Bloomberg News

NFL Lockout Can Continue as Appeals Court Reverses Judge

July 08, 2011

(Updates with status of labor talks in ninth paragraph.)

July 8 (Bloomberg) -- National Football League team owners can continue their player lockout, a divided U.S. appeals court ruled, reversing a Minnesota judge.

The St. Louis-based appeals court today said U.S. District Judge Susan Richard Nelson in St. Paul erred when she ordered the teams to grant players access to their training facilities and staff. She found that the players were otherwise likely to suffer irreparable harm.

Nelson’s order didn’t comply with federal labor law, a three-judge appeals panel said in a 2-1 ruling. Players claimed in a lawsuit that the NFL violates antitrust laws with anti- competitive practices. The league countered that the dispute is governed by the National Labor Relations Board and the court lacked jurisdiction to issue the injunction. The judges agreed.

“The labor dispute did not suddenly disappear just because the players elected to pursue the dispute through antitrust litigation rather than collective bargaining,” U.S. Circuit Judge Steven Colloton wrote in the majority opinion.

The 32-team league is the richest U.S. professional sports league, with annual revenue of about $9 billion. Players and owners are disputing over how to divide it. They also disagree over a rookie salary cap, expanding the regular season to 18 games from 16, and health care.

Players led by quarterbacks Tom Brady, Drew Brees and Peyton Manning sued the NFL March 11 after negotiations on a collective-bargaining agreement collapsed and the athletes dissolved their union. The lockout followed at midnight.

Legal Steps

Nelson issued an order to stop the lockout on April 25. The league won a temporary appeals court ruling on May 16 allowing the owners to reimpose the ban until judges decided on the lockout order. They did that today, without dismissing the case entirely.

In May 2008, the NFL opted out of its final two years of the prior agreement, citing concerns including operating costs, according to the appeals court.

Negotiators for the players and owners are close to an accord on how to divide a projected $9.3 billion in revenue, according to two people with knowledge of the talks. Team training camps are scheduled to open in two weeks.

The sides have worked on an agreement that may give players less than half of the league’s revenue, according to the people. Players got about 60 percent under the old agreement, after owners deducted $1 billion for such costs as the NFL Network.

The two sides issued a joint statement on today’s court decision, saying the dispute “must be resolved through negotiation.”

Dual Commitment

“We are committed to our current discussions and reaching a fair agreement that will benefit all parties for years to come, and allow for a full 2011 season,” the statement said.

Circuit Judge Kermit Bye dissented from today’s decision, saying the statutory immunity from antitrust law, enjoyed by both sides while they’re in labor talks, must have an end point.

“Such point comes at the moment of the union disclaimer,” Bye said, referring to the disavowal of the union.

The lower-court case is Brady v. National Football League, 11-cv-639, U.S. District Court, District of Minnesota (St. Paul). The appellate case is Brady v. National Football League, 11-1898, U.S. Court of Appeals for the Eighth Circuit (St. Louis).

-- With assistance from Aaron Kuriloff in New York. Editors: Andrew Dunn, Stephen Farr

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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