Sports Law Student Notes Part 2

LABOR LAW

Backdrop for labor law: classically

Who can form into labor groups?

American League of Baseball v. National Umpires – issue is whether umpires are protected under the NLRA. Yes.

They discuss whether umpires should be grouped in with the players in baseball because of baseballs anti-trust exemptions. The idea is whether or not umpires are actually supervisors.because if they are supervisors cannot be in a union.

Supervisors are people who have authority to direct the work force. Bosses on some level.

They are on some level bosses because they have a lot of authority out there BUT they are not directing the work force. They cannot hire and fire.so they are NOT supervisors for the purposes of the NLRB.

NLRB v. Transportation Management (*This case nothing to do with sports)

Guy leaves his keys in the car, and everybody does it, but the manual says you do this and you’re fired.

Wright line case – held the plaintiff (employee) has the initial burden of showing there was some reason for the firing that was related to the union activity in the first place. It has to have been a factor, not a substantial factor, but merely a factor. Once he meets that burden (not the winning burden, just a precursory burden) then the burden shifts over the employer to prove he would have fired him anyway.

This guy signs his partners’ signature and it something he does all the time, everyone knows, and one day the people say we are overworked and under paid let’s set up a union shop here. This guy is the ring leader and it irritates people, so the partners want to fire him. They find the company manual and there is a rule that says he cannot sign other people’s names on documents and they fire him for doing it.

This guy was unfairly fired but they followed the rules so it was legit.now the court needs to come up with a rule about this to make it fairer. Now the federal court is hearing these issues in order to have uniform decisions.

The other problem is the guy does a decent job, he messes up every once in awhile, (equivalent to the guy who runs a fast 40 yard dash and hurts his ankle a little, loses a 10 th of a second and falls over the edge. he’s a tweener) and this “tweener” starts a union. This guy is not a model employee (those employees shut up and do what they are told) not those that start unions.

Maryland Standard : substantial contributing cause -basically there can be a multitude of factors that cause the same thing.you know it when you see it, we do not have an exact definition.

There could be a fault free plaintiff but the defendant has contributed, only in part, to the injury. The plaintiff has led poisoning he got from working in a factory, and then one day you drive by and thrown led paint chips at him. The court says you contributed 2% of the poisoning but that is not a substantial cause. It would have been the drive by throwers burden to prove that his throwing the paint chips was not a substantial factor.

Some people thought the shifting of the burden might be unconstitutional but it is really only civil burden.

Elmer Nordstrom v. Seattle Seahawks (underscores that when you are trying to apply the Wright line test it is very fact extensive.)

North American Soccer League v. NLRB – determining whether

• Unfair labor practice for players – to refuse collective bargaining

The board is not required to choose the most appropriate bargaining unit. But they are to find one that satisfies the situation. The courts are not going to impose the judgment as to what is the most appropriate, but rather they will say what is the least appropriate.

Mario v. North American – Terms and condition of employment.some things are permissive bargaining subjects and some are mandatory. (i.e. uniform colors, Nbc/Cbs players don’t get a say). When there is a change in the conditions of the workplace the bargaining with the union becomes a must. Look at the below scenarios:

• When the league changes the brand of shoe that someone has to wear when they play is not a condition of the workplace because it should be easy enough to find an Addidas shoe that is wearable.
• Initiating a new winter since – initiating means we talked about it.it didn’t actually change anything.
• Taking affirmative steps to have the winter season – that is a change in the condition of the workplace
• Increasing the length of the season is a change
• Reducing the rosters is a change because if you are the one person cut from the roster than your workplace conditions have been dramatically changed.
• Individual contracts (side-deals) is a bad thing and affects the terms and conditions of the workplace.

National Football League Players v. NLRB – the instated rule that players could be fined for getting off the bench once a fight starts.

The commissioner has the power, on his own accord, to fine the players, but if the ownership dictates to the commissioner to do it then it is unethical, because the owners pay the commissioners paycheck.

This does affect the terms and conditions of the employment because it affects wages.

Review of Labor Points:

• Supervisors are not in the union (umpires case)
• Bargaining unit.make it something good (meaning it needn’t be the most appropriate/best bargaining unit but it must be a reasonable bargaining unit.it should have some foundation in logic and reason), if it is decent idea then we require bargaining.
• Mandatory vs. permissive bargaining units – things that change the conditions of the workplace MUST be bargained for.
• There is some value in having a larger union: but you typically choose smaller unions over large ones. The strength is in numbers (size) but also in

COMBINATION OF ANTI-TRUST AND LABOR LAW

The Sherman act does not clearly except labor, but buy its inherent definition a union engages in monopolistic activity because it is represents all of them.

