Can the owners impose a cap through impasse?

[Other Dave]

I was just reading The Hockey Rodent and he makes an interesting assertion: That the owners cannot impose a salary cap without the players' consent, period.

Is this in fact the case? Could the owners declare an impasse, then implement a new CBA in toto, even if the new CBA contains elements that were not part of any previous agreement? How might the owners try to get around this, if true, and what risks would they entail in such circumvention?

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[thinkwild]

I was intrigued by that too. I thought they could implement until NLRB relief for the players, they just cant make the players accept. Not really clearing it up any i know.

 

[Wetcoaster]

I was just reading The Hockey Rodent and he makes an interesting assertion: That the owners cannot impose a salary cap without the players' consent, period.

Is this in fact the case? Could the owners declare an impasse, then implement a new CBA in toto, even if the new CBA contains elements that were not part of any previous agreement? How might the owners try to get around this, if true, and what risks would they entail in such circumvention?

That position appears inaccurate and ignores the case law. This is dealing with what is usually referred to as the labor exemption from antitrust. There are two broad situations where this comes into play.

By the 1980's the US courts had ruled that once the players' union had consented to a provision it was immune from antitrust attack by the union or individual players - that is quite logical.

But what if the union has not in fact consented but was simply present? And that breaks down into two sub-situations.

1. The union previously has consented to a restraint and now wants that restraint removed after expiry of a collective agreement (e.g the NFL rules on restrictions on free agents or the NBA salary cap). This was settled in the Junior Bridgeman vs. the NBA case when the court ruled that the restraint (the salary cap) did not expire with the agreement. This was also confirmed in the Marvin Powell v. NFL case. So basically once a a union has agreed to a particular restriction it is immune from antitrust attack AS LONG AS THE UNION EXISTS. Hence decertification and hence why the NHLPA is so opposed to salary cap.

AND

2. The owners unilaterally modify or add what would be an illegal restraint of trade (the potential NHL case). The issue of modification was decided in the case where the NBA sued the NBAPA naming Buck Williams the President of the NBPA as Defendant in 1994 when they sought to harden their salary cap. The court ruled in favour of the NBA owners and gave a broad interpretation to the labour exemption stating the players could not rely on antitrust law while negotiating under labour law. The NBAPA then got all the players to sign notices withdrawing the PA as the bargaining agent (a decertification tactic) and the NBA backed down. In other words the NBA would lose its protection if the players decertified

Meanwhile a case from the NFL had gone to the US Supreme Court dealing with the issue of a new restraint. It involved the issue of the NFL creating a developmental squad and fixing salaries at so much per week so it was not a modification - it was new restraint. The NFL had created the first ever individual salary cap and incidentally massively cut salaries to such players who had been on a "taxi" squad in the past.

The NFLPA challenged it using Tony Brown (Brown v NFL) as the named defendant and won a $30 million antitrust suit at trial. This was overturned on appeal and the court applied the Buck Williams case's broad view of labour exemption from antitrust. The NFLPA appealed and lost. The Supreme Court ruled as long as the union existed and engaged in multi-employer bargaining the players had to give up their right to using antitrust law. Many legal pundits have criticized the decision in Brown saying the Supreme Court clearly got it wrong but there it sits as the law of the land.

The NHL appears legally entitled to impose any CBA that they have made as their last best and final offer after declaring an impasse - it could include (and I see no reason why it would not include) a salary cap. The generally accepted legal view is that the union cannot challenge an imposed CBA under antitrust law (unless it decertifies).

There may be one small crack to challenge an imposed CBA by the NHL with a salary cap but given the broad interpretation of the labour exemption from antitrust action I would not be to hopeful. In Brown the new restraint was imposed but not during a bargaining impasse. I suppose the NHLPA could argue that it does not apply to an imposed CBA during a bargaining impasse but since the Wiiliams case dealing with a modification was a bargaining impasse I do not see that as being successful.

Hockey Rodent also states that MLB is exempt from antitrust law on this type of labour matter but that changed in 1998 with the US Congress passing the Curt Flood Act.
http://roadsidephotos.com/baseball/curtflood.htm

 

[hillbillypriest]

Thanks wetcoaster for your usual thorough summary!!!

