Brady v. National Football League

This appeal arises from an action filed by nine professional football players and one prospective football player (“the Players”) against the National Football League and its thirty-two separately-owned clubs, more commonly known as football teams (collectively, “the NFL” or “the League”). On March 11, 2011, a collective bargaining agreement between the League and a union representing professional football players expired. The League had made known that if a new agreement was not reached before the expiration date, then it would implement a lockout of players, during which the athletes would not be paid or permitted to use club facilities. The League viewed a lockout as a legitimate tactic under the labor laws to bring economic pressure to bear on the players as part of the bargaining process. See Am. Ship Bldg. Co. v. NLRB, 380 U.S. 300, 301-02, 318, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965).

The players, aware of the League’s strategy, opted to terminate the union’s status as their collective bargaining agent as of 4:00 p.m. on March 11, just before the agreement expired. Later that day, the Players filed an action in the district court alleging that the lockout planned by the League would constitute a group boycott and price-fixing agreement that would violate § 1 of the Sherman Antitrust Act. The complaint explained that “the players in the NFL have determined that it is not in their interest to remain unionized if the existence of such a union would serve to allow the NFL to impose anticompetitive restrictions with impunity.” The plaintiffs also alleged other violations of the antitrust laws and state common law.

The League proceeded with its planned lockout on March 12, 2011. The Players moved for a preliminary injunction in the district court, urging the court to enjoin the lockout as an unlawful group boycott that was causing irreparable harm to the Players. The district court granted a preliminary injunction, and the League appealed. We conclude that the injunction did not conform to the provisions of the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq., and we therefore vacate the district court’s order.

I.

A.

Some historical background will place this case in context. In Radovich v. NFL, 352 U.S. 445, 451-52, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957), the Supreme Court held that professional football — unlike major league baseball — -is not categorically exempt from the antitrust laws. In 1968, the National Labor Relations Board (“NLRB”) recognized the NFL Players Association (“NFLPA”) as the exclusive bargaining representative of all NFL play*664ers, and the NFL and the NFLPA entered into their first collective bargaining agreement (“CBA”). Mackey v. NFL, 543 F.2d 606, 610 (8th Cir.1976). Since then, the relationship between the League and its players has been punctuated by both collective bargaining agreements and antitrust lawsuits.

In 1972, several players filed an antitrust action against the League in Mackey v. NFL, alleging that the League’s policy with respect to free agents — that is, players whose contracts with a particular team have expired — violated § 1 of the Sherman Act, 15 U.S.C. § 1.1 Mackey, 543 F.2d at 609. This court concluded that the restriction at issue, known as the “Rozelle Rule,” unreasonably restrained trade in violation of § 1, because it was “significantly more restrictive than necessary to serve any legitimate purposes” of maintaining competitive balance in the NFL. Id. at 622. While the Mackey litigation was pending, the CBA between the League and the NFLPA expired, and seventy-eight NFL players filed a separate class action antitrust suit against the League. See Reynolds v. NFL, 584 F.2d 280, 282 (8th Cir.1978); Alexander v. NFL, No. 4-76-123, 1977 WL 1497, at *1 (D.Minn. Aug. 1, 1977). In 1977, the League and the players entered into a settlement agreement incorporating a new CBA that implemented a revised system of free agency known as “right of first refusal/compensation.” Alexander, 1977 WL 1497, at *1-2. As part of the settlement, the League withdrew its petition for a writ of certiorari in Mackey. Reynolds, 584 F.2d at 282.