Nobody else is allowed to engage in monopolistic activity except for unions, so when management/ownership combines with a union and they together act monopolistic. Do they get a free pass because they are a union? Or are they automatically violation the Sherman/Clayton act?

Deals with the idea of the unions

The Sherman act does not explicitly exempt labor

Allen Bradley Co . – management companies cannot engage in monopolistic activities by aligning with unions.

In NYC a threesome of companies that sell electrical equipment came together and said they could only trade and buy from each other. They made their own monopoly. The union that represents the workers said they would only buy from that group and in making this deal they increased employee wages.

Price elasticity – a high and a low in a price range. The idea is that if you are an aids patient and they are selling drugs you need than that is a relatively inelastic good, it is not price dependant. As the price rises the demand remains the same. Essential goods are relatively inelastic. Other items, luxury goods, are price dependant

Electronics are relatively elastic. So that means that if the prices rise the companies will sell less goods.

Winners – Labor & Management come together

The workers win because the demand is higher than they get to work more and get higher wages.

The bosses of the companies have a definite market. And then if the demand is down and there is only a small number of sellers they can be nicer about how they deal with the bad times. If there are 25 competitors than they get cut throat.

Losers – the consumers and any foreign producer outside of the place that is agreed to buy from.

Court says congress never intended union to create that kind of business monopoly. Labor unions can engage in monopolistic activities.but you cannot have management companies aligning with unions just to engage
in monopolistic activities.

The economics behind it is

Jewel Tea Company – the court agrees with the union and that if they are opened after 6 it puts an unfair burden on the butchers.

The union said that between 9am and 6pm they were gonna have their butchers work, and no other times. The background behind this is that butchers were taken advantage of in terms of hours and such. This was an agreement to resolve that problem.

Jewel (owner of store) has a problem with it because he wants to be able to serve meat past 6 pm because there is a demand. And when there are no butchers he cannot sell the meat. There is a demand beyond the normal work hours.

Between Jewel and the meat cutters union there is an agreement

Pennington –

Coal Industry; the situation is where union has inspired the management to screw the little guy. Technology is on the rise and jobs will be lost, so they wanted to give all the business to the big companies because they were the only ones that were going to survive.

Economy of the scale – it costs a lot less for a large company to produce something than a small company. High economy of the scale is high fixed costs (i.e. health clubs – you have a high upfront costs, equipment and rent, and then after that it was cheap)

Mackey Case – arms length bargaining = if you do not have it, it means that the bargain was not fair because both sides are acting on their own free will.nothing is being forced.

The idea is that you can have principles that inherently violate anti-trust rules as long as the parties agree to it.

Roselle rule – the idea that you are indebted to one team forever.

You cannot force a reserve clause down someone’s throat because that is not bargained for and antitrust behavior.

Historically, the worker gets screwed. It is not a viable bargain to say this is the way it has always been done and we are not changing it. So there must be a give and take.

This is not an oppressed class, so it makes it a little harder.

McCourt v. Cali Sports

Dealing with a reserve clause similar to the rozelle rule and losing free agents in the Hickey league. The lower court said there was no arm’s length bargaining relying on Mackey. (the facts are different than Mackey but the ideas are the same). McCourt was rookie and had a great year, he played for the red wings.a goalie on another team became a free agent and signed with the red wings then the red wings traded McCourt for compensation. McCourt challenged that rule requiring that the team that takes your free agent must compensate you for that player is a violation of arm’s length bargaining.

In Mackey the 3 issues repeated here are:

• Hockey players
• Does it involve the terms and conditions of employment (Informed and practical effect)?
• Whether there was bonafide arms length bargaining? (in Mackey there was not)

The McCourt court here would say refusal to compromise a position on one side of the bargaining does not mean that there was no good faith bargain, but rather it would be called “ hard bargaining .” Just because they didn’t change their position does not mean they violated the bargaining requirements.

• Wood
• Fundamental precept – the court says we are not going to make a difference between basketball, football and the guys steel mine workers.

Woods says I was not a party to the agreement, so the teams are negotiating away might rights before I am even in the picture.

This does not fly, because it is impossible for every player to bargain for every bone of their rights, every time. AND it is meant to protect players already in the NFL, not hurt the new player coming in.

Wood was trying to cherry pick all the things that he did not benefit from.he didn’t want to touch the things that he was benefiting from. This was not allowed.

