So the NHL lockout is headed to court.
And the way things are playing out, the NHLPA will likely soon match the league with their own competing lawsuit in another state.
While this all seems extreme, these types of proceedings aren’t exactly new in pro sports – in fact, two other major North American leagues in the NFL and NBA went through similar court battles last year during their own lockouts – but the case law here is pretty fresh and the outcomes remain relatively uncertain.
The past few weeks, to help determine what exactly this pending litigation may mean, I’ve been throwing questions at U.S. sports law expert Nathaniel Grow and he’s been gracious enough to answer.
Grow has been quoted in this space a few times before, but as a refresher, he is an assistant professor at the University of Georgia who specializes in antitrust and sports law. He has written in-depth on the subject in his recent academic article, Decertifying Players’ Unions: Lessons From the NFL and NBA Lockouts of 2011.
If you’re looking for the basics, three weeks ago when talk of decertification of the union first surfaced, Grow offered some interesting thoughts on what was behind the manoeuvre.
With us now at the stage where things are progressing to court, I wanted to run by him three of the key questions that remain out there.
Basically, they all amount to: Where is this going and who will win?
No. 1: Does the NHL’s argument that the NHLPA dissolving the union (through a disclaimer of interest) is a sham have merit? After all, it does appear it’s being done simply for negotiating leverage.
If pro sports unions start doing this over and over, do the courts at some point say “okay enough is enough?”
Grow: “Whether that defence will work or not is a little unsettled. The NFL made the same argument in the Brady case, and the NBA was poised to do the same, but neither case progressed far enough for a court to decide the issue. Meanwhile, the U.S. Supreme Court has never definitively decided precisely what a union must do to assert an antitrust case against management. There are strong arguments on the issue either way.
“Some of it may even hinge on exactly how the NHLPA dissolved itself. Technically, there are two different means to dissolve a union, the more formal decertification and the less formal disclaimer of interest [which is the route the players are voting on this week].
“If the NHLPA did a formal decertification, then they could not reform a union for at least 12 months under US law. That would provide the union with a strong argument against the NHL's sham defence, but would also make it difficult to resolve the dispute in the short-term, thus likely sacrificing the season. On the other hand, if the union disclaimed interest (as both the NFL and NBA unions did), then the union could reform at any time by a majority vote of the players, enabling them to quickly resolve the dispute and save the season, but leaving them more susceptible to the charge that the dissolution is a sham. I suspect the union will disclaim interest rather than decertify if it gets that far.
“One thing in the NHLPA's favour on this issue is that they've never dissolved the union before, even during the cancelled season, so there isn't a pattern of dissolving merely to obtain bargaining leverage. The fact that the NFL and NBA unions recently did it shouldn't fairly count against the NHL players since they are wholly separate unions with different memberships and management.
“However, if the NHLPA does this several times in future years, then the NHL's sham argument will be stronger. Ultimately, if this becomes a pattern over a series of negotiations then yes, I could see courts eventually decide enough is enough.”
No. 2: Why would dissolving the union give the NHLPA any negotiating leverage if it’s widely held that the litigation they’re about to embark down is unlikely to ever reach its conclusion? Isn't this just another stalemate on top of an existing one?
Grow: “It's a really interesting question (and merits a longer answer than I originally anticipated). Disclaiming interest almost certainly would have given the players significantly more leverage had it been done back in October. If they had dissolved the union at that time, there would still have been plenty of time for a court to issue a preliminary ruling on the legality of the lockout before the entire season was endangered. And had the court actually gone so far as to enjoin the lockout, it obviously would have been a huge win for the players.
“Now, though, there most likely isn't enough time left to get a preliminary ruling before the league cancels the season (although it would be interesting to see what the league would do if a court enjoined the continuation of the lockout in, say, late-February).
“So I agree the benefits of dissolving the union are less significant today than they would have been in October. In some respects, the possibility that the players would file an antitrust suit has probably already been factored into each sides' strategic calculations.
“Nevertheless, there is still some incremental leverage to be gained by the players. As things stand today, the owners have clearly decided that they are willing to eat whatever losses they are currently incurring in order to get the deal they want. So unless the players truly believe the league is bluffing, the union must assume that the owners are willing to cancel the season if the players don't cave in. If they disclaim interest, however, they at least force the owners to face the possibility that they will have to pay $30-million per day in damages should a settlement not be reached.
“Admittedly, that likely won't give the players huge leverage over the owners. But it might give them a little bit. Maybe it's enough to get the owners to decide it isn't worth blowing up a season over a 5-year term limit for contracts, and that six or seven years would be acceptable. Or maybe it's enough to get the owners to agree to a slightly shorter term for the next CBA.
“The other thing to keep in mind is what's the downside for the players at this point? If the status quo continues, the season will be lost (again, unless they believe the owners are bluffing and will cave at the last second). Sure, things would become a bit more unpredictable, but these are all highly sophisticated, rational parties. It seems hard to believe that the owners would let a (long anticipated) disclaimer of interest derail the entire process, if they really are interested in saving the season.
“And other than a bit of unpredictability, what do you really lose at this point if you are the players? Especially given that the union leadership can still advise you in the role of litigation counsel, rather than PA management.
“So long story short, I completely agree that the actual benefits are relatively modest at this point. But given that the downside is modest as well, I don't see why the players wouldn't go ahead and disclaim interest. That having been said, though, I'm sure others would disagree and argue that the uncertainty it would introduce outweighs the incremental leverage to be gained.”
No. 3: There was an article on Sportsnet on Monday which stated pretty definitively the players had a losing case here. Does he have a point with regards to where the NHLPA stands?
Grow: “He’s incorrect about the NFLPA. It did pursue a disclaimer of interest, not a formal decertification as he said in the piece. The NFL appellate court decision in Brady also didn't reach the merits of whether the players' disclaimer of interest was valid in general. It merely held that they couldn't get an injunction because the case had ‘grown out of a labour dispute.’ So the players were still free to pursue their antitrust case.
“Other than that, though, what he’s arguing is a plausible outcome for the most part, but I don't think it's nearly as certain as he does. For instance, one could distinguish the NHLPA disclaimer from the NFLPA's insofar as the NFL players disbanded their union before the CBA had even expired. In contrast, the NHL players have appeared much more hesitant to do it, arguably indicating that their intention to dissolve the union is more sincere. I do agree with him that the players voting for disclaimer is an unusual scenario, and an argument in the NHL's favour.
“At the end of the day, no court has ever decided whether a disclaimer of interest is sufficient for players to file an antitrust suit. No court has definitively stated that a formal decertification is sufficient for that matter. Personally, I think there is a reasonable argument to be made that disclaimer should not be sufficient for just the reason the piece argues. But at the end of the day, no one knows for sure how a court would rule. Reasonable minds could go either way on it.”