This state of affairs lasted until December 1982, when the NFL players engaged in a fifty-seven-day strike before agreeing to a new CBA that included a modified version of the “right of first refusal/compensation” system. Powell v. NFL, 930 F.2d 1293, 1295-96 (8th Cir.1989); Powell v. NFL, 678 F.Supp. 777, 780-81 (D.Minn.1988), rev’d, 930 F.2d 1293. This CBA expired in 1987, and when negotiations for a new CBA proved unsuccessful, the NFLPA conducted another strike. Powell, 930 F.2d at 1296. Immediately after the strike ended in October 1987, the NFLPA and several individual • players commenced an antitrust suit in Powell v. NFL, alleging among other things that the League’s free agency restrictions violated the Sherman Act. Id. This court held that a nonstatutory labor exemption from the antitrust laws shielded the League from antitrust liability. Id. at 1303. The Supreme Court “has implied this exemption from federal labor statutes,” reasoning that “to give effect to federal labor laws and policies and to allow meaningful collective bargaining to take place, some restraints on competition imposed through the bargaining process must be shielded from antitrust sanctions.” Brown v. Pro Football, Inc., 518 U.S. 231, 236-37, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). This court in Powell concluded that the nonstatutory labor exemption can extend beyond an impasse in negotiations, and that application of the exemption was appropriate in that case, because the parties still could resolve their differences through the use of the “offsetting tools” of labor law, including strikes, lockouts, and petitions for intervention by the NLRB. 930 F.2d at 1302-03. The court declined, however, “to look into the future and pick a termination point for the labor exemption.” Id. at 1303.

Two days after this court’s decision in Powell, on November 3, 1989, the NFLPA’s executive committee decided to *665abandon the organization’s collective bargaining rights in an effort to end the NFL’s nonstatutory labor exemption from the antitrust laws. Powell v. NFL, 764 F.Supp. 1351, 1354 (D.Minn.1991). The NFLPA disclaimed its union status, enacted new bylaws prohibiting it from engaging in collective bargaining with the League, filed a labor organization termination notice with the U.S. Department of Labor, obtained a reclassification by the Internal Revenue Service as a “business league” rather than a labor organization, and notified the NFL that it would no longer represent players in grievance proceedings. Id.

In 1990, eight individual football players brought a new antitrust action against the League in McNeil v. NFL, contending that new player restraints imposed by the League during the 1990-1991 season violated § 1 of the Sherman Act. Id. at 1359. Following a ten-week trial in late 1992, a jury rendered a verdict in favor of the McNeil plaintiffs and awarded substantial damages. See McNeil v. NFL, No. 4-90-476, 1992 WL 315292, at *1 (D.Minn. Sept. 10, 1992).

Two new antitrust lawsuits were filed in the two-week period after the McNeil verdict. Ten NFL players brought suit in Jackson v. NFL, alleging that the League’s free agency restrictions violated the Sherman Act. Jackson v. NFL, 802 F.Supp. 226, 228-229, 234 n. 14 (D.Minn.1992). Five other NFL players instituted White v. NFL, a class action alleging that various practices of the League, including free agency restraints, the college draft, and the use of a standard NFL player contract, violated the antitrust laws. See White v. NFL, 822 F.Supp. 1389, 1395 (D.Minn.1993).

Many disputes between the League and the players were resolved when the parties entered into a class action settlement agreement in White. In January 1993, the parties reached a tentative agreement designed to resolve WMfe and related cases. Id. at 1395-96. The NFLPA subsequently collected authorization cards from NFL players re-designating the organization as the players’ exclusive collective bargaining representative, and the NFL voluntarily recognized the NFLPA as the players’ union on March 29, 1993. Id. at 1396-97. The district court approved the parties’ Stipulation and Settlement Agreement (“SSA”) in April 1993, and the NFL and the NFLPA entered into a new CBA shortly thereafter. White v. NFL, 836 F.Supp. 1458,1465-66 (D.Minn.1993). The NFL and the NFLPA agreed to amend various portions of the SSA to conform to the provisions of the new CBA, and the district court approved the requested amendments. Id. at 1466, 1468. The court entered a consent decree incorporating the terms of the amended SSA on August 20, 1993. White v. NFL, 836 F.Supp. 1508, 1511 (D.Minn.1993).

