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Among the fundamental principles of federal labor policy is the legal rule that employees may eliminate competition among themselves through a governmentally supervised majority vote selecting an exclusive bargaining representative. The National Labor Relations Act, 29 U.S.C.S. § 159(a), explicitly provides that representatives selected by the majority of the employees in a unit shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining. Federal labor policy thus allows employees to seek the best deal for the greatest number by the exercise of collective rather than individual bargaining power.
Plaintiff basketball player, O. Leon Wood, brought an action against defendant National Basketball Association ("NBA"), its member-teams, and the National Basketball Players Association ("NBPA"), alleging that provisions of a collective bargaining agreement violated the Sherman Act, 15 U.S.C.S. § 1. Plaintiff argued that provisions governing a salary cap, the college draft, and the prohibition of player corporations eliminated competition for the services of players and constituted per se violations of the statute. The district court rejected plaintiff's contentions on the grounds that such provisions were probably mandatory subjects of collective bargaining, raised no antitrust problems, and dismissed the action. Plaintiff appealed.
Did the provisions of the collective bargaining agreement violate the Sherman Act, 15 U.S.C.S. § 1?
On appeal, the court agreed and affirmed the judgment, holding that plaintiff's claims were at odds with and conflicted with federal labor policy, which attached prime importance to freedom of contract between the parties to a collective agreement. According to the court, freedom of contract was an important cornerstone of national labor policy for two reasons. First, it allowed an employer and a union to agree upon those arrangements that best suit their particular interests. Courts cannot hope to fashion contract terms more efficient than those arrived at by the parties who were to be governed by them. Second, freedom of contract furthered the goal of labor peace. To the extent that courts prohibited particular solutions for particular problems, they reduced the number and quality of compromises available to unions and employers for resolving their differences.