By Rob Becker, Sportsnet legal analyst
The NHL’s decision to file a pre-emptive lawsuit against the NHL Players’ Association appears to be based on a desire to show the union that its plan to file a “disclaimer of interest” in order to allow the players to file antitrust suits against the league will fail.
And I believe the union’s plan will indeed fail because Judge Paul Engelmayer, the young but brilliant federal judge in New York City who has been assigned the case, will see right through the formality of the disclaimer of interest to the underlying substance of what it really is: just another negotiating tactic by a union whose death will have been greatly exaggerated.
And that will mean that the players’ antitrust suits will continue to be barred, just as they have been while the union has been representing the players. It also means a settlement — or at least a settlement that the union will be happy with — is not just around the corner.
The governing law here lies on the borderline between U.S. labour and antitrust law. If the league and the union had not been negotiating with each other one-on-one over these past years — if there had never been a union, or if it had been terminated some time ago — then the players would be free to claim that the league’s decision to lock them out was an illegal collusion of teams to avoid paying the players what they would get if there were free competition for their services. Or, a violation of the antitrust laws. But when the two sides are negotiating as units — league vs. union — there is an exception to the antitrust laws under labour law, one in which the players are barred from bringing antitrust suits. This exception was created in order to allow collective bargaining to occur, because without it, leagues would have to fear that any attempt to negotiate as one entity might be construed as a conspiracy in restraint of trade.
The issue here is when does the termination of a union put the parties back where they would have been if there hadn’t been a union, so that the players are free to bring antitrust suits?
The players appear to believe that the answer is as soon as the union no longer represents the players.
And they seem to believe that if the union files a disclaimer of interest, which would mean it claims to no longer represent the players, the owners will have such a fear of antitrust suits that they will come to the bargaining table and make concessions.
But a review of the recent labour fights in the NFL and NBA shows that the players’ confidence is misguided. On March 11, 2011, in accordance with its plan, the NFLPA disclaimed interest in representing the players on the day the CBA expired, well before the beginning of the NFL season.
At first, the NFL players’ plan worked. They prevailed in the federal district court in Minnesota, which ruled they could bring antitrust suits and enjoined the NFL lockout. But the league appealed to the Eighth Circuit Court of Appeals, which reversed the district court judge by a vote of 2-1 and essentially found that all the parties were still in the midst of the same labour dispute they were involved in when there was a union. And the appellate court stated that under the Norris-La Guardia Act, federal courts are forbidden from enjoining lockouts in the middle of labour disputes. So the lockout continued. Yes, there eventually was a settlement, but in reaching that settlement, the NFL was bargaining from a position of strength.
In November 2011 the NBA Players’ Association, locked in a dispute with the NBA, filed a disclaimer of interest and the players brought antitrust suits against the league. That same month, a settlement was reached. But there was no legal ruling by a court in that case.
The players appear to be betting that since, in these two situations, the termination of the union led to a settlement, it is reasonable to expect that terminating the union will once again lead to a settlement, because of the owners’ fear of antitrust suits. But although union termination has been followed by settlement twice recently, it does not follow that union termination will be followed by settlement this time.
That’s especially true here. In the NBA situation, there was no legal ruling, so we don’t know whether the NBA owners settled because they feared antitrust suits. If we compare this situation to what happened in the NFL, it becomes clear that the NHL owners have reason to be confident of victory.
That’s because the players have gone about this process in such a transparent way. What the NHL players are doing (as I’m writing this) is closer to an obvious charade than what the NFL players did in 2011. First of all, since a disclaimer of interest is a quick process that–as in this case–can be utilized by the players whenever they decide it’s in their best interests to do so, it will be relatively easy for Judge Engelmayer to conclude that it doesn’t represent a real breakup between the union and the players. But second, the players are actually in the process of voting to have the union disclaim interest. Disclaimers of interest normally happen when a union has grown disenchanted with its membership and essentially fires the members and says we refuse to represent you anymore — kind of like a contentious divorce. But when the players actually vote to have the union disclaim interest, which is like asking someone to fire you, it’s pretty obvious that they aren’t disenchanted with their union at all. And just to make the sham clear, it was the NHLPA’s executive board that voted to authorize the players to vote to authorize the union to disclaim interest in further representing the players.
All of which makes it even more likely that Judge Engelmayer, who graduated summa cum laude from Harvard College and magna cum laude from Harvard Law School, will conclude that this is indeed what the Norris-La Guardia Act refers to as a “case involving or growing out of a labour dispute” and thus that he is forbidden to issue an injunction to end the lockout.
So I doubt the players’ strategy will lead to a quick end to the lockout in their favour. But ironically what might happen is that Judge Engelmayer, who, unlike mediators, has the power to threaten the parties with consequences if they do not act reasonably, may take the players and their lawyers into a conference room and say, “are you kidding me? I may have only been a judge since last year, but I wasn’t born yesterday. I know that you guys still look to the union to guide and lead you in this labour dispute. And that’s exactly why it’s the same labor dispute it’s always been. So if you think that when you guys file antitrust suits in my court I’m gonna enjoin the lockout, guess again!”
If that happens, the players will be bargaining from a weaker position than they were in early December, and the only settlement that will result will be one in which they move closer to accepting the owners’ terms.
I think that’s exactly why the NHL filed its lawsuit on Friday — they know that by doing so, they are moving the players closer to the realization that the antitrust cudgel they have been holding over the league is made of feathers.
That might save the season, but not the way the players want.