IN THE Supreme Court of the United States

Transcription

1 No IN THE Supreme Court of the United States MATT SARACEN. TIM RIGGINS, LANDRY CLARKE, JASON STREET and RAY TATUM, individually and on behalf of all others similarly situated PLAINTIFFS-PETITIONER, v. NATIONAL BASKETBALL ASSOCIATION DEFENDANT-RESPONDENT. ON WRIT OF CERTIORARI FROM THE UNITED STATES COURT OF APPEALS FOR THE EIGTH CITCUIT BRIEF FOR THE PLAINTIFFS - PETITIONERS TEAM 23 Counsel of Record Team 23

2 QUESTIONS PRESENTED 1. Does the Norris-LaGuardia Act prohibit the District Court from issuing an injunction to enjoin the NBA lockout? 2. Is the NBA lockout protected from antitrust scrutiny by the non-statutory labor exemption?

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

4 Cases: Am. Ship Bldg. v NLRB, 380 U.S. 300 (1965)...22 Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 691 (1965).16, 18, 25 Bhd. Of R.R. Trainmen v. Chi. River & Ind. R.R. Co., 353 U.S. 30, 40 (1957).11 Brady v. Nat l Football League, 779 F.Supp.2d 992 (D.Minn. 2011)... passim Brown v. Pro Football Inc., 518 U.S. 231 (1996).. passim Burlington Northern R.R. Co. v. Brotherhood of Maintenance of Way Employees, 481 U.S. 429, 437 (1987)...9, 13 Burlington Northern Santa Fe R. Co. v. Int l Brotherhood of Teamsters Local 174, 203 F.3d 703, 707 (9 th Cir. 2000) Connell Constr., Co. v. Plumbers, 421 U.S. 616 (1975).6 Dow Chem. Co. v. NLRB, 660 F.2d 637, 657 (5th Cir. 1981)...21 Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921)..7 In re Crow & Assoc., Inc., 713 F.2d 211 (6 th Cir. 1983). 8 In re Pittsburgh Steelers, No. 6-CA-23143, 1991 WL , 1 (June 26, 1991)...20 Int l Paper Co. v. The Inhabitants of the Town of Jay, 672 F.Supp 29 (D.Maine 1987)...8 Jackson v. Nat l Football League, 802 F.Supp. 226 (D.Minn. 1992).....6, 9, 13, 15 Keystone Freight Lines, Inc. v. Pratt Thomas Truck Line, Inc., 37 F.Supp 635 (W.D. Okla 1941) 8 Linden Lumber Div. v. NLRB, 419 U.S. 301 (1974)..21 Mackey v. Nat l Football League, 543 F.2d 606 (8th Cir. 1976)...6, 24, 25 McNeil v. Nat l Football League, 764 F. Supp (D. Minn. 1991) Morton v. Mancari, 417 U.S. 535, 550 (1974).. 15 Nat l Basketball Assoc. v. Williams, 45 F.3d 684 (2d Cir. 1995)....14, 16 Nat l Basketball Assoc. v. Williams, 857 F. Supp. 1069, 1078 (S.D.N.Y. 1994)..16 New Negro Alliance v. Sanitary Grocery Co., 303 U.S. 552 (1938)...12, 13 NLRB v. Cont l Baking Co., 221 F.2d 427 (8th Cir. 1955) NLRB v. Gissel Packing Co., 395 U.S. 575 (1969)...21 NLRB v. Truck Drivers, 353 U.S. 87 (1957)..18 Pittsburgh Steelers, Inc., No. 6-CA-23143, 1991 WL (NLRB G.C. June 26, 1991)....26, 27 Powell v. Nat l. Football League, 930 F.2d 1293 (8 th Cir. 1989)...passim 2

5 Statutes: 29 U.S.C U.S.C U.S.C ,8 29 U.S.C. 104(a) U.S.C. 113(c) U.S.C. 158(a)(5) U.S.C. 158(d). 25 3

6 STATEMENT OF THE CASE Plaintiffs-Petitioner are five professional basketball players who are employed by Defendant-Respondent, the National Basketball Association (hereinafter NBA), and the League, which is made up of the thirty separately-owned NBA teams. 1 The NBA is a multiemployer bargaining unit in the business of putting on professional basketball exhibitions for profit. 2 The Collective Bargaining Agreement (hereinafter CBA) explains the rules and the policies of the NBA as agreed to by the NBA and the players, and the current CBA was due to expire on October 11, 2011 at 11:59 p.m. because the NBA opted out of the final two years of the CBA. 3 The league, owners, and the players, including the Plaintiffs and their union the National Basketball Players Association (hereinafter NBPA), worked to negotiate a new CBA up until the day of the deadline but were unsuccessful. 4 The NBPA, prior to October 11, 2011, had taken polls from the players on whether the NBPA should continue if the CBA negotiations fail, or if the NBPA should decertify as a union allowing players to freely negotiate for themselves. 5 A significant majority of the players voted in favor of dissolving the union and restructuring as a professional association if it was deemed by the NBPA to be in their best interest. 6 On October 11, 2011, at 4:00 p.m. the NBPA informed the NBA that it would be disclaiming any interest in representing the players in further 1 R. at 3. 2 Id. 3 Id. 4 Id. 5 R. at 4. 6 Id. 4

