Clarett v. NFL - 369 F.3d 124 (2d Cir. 2004)

Rule:

In the context of collective bargaining, federal labor policy permits the National Football League (NFL) teams to act collectively as a multi-employer bargaining unit in structuring the rules of play and setting the criteria for player employment. Such concerted action is encouraged as a matter of labor policy and tolerated as a matter of antitrust law, despite the fact that it plainly involves horizontal competitors for labor acting in concert to set and to implement terms of employment. Multi-employer bargaining in professional sports, moreover, offers the added advantage of allowing the teams to agree with one another and, as required, bargain with the union over the host of uniform rules needed for the successful operation of the league, such as the number of games, length of season, playoff structures, and roster size and composition. The fact that the challenged rules govern eligibility for the NFL draft, thereby excluding some potential employees from consideration, does not render the NFL's adherence to its eligibility rules as a multi-employer bargaining unit suspect.

Facts:

Plaintiff-appellee Maurice Clarett, a talented amateur football player, sought to enter the NFL draft when he was forced to sit out his entire sophomore season. However, under the NFL rules, Clarett was precluded from doing so. Clarett filed an antitrust claim. NFL moved for summary judgment, asserting that Clarett lacked “antitrust standing” and that, as a matter of law, the eligibility rules were immune from antitrust attack by virtue of the non-statutory labor exemption. Clarett also sought summary judgment on the merits of his antitrust claim. The district court granted summary judgment in favor of Clarett and ordered him eligible to enter the draft. The district court concluded that the NFL's eligibility rules violated the antitrust laws by requiring the player to wait at least three full football seasons after his high school graduation before entering the NFL draft. In reaching its conclusion, the district court held that the eligibility rules were not immune from antitrust scrutiny under the non-statutory labor exemption.

Issue:

Were the NFL’s eligibility rules immune from antitrust scrutiny under the non-statutory labor exemption?

Answer:

Yes.

Conclusion:

The appellate court disagreed with the district court’s decision. According to the Court, while NFL clubs were horizontal competitors for the labor of professional football players, and thus, might not agree that a player would be hired only after three full football seasons had elapsed after that player's high school graduation, that characterization neglected that the labor market for NFL players was organized around a collective bargaining relationship that was provided for and promoted by federal law labor, and that the NFL clubs could act jointly in setting the terms and conditions of players' employment and the rules of the sport without risking antitrust liability. The Court averred that in the context of this collective bargaining relationship, the NFL and its players union can agree that an employee will not be hired or considered for employment for nearly any reason whatsoever so long as they would not violate federal laws such as those prohibiting unfair labor practices, 29 U.S.C.S. § 201 et seq., or discrimination, 42 U.S.C.S. § 2000e et seq. Thus, the federal labor law favoring and governing the collective bargaining process precluded the application of the antitrust laws to the NFL's eligibility rules.