In 1996, the Supreme Court decided an important case concerning professional football and the scope of .the nonstatutory labor exemption from the antitrust laws, Brown v. Pro Football, Inc., 518 U.S. 231, 116 S.Ct. 2116. After the expiration of the collective bargaining agreement in 1987, the League and the NFLPA bargained to impasse over player salaries for members of each club’s “developmental squad,” which consisted of up to six first-year play-, ers who were not on the regular player roster. The League then unilaterally implemented an agreement among the clubs to pay a salary of $1000 per week to these players. A group of the players sued, alleging that the employers’ agreement violated § 1 of the Sherman Act. The Supreme Court held that the nonstatutory labor exemption applied to the employer conduct at issue, which (1) took place during and immediately after a collective-bargaining negotiation, (2) grew out of, and *666was directly related to, the lawful operation of the bargaining process, (3) involved a matter that the parties were required to negotiate collectively, and (4) concerned only the parties to the collective-bargaining relationship. Id. at 250, 116 S.Ct. 2116. In a closing paragraph, the Court added the following:

Our holding is not intended to insulate from antitrust review every joint imposition of terms by employers, for an agreement among employers could 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. See, e.g., 50 F.3d, at 1057 (suggesting that exemption lasts until collapse of the collective-bargaining relationship, as evidenced by decertification of the union); El Cerrito Mill & Lumber Co., 316 N.L.R.B. [1005], at 1006-1007 [ (1995) ] (suggesting that “extremely long” impasse, accompanied by “instability” or “defunctness” of multiemployer unit, might justify union withdrawal from group bargaining). We need not decide in this case whether, or where, within these extreme boundaries to draw that line. Nor would it be appropriate for us to do so without the detailed views of the Board, to whose “specialized judgment” Congress “intended to leave” many of the “inevitable questions concerning multiemployer bargaining bound to arise in the future.”

Id. (citations omitted).

The Supreme Court’s most recent decision regarding this industry came in American Needle, Inc. v. NFL, — U.S. -, 130 S.Ct. 2201, 176 L.Ed.2d 947 (2010). The Court held that the alleged conduct of the NFL teams in forming National Football League Properties to develop, license, and market their individually owned intellectual property, and then to grant an exclusive license for that property, was concerted action not categorically beyond the coverage of § 1 of the Sherman Act. At the same time, the Court remarked that “[flootball teams that need to cooperate are not trapped by antitrust law,” to wit: “The fact that NFL teams share an interest in making the entire league successful and profitable, and that they must cooperate in the production and scheduling of games, provides a perfectly sensible justification for making a host of collective decisions.” Id. at 2216. Yet these interests did not justify treating the NFL teams as a single entity for purposes of § 1 of the Sherman Act when it came to the marketing of their intellectual property. Id. at 2217.

B.

Since 1993, the players and the League have operated under the White SSA, and the district court has continued to oversee the settlement by resolving numerous disputes over the terms of the SSA and CBA. White v. NFL, 585 F.3d 1129, 1133 (8th Cir.2009). Whenever the NFL and the NFLPA have agreed to change a provision in the CBA, a conforming change has also been made to the SSA. Id. at 1134. The SSA has been amended several times over the past eighteen years, most recently in 2006, when the NFL and the NFLPA reached an agreement on a new CBA that would last through the 2012-2013 football season. See id. The 2006 SSA and CBA gave both sides the right to opt out of the final two years of each agreement upon written notice.

In May 2008, the NFL opted out of the final two years of the SSA and CBA, citing concerns about operating costs and other elements of the agreements. White v. NFL, 766 F.Supp.2d 941, 944-45 (D.Minn.2011). As a result, the SSA and CBA were scheduled to expire in early March 2011. Id. Although the NFL and the NFLPA engaged in more than two years *667of negotiations toward a new CBA, the League and the players were unable to reach an agreement. The League filed an unfair labor practice charge with the NLRB in February 2011, asserting that the union failed to confer in good faith. The Players say that the charge is merit-less.

As the deadline approached, a substantial majority of NFL players voted to end the NFLPA’s status as their collective bargaining representative. On March 11, 2011 — the expiration date of the SSA and CBA — the NFLPA notified the NFL that it disclaimed interest in continuing to serve as the players’ collective bargaining representative, effective at 4:00 p.m. The NFLPA also amended its bylaws to prohibit collective bargaining with the League or its agents, filed a labor organization termination notice with the Department of Labor, asked the Internal Revenue Service to reclassify the NFLPA as a professional association rather than a labor organization, and notified the NFL that it would no longer represent players bringing grievances against the League.