7 negotiations, and would be decertifying as a union. The NBPA further amended its by-laws to prohibit its members from engaging in collective bargaining with the NBA on behalf of the players, as the NBPA was no longer a union and was no longer representing the players in negotiations. 7 Additionally, the NBPA filed with the Internal Revenue Service an application to be reclassified for tax purposes as a professional association and not a union. 8 The NBPA informed the league and players, that the players from then on would have to pursue or defend any grievances with the NBA or individual teams on an individual basis. 9 No agreement was reached and the CBA expired, and effective October 12, 2011 the NBA instituted a lockout which prevented all player employees of the NBA from working. 10 Plaintiffs allege that the lockout is a violation of federal antitrust law under Section 1 of the Sherman Act, while the NBA alleges that the lockout is exempted under the non-statutory labor exemption. 11 Plaintiffs further allege that the Defendants jointly agreed and conspired through an unlawful group boycott and price-fixing arrangement that will economically harm the Plaintiffs by aiming to shut down the free agent marketplace and boycott rookies and players currently under contract. 12 Moreover, the Plaintiffs seek specific performance in the form of an injunction to enjoin the NBA from perpetuating the lockout while the NBA claims that the Norris-LaGuardia Act prohibits a federal court from issuing said injunction. 7 Id. 8 Id. 9 Id. 10 R. at Id. 12 Id. 5

8 SUMMARY OF ARGUMENT The Norris-LaGuardia Act (hereinafter NLGA) enacted in 1932 was Congress reaction to the abuse of the court system by employers seeking injunctions against employees on strike. It is intended to prevent Federal Courts from intervening in certain labor disputes where employers are seeking injunctions against employees. The NLGA protects the rights of employees to organize into unions and to engage in concerted activities for the purpose of collective bargaining. 13 For the protection that the NLGA provides to employees, the statutory text, combined with the legislative intent and historical context, provides no protection for employers. Even if protection were afforded to employers, it would not be provided absent a union as case law has continuously held a labor dispute to be between an employer and a union. 14 Thus, the District Court of Tulania properly held the NLGA did not apply, and correctly issued an injunction to enjoin the NBA lockout. The NBA claims that their lockout is immune from antitrust scrutiny under the implied, judicially created non-statutory labor exemption. 15 However, this non-statutory labor exemption to the Sherman Act does not apply when the collective bargaining relationship has ended. 16 Thus, the United States District Court for the District of Tulania properly held that non-statutory labor exemption does not protect the NBA lockout from antitrust scrutiny U.S.C See, Brady v. Nat l Football League, 779 F.Supp.2d 992 (D.Minn. 2011); Jackson v. Nat l Football League, 802 F.Supp. 226 (D.Minn. 1992). 15 Brown v. Pro Football, Inc., 518 U.S. 231 (1996) (citing Connell Constr., Co. v. Plumbers, 421 U.S. 616, 622, 95 S. Ct. 1830, 1835, 44 L.Ed.2d 418) 1975). 16 See Brown v. Pro Football, Inc., 518 U.S. 231 (1996); Powell v. Nat l Football League, 930 F.2d 1293 (8th Cir. 1989), and Mackey v. Nat l Football League, 543 F.2d 606 (8 th Cir. 1976). 6

9 ARGUMENT I. The Norris-LaGuardia Act Does Not Prohibit The District Court From Issuing An Injunction To Enjoin The NBA Lockout. A. The Norris-LaGuardia Act Does Not Apply As The Act s Statutory Text, Legislative Intent, And History Demonstrate The Act Is To Protect Employees From Employer Sought Injunctions, Not The Inverse. Prior to the enactment of the NLGA in 1932, whenever unions would picket, employers would resort to judicial intervention in the form of injunctions to stop the unions from picketing, and force the employees back to work. Injunctive relief was popular among employers as it defeated strikes efficiently, and quickly ended labor disputes as the unions were not left in an advantageous bargaining position and were forced back to work. 17 As a result Congress passed the Clayton Act in 1914, which under Section 20 attempted to prevent these injunctions by providing procedural limitations in cases involving or growing out of labor disputes, however, a narrow reading of this statute by the Supreme Court only prohibited injunctions in a few cases. 18 As the Clayton Act did not deliver the intended effect, and employers were still using the Federal Courts to obtain injunctions to halt strikes, Congress enacted in 1932 the Norris-LaGuardia Act. 19 This act removed from the Federal Courts jurisdiction the ability to issue injunctions in labor disputes that were non-violent. 20 Congress needed to enact legislation that was pro-labor to help unions from the unfair practices employers were using and that the courts were allowing. The goal was to allow employees to organize into unions and bargain with employers on an 17 Burlington Northern Santa Fe R. Co. v. Int l Brotherhood of Teamsters Local 174, 203 F.3d 703, 707 (9 th Cir. 2000). 18 Norris-LaGuardia Act, 29 U.S.C. 52; See, Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921) U.S.C Id. 7

