Most NFL fans were appalled to learn about former New Orleans Saints defensive coordinator Gregg Williams' bounty system that paid his players for injuring opponents. In light of growing concern about retired NFL players' health, Commissioner Roger Goodell swiftly suspended Williams indefinitely from the league.
Thus far, Goodell's suspension of Williams has received overall positive press. However, even if fans are happy to see Williams go, their feelings beg an entirely different question: did Roger Goodell have the legal authority as a governing figure on behalf of the 32 teams to ban Williams from practicing his profession as a pro football coach?
If challenged under Section 1 of the Sherman Act, Goodell's attempt to indefinitely suspend Williams serves as an interesting test case to the modern view of antitrust law's Rule of Reason. As the NFL will most likely note, back in 1961 the U.S. District Court for the District of New York ruled in the case Molinas v. Nat'l Basketball League that a league commissioner may indefinitely suspend a player on moral grounds. However, since the Molinas case was decided (which, of course, only came from a single district court), courts' interpretation of antitrust law's Rule of Reason has changed significantly.
Most notably, in the 1978 U.S. Supreme Court case National Society of Professional Engineers v. United States, the high court explained that antitrust law's Rule of Reason should not turn "on a court's intuitive judgment of whether a particular practice seems sensible and equitable, but rather on economic analysis." In other words, unlike in past decisions such as Molinas, public policy grounds no longer serve a clear place in a proper antitrust analysis.
In light of the Supreme Court's holding in both Professional Engineers and its progeny, I have repeatedly argued that indefinite commissioner suspensions in professional sports leagues are generally no different from illegal group boycotts. This argument is especially powerful where the suspended party is an NFL coach because NFL coaches are not unionized and thus their suspensions lie outside of antitrust law's non-statutory labor exemption.
Interestingly, a rarely discussed footnote in Professional Engineers (footnote 22) leaves open a small gray area if the main purpose for a restraint of trade is to protect a collective entity from "product liability." Given the bona fide liability concerns that would flow to NFL teams by allowing continued employment of a coach that has encouraged physical harm to players, Goodell's suspension may fall firmly within the spirit of this Footnote 22 caveat.
Nevertheless, footnote 22 of Professional Engineers is vague, and its successful application has been rare. In addition, footnote 22 relates specifically to product markets and not to labor markets, where upholding such a restraint would entirely prevent one from practicing his chosen avocation.
In this vein, courts have been frequent to uphold the general position that no matter how laudable one's intentions, separate businesses are forbidden from coming together to form an extra-governmental entity that provides rules for the regulation and restraint of interstate commerce. According to most courts, the power to regulate such trade is a power reserved for the government and not trade associations, even where a trade association's leader has honorable intentions.
Thus far, Goodell's suspension of Williams has received overall positive press. However, even if fans are happy to see Williams go, their feelings beg an entirely different question: did Roger Goodell have the legal authority as a governing figure on behalf of the 32 teams to ban Williams from practicing his profession as a pro football coach?
If challenged under Section 1 of the Sherman Act, Goodell's attempt to indefinitely suspend Williams serves as an interesting test case to the modern view of antitrust law's Rule of Reason. As the NFL will most likely note, back in 1961 the U.S. District Court for the District of New York ruled in the case Molinas v. Nat'l Basketball League that a league commissioner may indefinitely suspend a player on moral grounds. However, since the Molinas case was decided (which, of course, only came from a single district court), courts' interpretation of antitrust law's Rule of Reason has changed significantly.
Most notably, in the 1978 U.S. Supreme Court case National Society of Professional Engineers v. United States, the high court explained that antitrust law's Rule of Reason should not turn "on a court's intuitive judgment of whether a particular practice seems sensible and equitable, but rather on economic analysis." In other words, unlike in past decisions such as Molinas, public policy grounds no longer serve a clear place in a proper antitrust analysis.
In light of the Supreme Court's holding in both Professional Engineers and its progeny, I have repeatedly argued that indefinite commissioner suspensions in professional sports leagues are generally no different from illegal group boycotts. This argument is especially powerful where the suspended party is an NFL coach because NFL coaches are not unionized and thus their suspensions lie outside of antitrust law's non-statutory labor exemption.
Interestingly, a rarely discussed footnote in Professional Engineers (footnote 22) leaves open a small gray area if the main purpose for a restraint of trade is to protect a collective entity from "product liability." Given the bona fide liability concerns that would flow to NFL teams by allowing continued employment of a coach that has encouraged physical harm to players, Goodell's suspension may fall firmly within the spirit of this Footnote 22 caveat.
Nevertheless, footnote 22 of Professional Engineers is vague, and its successful application has been rare. In addition, footnote 22 relates specifically to product markets and not to labor markets, where upholding such a restraint would entirely prevent one from practicing his chosen avocation.
In this vein, courts have been frequent to uphold the general position that no matter how laudable one's intentions, separate businesses are forbidden from coming together to form an extra-governmental entity that provides rules for the regulation and restraint of interstate commerce. According to most courts, the power to regulate such trade is a power reserved for the government and not trade associations, even where a trade association's leader has honorable intentions.