The League filed an amended unfair labor practice charge on March 11, alleging that the NFLPA’s disclaimer was a “sham” and that the combination of a disclaimer by the union and subsequent antitrust litigation was “a ploy and an unlawful subversion of the collective bargaining process.” The Players dispute the charge, citing an advice memorandum of an associate general counsel of the NLRB in Pittsburgh Steelers, Inc., No. 6-CA-23143, 1991 WL 144468 (NLRB G.C. June 26, 1991). The memorandum concluded that the NFLPA’s 1989 disclaimer was valid, and that it was “irrelevant” whether the disclaimer was motivated by “litigation strategy,” so long as the disclaimer was “otherwise unequivocal and adhered to.” Id. at *2 & n. 8.

The Players, funded by the NFLPA, commenced this action on the same day as the disclaimer, March 11, 2011. Four of the plaintiffs are under contract with an NFL club; five are free agents, and one is a prospective player who had entered the 2011 NFL draft and was ultimately selected in that draft. The Players brought this action on behalf of themselves and a putative class consisting of players who are under contract with any NFL club, free agents seeking employment with any NFL club, and college or other players who have not previously been under contract with any NFL club and who are eligible to play as a rookies for any club. As the case comes to us, no class has been certified.

The Players explained in their complaint that “[t]he players ... have ended the role of the NFLPA as their collective bargaining representative and no longer have a collective bargaining relationship with the NFL defendants.” They asserted, based on the Supreme Court’s language in Brown, that the nonstatutory labor exemption therefore no longer protects the League from antitrust liability. The complaint alleged that the NFL’s planned lockout was an illegal group boycott and price-fixing arrangement that violated § 1 of the Sherman Act. In addition, the Players claimed that the lockout would violate state contract law by depriving players of contractually owed compensation, and would violate state tort law by interfering with players’ existing contracts as well as their opportunities to enter into new contracts with NFL teams.

The complaint further alleged that the League planned to institute or to continue several anticompetitive practices that would violate § 1 of the Sherman Act, including a limitation on the amount of compensation that can be paid to recently drafted first-year “rookie” players, a cap on salaries for current players, and “fian*668chise player” and “transition player” designations that restrict the ability of free agents to join a team other than their former team. The Players requested damages and declaratory and injunctive relief regarding these practices, including an injunction prohibiting the League from implementing or continuing the lockout.2

The SSA and CBA expired at 11:59 p.m. on March 11. At 12:00 a.m. on March 12, the League instituted a lockout of members of the NFLPA’s “bargaining unit,” which includes professional football players under contract, free agents, and prospective players who have been drafted by or entered into negotiations with an NFL team. The NFL informed players under contract that the lockout would prohibit them from entering League facilities, from receiving any compensation or benefits, and from performing any employment duties including playing, practicing, working out, attending meetings, making promotional appearances, and consulting medical and training personnel except in limited situations. The League also notified the players that they could be required to report back to work immediately “[o]nce a new labor agreement is reached” between the NFL and the NFLPA.

On April 25, 2011, the district court granted the Players’ motion to enjoin the lockout, rejecting the League’s assertions that the court lacked jurisdiction to enter the injunction, that the court should defer to the primary jurisdiction of the NLRB, and that the League is in any event immune from antitrust liability under the nonstatutory labor exemption. See Brady v. NFL, 779 F.Supp.2d 992, 1042-43, No. 11-639, 2011 WL 1535240, at *37 (D.Minn. Apr. 25, 2011) [hereinafter Brady I.]. The court concluded that the Noms-LaGuardia Act (“NLGA” or “Act”), 29 U.S.C. § 101 et seq., which restricts the power of federal courts to issue injunctions in cases “involving or growing out of a labor dispute,” id. § 1, was inapplicable, because the term “labor dispute” connotes a dispute between an employer and a union, and the Act therefore does not apply “absent the present existence of a union.” Brady I, 779 F.Supp.2d at 1026-32, 2011 WL 1535240, at *24-26. In the court’s view, the conflict between the League and the players ceased to be a “labor dispute” subject to the Act when the NFLPA terminated its status as a union by disclaiming its role as the players’ collective bargaining representative. Id. at 1031-33, 2011 WL 1535240 at *26-27.