10 equal ground free from the interference, restraint, or coercion of employers NLGA is the equalizer at the bargaining table bringing the employee up to a fair level with the employer. Courts interpretation of the NLGA since its enactment have been very pro-labor (pro-employee) and protective of organized labor. 22 The language of the NLGA cannot be read or interpreted without knowing the historical context in which it was written. Knowing the pro-labor stance intended in the statute, and during a time in history when a remedy was needed to right the inequity that employees were receiving at the bargaining table, one must read the statute and interpret it from this historical context. The wording of the statute itself furthers the pro-labor message and intent. The NLGA aimed to make it easier for employees to organize into unions to better effectuate the collective bargaining with employers. 23 Section 102 states, [t]he individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment, wherefore... it is necessary that he have full freedom of association, self-organization, and designation of representatives... to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers in concerted activities for the purpose of collective bargaining This portion of the NLGA shows a clear intent to aid employees, provide them more leverage in 21 Brady, at , quoting 29 U.S.C See generally, In re Crow & Assoc., Inc., 713 F.2d 211 (6 th Cir. 1983); Int l Paper Co. v. The Inhabitants of the Town of Jay, 672 F.Supp 29 (D.Maine 1987); Keystone Freight Lines, Inc. v. Pratt Thomas Truck Line, Inc., 37 F.Supp 635 (W.D. Okla 1941) U.S.C Id. 8

11 collective bargaining, and allow them to unionize and collectively bargain without interference from employers. 25 The basic language of the NLGA and from courts interpretation of it shows a basic policy against the injunction of activities of labor unions. 26 The NLGA is a one way street designed to aid employees, and not to work to the advantage of employers who were already abusing the court system to gain unfair advantages in labor negotiations. Section 104(a) which is the first of the enumerated specific acts not subject to restraining orders or injunctions says a person shall not ceas[e] or refus[e] to perform any work or to remain in any relation of employment[.] 27 It is clear from the language that this applies to an employee s right to strike, but mentions nothing about protecting an employer s right to lockout. Case law has indicated that an employer s right to lockout is not protected under this language as stated by Judge Doty in Jackson v. Nat l Football League. 28 Judge Doty said, [i]t would be ironic if a statute that had been enacted to protect the rights of individual employees from improper actions by employers and the courts were turned against those employees and used to justify the continued application of a system found illegal under the Sherman Act. 29 In the present case the employer, NBA, opted out of the final two years of the Collective Bargaining Agreement (hereinafter CBA) it had with the National Basketball Players Association (hereinafter NBPA), and the agreement was set to expire on October 11, 2011 at 25 See, Burlington Northern R.R. Co. v. Brotherhood of Maintenance of Way Employees, 481 U.S. 429, 437 (1987); See generally, Brady (2011). 26 Burlington Northern R.R. Co., (1987) U.S.C. 104(a) F.Supp. 226 (D.Minn. 1992). 29 Id. 9

12 11:59pm. 30 The players were represented in the negotiation by the NBPA up until voting to decertify the union on October 11, 2011, at 4pm. 31 At this point the players represented themselves individually or could continue bargaining as the newly classified professional association rather than as a certified labor union. 32 On October 12, 2011, the day after the CBA had expired, the NBA began a lockout of the players, which is the act of preventing all player employees of the NBA from working. The Saracen Plaintiffs, five professional basketball players employed by the NBA, are seeking specific performance in the form of an injunction lifting the lockout and allowing them to work again while continuing to work on a new CBA with the NBA. 33 The District Court correctly granted the injunction lifting the lockout as it found the NLGA to be inapplicable. Based upon the legislative intent to protect employees and not employers, coupled with the extensive case law finding that the NLGA only prevented injunctions where the employer was seeking an injunction, the District Court was correct in interpreting the statutory language of the NLGA to find it did not prohibit the issuance of an injunction in this case. 34 The Appellate Court incorrectly reversed the lower Court Decision finding that the present case was governed by the NLGA, and thus prohibited the District Court from granting an injunction. The Appellate Court completely overlooked the legislative intent and history behind the enactment of the NLGA, citing only to one case, Bhd. Of R.R. Trainmen v. Chi. River & Ind. R.R. Co., regarding the overarching purpose of the NLGA as preventing injunctions to allow for 30 R. at R. at R. at R. at R. at

13 the natural interplay of the competing economic forces of labor and capital. 35 However, the Appellate Court misreads the holding in R.R. Trainmen as one in support of the employer. This case involved the interplay between the Railway Labor Act (hereinafter RLA) and the NLGA. 36 The employer was seeking an injunction against the striking railroad workers, which is precisely what the NLGA would have prevented a court from granting (and which the Supreme Court acknowledged in its holding would have happened but for the competing RLA). 37 However, the RLA required workers, prior to a strike, to submit to arbitration to attempt to resolve their dispute prior to a work stoppage. The Supreme Court held that the detailed RLA prevailed over the broad NLGA and prior to a strike, the employees must go through with arbitration as public policy promotes the peaceful resolution to labor disputes. 38 Thus, the injunction was granted but this injunction differed from injunctions the NLGA was designed to prevent, as this one did not harm the employees bargaining position, and instead afforded them a seat at the arbitration table as per the RLA. The Appellate Court cites this case as a reason why Section 104(a) does not limit the NLGA to protecting employees only and not employers, however, the case actually supports the position that the NLGA protects employees only as it was the RLA and not the NLGA that protected the employer in R.R. Trainmen. The Appellate Court erred in their analysis of the application of the NLGA in the present case and the history and legislative intent behind the act show a clear protection for employees and not employers. Moreover, the NLGA does not prohibit the District Court from issuing an 35 R. at 15 citing Bhd. Of R.R. Trainmen v. Chi. River & Ind. R.R. Co., 353 U.S. 30, 40 (1957). 36 See, Bhd. Of R.R. Trainmen, (1957). 37 Bhd. Of R.R. Trainmen, at Id., at

