Monday, February 14, 2011

17 Days to Armageddon

I spent a lot of time thinking about how I was going to cover the NFL labor situation. Such a broad topic (and such a horrific mess) would probably take about 80,000 words and 10 columns just to scratch the surface. Even if I took the time to go through it all, you'd be asleep after 10 paragraphs.

80,000 words don't help anybody, and giving labor law advice is what I do for "work," so it's not a whole lot of fun for me to spend the hour a week I devote to this site writing about work.

Instead of analyzing the issues I'm going to cover some of the misconceptions that persist about the NFL Labor dispute. If you are interested in researching the issues beyond what is in this article, I'd like to bless Andrew Brandt's eight part series on the subject.

Brandt's series is well-written, contains a perspective on both sides of the issues, and will tell you everything you need to know about the likely outcome of this nasty mess without me giving you a course in labor law.

On to the misconceptions:

1) "The owners stormed out of negotiations last week. They don't want a deal to get done."

The owners want to get a deal done as soon as possible. They know their business is going to take the heat for any lost games, and they also know that the public tends to side with the players since: a) the public is personally attached to the players; b) there are a lot of players preaching uninformed nonsense on twitter; and c) people seem to think the players are accurately informed by the NFLPA. Accordingly, it behooves the owners to get a deal done as soon as possible.

The cancellation of negotiations last week was purely strategic. The talks were going nowhere and the owners needed to position themselves to file an Unfair Labor Practice charge ("ULP") against the union. By doing so the league is charging the union with a refusal to bargain. Its reason for this is threefold:

First, the league would like to force the union to have meaningful negotiations. Lawyers cost a lot of money, and it doesn't make sense to fly people in to sit at a table (at $500 per hour) where one party is being unreasonable. Some pressure had to be applied to force the union to engage in meaningful negotiations. In order to do so, the league had to seek the intervention of an administrative body.

Second, the union can attempt (and has threatened) to "decertify" itself. If the NFLPA does this the league would be able to implement its own rules absent a collective bargaining agreement (they would continue with the structure that was in place in 2010). However, the union would then file an antitrust lawsuit claiming that the owners were acting in concert to restrain trade in violation of the federal antitrust laws. A refusal to bargain ULP is the first step in a league attempt to block decertification.

Finally, if the two sides reach impasse (a total block in negotiations), the league can unilaterally implement its last, best, and final offer. Obviously the NFLPA doesn't want this to happen because another year under the 2010 rules will be seen as a victory for the league, and the players will be more than a little unhappy. However, under this scenario the situation would be temporarily resolved until the players strike on March 3, 2012.

Although declaring impasse and delaying things for a year sounds easy, it is very difficult to prove that two sides are actually at "impasse," and thus, striking a deal before the regular season is a more likely outcome. But until meaningful negotiations are exhausted, impasse (or a deal) can't occur. So the NFL needs intervention to force the sides to continue talking. They can only do this by walking away from a table where nothing is progressing.

In sum, the cancellation of last week's negotiations was only to facilitate things moving along more quickly via the filing of a ULP against the union (who are the real ones trying to stall things).

1a) "But why would the union want to stall things?"

The union wants to stall things because if a deal isn't done by March 3 there will be a lockout, for which the owners will squarely be blamed. The NFLPA knows there is significant leverage to be gained in a lockout, and this is what they really want (even though they will never say it).

2) "Why can't the two sides just get a deal done?"

Reaching a deal in a heated labor negotiation almost never happens until the absolute eleventh hour. I can't tell you how many times in my career a strike or lockout has been imminent and the parties settled the dispute at the very last possible moment. It just seems to be the way these things are done in the legal profession.

3) "We should support the players because they are running a #letusplay campaign on Twitter."

Although it's great to support your favorite player, remember that he may not be the high-character guy you think he is. Which is fine. How often do you go to work not looking to get the best possible deal for yourself? Football is a business, just like a grocery store, paper mill, law firm, or hospital. Both sides need to work out a compromise that is favorable to all parties, and can't just strike a deal to strike a deal.

What people don't understand is that the players themselves are left in the dark about what is going on behind closed doors in union negotiations. They have "player representatives" (union stewards) that learn a little and can deliver union-prepared speeches, but for the most part labor negotiations are conducted by a bunch of lawyers in a room racking up billable hours.

The players can "want to play"all they want, but they don't have that choice (at least not individually). If they really want to get on the field, what the players should be doing is putting pressure on the NFLPA to make some concessions to the owners. However, that's highly unlikely given their level of knowledge about how this process actually works.

4) "I support the NFLPA because the owners are greedy and I'd never agree to a pay cut."

"Greed is good." - Gordon Gecko, 1988.

The owners are greedy, they are businessmen. This isn't a bad thing. By putting the best product on the field, the owners make more money. Interesting concept huh?

Why would you ever invest hundreds of millions of dollars in something that won't provide you with a return? Is it because you love football that much? Come on.

The NFL is a multi-billion dollar business and under no circumstances will the [veteran] players be taking a pay cut. That was never threatened and is wholly unrealistic. Instead, rookies like 2007's JaMarcus Russell (may his career rest in peace) are going to be sacrificed and will wind up being paid on a scale like rookies in the NBA.

Everyone agrees that rookies will be taking the hit. Anything you hear about players taking a pay cut is just lip service by the NFLPA. This was never threatened, and would never be realistic.

5) "The owners need to open their books. It would facilitate a deal."

This is as unethical a request as it is unrealistic. The players have no right to examine their employer's financial records. The process is called "collective bargaining." What exactly are the players offering to give up in order to examine the private financial business records of their employer? Open books are not something that happens even in the worst economic times.

Although you may be able to find situations where an employer has opened its books to its employees, it is likely in a situation where they have filed for bankruptcy or have some incentive to do so. Proving that there is less profit than the players claim there is is not a legitimate reason to open private financial records. The risk for exposure is far too great.

Again, this will never (and should never) happen. Financial records are commonly requested by unions, and it is labor law 101 to reject all such requests outright.

6) "If there is a lockout the NFL will lose me as a fan and I won't be back."

I hear this one all the time and it's just silly. First off, the odds that there will be some form of a lockout are probably -300 in favor. 3-1 is pretty good odds. After seeing the Packers win Super Bowl XLV are you really willing to take that kind of a risk? You'll be back.

The caveat to my lockout prediction is that I put the odds on the season starting on time (and being played in full) at -900. I've seen far worse situations get worked out, and the NFL and NFLPA have the advantage of the CBA expiring a full six months before the start of the 2011 season. That is plenty of time to work out a deal, no matter how far apart the sides are. There will be a season, we will have fantasy football, and the Packers will be on the field to defend their title.

So there you have it. The labor situation is a nightmare, it is a pain to hear about, and isn't fun to write or talk about. But it happens in all industries where labor is organized. The people in charge of the NFLPA have their own interests (and political aspirations) in mind, and aren't afraid to tell you that at the bargaining table.

At the end of the day, players like Jermichael Finley and Nick Barnett can tweet all they want about how much they want to play and how much they need your support, but they need a paycheck to pay for the fur coats, watches, and trucks they "need" and desire. Thus, the players will come around, just maybe not on March 3.

In the meantime, as your attorney, I advise you to wholeheartedly reject the players pleas for your support and instead let them know that you are solidly in support of the owners. The faster fans break the NFLPA, the faster the players get back on the field.

Don't fall for the hype.


1 comment:

Juicelaw said...

I enjoyed the insight. I always find these things fascinating.