Wednesday, August 3, 2011

No-no-no: David Stern Channels his Inner "Mutombo" to Preemptively Block NBPA

On Tuesday, Commissioner Stern ran up the "court" where he grabbed the first "Board"; National Labor Relations Board to be exact, to "block" the National Basketball Players Association (NBPA) from de-certifying as a Union. But enough for the flagrant foul worthy puns and onto what's going on in NBA Lockout Land. Stern decided to brush off his litigious rust that he fostered early on as the youngest Partner at Proskauer Rose, a white shoe law firm that has a significant sports law practice group, and preemptively strike and prevent the NBPA from decertifying. It seems as Stern learned from NFL Commissioner's Roger Goodell's cautious attitude toward the NFLPA decertification and wanted to stop it before it started. Goodell probably had a good understanding that it would take decertification in order to get the players back to the table. Goodell was rightfully optimistic that a deal would get done before risking any missed regular seasons games. You see, unlike the NBA, all of the NFL Franchises have been profitable. The lockout was just a way to reorganize how profitable the NFL could be and put the owners in a place where they could maximize profits for the longterm (i.e. 10 year deal.) In comparison, the NBA is not in great shape. Many teams have been taking losses the last few year to a point where almost half of the teams requested a credit extension from the League. That is not a good situation to be in when facing possible anti-trust litigation. Where as the NFL tweaked their salary cap structure, it seems that NBA Owners want to completely blow up their soft cap and start over again. This would be no easy fix in anti-trust violation settlement discussions. David Stern knew this and decided to nip it in the bud.

Stern first filed a Unfair Labor Practices Charge against the NBPA with the National Labor Relations Board (NLRB), the federal agency that oversees all interstate labor disputes. The "basis of the Charge" lays out the facts which claim that as of August 4, 2009, the NBA on behalf of its members commenced negotiations with the NBPA for a Collective Bargaining Agreement (CBA) to replace the 2005 CBA that expired at the end of June. The charge further states that NBPA has violated Section 8(d) of the National Labor Relations Act (NLRA) for failing to bargain in good faith with the NBA regarding mandatory subjects of collective bargaining encompassing wages, hours and other conditions of employment. The plain text of the complaint further states: (Emphasis Added).

More specifically, the Union has repeatedly threatened that, unless its demands for a successor agreement are met by the NBA, it will engage in the pretense of "decertifying" or "disclaiming interest" in further representing NBA players. This is an impermissible negotiating tactic, designed by the Union as a predicate for the commencement of an antitrust lawsuit challenging the NBA's current lockout and other practices, and intended, by the misuse of the antitrust laws, to create leverage for the Union in its efforts to achieve its preferred outcome in collective bargaining.

What the NBA is alleging, is basically the de-certification threat is a sham tactic and that whatever "Association" the players form will basically be the same as the previous Union that they claim is not representing their interests, all in a way to bring an anti-trust suit to pressure the NBA into another unfavorable CBA (more on that in another post!) which Stern claims is a violation of Section 8(b)(3) of the NLRA. This section of the Act states:
to refuse to bargain collectively with an employer, provided it is the representative of his employees subject to the provisions of section 9(a)[,] [which states:]
Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: Provided, That any individual employee or a group of employees shall have the right at any time to present grievances to their employer and to have such grievances adjusted, without the intervention of the bargaining representative, as long as the adjustment is not inconsistent with the terms of a collective- bargaining contract or agreement then in effect: Provided further, That the bargaining representative has been given opportunity to be present at such adjustment.
Stern's argument does have some merit. As we saw that the NFL Players "Trade Association" basically acted in the same way as an union except with one big difference---the Trade Association was armed with a huge weapon of anti-trust litigation which typically is exempt from being used in labor disputes between unions and their employer(s). However, it should be stressed that the NFL Players did a good job of keeping to the formalities of decertifying and re-certifying, which will definitely be appreciated by their NBPA Brethren. The NBA has a right to be represented by an union in regard to collectively bargaining mandatory subjects but I am not sure that the right is exclusive to only union representation, as other parts of the NLRA make clear that employees cannot be forced to unionize.

Further, it is interesting that NBA is claiming that the NBPA has not negotiated in good faith. I am sure there will be a counter complaint made by the NBPA that the NBA Representatives did not make a good faith effort in negotiating and that the Lockout process was self-determinative. Typically, labor economic weapons of a strike or lockout should only be used when impasse is reached. A lot of times, it is difficult to decipher when that point is. A lockout should not be the default option. In fact it has been whispered about by owners who own both NBA and NHL teams, that it made financial sense to lose a whole hockey season to gain a favorable CBA when their NHL teams were losing money even with games played. Therefore, the imposition of the lockout itself without a showing of impasse or a failure to bargain in good faith may be an unfair labor practice.

Furthermore, the NBA has managed to gain a home court advantage with their Zone Defense in favorable venue. Concurrently with filing their NLRB complaint, NBA also filed a class action lawsuit against the NBPA in the United States District Court Southern District of New York which is a venue in the 2nd District notorious for their leanings towards favoring business/employer parties. This was an intelligent litigation tactic on the NBA's part as it means that the fight to decertify will be fought in this district if it is not resolved by the NLRB. The NBPA probably would have been better served if they could fight this battle in a California Court in the 9th District, which is notorious for their employee leaning outcomes. In this lawsuit, the NBA is asking the Court for a declaratory judgment that the NBA's ongoing lockout is legal as a matter of federal labor law and does not violate federal antitrust law under auspice of labor exemption provided by the Section 20 of the Clayton Act (Anti-trust) and the Norris-LaGuardia Act (labor law), and that the lockout is also protected from antitrust suits via the Non-statutory labor exemption. The non-statutory labor exemption is the judicially created doctrine which favors collective bargaining and gives it preferential treatment over antitrust laws. Although usually applied to sports union activity, here in this case it would apply to employer bargaining units. Moreover, the NBA asked for a declaration that because the lockout evolved out of a labor dispute, the Sections 101 and 104 of the Norris LaGuardia act deprives federal courts of jurisdiction to restrain or enjoin the lockout. This move was most likely made after the Minnesota Federal District Court in the Brady v. NFL suit temporarily halted the lockout and although it is only a district court opinion, because the parties settled prior to the announcement of the Court of Appeals Decision, the District Court opinion in favor of the NFL players could be persuasive authority. And lastly, and maybe most gutsy, the NBA is asking for a declaration that if the NLRB allows the NBPA to decertify, all contracts between NBA clubs and current players would be void and unenforceable due to the Uniform Player Contract interconnectedness with the NBA CBA.

The NBA has gotten the first shot in. It will be interesting to see how the players regroup and respond. But until then it seems Commissioner Stern has summonsed his inner Dikembe Mutombo by wagging his finger at the players and proclaiming "No Antitrust For You!"



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