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Labor relations expert: The NCAA prefers labor strife to an antitrust lawsuit

Micael LeRoy
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L. Brian Stauffer

A labor dispute serves the NCAA’s interests better than an antitrust lawsuit, which could potentially cost the NCAA millions of dollars in monetary damages, says Michael LeRoy, a professor of labor and employment relations at Illinois.

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4/7/2014 | Phil Ciciora, Business & Law Editor | 217-333-2177; pciciora@illinois.edu

CHAMPAIGN, Ill. — A labor dispute serves the NCAA’s interests better than an antitrust lawsuit, which could potentially cost the governing body for college athletes millions of dollars in monetary damages, says a University of Illinois expert in labor relations and collective bargaining in athletics.

According to Michael LeRoy, a professor of labor and employment relations, the damages from an antitrust lawsuit that ruled in favor of players would likely dwarf whatever they could “win” in collective bargaining – and also might not be taxable.

“If the players were to ditch their unionization efforts, an antitrust lawsuit could proceed on behalf of a certified class of all college athletes – not just a handful of players who are at an National Labor Relations Board-jurisdiction Division I school like Northwestern,” said LeRoy, the author of the recently published legal casebook “Collective Bargaining in Sports and Entertainment.”

As defined by the Norris-LaGuardia Act, a labor dispute divests a federal court of jurisdiction under antitrust law, meaning the NCAA would be effectively shielded from an injunction as well as an antitrust lawsuit from unionized college football players, LeRoy said.

“Ultimately – and paradoxically – the NCAA would prefer a labor dispute over a potentially very costly antitrust mega-lawsuit,” he said. “If the NCAA bothered to ask the NFL, Roger Goodell would have told Mark Emmert (the president of the NCAA) to be grateful that Kain Colter and company are mired in a labor dispute rather than an antitrust lawsuit, because you’ll always have a strong upper hand if you are negotiating under a labor law compared to a class-action, antitrust settlement negotiation.”

Colter, a former Northwestern quarterback, is a co-founder of the College Athletes Players Association.

LeRoy also notes that both the NFL and NBA have been stung by very costly antitrust settlements with their players – and those cases involved issues similar to the Northwestern situation.

According to LeRoy, it’s in the NCAA’s self-interest to embrace the union representation process – “to engage in hard bargaining, where their bargaining strength is pitted against the vastly inferior bargaining power of college athletes.”

“If the NCAA is worried about its public image, about coming off too
heavy-handed when engaging in hard bargaining with student-athletes, it might consider how the public views player unions,” he said. “The fact is, the public already believes the NCAA is too powerful. But they’re not too crazy about player unions, either.”

Although critics of the NCAA are legion, they tend to assume that a union will improve conditions for players, LeRoy said.

“To the contrary, the NFL experience shows that a professional league has much more bargaining power than a mere group of players whose average job-tenure is about 3 1/2 years, which is roughly comparable to NCAA eligibility for college athletes,” LeRoy said. “It’s wholly appropriate to condemn college football for exploiting players without paying them. But even in good times, both professional and collegiate football players have very little job security.”

Professional players don’t have much time to recover from a strike or lockout, simply because coaches can find replacements for starters every week.

“Once a league figures out how to bargain hard, players seem to regret that they formed a union and eventually fold their hand,” LeRoy said. “People forget that NFL players decertified their union not once, but twice, in 1989 and again in 2011.”

According to LeRoy, from 1993-2011, NFL players negotiated a series of antitrust “stipulation and settlement agreements” that were proxies for collective bargaining agreements under the National Labor Relations Act.

“Ironically, to achieve that success, the players had to decertify their union first so that they could avoid the duty to bargain under the NLRA,” he said. “During that time, there was no legal relevance as to whether NFL players were ‘employees’ under federal labor law – all that mattered to a federal judge is that their league had imposed restrictions and constraints that restricted their mobility and caused monetary damages.”

Many of the current positions and arguments on either side of the player-union question are uninformed by a broader understanding of how collective bargaining has disappointed professional athletes and become an unlikely refuge for wealthy owners, LeRoy says.

“Just think back to 2011, when NFL players disbanded their union hours before their collective bargaining agreement expired, in order to posture as class action plaintiffs in a Sherman Act lawsuit,” he said. “Concurrently, you had NFL owners petitioning the NLRB with a charge that the players committed an unfair labor practice by not negotiating monetary concessions in good faith.”

LeRoy notes that critics of the player-union concept worry that paying college football players would take money away from non-revenue sports, especially those for female athletes. In addition, they also worry that paying college football players would complete the de facto transformation of the Division I game into a professional sport, create income tax liability for colleges and universities, or would open the door to unionizing other college sports.

As varied as these scenarios are, LeRoy says they ignore the antitrust alternative to the player-union question.

“My take is, when two sports monopolies – one that represents a league, and one that represents college athletes – bicker over player compensation, courts increasingly use the ‘labor exemption’ in antitrust law, and bow out of these brawls,” he said. “The two monopolies are then left to bargain until they reach an agreement or impasse – at which point either one can use weapons such as a strike or lockout, or in the case of the NFL, implementation of its final offer.”

So far, the courts have not accepted the players’ antitrust arguments that they compete in a market. But LeRoy cites a 2012 article he wrote for Wisconsin Law Review titled “An Invisible Union for an Invisible Labor Market” that asserts that these cases predate the current mega-commercialization era of college football.

“The time may have come when judges see college football for what it is – an academic version of the NFL, the Saturday TV-complement to Sunday football,” he said.

To this point, LeRoy cites U.S. Circuit Judge Joel M. Flaum’s 20-year old dissenting opinion in Banks v. NCAA; the judge reasoned that an NCAA eligibility rule “distorts the ‘price’ of labor in the college football labor market to the detriment of players.”

“If Judge Flaum thought college players were in a labor market in the early 1990s, more federal judges would likely agree with him today,” LeRoy said.

Ultimately, whether the recent ruling by the NLRB Regional Director is upheld on appeal or overturned, LeRoy said college football will not be unionized because “the vast majority of players do not fall under the jurisdiction of the NLRB or a state labor board that administers a local collective bargaining law.”

But the unionization effort will likely not end there, LeRoy says.

“Whether or not the unionization effort enjoys isolated success, or none at all, I have a feeling players will eventually see the wisdom in following the wildly successful path of NFL players, who sued the National Football League after their disastrous 1987 players’ strike as class-action plaintiffs under the Sherman Act,” he said.

Editor's notes: To contact Michael LeRoy, call 217-766-5012; email m-leroy@illinois.edu.
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