Arbitrating Player Rights

Embodies a Whole System of Dispute Resolution

• NFL CBA: any dispute re interpretation of CBA, standard player K, NFL Const. re players, subject to arbitration

• Why arbitration is strongly preferred– Cheaper, informal, quick, private– Not just alternative to litigation, but alternative

to strikes during term of CBA

• Key development: substituting independent arbitrator for Commissioner

Various Types of Arbitration

• Grievance: general interpretation of contract or factual resolution of dispute

• Review of league discipline

• Medical arbitration for injuries

• Salary arbitration

• NBA “basketball expert” on likelihood of bonuses being achieved for salary cap purposes

Grievance Arbitration Procedures

• Union grieves• U and mgt try to agree on facts• U and league’s Player Relations

Committee have right to settle, even if club or player disagrees

• Refer to arbitral panel including impartial decision-maker

• Arbitrator has full powers unless limited by express terms of CBA

Issues in Messersmith/ McNally

• Is the dispute subject to arbitration (discuss later in KC Royals)?

• Are the players “under contract”?

• If not, can the clubs still place them on a reserve list?

Legal Bases for Contract Law Decision in Messersmith/ Dutton

• Is there any basis for the arbitrator’s decision other than his “own personal brand of industrial justice”?– Literal language of contract– Intent of parties– Canons of contract interpretation– Precedent– No meeting of the minds– Unconscionability– Relevance of “harm to baseball” argument

Intent of the Parties

• Restatement (Second) of Contracts § 201 (1981):– (1) Where the parties have attached the same meaning to a promise or

agreement or a term thereof, it is interpreted in accordance with that meaning.– (2) Where the parties have attached different meanings to a promise or

agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made

• (a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or

• (b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party.

• Under this provision, shouldn’t Marvin Miller have been obligated to state his opinion and clarify contract language?

Harm to Baseball

• [282]: MLB argued that interpreting CBA to permit free agency after 2 years would “devastate” baseball– Wealthiest clubs would get all the best players, creating

competitive imbalance– Clubs would sacrifice young player development to hire best

free agents– Owners would overspend– New investors discouraged

• Assuming this is correct, is it a legitimate concern for the arbitrator?

Are players free agents if contract expired?

• Clubs say still subject to reserve list• Players say reserve list only for those

under contractWho is right?

Dutton arbitration

• Issue identical to Messersmith: owners decide to construe language to create perpetual option

Can you reconcile these two decisions?

KC Royals v MLBPA

• Did the 8th Circuit conclude that clubs and players actually agreed that this type of issue was arbitrable?

• Wasn’t AL President McPhail probably correct in testifying that the owners would not have permitted the reserve system to be subject to the decision of an independent arbitrator?

Judicial Review of Arbitral Decisions

• Courts determine whether decision either:– “draws its essence” from CBA; or– imposes arbitrator’s “personal brand of justice”

• Any standard means of interpretation will be sustained• MLBPA v Garvey illustrates

– Arbitrator rejected claim for additional damages from collusion, finding that Padres’ failure to offer Garvey a contract extension was based on baseball judgment and not collusion; rejected as non-credible owner’s testimony, 7 years later, that motivation was collusion

– 9th Circuit reversed, finding arbitrator’s decision irrational– Supreme Court reverses again, rejecting appellate court review because even

erroneous arbitral decision must be upheld

Review of Labor Law options

• After Royals, what are the options available under the NLRA to MLB owners in light of interpretation that players all can become free agents after 2 years?