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Mackey v. NFL - 543 F.2d 606 (8th Cir. 1976)

Rule:

The enforcement by the National Football league, its member clubs, and it commissioner of the Rozelle Rule is not exempt from the coverage of the antitrust laws. Although the court disagrees with the district court's determination that the Rozelle Rule is a per se violation of the antitrust laws, the court does find that the Rule, as implemented, contravenes the Rule of Reason and thus constitutes an unreasonable restraint of trade in violation of § 1 of the Sherman Act, 15 U.S.C.S. § 1. The court notes that its disposition of the antitrust issue does not mean that every restraint on competition for players' services would necessarily violate the antitrust laws. Also, since the Rozelle Rule, as implemented, concerns a mandatory subject of collective bargaining, any agreement as to interteam compensation for free agents moving to other teams, reached through good faith collective bargaining, might very well be immune from antitrust liability under the nonstatutory labor exemption.

Facts:

Plaintiff professional football players (NFL players) sued National Football League (NFL), twenty-six of its member clubs, and its Commissioner, Alvin Ray "Pete" Rozelle, alleging that league rule requiring a team acquiring a player whose contract had expired to pay the player's former team compensation violated the Sherman Act, 15 U.S.C.S. § 1. The trial court granted NFL players judgment and enjoined enforcement of the rule. On appeal, NFL et al. argued that the non-statutory labor exemption immunized them from antitrust liability.

Issue:

Did the non-statutory labor exemption provide immunity to NFL at al. from antitrust liability?

Answer:

No

Conclusion:

The Court of Appeals for the Eighth Circuit held that the non-statutory labor exemption did not apply because while the rule affected only the parties to the collective bargaining agreement, and the agreement concerned a mandatory subject of collective bargaining, it was not the product of a bona fide arm's-length bargaining. The court held that the rule was not per-se illegal under the Sherman Act, but found it illegal under the Rule of Reason because the restraint was not justified by a legitimate business purpose and was more restrictive than necessary.

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