Tuesday, November 17, 2015

Deflating The National Football League

On January 18, 2015, the New England Patriots were playing against the Indianapolis Colts in the American Football Conference (AFC) Championship Game for the opportunity to advance to the Super Bowl. During the first half, Colts linebacker D’Qwell Jackson intercepted a pass thrown by Patriots quarterback Tom Brady. This was a big play, and Jackson decided to keep the football as a souvenir. However, when the Colts’ equipment manager received the football from Jackson, he noticed certain abnormalities; after testing, the manager discovered that the ball’s air pressure was below the acceptable range required by the NFL’s rules. During halftime, the NFL tested all of the Patriots’ footballs, and determined that all 11 were below the required minimum, which gave the Patriots an unfair advantage. Thus began the “Deflategate” controversy.

On May 6, 2015, the NFL released its 139-page investigatory report. The report concluded that it was “more probable than not” that the low pressure in the footballs was caused by someone’s deliberate action. Further, the report concluded that Tom Brady was likely “generally aware” that the deflation had occurred. Within a week of the report’s release, the NFL suspended Brady for four “games” without pay. Brady appealed his suspension through his Union, the National Football League Players Association. Notably, NFL Commissioner Roger Goodell was the decision-maker on this appeal, and unsurprisingly upheld the League’s decision during the June 23, 2015 arbitration. The NFL Players Association again appealed, this time to the United District Court Southern District of New York.

On September 3, 2015, Judge Richard Berman vacated Goodell’s decision to suspend Brady. In doing so, the Court did not focus on whether “Deflategate” in fact occurred. Instead, the Court focused on whether the NFL violated Brady’s due process rights when it suspended him. Significantly, the Court found that Brady did not have adequate notice of his four-game suspension, and could not have reasonably anticipated it. In doing so, the Court also overturned Commissioner Goodell’s arbitration award against Brady.

Judge Berman’s decision is interesting for non-sports enthusiasts for two reasons. One, under the Federal Arbitration Act, judicial scrutiny of arbitration decisions is extremely limited, and awards can be overturned only on very specific grounds. Many companies require arbitration clauses in their consumer and employment contracts, and the arbitrators know that their livelihood comes from the satisfaction of these businesses. As employers win about 85% of forced arbitration cases, employees and consumer advocates protest against mandatory arbitration clauses. The New York Times recently published a series of articles on how forced arbitration protects big companies from accountability. However, at least in the sports arena, courts seem to be more willing to scrutinize arbitration awards. In addition to the Brady case, the Orioles’ also prevailed on November 4, 2015, in the Supreme Court of New York in overturning an arbitration decision that showed “evident partiality”.

Of course, there is another, likely quicker way to help bring an end to forced arbitration: contact your members of Congress and urge them to co-sponsor the Arbitration Fairness Act (AFA), H.R. 2087 and S. 1133. AFA would require that arbitration agreements with employees and consumers be made after the dispute arises – that way arbitrators will know that both parties selected them. Now, the Chamber of Commerce is lobbying Congress to prohibit the Consumer Financial Protection Bureau from regulating forced arbitration in consumer transactions.

Two, Judge Berman’s decision may have positive implications for employees who believe they have been arbitrarily punished for workplace misconduct. The NFL, as an employer, has repeatedly attempted to discipline players for misconduct in an ad-hoc fashion. The Brady case represents the fifth consecutive labor rights victory for the Players Association over the NFL on due process grounds. (The other cases involve “Bountygate”, Ray Rice, Adrian Peterson, and Greg Hardy.) However, employees should still be mindful that these cases involve powerful unions and highly visible players – in other words, not your average employer-employee relationship. In the Brady case, the Officials Locker Room attendant and the Patriots’ equipment assistant remain on indefinite suspension without pay. Nonetheless, with vigorous advocacy, perhaps the legal arguments regarding what counts as reasonable notice of a penalty and when an arbitration decision may be overturned could have a positive effect on employees in general.

For more information about this post or how you can protect your rights, please contact Nina Ren.

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