My understanding of the bottom line from the supreme court's decision in Brown v. Pro Football is that bargaining units must have decertified before claiming that work rules devised by the owners breach the Sherman Act and anti-trust laws. Period. This tells me that if a cap was presented as a final offer at impasse at the end of a collective bargaining process, it would be exempt from from anti-trust reach. Can I generalize this much. Would appreciate your thoughts.

HBP

 

[jcab2000]

Quite an interesting and informative read there wetcoaster.

 

[Wetcoaster]

Thanks wetcoaster for your usual thorough summary!!!

My understanding of the bottom line from the supreme court's decision in Brown v. Pro Football is that bargaining units must have decertified before claiming that work rules devised by the owners breach the Sherman Act and anti-trust laws. Period. This tells me that if a cap was presented as a final offer at impasse at the end of a collective bargaining process, it would be exempt from from anti-trust reach. Can I generalize this much. Would appreciate your thoughts.

HBP

That is the generally accepted view of Brown. However there are two potential issues that Brown did not resolve and that may allow the union to use antitrust law while still consitituted as union.

One is as I mentioned Brown did not involve a bargaining impasse so perhaps a new restraint imposed could be ruled in violation of antitrust law. Given the large number of criticisms of Brown it is possible this could be changed. However I suspect it would take the Supreme Court to make that change although I suppose a bold lower court judge could try to distingusih Brown.

The second is what happens if the imposed CBA is voided by the NLRB. In that case the imposed salary cap would be void ab initio as not properly imposed and there I think the players would have a good run at the owners under antitrust law.

It may be that Brown is not quite as broad as is sometimes claimed.

 

[thinkwild]

Thanks wetcoaster. So perhaps Brown is the case this lockout is really about?

Is the issue, that they unilaterally implemented the new taxi squad rules outside of the bargaining process? Why was this situation not considered at bargaining impasse? What could make it eligible for a different restraint from the NHL owners implementing?

 

[hillbillypriest]

That is the generally accepted view of Brown. However there are two potential issues that Brown did not resolve and that may allow the union to use antitrust law while still consitituted as union.

One is as I mentioned Brown did not involve a bargaining impasse so perhaps a new restraint imposed could be ruled in violation of antitrust law. Given the large number of criticisms of Brown it is possible this could be changed. However I suspect it would take the Supreme Court to make that change although I suppose a bold lower court judge could try to distingusih Brown.

The second is what happens if the imposed CBA is voided by the NLRB. In that case the imposed salary cap would be void ab initio as not properly imposed and there I think the players would have a good run at the owners under antitrust law.

It may be that Brown is not quite as broad as is sometimes claimed.

Thanks for your response...

I agree that the interpretation of the protections to the collective bargaining "anti-trust shield" arising from Brown did not involve a unilateral cba as might occur in an impasse scenario in this case. But my my recollection (and I'm notoriously lazy about actually bothering to check facts from things I've read before) is that the reasoning behind Brown was that serious damage could be done to the integrity of multi-employer collective bargaining if one side involved in that process of trying to come up with a "collective" deal could be accused - after the fact - of anti-competitive behaviour. This, in my understanding and recollection, was the central reasons why the court determined that it had to let parties, in effect, understand what context they were operating under - either an anti-trust environment or a labour relations environment, but never both at the same time. Therefore, the determination was that the trigger for ending the collective bargaining relationship and the end exemptions from anti-trust exemption occurred only at decertification, but not before.

Given this, I'm not sure why it would matter how the unilaterally imposed work terms came about during the collective bargaining phase. So long as the work rules came about as the end-product of the collective bargaining PROCESS, it would seem to me that the Brown protections would apply. Could be wrong, and would love to hear your views, but my sense is that it would be difficult.

I think your second point is the key one. The league would have to be completely successful at convincing the NLRB that the impasse was valid following the break down of good faith negotiations. If the NHL fails to pass this hurdle, I would think they would be stymied in trying to get Brown anti-trust protections from a unilaterally imposed CBA.

Anyway, its all very interesting....

 

[Wetcoaster]

Thanks wetcoaster. So perhaps Brown is the case this lockout is really about?

