Brown v. Pro Football, Inc., Nos. 93-7165

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtHARRY T. EDWARDS; WALD; PER CURIAM; TATEL; WALD
Citation50 F.3d 1041
Parties148 L.R.R.M. (BNA) 2769, 311 U.S.App.D.C. 89, 63 USLW 2593, 1995-1 Trade Cases P 70,933 Antony BROWN; James Bishop; John Buddenberg; Gary Couch; Craig Davis; Ricky Andrews; Thom Kaumeyer; Wesley Pritchett; and John Simpson, Individually and on Behalf of All Class Members, Appellees, v. PRO FOOTBALL, INC., d/b/a Washington Redskins; The Five Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc., d/b/a Buffalo Bills; Chicago Bears Football Club, Inc., d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland Browns; Dallas Cowboys Football Club, Ltd., d/b/a Dallas Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The Detroit Lions, Inc., d/b/a Detroit Lions; Green Bay Packers, Inc., d/b/a Green Bay Packers; Houston Oilers, Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a Indianapolis Colts; Kansas City Chiefs Football Club, Inc., d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd., d/b/a Los Angeles Raiders; Los Angeles Rams Football Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins, Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football Club, Inc., d/b/a Minnesota Vikings; KMS Patriots, L.P., d/b/a New England Patriots; The New Orleans Louisiana Saints Limited Partnership, d/b/a New Orleans Saints; New York Football Giants, Inc., d/b/a New York Giants; New York Jets Football Club, Inc., d/b/a New York Jets; The Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia Eagles; B & B Holdings, Inc., d/b/a Phoenix Cardinals; Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers; The Chargers Football Company, d/b/a San Diego Chargers; The San Francisco Forty-Niners, Ltd., d/b/a San Francisco Forty-Niners; The Seattle Professional Football Club, d/b/a Seattle Seahawks; Tampa Bay Area NFL Football, Inc., d/b/a Tampa Bay Buccaneers, Inc.; and National Football League, Appellants. et al., 94-7071.
Decision Date12 June 1995
Docket NumberNos. 93-7165

Page 1041

50 F.3d 1041
148 L.R.R.M. (BNA) 2769, 311 U.S.App.D.C.
89, 63 USLW 2593,
1995-1 Trade Cases P 70,933
Antony BROWN; James Bishop; John Buddenberg; Gary Couch;
Craig Davis; Ricky Andrews; Thom Kaumeyer; Wesley
Pritchett; and John Simpson, Individually and on Behalf of
All Class Members, Appellees,
v.
PRO FOOTBALL, INC., d/b/a Washington Redskins; The Five
Smiths, Inc., d/b/a Atlanta Falcons; Buffalo Bills, Inc.,
d/b/a Buffalo Bills; Chicago Bears Football Club, Inc.,
d/b/a Chicago Bears; Cincinnati Bengals, Inc., d/b/a
Cincinnati Bengals; Cleveland Browns, Inc., d/b/a Cleveland
Browns; Dallas Cowboys Football Club, Ltd., d/b/a Dallas
Cowboys; PDB Sports, Ltd., d/b/a Denver Broncos; The
Detroit Lions, Inc., d/b/a Detroit Lions; Green Bay
Packers, Inc., d/b/a Green Bay Packers; Houston Oilers,
Inc., d/b/a Houston Oilers; Indianapolis Colts, Inc., d/b/a
Indianapolis Colts; Kansas City Chiefs Football Club, Inc.,
d/b/a Kansas City Chiefs; The Los Angeles Raiders, Ltd.,
d/b/a Los Angeles Raiders; Los Angeles Rams Football
Company, Inc., d/b/a Los Angeles Rams; Miami Dolphins,
Ltd., d/b/a Miami Dolphins; Minnesota Vikings Football
Club, Inc., d/b/a Minnesota Vikings; KMS Patriots, L.P.,
d/b/a New England Patriots; The New Orleans Louisiana
Saints Limited Partnership, d/b/a New Orleans Saints; New
York Football Giants, Inc., d/b/a New York Giants; New York
Jets Football Club, Inc., d/b/a New York Jets; The
Philadelphia Eagles Football Club, Inc., d/b/a Philadelphia
Eagles; B & B Holdings, Inc., d/b/a Phoenix Cardinals;
Pittsburgh Steelers Sports, Inc., d/b/a Pittsburgh Steelers;
The Chargers Football Company, d/b/a San Diego Chargers;
The San Francisco Forty-Niners, Ltd., d/b/a San Francisco
Forty-Niners; The Seattle Professional Football Club, d/b/a
Seattle Seahawks; Tampa Bay Area NFL Football, Inc., d/b/a
Tampa Bay Buccaneers, Inc.; and National Football League, Appellants.
Nos. 93-7165 et al., 94-7071.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 17, 1994.
Decided March 21, 1995.
Order Denying Suggestion for Rehearing In Banc June 12, 1995.