14 injunction lifting the lockout, therefore we respectfully request an injunction lifting the lockout. B. The Norris-LaGuardia Act Does Not Apply When The Union Has Been Disbanded As The Broad Definition Of Labor Dispute Has Been Interpreted By Courts As A Dispute Between A Union And Employer. The application of the NLGA to the present case hinges on what constitutes a labor dispute and if the present dispute is such and would therefore be a collective bargaining relationship governed by the Federal Labor Laws such as the NLGA. The NLGA is a broad statute under which labor dispute is defined as, any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee. 39 Courts have interpreted the definition of labor dispute broadly but it has uniformly defined as a dispute between a union and an employer. 40 Courts have once found the NLGA applicable in a case where no union existed, New Negro Alliance v. Sanitary Grocery Co. 41 In this case a grocery store was being picketed by a third party organization called the New Negro Alliance. The Court extended NLGA protection to this non union group based on their status as a person of interest in the labor of the grocery store and its union of workers. 42 However, in this case there was a union, even though not named in the suit, and the Court held the NLGA applicable but the holding has since been narrowly construed to apply outside the employee-employer relationship only when the third party has no relationship with U.S.C. 113(c). 40 Brady, at U.S. 552 (1938). 42 Id., at

15 the employee and is interested on their own platform. 43 Further, New Negro Alliance is distinguishable from the present case as it did not involve a lockout, or even a labor dispute and was only covered by the NLGA because of a third party s interest. Labor disputes under the NLGA have been held by courts to be a dispute between an employer and either the union ( an association of employees ) or an individual unionized employee or employees Since New Negro Alliance was decided no courts have held NLGA to be applicable absent a union. Regardless of the length of time from when the bargaining relationship ended, to when the lockout began, the NLGA is inapplicable as Federal law would no longer govern absent a union. 45 The present case is analogous to the line of cases since New Negro Alliance that uphold the intent behind the NLGA and find the NLGA inapplicable in situations where no union exists. 46 The CBA expired on October 11, 2011, at 11:59pm. The NBPA (player s union) on October 11, 2011 at 4pm voted to end their collective bargaining status and decertify the union. Instead of being a union the NBPA was restructured as a professional association rather than a union. 47 In addition, the NBPA notified the National Labor Relations Board to terminate its status as a union, and notified to the Internal Revenue Service requesting to be reclassified for tax purposes as a professional association rather than a labor association. 48 The NBPA also amended its by-laws to prohibit members from engaging in collective bargaining with the NBA, individual teams, or their agents. The players and NBA were notified that the players would now 43 See, New Negro Alliance; Brady, at Brady, at Jackson v. Nat l Football League, (1992). 46 See, Burlington Northern R.R. Co; Brady; Jackson. 47 R. at Id. 13

16 have to pursue or defend any grievances with the NBA or individual teams on an individual basis as the union no longer existed. 49 Effective October 11, 2011, at 4pm, the NBPA was no longer a labor union and was instead a professional association. The union was decertified and therefore when the lockout began on October 12, 12:00am, the NBA was not locking out the union, but was locking out non-unionized individual employees. 50 This means the present case falls outside the protection of the NLGA and therefore the District Court is not prohibited from issuing the injunction requested in this case. The Appellate Court incorrectly ruled that the NLGA is applicable in this case on the basis of a lockout being found legal in previous cases regarding professional sports. 51 However, the present case is distinguishable from both Powell v. Nat l Football League and Nat l Basketball Assoc. v. Williams that the Appellate Court cites. The cited cases all involved a lockout by the employer on its unionized employees, which is clearly within the coverage of the NLGA. 52 However, the present case is distinguishable in that the lockout is between the employer and the non-union employees, which clearly falls outside of the NLGA as multiple more recent cases have held Id. 50 R. at Powell v. Nat l Football League, 930 F.2d 1293 (8 th Cir. 1989); Nat l Basketball Assoc. v. Williams, 45 F.3d 684 (2d Cir. 1995). 52 See, Powell; see generally, Nat l Basketball Assoc. v. Williams. 53 See, Brady at 1028, citing Jackson v. Nat l Football League, 802 F.Supp. 226, 233 (D.Minn. 1992) (holding that Norris-LaGuardia Act no longer applies to preclude injunctive relief after court concludes that any bargaining relationship between players and defendants ended ). 14

17 As the Appellate Court erred in holding that the NLGA governed the present case thus finding the District Court was prohibited from issuing an injunction, we respectfully request that this Court grant the injunction requested by Plaintiffs. II. The Non-Statutory Labor Exemption Does Not Protect The NBA Lockout From Antitrust Scrutiny. A. When There Is No Collective Bargaining Relationship, The Non-Statutory Labor Exemption Does Not Apply. This court has held that the non-statutory labor exemption lasts only until the collapse of the collective bargaining relationship. 54 The non-statutory labor exemption is an implied repeal of the Sherman Act whereby imposing antitrust liability against employers would conflict with federal labor statutes. 55 It has been stated that [T]he only permissible justification for a repeal by implication is when the earlier and later statutes are irreconcilable. 56 As a result, courts have and may apply the non-statutory labor exemption only where it would be difficult, if not impossible, to enforce the labor laws if the antitrust laws were applied. 57 As the District Court of Tulania properly noted, the National Labor Relations Act s (NLRA) requirement that employer and unions bargain over terms of employment, would be futile if any resulting agreement were deemed an antitrust violation. 58 However, in the instance when employees are not represented by a union, as is the case currently when the NBA players fully and successfully disclaimed their union on October 11 at 4 p.m. once negotiations broke down, there is no possible conflict between labor law and the Sherman Act because the labor-law provisions 54 Brown, 518 U.S. at Id. at Morton v. Mancari, 417 U.S. 535, 550 (1974). 57 Brown, 518 U.S. at See Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 691 (1965). 15

