In September I discussed the National Football League Players Association’s antitrust-fueled decision to preemptively authorize “decertification” of the union if and when there’s an impasse in negotiations with the NFL Management Council, the collective bargaining entity representing the 32 NFL ownership groups. To briefly recap, in theory decertification ends the government-mandated “collective bargaining” process and allows the Management Council to unilaterally adopt labor standards, which individual players could then challenge under the antitrust laws as unreasonable “restraints of trade.” Under decertification, the players would be individuals who could choose to deal or not deal with the NFL as they wished.
Mike Florio of NBC Sports and ProFootballTalk.com, a lawyer himself, has suggested the vote to authorize decertification effectively nullifies the Management Council’s threat to “lockout” the players should a new collective bargaining agreement not materialize before the start of the next league business year in March. Yesterday Florio asked why the NFLPA wasn’t more forward in alerting the public to this:
Decertification would prevent a lockout, because there would be no combined work force to prevent from working. So I asked NFLPA spokesman George Atallah during his Friday visit to The Dan Patrick Show why the union doesn’t mention, when banging the drum in the halls of Congress regarding a lockout, the fact that the union has secured the ultimate silver bullet — the ability to shut down the process and proceed as a group of individual employees.
Atallah stopped short of saying that the union definitely would implement decertification, explaining that the players continue to prefer to work things out at the bargaining table. But none of this changes the fact that, when sounding the lockout alarm, the NFLPA isn’t telling the entire story to the media, the fans, or the politicians.
So whenever [NFLPA executive director DeMaurice] Smith says that a lost 2011 football season would trigger “$5 billion in lost wages, taxes and other revenue,” he should point out the fact that the union has pieced together the ability to prevent the NFL from locking out the players, if/when it comes to that.
But is it really that cut-and-dry? Decertification carries antitrust risks for the NFLPA and the players as well as the Management Council. Although Florio and others might look to the NFLPA’s decertification following the union’s aborted 1987 strike as a guide here, antitrust theology has changed considerably over the past two decades. As I documented in my recent Reason article, the Federal Trade Commission and Department of Justice have successfully used antitrust to prosecute dozens of independent physician associations because they improved their “bargaining position” with insurance companies without forming a government-sanctioned union or other economically integrated entity.
The DOJ-FTC rules require physicians act independently in deciding whether to accept or reject an insurance company’s contract offer. Outside the labor union contest, physicians may not exchange any information regarding their willingness to accept a contract or the terms on which they’d consider a contract (i.e., prices). As former FTC official and congressman Tom Campbell noted in a 1998 hearing, “three eye doctors in Elgin, Illinois” couldn’t meet over lunch to discuss an HMO contract without violating FTC rules, yet every unionized steelworker in Gary, Indiana, could go on strike without penalty.
So if these antitrust rules apply to highly skilled professional physicians, why wouldn’t they apply equally to highly skilled professional football players? If and when the NFLPA decertifies, the organization won’t go out of business. Just as in the prior decertification, the association will reorganize itself as some sort of non-union trade group. And that would subject the NFLPA to the same sort of antitrust liability that independent physician associations face. Any hint or suggestion that the NFLPA — or even just a small group of players — are acting together in any way could trigger a lengthy and costly FTC or DOJ investigation.
Insurance companies routinely use backchannel lobbying at the FTC to force physicians’ hands at the bargaining table. And in some of these cases, we’re talking about a dozen specialists in one city. It’s not incomprehensible to think the FTC might adapt its highly successful bullying tactics against NFL players — especially when every media outlet in the country starts screaming about the devastating impact a lack of professional football will have on dozens of cities and their fragile economies.
The FTC or DOJ could easily turn the antitrust tables on the players and argue that decertification is simply a sham to justify illegal “price fixing.” Just opening an investigation would impose heavy manpower costs on the NFLPA and individual players. Remember, the FTC is effectively exempt from the 4th Amendment, so its subpoena power is virtually unlimited. And as the FTC demonstrated in its successful anti-merger case against Whole Foods, the agency is not shy about leaking damaging internal documents to the press to make a defendant look bad. Again, there are no external ethical constraints on the FTC’s behavior.
If you follow the physician precedents, the FTC could censor the speech of DeMaruice Smith or any other individual who claims to speak on behalf of NFL players in contract talks. Smith would be in the same position as the healthcare management consultants prosecuted by the FTC; these people have no 1st Amendment rights as far as the Commission is concerned. As for the players, they could face prosecution if the FTC infers collective action even if there is none. As the 5th Circuit ruled in the one physician case that made it to appeal, the FTC does not have to provide any empirical evidence of restraint of trade or consumer harm; the government can simply rely on its own “experience and judgment” in deciding whether individuals have acted unreasonably.
Smith in fact may have exposed himself and his members to an antitrust charge simply by organizing a preemptive decertification vote. In the post-1987 decertification, the union only “disbanded” after a failed strike and protracted negotiations and litigation. It was a last-ditch move to jumpstart an antitrust lawsuit against the Management Council. Here, the current collective bargaining agreement hasn’t expired talks haven’t broken down. The Management Council — and the FTC or DOJ — could argue that Smith’s decision to organize a decertification vote ahead of time shows intent to engage in “anticompetitive” behavior prohibited by the Sherman and Federal Trade Commission Acts. (The 5th Circuit case I noted above actually dealt with a physician group that “polled” its members on the minimum terms they would accept for considering a contract as a group, which is awfully similar to voting to “decertify” if the Management Council doesn’t offer certain terms.)
This may explain why Smith is not eager to publicly promote decertification as a so-called magic bullet to prevent a Management Council lockout. As a lawyer himself, Smith knows he’s exposing himself to liability by even suggesting a solution to the present labor dispute outside of the federal government’s highly overregulated, guild-based “collective bargaining” system. It’s in his best interests to keep things under the watchful eye of the National Labor Relations Board. Roaming around in the antitrust wilderness is probably not a viable alternative.
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Wouldn’t the decertification vote be protected from anti-competitive sanction since it occurred within the protective rubric of a government recognized union — rather than the “illegitimate” framework of a physician group?
Even if the vote itself is protected, the FTC could still investigate the NFLPA’s post-decertification activities and determine there was a Sherman Act or FTC Act violation. In other words, the FTC could argue the NFLPA continue to engage in union-like activities after it withdrew from “legitimate” collective bargaining activities. That would put the NFLPA in the same basket as the physician groups.
Remember, the physician groups aren’t illegal either. The FTC claims the line is crossed when the groups try to “improve the bargaining position” of individual members.
“could ho on strike”
This typo is surprisingly frank about the nature of labor unions.
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