Clarett v. NFL – NFL’s eligibility rule fell within scope of nonstatutory exemption to antitrust review, and the fact that NFL and players’ union did not bargain over rule did not exclude rule from scope of nonstatutory exemption

Clarett was a remarkable running back in freshman year of college at Ohio State . It was questionable whether he would be a good NFL player. After his freshman year, Clarett had a lot unrelated issues and as a result he decides he want to go right into the NFL, but there us a rule that says you must be in the college ball system for 3 full years before you can come to the NFL. Clarett then files suit in Ohio and the district court says you can go into the draft.he didn’t like the rules.

• Does the no statutory exemption apply.does the labor exemption apply to this?
• Does the rule address a mandatory subject of collective bargaining
• Whether the labor exemption is being applied to those excluded
• Was there arms length negotiation?
• If you are the NFL.if you lose any one of them, you lose the case. The district court says they lose them all, the circuit court says you win them all.

District Court said (which is rejected):

• The rules does address collective bargaining because the rule itself if not mandatory
• Clarett is not permitted to be drafted.his eligibility was not the union to trade away. The nonstatutory exemption does not apply to subject which are not mandatory and eligibility is not covered.

Dissent: they think it is so inherently anti-competitive and so it cannot be allowed, it should be wiped out. Disagrees with Mackey too. (but these are different circuit cases and need not agree)

Circuit Court says: in order to fall within a nonstatutory exemption a restraint must:

• primarily affect only the parties to the collective bargaining relationship,
• court says yes: Clarett was inside the collective bargaining agreement, because it was between players and owners, Clarett is a future player in this group.
• concern a mandatory subject of collective bargaining,
• yes, contrary to the district courts belief this court says eligibility rules are mandatory bargaining subjects
• Be the product of bona fide arm’s-length bargaining.

Yes, this is an arm’s length process à The fact that a position of a party on an issue remains unchanged does mean that there was no collective bargaining over the issue. If you stick your feet in the mud and refuse to talk about it, that in and of itself is not participating in arm’s length bargaining.

The court uses the Mackey test, but they do not feel compelled to follow it exactly.

From owners standpoint they must satisfy all three.

There is a dispute as to whether raising the nonstatutory exemption , is an affirmative defense? (which would means the burden of proof changes)

The district court felt it was an affirmative defense and in the context this is a big deal because now the league has the burden of proof.

The circuit court said this is NOT an affirmative defense (and said it in dicta because it was not a paramount issue)

This court talks about Wood and said that to allow Clarett to jump into the draft would be in violation.

Oldfield v. Athletic Congress

Plaintiff was not allowed to complete in the Olympics. He became a professional in lieu.

ONLY when the statute is ambiguous as to if there is a private cause of action do you look at the factors

The court factors 4 things: whether or not congress intended to create a cause of action. (Most important factor.

• whether the plaintiff is a member of a class for whose special benefit the statute was enacted
• whether there is an indication of congress’s intent to create or deny a private remedy
• whether a private remedy would be consistent with the statutes underlying purpose
• whether the cause of action traditionally is regulated by the state law.

Oklahoma secondary school activities association v. Midget

In this time period
the idea towards progress was integration and bringing all people together. In order to do this bussing came about…because we had to bring people that lived in different areas to the same schools.

Facts: a black player moves from a black school to a white school and then when he goes back to the black school (because he wanted to play a sport) but at that point he is denied the right to waive the year hold. All of his games are forfeited because he went back to his majority school, and they sue

The court says due process…follow your own internal rules and by laws, if you violate your own rule it is a violation, but that law cannot be arbitrary and capricious. As long as a reasonable person could have found as you did at the time it is okay. The court says they do not hear the merits because it was in absence of fraud and collusion -> and the procedural due process was respected.

Athletically they tried to create conditions by which people would go to the minority schools.

In every highschool in Maryland today you can go to whatever school you want and you want to transfer, you can do it but you ave to sit out a year. This is to stop people from bouncing high schools to avoid people moving for athletic purposes. BUT, if were at a majority school and wanted to move to a minority school, you would not have to sit out for that year…and this would encourage intergation.

California State U, Hayward v. NCAA

Flip side of Midget – you have a rule and even if it is a a bad one ( an eligibility rule) but you must enforce it in accordance with what it says. The only prblem is if the rule is vague and ambiguous and then there is a problem, because the rule is subject to more than one interpretation

NCAA v. Tarkanian

Tarkanian is a great basketball coach at UNLV (not a school known for academics). At the time of this case this was a basketball powerhouse school. And Tarkanian was a tenured professor and this was something the school did for their coaches…and allowed them to have money from commercial contracts as well.