18 governing collective bargaining do not apply. Therefore, because no conflict existed once the players disbanded the union, this Court is obligated to enforce and apply antitrust laws to the current NBA lockout. 59 B. NBA s Misrepresentation Of Brown And Powell. The NBA has consistently relied on language in Brown and Powell, stating that the nonstatutory labor exemption continues to apply until some point that is sufficiently distant in time and in circumstances from the collective bargaining process. 60 However, the NBA and Court of Appeals applications of Brown and Powell onto the non-statutory labor exemption at issue in the present case are wrong. In Brown, the issue was whether the non-statutory labor exemption permits members of a multiemployer bargaining group to jointly implement their last best bargaining offer after reaching impasse with the union. 61 This Court has held that it does but the difference between Brown and our current dispute, is that Brown had a tension between antitrust and labor law whereas, the current case does not. In Brown the court noted that because of the direct and considerable labor-law regulations of their conduct following an impasse in collective bargaining, employers in a multiemployer bargaining unit would find themselves with no lawful option unless the non-statutory labor exemption applied and guarded against the forcing of postimpasse terms from antitrust scrutiny See McNeil v. Nat l Football League, 764 F. Supp. 1351, 1358 (D. Minn. 1991); Nat l Basketball Association v. Williams, 857 F. Supp. 1069, 1078 (S.D.N.Y. 1994), aff d, 45 F.3d 684 (2d Cir. 1995). 60 See Brown, 518 U.S. at 250; Powell v. Nat l Football League, 930 F.2d 1293, 1303 (8th Cir. 1989) U.S. at U.S. at

19 This is the tension between labor and antitrust law that this Court articulated in Brown that does not exist here, because in this dispute, the parties have moved beyond collective bargaining entirely when the negotiations stopped and the NBA players union disbanded and decertified. 63 Whereas in Brown, a union was still in place representing the players. 64 By disbanding their union and terminating the collective-bargaining process on October 11, the NBA players have given up the right to charge any individual team with an unfair labor practice. As a result, there is no tension for the NBA teams here to have to choose between labor and antitrust law because any labor law obligations the league had when there was a player s union, is now gone after decertification and disbanding by the players and subsequently, any implied exemption from antitrust laws for the league has thus ended. This Court in Brown also discussed a different scenario then from above in regards to the application of the non-statutory labor exemption. 65 The sufficiently distant language in Brown addresses the situation where the parties to a collective bargaining relationship have reached impasse but are still within an existing bargaining framework. 66 This Court in Brown recognized that some cases may be sufficiently distant in time and in circumstances from the collective bargaining process that a rule permitting antitrust intervention would not significantly interfere with that process, but the court did not ever apply this standard and never gave any ruling on whether, or where, within these extreme outer boundaries to draw that line. 67 It has also been acknowledged that a collapse of the collective -bargaining relationship, as evidenced 63 R. at U.S. at Brown, 518 U.S. at R. at Brown, 518 U.S. at

20 by decertification of the union, is an example of when the non-statutory labor exemption would subsequently not exist, and therefore, provides the explanation as to why the non-statutory labor exemption no longer applies to the current dispute once the NBPA no longer existed. 68 The NBA and Court of Appeals use of Powell is also misguided. The Eighth Circuit in Powell v. Nat l Football League held that the non-statutory labor exemption continues to apply post impasse during an ongoing collective bargaining relationship. 69 There, the court acknowledged that the exemption might eventually terminate notwithstanding the collective bargaining relationship but did not even suggest, let alone hold, that the non-statutory labor exemption would continue after the collective bargaining relationship had ended. 70 To the contrary, the court in Powell stated, [T]he Sherman Act could be found applicable if the affected employees ceased to be represented by a certified union. 71 This is exactly on point with the current NBA labor dispute because the affected employees, that being the players that are locked out from performing their jobs by not being able to play the game of basketball, have successfully and fully ceased from being represented by any certified union. To bolster this interpretation, even the dissent in the case noted that, under the majority s opinion, the labor exemption will continue until the bargaining relationship is terminated either by a National Labor Relations Board (NLRB) decertification proceeding or by abandonment of bargaining rights by the union. 72 It is thus very compelling to believe based on both the majority and 68 Brown, 518 U.S. at 250 (quoting NLRB v. Truck Drivers, 353 U.S. 87, 96 (1957) and citing Meat Cutters v. Jewel Tea, 381 U.S. 676, 710 (1965)) F.2d 1293, 1303 (8th Cir. 1989). 70 R. at Id. at Powell, 930 F.2d at 1305 (Heaney, J. dissenting). 18