Page 1044

On Appeal from the United States District Court for the District of Columbia (No. 90cv01071).

Gregg H. Levy, Washington, DC, argued the cause for appellants. With him on the briefs were Herbert Dym and Sonya D. Winner, Washington, DC. Richard W. Buchanan, Washington, DC, entered an appearance, for appellants.

Joseph A. Yablonski, Washington, DC, argued the cause for appellees. With him on the briefs were Daniel B. Edelman and John F. Colwell, Washington, DC.

Howard L. Ganz, New York City and Warren L. Dennis, Washington, DC, filed amicus curiae brief for The Nat. Basketball Ass'n and The Nat. Hockey League.

Peter D. Isakoff, Washington, DC and David G. Feher, New York City, filed amicus curiae brief for The Nat. Basketball Players Ass'n and The Nat. Hockey League Players Ass'n.

Before: EDWARDS, Chief Judge, WALD and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Chief Judge EDWARDS.

Dissenting opinion filed by Circuit Judge WALD.

HARRY T. EDWARDS, Chief Judge:

This case poses a conflict between the policies underlying federal labor law and antitrust law in the context of a labor dispute involving professional football. In the Sherman Act, 15 U.S.C. Sec. 1 (Supp. II 1990), enacted in 1890, Congress proscribed certain practices and agreements inimical to free trade as a means "to promote the national interest in a competitive economy." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 635, 105 S.Ct. 3346, 3358, 87 L.Ed.2d 444 (1985) (internal quotations omitted). There was no unified federal labor policy at the time of the passage of the Sherman Act. However, over fifty years later, when Congress passed the National Labor Relations Act ("NLRA"), 29 U.S.C. Sec. 151 et seq. (1988), "it set down a federal labor

Page 1045

policy ... plainly meant to do more than simply alter the prevailing substantive law. It sought as well to restructure fundamentally the processes for effectuating that policy, deliberately placing the responsibility for applying and developing this comprehensive legal system in the hands of an expert administrative body [the National Labor Relations Board ("NLRB") ] rather than the federalized judicial system." Amalgamated Ass'n of Street, Elec. Ry. & Motor Coach Employees v. Lockridge, 403 U.S. 274, 288, 91 S.Ct. 1909, 1918, 29 L.Ed.2d 473 (1971). A principal tenet of this federal labor policy is that settlement of collective bargaining disputes should be achieved by "subjecting labor-management controversies to the mediatory influence of negotiation," not litigation. Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 211, 85 S.Ct. 398, 402, 13 L.Ed.2d 233 (1964). In this case, we must determine whether the nation's labor laws or antitrust policy control where, after bargaining in good faith to a point of impasse, an employer group takes unilateral action to impose a fixed salary for a category of employees as an otherwise lawful step in the collective bargaining process established by the NLRA.

In 1989, the 28 clubs of the National Football League ("NFL") were engaged in collective bargaining with the NFL Players Association ("NFLPA"), the players' collective bargaining representative. During the course of bargaining, the NFL proposed to pay a fixed salary of $1,000 per week to any player assigned to newly formed practice squads. Had the parties been able to reach a settlement on this issue, they could have concluded an agreement establishing $1,000 per week as the salary for practice squad players, and this agreement would have posed no legal problems under the federal labor or antitrust laws. Such was not to be the case, however, for the parties bargained to impasse over the issue, after which the clubs unilaterally imposed the fixed salary for the 1989 NFL season. In response to the clubs' action, nine players who had been assigned to practice squads filed this class action antitrust lawsuit against the clubs and the NFL in the District Court, alleging that the fixed salary constituted an unreasonable restraint of trade in violation of the Sherman Act. During four years of ensuing litigation, the District Court held that the defendants' agreement on a fixed salary violated the Sherman Act, and, after a trial to determine damages, entered a judgment against the clubs and the NFL in the amount of $30,349,642, and enjoined them from ever again setting a uniform salary for any class of players.

While the clubs and the NFL raise a number of challenges to the District Court's actions, we need not address most of them, for we hold that the District Court erred in rejecting the appellants' claim that the nonstatutory labor exemption shields them from liability in this case. This exemption, a judicially-created doctrine designed to reconcile federal labor and antitrust policies, has had an important place in federal jurisprudence for almost 30 years. Although there has been much debate over the years regarding the scope of the exemption, there is at least one principle that seems clear: restraints on competition lawfully imposed through the collective bargaining process are exempted from antitrust liability so long as such restraints primarily affect only the labor market organized around the collective bargaining relationship. Thus, employees confronted with actions imposed lawfully through the collective bargaining process must respond not with a lawsuit brought under the Sherman Act, but rather with the weapons provided by the federal labor laws.

