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University of New Hampshire Law Review

Abstract

[Excerpt] "Federal antitrust law and national labor law set forth two conflicting policies that have created a periodic drama for sports fans concerned that their favorite sports will suffer a cataclysmic court room battle impairing the quality of the game.1 The Supreme Court interpreted federal antitrust and labor law to implicitly exclude antitrust liability for certain collective bargaining labor related activities under the non-statutory labor exception to antitrust law.2 This absence of explicit guidance has led to a split in the circuits where courts have formulated their own interpretations of these colliding national policies. In 1996, the Supreme Court in Brown v. Pro Football, Inc., 3 attempted to further clarify the scope of this exemption and ultimately held that national antitrust and labor policies favored the application of the exception when the alleged restraints were in labor markets defined by collective bargaining. In 2004, the United States Court of Appeals for the Second Circuit held in Clarett v. National Football League4 that Brown reaffirmed the Second Circuit position that restraints resulting from the collective bargaining process and primarily impacting the labor market were subject to the non-statutory labor exception to antitrust law. In 2003, Maurice Clarett, a sophomore collegiate running back for Ohio State University (“OSU”) announced that he intended to enter the 2004 National Football League (“NFL”) draft. The NFL declared that Clarett was ineligible for the rookie draft stating that the NFL player Eligibility Rules required all players to have exceeded a three year post-high school graduation requirement. Clarett subsequently sued the NFL, claiming that the Eligibility Rules worked as a violation of antitrust law by unreasonably restraining him from pursuing a career in the NFL.5 The National Football League Management Committee (“NFLMC”) and the National Football League Players Association (“NFLPA”) are contractually obligated to the terms and conditions of the current collective bargaining agreement (“CBA”).6 The CBA references the NFL Constitution and Bylaws, which requires all draft applicants to meet a minimum of having exhausted at least three football seasons after their high school graduation (the “Eligibility Rules”).7 Clarett’s case went to trial in the United States District Court for the Southern District of New York, resulting in a finding of an antitrust violation and an injunction ordering the NFL to instate Clarett for the draft.8 On appeal, the Second Circuit reversed and remanded the district court holding that the Eligibility Rules violated antitrust law.9 Notably, the court interpreted the non-statutory labor exemption to antitrust law to require deference to the labor law remedies and policy where the alleged injury is primarily focused in a labor market.10 Clarett’s desire to enter professional organized labor is indicative of the ongoing desire by many younger athletes to forego formal postsecondary education and to enter the world of professional sports.11 Over the past several decades, there has been a general relaxing of age-based player eligibility rules in many professional sports (including the 1993 NFL Collective Bargaining Agreement, a move from a four year post-high school requirement to the current three year requirement).12 Commentators continue to opine that the NFL Eligibility Rules should be abolished.13 Had this happened, Clarett would have likely entered the NFL in the 2004 draft and not spent over a year away from organized football; instead Clarett remained depressed by the Second Circuit decision and prepared himself for the 2005 draft.14 Still, the policies behind the national antitrust and labor laws have set forth principles which have been interpreted by the courts to exempt certain labor issues from federal antitrust law. Clarett noted the distinction between its own circuit law (as supported by the 1996 Brown decision) which interpreted labor laws as “waive[ing] antitrust liability for restraints on competition imposed through the collective bargaining process, so long as such restraints operate primarily in a labor market characterized by collective bargaining” and differing interpretations as set forth by Eighth Circuit law.”15 Clarett noted the distinction between its own circuit law (as supported by the 1996 Brown decision) and differing interpretations as set forth by the Eighth Circuit.16 Clarett held that the Eligibility Rules were a mandatory subject of bargaining and a restraint created by the collective bargaining agreement; the court further found that this restraint operated primarily in a labor market, not a business market.17 Accordingly, Clarett interpreted national antitrust and labor policy to dictate that the issue was exempt from antitrust violation and under the jurisdiction of labor law and the National Labor Relations Board (“NLRB”).18 This note will analyze the Second Circuit’s ruling and rationale in light of the relevant governing law and national policies between antitrust law and labor law. Part II will discuss the general trend of player-raised antitrust challenges to restraint cases in professional sports, setting the stage for an aspiring football player like Clarett to challenge the NFL Eligibility Rules. In Part III, this note will discuss the facts, procedural history and outcome of Clarett. Part IV will discuss the historical background under which Clarett was ruled. Part V will analyze how courts have distinguished between restraints created through the collective bargaining process which primarily impact the labor market as opposed to those that primarily impact business markets. In Part VI, this note will analyze Clarett’s interpretation of Brown in distinguishing labor and business markets, and discuss how the non-statutory labor exception should be applied to labor market restraints as compared to business market restraints. Finally, it will outline the legacy that Clarett provides for future player-raised challenges in similar situations.”

Repository Citation

Ronald TerkSia, Clarett v. National Football League: Defining the Non-Statutory Labor Exception to Antitrust Law as it pertains to Restraints primarily focused in Labor Markets and Restraints primarily focused in Business Markets, 4 PIERCE L. REV. 155 (2005). Available at http://scholars.unh.edu/unh_lr/vol4/iss1/8

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