21 dissent s interpretations in Powell, that the non-statutory labor exemption does not apply after collective bargaining has ended. The Court of Appeals and NBA argue however that the court in Powell noted that the non-statutory labor exemption applies as long as there is a possibility that proceedings may be commenced before the [National Labor Relations Board] or until final resolution of Board proceedings and appeals therefrom. 73 The Court of Appeals claimed that because the NBA s unfair labor practice claim with the NLRB is yet unsettled and that the NLRB is not compelled to find a valid disclaimer of interest simply because the union uses the word, these facts indicate that there cannot be a final resolution to proceedings before the NLRB in this matter, resulting in the continued opportunity to apply the non-statutory labor exemption. 74 However, the Court of Appeals fails to disclose the fact that the court in Powell, never had to apply their standard to the facts of the case because the matter before them concerned an interlocutory appeal, and thus did not need to decide the issue. 75 This interpretation by the Court of Appeals is also suspect and weakened based upon an actual analysis of a similar labor dispute as to the case at hand. 76 There, the court noted that although the league filed an unfair labor practice charge, and purported to amend that charge immediately after the union s disclaimer, it would be likely, if not inevitable, that the NLRB would dismiss that charge based on the fact that the Players have successfully exercised their right to abandon the collective bargaining framework of labor law in order to pursue individual 73 Powell, 930 F.2d at R. at See Powell, 930 F.2d at Brady v. Nat l Football League, 79 F.Supp.2d at 1016 citing In re Pittsburgh Steelers, No. 6-CA-23143, 1991 WL , 1 (June 26, 1991). 19

22 contracts. 77 This application is on point with the case at hand because in this instance, the NBA players have also successfully abandoned the collective bargaining framework by disclaiming the union on October 11 at 4 p.m. and as a result, the NLRB similarly would likely abandon this unfair labor practice charge by the league against the players. 78 Since there would likely be a final resolution of the NLRB proceeding through a dismissal of the charge after the player s union decertifies, the Court of Appeals determination that the non-statutory labor exemption would apply in this case under Powell is wrong. C. Labor Law Policy Argument Applied To The Non-Statutory Labor Exemption The NBAs attempt to use labor law policy arguments in order to warrant the application of the non-statutory labor exemption to protect their lockout from facing antitrust scrutiny is suspect. The NBA contends that from a policy standpoint, the non-statutory labor exemption must still apply because a multiemployer bargaining unit could not exist if previously unionized employees could assert antitrust claims after abandoning their union as such claims would hinder the collective bargaining process from its outset. 79 This view by the NBA however is merely assuming that the players only disclaimed their union as a step towards improving their bargaining position, however the result of such actions by the union has the opposite effect. When a union dissolves, workers abandon their rights under the labor laws to challenge, as unfair labor practices, the refusal of individual employers to bargain collectively. 80 Thus, as the District Court for Tulania properly noted, after a disclaimer, an individual can impose the 77 Id. at R. at R. at See NLRB v. Gissel Packing Co., 395 U.S. 575, 596 (1969); Dow Chem. Co. v. NLRB, 660 F.2d 637, 657 (5th Cir. 1981). 20

23 terms and conditions of employment it desires without collective bargaining so long as the terms do not violate the antitrust laws. 81 This is why after a disclaimer, employers, such as the NBA, can alter the workplace in fundamental ways that otherwise would violation NLRA provisions. 82 Another potential problem for the players that the NBA overlooks by claiming this is a mere tactic with no substance is the fact that a decision to disclaim can be a very difficult one to reverse. The law states that when employees are organized as a union, their employer cannot refuse to collectively bargain with that union without committing an unfair labor practice. 83 On the other hand, when non-unionized employees attempt to reconstitute their union, the employer has the right to force them to seek a NLRB-supervised election, even if a majority of those non-unionized employees have already given their consent by signing authorization cards that recognize that specific union as their own. 84 This shows that contrary to what the NBA believes, a disclaimer of the players union is not merely a labor negotiations tactic, but an actual decision that has serious consequences on the players. 85 Another flawed policy argument by the NBA involves their claims that deeming multiemployer bargaining unit lockouts as antitrust violations will violate their right as employers to lock out the players, as their employees, under the labor laws. 86 This view is wrong however because unlike the right to strike under 29 U.S.C. 157, 163, the ability of an employer like the NBA to lock out its player employees is not guaranteed by the NLRA or any other statute. Instead, an employer s ability to lockout its employees is implied as only a 81 R. at R. at U.S.C. 158(a)(5) (1935). 84 See Linden Lumber Div. v. NLRB, 419 U.S. 301, (1974). 85 R. at R. at