Is the issue, that they unilaterally implemented the new taxi squad rules outside of the bargaining process? Why was this situation not considered at bargaining impasse? What could make it eligible for a different restraint from the NHL owners implementing?

As I understand the sequence of events the developmental squad was put in before the impasse had been declared.

Because it only affected a small number of players a strike or decertification by the entire union was not really a viable option so the antitrust action was filed.

Brown would only be an issue if the NHL does declare an impasse and there is still the problem the NHL faces in getting sufficient replacement players with the immigration visa/work permit restrictions.

 

[vanlady]

Actually they might not be able to implement a cap without negotiating the definition of revenues. This is the most recent decision of the Board on Merit pay. The only exception to the impasse doctrine is Merit Pay as it allows employers to dramatically change pay without negotiated parameters.

The Board adopted, without comment, the administrative law judge’s finding that the Respondent’s wage proposal for its employees in the commercial operations department “sought to retain unlimited discretion to adjust wages and/or alter the wage incentive plans, without any established criteria for determining the method, manner, time, duration, or amount of the adjustments.â€[7] The Board also adopted the judge’s finding that the Respondent’s wage proposal allowed the Respondent “broad discretionary power to unilaterally adjust wages and the wage incentive plans without any established criteria,â€[8] and as such was in contravention of McClatchy.[9]

http://www.nlrb.gov/nlrb/shared_files/decisions/340/340-33.htm

 

[thinkwild]

Interesting. This horrible "Process" we have been put through, was it good faith, really seems a critical gamble the PA has to assess, if they are the least bit insecure about Brown making decertification as a tactic unavailable. Seems like 2 interesting cases begging for challenge. I'd think all the unions and owners of all leagues must be looking at that and saying, ok, who's in the best position to test the waters. Bettman can win by mastering the technicalities of the process so as not be bad faith? THat would seem good leverage.

 

[Solipsist]

The NHL appears legally entitled to impose any CBA that they have made as their last best and final offer after declaring an impasse - it could include (and I see no reason why it would not include) a salary cap. The generally accepted legal view is that the union cannot challenge an imposed CBA under antitrust law (unless it decertifies).

Hi, Looking over the posts here, and have found an interesting quandry that I would like to ask the chatters here about. It is my understanding that the NHL, once it has made an offer, cannot then make an offer that is worse than the one on the table. This prevents them from offering one proposal, having it rejected, and then putting a draconian offer on the table simply so they can then implement it upon declaring an impasse. Now, assuming that none of the triggers from today's offer actually currently exist at this moment (the validity of such an assumption I cannot comment on), wouldn't the NHL now be stuck with the Dec. 9th NHLPA proposal, since that is now the best offer on the table by the NHL? Granted, it would still have the triggers attached, but it seems to me that would have to be the CBA implemented, since that was the last, best offer the NHL has put on the table. Thoughts? If you could please cite to what you use as a reference I would appreciate it. Most of my knowledge is based off of summarys, and I haven't take the time yet to investigate primary sources yet. Thanks.

 

[L.I.RangerFan]

One thought that has not been brought forward yet is the fact that at the time of the court rulings regarding sports teams (NFL and NBA) there were no teams outside the United States involved.

The NLRB has jurisdiction in the USA only as does the Supreme Court. Canadian law is basically set up on a province to province basis.

So if the NHL is successful in getting the NLRB to declare impasse, what does this mean for the Canadian teams? I believe both BC and Quebec do not allow the use of replacement workers. There is also some thought out there that the ruling would only effect US born players and that visas could not be issued to ANY foreign player as a replacement worker. So does this leave US players playing for US teams only?

IMO impasse is out of the question because of the numerous international concerns and cross border problems surrounding it.

Just get the deal done!

 

[ti-vite]

The NHLPA (ASSOCIATION) is not considered a union in Quebec and BC I believe, or at least have read here on numerous threads.

 

[Other Dave]

The NHLPA (ASSOCIATION) is not considered a union in Quebec and BC I believe, or at least have read here on numerous threads.

The Code Guide on the LRB-BC site suggests that since the NHLPA and the NHL have entered into a CBA, the PA has been voluntarily recognized by the NHL as the bargaining agent for the players, and so would be so recognized in BC.

Please correct me if I'm misinterpreting this information.