Gut Reaction: Injunction granted

UPDATED 8:32PM ET - This is really big news, but it's definitely no surprise, which you know if you've been rolling with us.  All along, it's been pretty clear that the law was on the players' side.  A union can decertify if it wants to, and you can't lock out a non-organized labor force.  Individuals are free to file suit, where a union can't, and that's the vehicle through which a new CBA is going to be eventually reached.

I am a little bit surprised that Judge Susan Nelson declined to grant a stay, pending appeal.  That indicates that she considers the probability of her decision being overturned to be low, but often, if a stay is requested for a timely appeal, it is granted.

The 8th Circuit could stay the decision, and to me, as a chaos-averse fan, it would be preferable.  In a stay, the lockout would effectively continue for a while, until the Appeals court can rule.  If they agree with Judge Nelson, which is likely, it's game over for the lockout.  It's virtually certain that the Supreme Court isn't going to hear this case.

The reason that a stay is probably preferable for a fan is because if there's no stay, the owners will be ordered to impose rules and get back to business.  Say they're required to begin a new league year by May 1st.  A bunch of free agents get signed, and then the 8th Circuit overturns Nelson's ruling.  What then?  Are there take-backs on those signings?  It'd get pretty chaotic.

I expect that within 2-3 weeks, the 8th Circuit will uphold Nelson's ruling, and the owners will be ordered to start a new league year.  The legal process will play out over a long timeline (months to years) without the pressure of lost wages or revenue.  It will probably only break when David Doty or Susan Nelson indicates that the owners are going to get owned in the lawsuits, and advises them to take the best settlement they can get.  Welcome back to the late 1980s.

In reading the full text of the ruling, something shocking jumped out at me on pages 11 and 12.  The owners demanded that the NFLPA recertify as a union in 1992, and the players agreed, on the quid pro quo condition that the NFL never attempt to challenge a future decertification.  If this is how it really went down, and there's reason to think that the Minneapolis court is intimately familiar with these details, there's practically no chance the owners can win.

I just skimmed all 89 pages while listening to a lecture about risk management in my MBA class.  Luckily, I know a lot about the topic already.  Here are some key points I wrote down from Judge Nelson's decision:

A.  She found the NFL's claim that the National Labor Relations Board had the proper jurisdiction (rather than the federal court) to be without merit, and likely to be designed as a delay tactic.  She wrote "this court is unable to find much, if any, basis for referring the disclaimer issue to the NLRB." That's really clear.

B.  Disclaimer is another word for decertification, and Nelson found that the NFLPA's action was a proper decertification for the following reasons:

  1. The General Counsel for the NLRB found that a virtually identical claim by the NFL of a sham decertification by the NFLPA in 1991 was meritless.
  2. The NFL argues that the disclaimer is a sham because it doesn't actually signal that the NFLPA intends to abandon unionism permanently.  Nelson notes that no requirement of permanence exists in labor law.
  3. Nelson notes that workers have exactly as much right not to be in a union as they do to enter into one.
  4. To the NFL's claim that the disclaimer represents a transparent litigation strategy, Nelson declares that that is "irrelevant so long as the disclaimer is unequivocal, and adhered to."
  5. Nelson gives a lot of weight to the facts that the NFLPA changed its bylaws upon converting to a trade union, and also notified the Department of Labor in writing of its changed status.  These are clearly actions that indicate that the intent of the disclaimer is serious.

C.  Nelson found that the Norris-LaGuardia Act, which discourages injunctions in labor disputes, only applies to labor disputes. That is, given that the NFLPA did legally cease to be a collective bargaining unit, this is definitionally no longer a labor dispute.

The key quote is this:  "the parties have moved beyond an impasse in bargaining.  They've moved past collective bargaining altogether."

D.  Nelson ruled that the players began suffering irreparable harm at the moment the lockout began.  This was effectively demonstrated to her by the cases of Vincent Jackson and Logan Mankins as franchise players, Ben Leber and Mike Vrabel as veteran free agents, and Von Miller as a prospective NFL player. 

Jackson and Mankins are harmed because they have expectations of being highly paid in the open market, and are hindered from maximizing their earnings.  Vrabel and Leber are hindered from extending their careers by finding ongoing gainful employment.  Miller is hindered from participating in normal rookie activities which could adversely affect his entire career.

Nelson explicitly states that the harm suffered by players patently outweighs any potential harm the owners could suffer by having their lockout ended.

E.  Nelson judges that the players, in their accompanying litigation, are likely to prevail.  She notes that this injunction only pertains to the question of the propriety of a lockout, though.

F.  Finally, Nelson states that a lockout is not in the public interest.

This is a hellacious ass-kicking that the owners just suffered. The tone of the ruling is that the NFL's claims are absurd, and that they should know that, because they lost in attempting this very same play in 1991. 

I can't see a way where this ruling gets overturned, especially in light of the apparent quid pro quo deal of 20 years ago.  A commenter has already said that he thinks the owners have the upper hand, but I couldn't disagree more strongly.

The owners only had the upper hand insofar as they could turn this into a war of attrition where players were losing paychecks and solidarity was tested.  Today's ruling signals that there almost certainly will be no such war of attrition.

Not only that, I think it's pretty likely that Judge Doty rules that the NFL owes the players significant monetary damages pertaining to their evidently illegal attempt to create a lockout war chest with the last television deal.  If he orders them to pay out something on the order of $1 billion, which is possible, they'd be highly damaged.  Remember - according to Forbes, that's a full year's profit.

This was pretty much the worst-case scenario for the NFL, because it deprives them of any reason to be publicly hopeful, and because the players can and will claim (accurately) that they've won a victory to ensure that the fans will get to watch football this fall.  

1.  I’m not in the arguing business, I’m in the saying what I think business.
2.  I get my information from my eyes.

Follow me on Twitter  While you’re at it, Like our Facebook page

Gut Reactions