24 counterbalance to the employees right to strike. 87 Therefore, as the District Ct for Tulania properly concluded, once the players as employees renounce their union and give up their laborlaw right to strike collectively without violating the antitrust laws, the NBAs corresponding ability as an employer to lock out the players necessarily loses its protection from antitrust scrutiny. 88 Lastly, the NBA influenced the Court of Appeals to claim public policy states that to allow a disclaimer of interest by a union in order to extinguish the non-statutory labor exemption would be to frustrate federal labor law, as it would place employers in an untenable catchtwenty-two if the union either disclaimed or threatened to disclaim interest. 89 It is hard to find this concern valid however because while pre-disclaimer activity is protected by the nonstatutory labor exemption under Brown; any post disclaimer activity loses its labor law protections and would be regulated solely by antitrust laws making it hard to see a dilemma that the employer, or in this case what the NBA would face. 90 As mentioned before, players would lose not only negotiating rights but all other labor rights they enjoined as a union, while at the same time, relieving the NBA as the player s employer from having to comply with federal labor law regulations. 91 By ruling in favor of the league on this point, in permitting antitrust immunity to endure even after the collective bargaining relationship has ended by a successful disclaimer of the player s union, the result would leave the non-unionized players left with no 87 See Am. Ship Bldg. v. NLRB, 380 U.S. 300, 315 (1965); NLRB v. Cont l Baking Co., 221 F.2d 427, 436 (8th Cir. 1955) (stating that a lockout could be justified as the assertion of the employer s corollary to the Union s right to strike ). 88 R. at R. at See Brady v. Nat l Football League, 779 F. Supp. at Id. 22

25 labor or antitrust relief against the NBA, which is a real catch-twenty-two, which stands for exactly why Brown identified the definitive end of the collective bargaining process as the extreme outer boundaries where the labor exemption sought by the league would no longer apply. 92 D. The Lockout Is Not Exempt From The Sherman Act Because The Lockout Does Not Concern A Mandatory Subject Of Bargaining. The NBA has argued and the Court of Appeals for the Eighth Circuit has held, that the non-statutory labor exemption in this dispute continues to apply to the current lockout. 93 The NBA and Court of Appeals relied heavily on policy arguments and the conflicts between federal labor and antitrust laws in their decision in order to protect the NBA from facing antitrust scrutiny but they failed to address the other legal claim that the union has for why the current lockout is not exempt from antitrust scrutiny and that is because the current lockout does not satisfy the Eighth Circuits own requirements held in Mackey. 94 In Mackey, the Eighth Circuit had to analyze the principles that create the non-statutory labor exemption and decide the issue of whether relevant federal labor policy deserved preeminence over federal antitrust policy under the circumstances of a particular case. 95 The court in Mackey created a three factor test to resolve the competing interest of labor and antitrust law in U.S. at R. at F.2d 606 (8th Cir. 1976). 95 Powell v. Nat l Football League, 930 F.2d 1293 at 1297 citing Mackey v. Nat l Football League, 543 F.2d at

26 order to determine if the non-statutory labor exemption applied to a given dispute. 96 For the exemption to apply the court articulated that; [F]irst, the labor policy favoring collective bargaining may potentially be given preeminence over the antitrust laws where the restraint on trade primarily affects only the parties to the collective bargaining relationship. Second, federal labor policy is implicated sufficiently to prevail only where the agreement sought to be exempted concerns a mandatory subject of collective bargaining. Finally, the policy favoring collective bargaining is furthered to the degree necessary to override the antitrust laws only where the agreement sought to be exempted is the product of bona fide arm s length bargaining. 97 With this three factor test, we can see when the exemption can be applied by first looking to Amalgamated Meat Cutters v. Jewel Tea, where a plurality of this Court determined that an hour s restriction was so intimately related to wages, hours and working conditions that the unions successful attempt to obtain that provision falls within the protection of the national labor policy and is therefore exempt from the Sherman Act. 98 From here, we note again what Mackey held, that federal labor policy is implicated sufficiently to prevail only when the allegedly collusive activity concerns a mandatory subject of collective bargaining. 99 This second factor from the rule in Mackey was reaffirmed by the Eighth Circuit in Powell, when the court concluded that the exemption extended to also the post-impasse imposition of terms on a mandatory subject of collective bargaining. 100 Subsequently, the terms imposed in Brown F.2d at Powell v. Nat l Football League, 930 F.2d 1293 at 1297 (citing Mackey v. Nat l Football League, 543 F.2d at 614.) U.S. at F.2d at 614 (citing Jewel Tea) F.2d at

27 concerning a bargaining impasse over a wage issue with the developmental squad football players also related to a mandatory subject of bargaining. 101 What separates this lockout as a labor issue, compared to the labor issue in Brown that the NBA and Court of Appeals fails to distinguish, is the fact that this group boycott does not concern a mandatory subject of collective bargaining such as wages, hours, and other terms and conditions of employment. 102 For this reason, the NBA is unable to successfully gain an antitrust exemption because their conduct of imposing a lockout against the players here falls outside any mandatory subject of collective bargaining, which results in the loss of the NBA to use the non-statutory labor exemption to this lockout, thereby properly exposing this NBA lockout to antitrust scrutiny. E. The Disclaimer By The NBA Player s Union Was Valid And Not A Sham. Immediately after the NBA players disclaimed their union on October 11 at 4:00 p.m., the NBA proceeded to file an unfair labor practice claim with the National Labor Relations Board alleging that the player s union disclaimer of interest was a sham in that the disclaimer and subsequent filing of this action were merely intended to be used as leverage at the bargaining table and part of the collective bargaining process. 103 The NBA is attempting to discredit the disclaimer of the player s union in order to receive a favorable ruling protecting their imposed lockout from antitrust scrutiny under the non-statutory labor exemption, by implying that a collective bargaining relationship still exists between the two parties because the union s disclaimer was never meaningful and as a result, fails to meet Brown s sufficient distance in 101 See 518 U.S. at U.S.C. 158(d) (1935). 103 R. at 4. 25

