Tag:decertification
Posted on: November 7, 2011 1:27 pm
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Legal options: Players can give ultimatum, too

NEW YORK -- As union officials huddled Monday to consider their options in the face of an ultimatum to accept the owners' latest proposal, one such option could be a shift in legal strategy with plenty of risk and reward attached to it.

Rather than waiting for the players to get the necessary signatures to dissolve the union by seeking a time-consuming decertification vote, Billy Hunter could advise commissioner David Stern that, if no further negotiations occur before the Wednesday deadline to accept the owners' deal, he will have no choice but to step aside as executive director of the union.

The legal term for this would be a disclaimer of interest, which would only require a letter from Hunter to Stern advising him that the National Basketball Players Association no longer exists as the bargaining unit for the players.

The advantage of this for the players would be that, once the letter is sent, their attorneys would not have to wait 45-60 days for the National Labor Relations Board to authorize an election to formally dissolve the union. With a disclaimer of interest, the players could almost immediately commence an anti-trust lawsuit against the NBA, said Gabe Feldman, director of the Sports Law Center at Tulane University.

"The owners have threatened to, in some ways, end the negotiations if (the players) don’t agree by Wednesday, because 47 percent is a non-starter -- we all know that," Feldman said. "So the owners have given the players an ultimatum with an artificial deadline, and it may force the players to respond with their own ultimatum. But both are destructive of the negotiation process.

"Clearly, what David Stern has said is designed to push the players to make a concession with the threat of essentially ending the negotiations," Feldman said. "And that’s what the players would be doing by threatening to dissolve the union."

A parallel threat to dissolve the union through a decertification vote already is under way, with players and agents dissatisfied with the union's representation consulting with anti-trust attorneys to weigh the costs and benefits of decertifying. But while a decertification initiated by union members has a better chance of holding up in court as not being a "sham," the disclaimer of interest route is more expeditious and could apply the leverage players are seeking without endangering the entire 2011-12 season.

A key difference, however, is that with a player-initiated decertification, union leadership would remain in power until the election, and thus, negotiations could continue. If Hunter steps aside and dissolves the union voluntarily through a disclaimer of interest, the union would have to reform before negotiations could continue.

"You can't flip a light switch on and off," Feldman said. "It’s a sobering process. Writing a letter one day and tearing up the letter the next day flies in the face of that."

That distinction makes a disclaimer a dangerous legal weapon for the union to implement at this point. The NBA already has sued the NBPA in federal court, seeking declaratory judgment that a disclaimer or decertification on the players' part would be illegal. If the union disclaims, in some ways it would strengthen the league's legal argument that it was planning to dissolve all along. But the union would have a valid counter-argument.

"Billy Hunter could make the argument that dissolving the union was never a strategy until Stern threatened to end the negotiations unless we agreed to every last one of their demands," Feldman said.

As evidence that he never intended to dissolve the union, Hunter could cite the players and agents who have become so enraged with his refusal to do so that they've begun the process of doing it themselves. In fact, for legal purposes, both a disclaimer and decertification could proceed on a parallel basis as a last-resort response to the league's ultimatum, Feldman said.

The biggest legal benefit to dissolving the union through a disclaimer would be that, once the union was transformed into a trade association, the players could almost immediately file an anti-trust lawsuit against the league -- which in theory would open the owners to not only the financial losses of a canceled season, but also anti-trust damages. In all likelihood, the players would file their action in the 9th Circuit in California, where more employee-favorable law exists. Since the league already has pre-emptively sued in the employer-friendly 2nd Circuit in New York, a messy and potentially lengthy jurisdictional battle would then unfold.

And while the disclaimer would be a more expeditious route to antitrust action, it would also be less likely to succeed than a decertification initiated by the players. Courts would be more likely to view a disclaimer as a bargaining tactic, rather than a decision with the true intent to dissolve.

NBPA outside counsel Jeffrey Kessler, who oversaw the NFLPA's disclaimer of interest, "wants to protect not only players in this negotiation but players' ability to use this weapon in the future," Feldman said. "He has to make it appear that this dissolution is a not a sham."

If either of these legal strategies becomes official, the hope of a swift end to the impasse at the bargaining table would be seriously imperiled. So Hunter's best move before Wednesday may be to directly ask Stern for another bargaining session before Wednesday in an effort to close the gap on the remaining system issues so he can bring the deal to the players for a ratification vote. If Stern refused, Hunter could advise him that he will have no choice to send him a disclaimer of interest letter -- and indeed, that even if he doesn't step aside, the players are planning to dissolve the union on their own through decertification.

The question of how Stern and the owners would respond to the players' own ultimatum is a risky and unknown game of roulette that union leaders will have to decide if they want to play.

"It could go either way," Feldman said. "It could cause enough owners to be skittish and want to avoid the risk of anti-trust litigation -- because if they lose there, it’s a huge loss. ... The other side is that it could cause Stern and the owners to say, 'We’re not going to let you manipulate labor law by threatening us with an anti-trust suit and we're going to take a stand.

"The question becomes: Do all of these threats bring the sides closer together," Feldman said, "or push them further apart?"
Posted on: March 11, 2011 7:20 pm
Edited on: March 11, 2011 10:39 pm
 

NFLPA's tactic will be blueprint for NBA talks

The decision Friday by the NFL Players Association to decertify and attempt to block a lockout by owners has wide-ranging implications for the NBA labor talks. While NBA labor strife is a few months behind football's timeline, legal experts expect the basketball game plans to play out in much the same way. 