The district court also declined to stay the action pending the NLRB’s resolution of the League’s pending unfair labor practice charges. See id. at 1006-07, 2011 WL 1535240 at *9. The court determined that a stay would not be appropriate because the delay could cause significant hardship for the plaintiffs, and because “[t]he Board has articulated the standard under which disclaimers must be evaluated in a clear and consistent fashion, and application of that established standard requires no particular specialized expertise.” Id. at 1013-15, 1018-19, 2011 WL 1535240 at *14-15, 18. Finally, the district court concluded that the nonstatutory labor exemption does not protect the League from antitrust liability related to the lockout. See id. at 1039-40, 2011 WL 1535240 at *34. In the court’s view, the exemption applies only to agreements concerning “mandatory subjects of collective bargaining,” such as wages, hours, and other terms and conditions of employment, and an employer’s *669imposition of a lockout is not exempted because “[a] lockout is not a substantive term or condition of employment.” Id. at 1040-42, 2011 WL 1535240 at *35-36. The court distinguished the Supreme Court’s decision in Brown on the basis that the parties here “have left the collective bargaining framework entirely.” Id. at 1040-41, 2011 WL 1535240 at *35.

The district court’s order stated only that “[t]he ‘lockout’ is enjoined,” id. at 1042-43, 2011 WL 1535240 at *37, and did not expressly define the scope of the injunction. In concluding that the plaintiffs would suffer irreparable harm absent an injunction, however, the court indicated that its order would prevent the harm that players would suffer if the League were able to bar them from playing or practicing for an extended period of time. See id. at 1035-36, 2011 WL 1535240 at *29-30. The court also suggested that the injunction would provide free agents and rookies with significant opportunities to market their services to individual teams, see id. at 1036-38, 2011 WL 1535240 at *31-32, although it later remarked in denying a motion for stay pending appeal that the injunction did not require the League to enter into contracts. See Brady v. NFL, 779 F.Supp.2d 1043, 1049-50, No. 11-639, 2011 WL 1578580, at *5 (D.Minn. Apr. 27, 2011). From this discussion, we understand the court’s order to mean that the League must allow players under contract to play football, attend practice sessions, and collect compensation, and that the League must provide free agents and rookies with an opportunity to market their services to potential employers.

The League appealed, challenging the district court’s application of the NorrisLaGuardia Act, the doctrine of primary jurisdiction, and the nonstatutory labor exemption. This court granted the NFL’s motion to expedite the appeal and its motion for a stay of the district court’s order pending appeal. We now consider the merits of the appeal.

II.

We consider first the League’s contention that the Norris-LaGuardia Act deprived the district court of jurisdiction to enter the injunction. The NLGA, enacted in 1932, curtails the authority of a district court to issue injunctions in a labor dispute. “Congress was intent upon taking the federal courts out of the labor injunction business except in the very limited circumstances left open for federal jurisdiction under the Norris-LaGuardia Act.” Marine Cooks & Stewards v. Pan. S.S. Co., 362 U.S. 365, 369, 80 S.Ct. 779, 4 L.Ed.2d 797 (1960).

The Supreme Court has explained that the NLGA responded directly to the Court’s construction of § 20 of the Clayton Act of 1914, 29 U.S.C. § 52, in Duplex Printing Press Co. v. Deering, 254 U.S. 443, 41 S.Ct. 172, 65 L.Ed. 349 (1921), and to other decisions of federal courts entering or upholding injunctions in labor disputes. Burlington N. R.R. Co. v. Bhd. of Maint. of Way Emps., 481 U.S. 429, 438, 107 S.Ct. 1841, 95 L.Ed.2d 381 (1987). The Clayton Act bars federal courts, “in any case between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving, or growing out of, a dispute concerning terms or conditions of employment,” from issuing an injunction to prohibit “any person or persons” from “ceasing to perform any work or labor” or “terminating any relation of employment.” 29 U.S.C. § 52. In Duplex Printing, however, the Court held that § 20 of the Clayton Act did not prohibit an injunction against a secondary boycott undertaken by union members who were not “proximately and substantively concerned as parties to *670an actual dispute respecting the terms or conditions of their own employment.” 254 U.S. at 472, 41 S.Ct. 172. Similarly, in Bedford Cut Stone Co. v. Journeyman Stone Cutters’ Ass’n, 274 U.S. 37, 47 S.Ct. 522, 71 L.Ed. 916 (1927), the Court ruled that § 20 did not prohibit an injunction against a union’s refusal to perform work on stone produced by a particular company with which the union had an ongoing dispute. Id. at 42-43, 55, 47 S.Ct. 522. The NLGA effectively superseded these decisions by precluding federal courts from enjoining certain secondary activity by workers in labor disputes.

