plaintiff-Appellee, v. CALIFORNIA SPORTS, INC., et al., Defendants, NATIONAL HOCKEY LEAGUE, Defendant-Appellant. DALE McCOURT, Plaintiff-Appellee, v. CALIFORNIA SPORTS, INC., et al., Defendants, NATIONAL HOCKEY LEAGUE PLAYERS' ASSOCIATION, Defendant-Appellant
Subsequent History: [**1] Rehearing Denied June 27, 1979.
Rehearing denied by McCourt v. California Sports, Inc., 600 F.2d 1193, 1979 U.S. App. LEXIS 13640 (6th Cir. Mich., 1979)
Prior History: APPEAL from the United States District Court for the Eastern District of Michigan.
McCourt v. California Sports, Inc., 460 F. Supp. 904, 1978 U.S. Dist. LEXIS 15253 ( E.D. Mich., 1978)
players, bylaw, exemption, free agent, League, Hockey, bargaining, negotiations, collective bargaining agreement, anti trust law, equalization payment, arbitrator, equalization, collective bargaining, sports, antitrust, parties, Sherman Act, Rozelle Rule, acquiring, district court, nonstatutory, injunction, courts, team, arm's-length, settlement, contracts, district judge, labor union
Antitrust & Trade Law, Regulated Practices, Price Fixing & Restraints of Trade, General Overview, Business & Corporate Compliance, Labor & Employment Law, Collective Bargaining & Labor Relations, Bargaining Subjects, Exemptions & Immunities, Labor, Nonstatutory Exemptions, Statutory Exemptions, Regulated Industries, Sports, Football, Labor & Employment Law, Enforcement of Bargaining Agreements, Duty to Bargain