Tarkanian was cheating right under the nose of the NCAA, and they went to the school and said we are going to sanction you…x amount if you fire this guy and we will fine you double the amount of x if you do not. Tarkanian sues.

The school did not have a lot of options, they could follow the sanction, pull from the NCAA, reassign the people in question. Not all of these options were realistic. Pulling from the NCAA was not really an option because it would demolish the team, no one would want to watch them. So, UNLV fires Tarkanian but says we don’t want to…we only do it because the NCAA is making us.

Is the NCAA (a private organization) a defacto public actor? This means if this private organization is making the school do this (the school really has no other realistic choice) than they are acting as a public actor and the due process clause applies.

The majority said…NO you had choices and you may not have liked the other choices but they were there. You could have pulled from the league. The UNLV did not delegate its power to the NCAA, and the NCAA did not have the power to do what UNLV did.

Dissent – the private actor was acting as a defacto public actor.

Louisiana High School Athletic Association v. St Augustine High School

If the private organization is really a public organization (funded by public monies) than they are actually looked as a public organization.

Brand v. Sheldon Community School – There is a bright line rule that there is no property interest in the expectation of a college scholarship.

A girl had consensual sex with Brand and a number of other men at the same time, of the school’s property. Word got around. Everybody gets punished. The guy cannot wrestle in his senior year. He sues.

One of the questions in the case is the issue of a college scholarship and whether or not Brand had a property interest in his college scholarship? Brand wants to prove that he would have gotten a scholarship if it were not for this incident (this would be easy for him to do).

He says that since he knows he is getting a scholarship he has a property interest BUT the court says he does not have a property interest in the expectation of a college scholarship.

we have this bright line rule because it prevents wasteful litigation.

The expert would have to say “to a reasonable degree of wrestling couch certainty,” I believe Brand would have gotten a scholarship…and so this would be a fact for the jury to balance. THE REASONABLE STANDARD OF EXPERT IS TO BE ON EXAM

NOTE: once a scholarship is awarded there is a property interest, but only once it is awarded.

Amateur Sports Law in Maryland : University of Maryland v. Baltimore Sun: Maryland Court of Appeals say public school coaches salaries and compensation a matter of public record.

• Franchise Label – slap a tag on a guy and make him a franchise player (like the QB or Ray Lewis). Meaning the maximum salary he can receive is the average of the top 5 players that also play his position.
• Salary Cap – (1) collectively bargained for deal that keeps owners… (2) the NFL has had a great desire to keep parody. So there is a complicated system to try and keep everyone on the same playing field.

The signing bonus is paid to player all at once when the contract is signed, but for salary cap purposes the team spreads that money out over time so not to subtract a large chunk of change from the cap for one specific year. I f the player is cut before June 1-the team does not have the option of spreading out the remainder of the bonus over the left over years on the contract, rather the team must subtract all the remainder of the signing bonus (not already subtracted) from the cap for that upcoming year all at once. If they cut on or after June one, the team moust automatically split the remainder over the next two years. No option.

• player has 4 year contract for 4 million dollar signing bonus and a million dollars a year. Each year, for salary cap purposes he gets 2 million. (8 million spread out over 4 years)
• If the player gets cut after year 2…depending on what time of year it is determines what monies they get.. If it is June 1 st (the big football cut date).
• If cut before June 1 st – all the money comes due for cap purposes in that calendar year.
• If cut on June 1 – the team must spread it out over the next two years

AGENTS ISSUE

Zinn v. Parish – the idea is that when an existing agent is fired because he is not holding up his end of the bargain that original agent gets the settled upon fee regardless of the fact that some time after the contract was signed he was terminated. The newly hired agent does not get it.

You have an agent who negotiates the deal 2 million a year, the player calls a year later says you guys are not taking care of me any more and I am firing you and hiring a new agent. The new guy does all the right stuff (calls the team, calls the player, etc. to push the contract along and keep every one happy) and says I should be getting paid my 3% a year. BUT the original agent gets the fee regardless of the fact that some time after the contract was signed he was terminated.

The new guy might be able to get the old contract severed (but there must be a substantive material change to the contract to do this) and renegotiate a new one. BUT the old guy still gets his percent on the improved contract and the new guy would only get an amount that was above the original contract amount.

The maximum cut an agent can get is 3%…and the NFL publishes a list of all the agents and what they are making. They can charge additional services (i.e.taxes) to lead to additional charges.