The language of the Act, however, extends well beyond the specific issues decided in such cases as Duplex Printing and Bedford Cut Stone. The impetus for the NLGA was dissatisfaction with injunctions entered against workers in labor disputes, but the statute also requires that an injunction against an employer participating in a labor dispute must conform to the Act. E. g., Bodecker v. Local Union No. P-46, 640 F.2d 182, 185 (8th Cir.1981); District 29, United Mine Workers v. New Beckley Mining Corp., 895 F.2d 942, 944-47 (4th Cir.1990); Amalgamated Transit Union, Div. 1384 v. Greyhound Lines, Inc., 550 F. 2d 1237, 1238 (9th Cir.1977); Detroit Newspaper Publishers Ass’n v. Detroit Typographical Union No. 18, 471 F.2d 872, 876-77 (6th Cir.1972); see Greyhound Lines, Inc. v. Amalgamated Transit Union, Div. 1384, 429 U.S. 807, 97 S.Ct. 43, 50 L.Ed.2d 68 (1976). This case requires us to decide whether, and if so how, the Act applies to the district court’s injunction against the League.

To determine whether the NLGA forbids or places conditions on the issuance of an injunction here, we begin with the text of the statute. Section 1 provides that “[n]o court of the United States ... shall have jurisdiction to issue any ... temporary or permanent injunction in a case involving or growing out of a labor dispute, except in strict conformity with the provisions of this chapter.” 29 U.S.C. § 101. As noted, the district court concluded that the Act is inapplicable to this action, because the case is not one “involving or growing out of a labor dispute.”

Section 13(c) of the Act states that “[t]he term ‘labor dispute’ includes 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.” 29 U.S.C. § 113(c) (emphasis added). This lawsuit is a controversy concerning terms or conditions of employment. The Players seek broad relief that would affect the terms or conditions of employment for the entire industry of professional football. In particular, they urge the court to declare unlawful and to enjoin several features of the relationship between the League and the players, including the limit on compensation that can be paid to rookies, the salary cap, the “franchise player” designation, and the “transition player” designation, all of which the Players assert are anticompetitive restrictions that violate § 1 of the Sherman Act. The district court did not appear to question this point, even distinguishing authority cited by the Players on the ground that it involved a dispute over the sale of commodities rather than “a controversy over terms and conditions of employment.” Brady I, 779 F.Supp.2d at 1028 n. 44, 2011 WL 1535240, at *24 n. 44.

We are not convinced by the Players’ contention that because § 13(c) uses the term “includes,” rather than “means,” to introduce the substance of a “labor dispute,” Congress did not fully define the term. They urge that § 13(c) merely ex*671panded in one respect (to disputes outside the employer-employee relationship) a preexisting definition of “labor dispute” — a definition that was not codified and that, according to the Players, extended only to disputes involving organized labor. Whatever might be the significance of the verb “include” when used in other contexts, cf. Massachusetts v. EPA, 549 U.S. 497, 556-58, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) (Scalia, J., dissenting), Congress stated in § 13 of the NLGA that “labor dispute” is “defined in this section,” 29 U.S.C. § 113(a), and the Supreme Court consistently has described § 13(c) as a “definition” of “labor dispute.” Burlington N. R.R. Co., 481 U.S. at 443, 107 S.Ct. 1841; Jacksonville Bulk Terminals, Inc. v. Int’l Longshoremen’s Ass’n, 457 U.S. 702, 711 n. 11, 712, 102 S.Ct. 2672, 73 L.Ed.2d 327 (1982); H.A. Artists & Assocs. v. Actors’ Equity Ass’n, 451 U.S. 704, 714 n. 14, 715,