For those keeping legal score at home, the first point to make is that there's no correlation between the timing of the NFLPA's decertification and the timing of such a decision by the NBPA. While labor attorneys view decertification -- the disbanding of a union and transformation its members into independent contractors -- as a potential deterrent to a lockout, the NBPA won't have the same time pressure to decertify that the NFLPA did. 

Once it became apparent Friday that no deal would be reached in the NFL talks before the 5 p.m. expiration of the collective bargaining agreement, the NFLPA had to decertify and put into motion its antitrust lawsuit or risk losing its sympathetic judge. U.S. District Court Judge David Doty in Minneapolis still has jurisdiction over any and all disputes stemming from the NFL's 1993 antitrust settlement -- but only when a collective bargaining agreement is in effect. If the NFLPA had waited until the agreement expired and/or the owners imposed a lockout, Doty -- who has a history of pro-player rulings -- wouldn’t have retained jurisdiction. Doty's jurisdiction stemming from the '93 settlement was included in all subsequent CBAs. 

The NBA and NBPA have no such provision, meaning lawsuits between the two sides can be filed in any court where the league or teams do business. In an interesting twist, Doty, 81, might want to clear his calendar for the summer. The NBA's collective bargaining agreement expires June 30, and one option at the NBPA's disposal would be to decertify and file an antitrust lawsuit -- guess where? -- in Doty's district. Legal experts say the case wouldn't necessarily be assigned to Doty, except that similar cases typically are assigned to the same judge to avoid differing opinions on the same legal issues within the same district. 

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The outcome of the NFLPA's decertification move will provide a "road map" and a "blue print" for the NBPA as it weighs its legal options when it comes to preventing a lockout or reacting to one once the NBA owners impose it, said a person familiar with the NBA's labor situation, who spoke on condition of anonymity because he was not authorized to address the matter publicly. 

The question of whether the NBPA follows the NFLPA's lead and decertifies will depend nearly 100 percent on how successful the move is for the NFLPA. If NFL players are successful in getting an injunction preventing the NFL from imposing a lockout against a group of employees that is no longer unionized, this would be a clear green light for the NBA players -- who, coincidentally, are represented by the same attorney, Jeffrey Kessler. If decertification works for the NFL players, you don't need a law degree to see that the NBPA will run the very same play. 

But if the decertification tactic winds up being, as NBA commissioner David Stern called it, "the nuclear option that falls on the party that launches it," then it becomes far less likely that the NBA players would pursue it. 

"If the NFLPA is unsuccessful in blocking a lockout, then the NBA players will lose leverage," said Gabe Feldman, director of the Sports Law Program at Tulane University. 

Despite different issues, the NFL and NBA labor talks are in lock step -- so much so that Billy Hunter, the executive director of the National Basketball Players Association, issued a statement this week announcing his full support of the NFLPA's efforts.

"The success of the NFL is built on the backs and shoulders of NFL players," Hunter said. "NFL players deserve nothing less than an agreement that recognizes the players' contributions and sacrifices, despite the owners' threats and tactics to impose a lockout. The NBPA offers unconditional and uncompromising support for the NFLPA's continued efforts to secure a fair deal."

The ability to watch how the NFL legal fight plays out months before their own labor D-Day is a clear advantage for both the NBA and NBPA -- but not necessarily for one over the other. On one hand, having clues as to how certain legal moves will play out could save the NBA and its players some time and lead to a quicker resolution. But Feldman, who has closely followed the issues in both the NFL's and NBA's labor strife, said the NBA situation is far more ripe for a lengthy work stoppage than the NFL's. 

"Looking back at history at what has caused significant work stoppages in sports, it's typically when one side is seeking a sea change and that side has determined that they're better off not playing than playing under the current system," Feldman said. 

That describes the NBA owners, who are seeking to switch from a soft-cap to a hard-cap system, but not their NFL brethren, who seem to simply want to make more money for the same reasons dogs -- well, because they can. 

But with superteams having been built or under construction in all the major NBA markets, not all owners are down with the notion of killing the sport for a significant time -- perhaps for an entire season. In that regard, Stern will have a much more difficult time unifying his owners than NFL commissioner Roger Goodell will have. 

On one hand, a significant number of small-market and/or low-revenue owners are unfazed by the NBA's skyrocketing TV ratings. As one person familiar with ownership's bargaining strategy put it, the obvious interest in watching NBA games on TV has no bearing on the league's financial health. "They don't correlate," the person said, asserting that the NBA gets no additional money tied to higher ratings.  On the other hand, is Madison Square Garden chairman James Dolan going to stand idly by while the 2011-12 season is canceled after it was revealed Friday that Knicks season-ticket prices will increase an average of 49 percent in the wake of the team's acquisition of Carmelo Anthony

If enough NBA owners are willing to go to the wall with their position that the soft-cap system is broken and must be obliterated at any cost, then there's little hope the early weeks and months after the expiration of the CBA will go any better than what the NFL is experiencing now. Both sides in the basketball fight can simply get their popcorn, see how the NFL players' decertification tactic works, and proceed accordingly. 

All of which means a potentially long summer of watching athletes perform in the courtroom instead of where they belong.
 
 
 
 
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