Brown v. Wolf – summary judgment and malice

• When are punitive damages allowed?
• Jurisdiction vary as to standards

The standard for punitive damages in
Maryland in is that there be “actual malice.” Zanovia case. There is no cap on punitive damage like there are on things like emotional damages etc.

Summary judgment – even if we agree on everything, you still should find in my favor because there is NO dispute as to the facts, the only dispute is to the law.

Detroit Lions v. Argovitz (p.7-7) – there are some conflicts that are so great that they transcend the conflict and it can be waived, put aside.

Argovitz was Sims agent and was also acquiring the Detroit Lyons team himself. He realized that he could pretend the Lyons were interested in him and used this as a bargaining tool to get him signed with another team.

Maryland athlete agent law: Md. Code. Ann. Bus. Reg. §§ 4-401 – 4-426 , enacted in 1992, amended in 1998.

TITLE 9 – students and employees of education institutions cannot be denied rights based on sex. There are 2 parts to the title: (1) there is one title 9 that provides opportunity for women to play sports they couldn’t play before. (2) is the title 9 that has the backlash on men’s sports to make-up for the problems with women’s sports.

• Passed in 1972, modifying the Civil Rights Act
• Linden Johnson, in 63 Kennedy dies, nation backs up Johnson (but it is thought that the election will be difficult).political advisors thought it was best to hold off on the civil rights act before the election. Mansfield said that if you push the civil rights act you will lose the South for the next 50 years. Johnson agreed – but said “so be it, everyone should be treated equal.”
• Issues related to sex were not addressed appropriately and so came Title 9.
• Analyzing whether there is a violation of title 9: The spirit of Title 9 is Equal Opportunity!
• Is the school federally funded?
• What is the enrollment of males to females? 50/50
• Number of men playing sports; number of women playing sports? 1500/500
• Total net cost of program: travel costs, locker rooms, other facilities?
• How much money is coming in from the sport?
• Is there a balance between the sports? (soccer team for soccer team)
• Interest in sports? (But there is no formula for determining if all persons interested in playing are actually playing)
• if this breaks down to be equal in terms how many players there are.
• The idea is that women have consistently been given disproportionate opportunities to men.
• Bush administration says we have taken it too far, and now some men are unable to play the sports they want.
• Football – some people think there should be a football exception because: there are so many people on a football team/they are very expensive and it brings in the most money.

Cohen v. Brown University – they implement a 3 prong test. The school has to meet one of the following: (1) participation opportunities for both sexes proportionate to overall enrollment in the school (2) if the answer to #1 is unequal then. indicate a history of continued expansion that is demonstratively responsive to the interest of the unrepresented sex OR (3) demonstrate the interest and abilities of the under represented sex have been fully accommodated. do a study that women are not interested in playing.

Usually when you have a trial there is a very specific remedy, but in this case the district court said – go fix this problem, then come back and we will tell you what we think about it.

What is ironic about this case is that it is Brown.ivy league, not a sports oriented school.

• NEED TO KNOW
• NO Allan Bradley – union cannot hook up with management to engage in anti-tryst behavior.
• NO jewel tea
• NO united mine workers
• NO Mackey – arms length bargaining. Cannot impose your will on the other party when they do not have an option. But it is usually not so clear. Clarett did not agree with Mackey. Agree with McCourt .
• NO Reynolds
• NO Woods v. NBA – impose rules on persons not yet I the league
• YES Oldfields – know the courts factors, and understand that you do not get to the court factors if the statute is clear as to whether or no there is a private cause of action. ONLY when the statute is ambiguous as to if there is a private cause of action do you look at the factors
• YES Midget – an association has to stand by due process cannot make decision outside of bylaws or that are capricious and arbitrary
• YES Tarkanian – READ IT – whether or not a private organization can be turned into a de facto state actor subject to due process. Look at Dissent in Dennis. KNOW THE FACTS and be able to distinguish them with the exam fact pattern
• Clarett
• YES Bran – there is not a property interest in the expectation of a college scholarship, but there is if it is already awarded. (group sex)

• Agents – the idea that you negotiate a players contract – you get the value which you negotiate whether or not they switch agents along the way.
• Salary cap – how things are spread out,
• NO Dunn v. Steinberg case
• Intellectual Property – OBVIOUS

Title 9

There are actually two Title IX questions. The first I addressed in the last email. The second involves one of the losing arguments/themes Brown utilized in the case in presenting its defense.

There may be a question on the exam on Title IX asking you to apply a test.

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