28 time and circumstances standard. 104 However, there is no reasonable argument that the disclaimer by the player s union here was a sham. The ruling in Pittsburgh Steelers, Inc., is directly on point with the current NBA labor dispute and refutes any argument by the league that the National Basketball Association Players Association (NBPA) s disclaimer is a sham. 105 Pittsburgh Steelers, Inc., arose out of the NFL players disclaimer of the NFLPA as their collective bargaining representative in The Office of General Counsel concluded that the NFLPA had effectively disclaimed its representational rights because its disclaimer was unequivocal, made in good faith, and unaccompanied by inconsistent conduct. 107 When forced to address the objection by the league that the disclaimer was motivated by the players intent to bring antitrust lawsuit, Pittsburgh Steelers, Inc. explained that the fact that the disclaimer was motivated by litigation strategy, i.e., to deprive the NFL of a defense to players antitrust suits and to free the players to engage in individual bargaining for free agency, is irrelevant so long as the disclaimer is otherwise unequivocal and adhered to. 108 The court in Brady also faced a disclaimer issue that is essentially identical to this dispute. The NFL in Brady, just like the NBA in this dispute, contended that the Player s purported disclaimer of their collective bargaining agent is a mere U.S. at Brady v. Nat l Football League, 779 F. Supp. 992, 1015 (2011) (citing Pittsburgh Steelers, Inc. No. 6-CA-23143, 1991 WL ). 106 Brady v. Nat l Football League, 779 F. Supp. at 1016 (citing Pittsburgh Steelers, Inc. No. 6-CA-23143, 1991 WL ). 107 Brady, 779 F. Supp. at 1016 (citing Pittsburgh Steelers, Inc. No. 6-CA-23143, 1991 WL ). 108 Brady, 779 F. Supp. at 1016 (citing Pittsburgh Steelers, Inc. No. 6-CA-23143, 1991 WL ). 26

29 tactic that undermines the validity of the disclaimer. 109 The Players in Brady denied this by asserting that [b]y disclaiming their union, the Players have given up the right to strike, to collectively bargain, to have union representation in grievances, to have union representation in benefits determinations, and to have union regulation of agents. 110 In addition, the Players note that the disclaimer does not stand alone either because of four additional steps by the Players. 111 The Union in Brady also (1) amended its bylaws to prohibit it or its members from engaging in collective bargaining with the NFL, the individual teams, or their agents, (2) filed notice with the Department of Labor to terminate its status as a labor organization, (3) filed an application with the IRS to be reclassified for tax purposes as a professional association rather than a labor organization, and (4) informed the NFL that it no longer would represent players in grievances under the soon-toexpire CBA, such that the players would have to pursue or defend on an individual basis any grievance with the NFL or the individual teams. 112 As a result, the court in Brady less than a year ago held that the NFLPA s disclaimer is not a mere tactic because it results in serious consequences for the Players. 113 The record provides undisputed evidence that the union s disclaimer was valid and not a sham from the fact that prior to expiration of the Collective Bargaining Agreement (CBA), the NBPA had taken polls with its players to see if a substantial majority of the union wished to disband the union if negotiations for a new CBA failed.114 Based upon these polls, just prior to the expiration of the CBA, the NBPA decided to end the collective bargaining status of their F. Supp. at 1017 and R. at F. Supp. at Id. at Id. 113 Id. 114 R. at 4. 27

30 union by disclaiming its interest in representing the players and thus the player representatives voted to restructure the organization as a professional association rather than as a union. 115 Upon this disclaimer by the NBPA, the NBA then brought the above referenced unfair labor practice charge. 116 By this time, the NBPA had taken further steps which are identical to what the NFLPA did in Brady by also amending its bylaws to prohibit its members from engaging in collective bargaining with the NBA, individual teams, or their agents. 117 The NBPA just like the NFLPA in Brady also notified the NLRB to terminate its status as a labor organization and additionally filed an application with the Internal Revenue Service to be reclassified for tax purposes as a professional association rather than a labor organization. 118 Lastly, in its October 11 notice, the NBPA also informed the NBA that it would no longer represent players in grievances under the soon-to-expire CBA, so that players would have to pursue or defend any grievances with the NBA or individual teams on an individual basis, just like in Brady. 119 Based upon the similarities between the NFLPA s disclaimer in Brady and the NBPA s disclaimer in the present labor dispute, it is appropriate to conclude, just as the court in Brady had, that the disclaimer by the NBPA is not a mere tactic because it similarly results in serious consequences for the Players. 120 Therefore, the NBA s argument that this disclaimer was only a sham is incorrect and should be taken into consideration in determining that a valid disclaimer by the NBPA existed, which would result in an official end to the collective 115 R. at R. at R. at R. at R. at F. Supp. 2d at

31 bargaining relationship, favoring the Player s position that the Non-Statutory Labor Exemption ceases to apply to the current NBA lockout. CONCLUSION For the foregoing reasons, this Court should find that the Norris-LaGuardia Act does not Prohibit the District Court from issuing an injunction to enjoin the NBA lockout, and that the NBA lockout is not protected from antitrust scrutiny by the non-statutory labor exemption. Respectfully submitted, TEAM 23 Counsel for Plaintiffs-Petitioner 29