The NFL was free to take unilateral action after impasse (just as the NFLPA was free to strike), because the action was a legitimate economic weapon available to be used in an attempt to force a settlement. This is exactly what federal labor policy condones, as the Supreme Court has often recognized:

[A] particular activity might be 'protected' by federal law not only [where it falls] within Sec. 7 [of the NLRA], but also when it [is] an activity that Congress intended to be 'unrestricted by any governmental power to regulate' because it [is] among the permissible 'economic weapons in reserve ... actual exercise [of which] on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized.'

Page 1046

Lodge 76, Int'l Ass'n of Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 141, 96 S.Ct. 2548, 2553, 49 L.Ed.2d 396 (1976) (quoting NLRB v. Insurance Agents' Int'l Union, 361 U.S. 477, 488, 489, 80 S.Ct. 419, 426, 427, 4 L.Ed.2d 454 (1960)). And, as the Second Circuit has recently held:

[T]he antitrust laws do not prohibit employers from bargaining jointly with a union, from implementing their joint proposals in the absence of a [collective bargaining agreement], or from using economic force to obtain agreement to those proposals. What limits on such conduct that exist are found in the labor laws.

National Basketball Ass'n v. Williams, 45 F.3d 684, 693 (2d Cir.1995). We agree.

Because the NFL in this case acted lawfully within the framework of the collective bargaining process when it unilaterally imposed a fixed salary for practice-squad players, and because this action affected only the market for professional football player services, the nonstatutory labor exemption precludes any finding of liability under the Sherman Act. Accordingly, we reverse the decision of the District Court.

I. BACKGROUND

This case arises from a labor dispute over salaries for a limited number of professional football players whose jobs required them to practice with regular NFL players, and to replace regular players who became injured, but not otherwise to play in NFL football contests. In 1987, a collective bargaining agreement governing the terms and conditions of employment for all professional football players expired, and the NFL and NFLPA began negotiations for a...

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    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • November 29, 2010
    ...inefficiencies, and (given the reductions in output) higher prices for consumers in the long run. See Brown v. Pro Football, Inc., 50 F.3d 1041, 1061 (D.C.Cir.1995) (Wald, J., dissenting) (discussing the anticompetitive effects of monopsony) (citing Roger D. Blair & Jeffrey L. Harrison, Mon......
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    ...exemption to agreements whose anticompetitive restraints fell primarily and directly on the labor market. See Brown v. Pro Football, Inc., 50 F.3d 1041, 1051 (D.C.Cir.1995), aff'd 518 U.S. 231, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996) ("[T]he case for applying the exemption is strongest where......
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    ...phrased in an evenhanded fashion to protect employer conduct in labor disputes as well as that of unions.’ ” Brown v. Pro Football Inc., 50 F.3d 1041, 1055 (D.C.Cir.1995) (quoting Nat'l Basketball Ass'n v. Williams, 45 F.3d 684, 689 (2d Cir.1995)), aff'd, 518 U.S. 231, 116 S.Ct. 2116, 135 L......
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    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • September 10, 2002
    ...fall under antitrust purview because monopsonistic practices will eventually adversely affect consumers. Brown v. Pro Football, Inc., 50 F.3d 1041, 1061 (D.C.Cir.1995) (Wald, J., dissenting) (emphasis omitted), aff'd, 518 U.S. 231, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). The two district co......
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30 cases
  • West Penn Allegheny Health Sys. Inc. v. Upmc, No. 09-4468
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • November 29, 2010
    ...inefficiencies, and (given the reductions in output) higher prices for consumers in the long run. See Brown v. Pro Football, Inc., 50 F.3d 1041, 1061 (D.C.Cir.1995) (Wald, J., dissenting) (discussing the anticompetitive effects of monopsony) (citing Roger D. Blair & Jeffrey L. Harrison, Mon......
  • California ex rel. Lockyer v. Safeway, Inc., No. CV 04-0687 GHK SSX.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • May 25, 2005
    ...exemption to agreements whose anticompetitive restraints fell primarily and directly on the labor market. See Brown v. Pro Football, Inc., 50 F.3d 1041, 1051 (D.C.Cir.1995), aff'd 518 U.S. 231, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996) ("[T]he case for applying the exemption is strongest where......
  • Brady v. Nat'l Football League, No. 11–1898.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • May 16, 2011
    ...phrased in an evenhanded fashion to protect employer conduct in labor disputes as well as that of unions.’ ” Brown v. Pro Football Inc., 50 F.3d 1041, 1055 (D.C.Cir.1995) (quoting Nat'l Basketball Ass'n v. Williams, 45 F.3d 684, 689 (2d Cir.1995)), aff'd, 518 U.S. 231, 116 S.Ct. 2116, 135 L......
  • Telecor Communications v. Southwestern Bell, No. 01-6067.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • September 10, 2002
    ...fall under antitrust purview because monopsonistic practices will eventually adversely affect consumers. Brown v. Pro Football, Inc., 50 F.3d 1041, 1061 (D.C.Cir.1995) (Wald, J., dissenting) (emphasis omitted), aff'd, 518 U.S. 231, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). The two district co......
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