On Thursday September 3, 2015, Hon. Richard M. Berman, United States District Court Judge for the Southern District of New York, issued a decision in National Football League Management Council v. National Football League Players Association (15-cv-5916 & 15-cv-5982). “Deflategate”, as it is commonly referred to, pitted NFL Commissioner Roger Goodell against New England Patriots quarterback Tom Brady. Judge Berman’s decision provides a detailed analysis of the NFL CBA’s arbitration clause pertaining to the procedure for imposing discipline for on-field player conduct.[1] The NFL had imposed a 4-game suspension on Brady for his alleged complicity in using footballs that were underinflated during the AFC Championship game against the Indianapolis Colts on January 8, 2015. The Decision resolved the parties cross-motions to confirm or vacate the July 28, 2015 arbitration award imposed pursuant to Section 301 of the Labor Management Relations Act (29 USC 185) and the Federal Arbitration Act (9 USC 10).

This article compares player discipline under the CBA’s of the NFL and the NBA. The article will be divided into two parts: (1) background of “Deflate”gate and Judge Berman’s decision and (2) comparison of the NFL and NBA CBA’s provisions for arbitrating player disciplinary matters.

TIMELINE AT ISSUE IN THE “DEFLATE”GATE CASE

• 1/8/15 — AFC Championship Game
• 1/23/15 — NFL announces that NFL Executive Vice President and General Counsel Jeff Pash and Theodore V. Wells of Paul, Weiss, Rifkin, Wharton & Garrison will conduct an investigation into allegations that footballs used in the game were intentionally underinflated to give Tom Brady an advantage because he preferred to use “softer” footballs (“Pash/Wells investigation”)
• 3/6/15— the day that that he was interviewed by Mr. Wells and his investigative team- Mr. Brady instructed his assistant to destroy the cellphone that he had been using since early November 2014, a period that included the AFC Championship Game and the initial weeks of the subsequent investigation
• 5/6/15— 139-page “Pash/Wells” investigative report made public
• 5/11/15— NFL Executive Vice President Troy Vincent sends separate disciplinary letters to Tom Brady and Robert Kraft, owner of the Patriots, notifying them that based on the findings of the report the NFL will impose a 4-game suspension on Brady and fine Kraft one million dollars; in addition, the Patriots will forfeit their first round pick in the 2016 draft and their fourth round pick in the 2017 draft.[2]
• 5/14/15— Brady through the Players Association, appealed the four-game suspension. Commissioner Goodell designated himself as arbitrator to hear Brady’s appeal pursuant to CBA Art. 46 § 2(a), which provides that “the Commissioner may serve as hearing officer in any appeal under Section l(a) of this Article at his discretion.” [3]
• 5/19/15– The Players Association filed a motion seeking Goodell’s recusal[4] from arbitrating Brady’s appeal, arguing that he could not lawfully arbitrate the dispute because Goodell was a central witness and that he had publicly prejudged the outcome apparently referring to remarks Goodell had made in the press.
• 6/22/15-– Commissioner Goodell denied Brady’s document request citing to CBA Article 46: “[i]n appeals under Section I(a), the parties shall exchange copies of any exhibits upon which they intend to rely no later than three (3) calendar days prior to the hearing.” Goodell stated that “the collective bargaining agreement provides for tightly circumscribed discovery and does not contemplate the production of any other documents in an Article 46 proceeding other than under these terms.” Commissioner Goodell granted the motion to compel the testimony of Wells, but denied the motion to compel the testimony of designated co-lead investigator Pash. With regard to Pash, Commissioner Goodell contended “[b]ecause Article 46 of our Collective Bargaining Agreement does not address the permitted scope of witness testimony at appeals hearings, it is within the reasonable discretion of the hearing officer [Goodell] to determine the scope of the presentations and, where appropriate, to compel the testimony of any witnesses whose testimony is necessary for a hearing to be fair.” Goodell stated that “Jeff Pash, the NFL’s general counsel, does not have any first-hand knowledge of the events at issue here”.[5]
• 6/23/15— Brady and the Patriots appealed from disciplinary decision letter and an arbitration hearing was conducted before NFL Commissioner Roger Goodell pursuant to Article 46 of the NFL CBA—transcripts of hearing made public this date

• 7/28/15— Commissioner Goodell issues final decision in the Article 46 appeal. He vacates team penalties but affirms Brady’s 4-game suspension. The NFL League Management Council files a Civil Complaint in federal court in New York City requesting that it adopt the findings of the arbitrator giving the decision force of law[6]
• 8/4/15— The NFL Players’ Association files an Answer to the League’s Complaint and a Counterclaim in US District Court for the SDNY. The Counterclaim requests that the Court vacate the arbitration decision.
• 8/7/15— NFLPA files a memorandum of law with the Court
• 8/7/15— the NFL Management Council files a memorandum of law
• 8/12/15 & 8/19/15 — The Court hears oral argument from the attorneys on the competing motions to affirm or vacate the arbitration decision

The Federal Court’s Analysis

Judge Richard M. Berman is a federal district court judge in the Southern District of New York, which hears cases in Manhattan where league offices are located. Judge Berman has served on the Court since October 21, 1998 after having been nominated by President Bill Clinton. He has been on senior status since September 11, 2011. Others who have served as judges of the Court include Justice Sonia Sotomayor. The Southern District has heard many cases with historical significance including, for example, claims arising from the sinking of the Titanic and the New York Times’ Pentagon Papers.

The NFL was represented by a team led by Daniel L. Nash of Akin Gump. Mr. Nash is a well-known labor and employment lawyer in Washington DC. He has defended professional sports leagues and member teams in a number of cases ranging from the obligation of a team to pay player medical coverage during a lockout to claims of bad faith bargaining in a contract dispute.

The NFLPA and Brady were represented by Jeffrey Kessler of Winston Strawn. Mr. Kessler’s major clients include the National Football League Players Association and the National Basketball Players Association. His reputation is as an anti-trust and intellectual property lawyer for clients with international interests. He has represented professional sports unions, CAA (a U.S. based international sports and entertainment agency) and is perhaps best known for negotiating the current free agency/salary cap systems in the NFL and NBA. He represented Michael Vick in his roster bonus arbitration, Plaxico Burress in his Signing Bonus arbitration, and now Tom Brady.

After extensive settlement negotiations failed to resolve the case, Judge Berman issued a Decision reversing the NFL’s decision to suspend Brady for four games. The Court relied on the same factual findings in the Pash/Wells investigative report and the documents and testimony comprising the record of the arbitration proceedings:

“An arbitrator’s factual findings are generally not open to judicial challenge, and we accept the facts as the arbitrator found them”. (citing Westerbeke Com. v. Daihatsu Motor Co.. Ltd., 304 F.3d 200, 213 (2d Cir. 2002); see also Int’l Bhd. of Elec. Workers. Local 97 v. Niagara Mohawk Power Com., 143 F.3d 704, 726 (2d Cir. 1998).

The Court concluded that the facts required the arbitrator’s decision to be reversed. More frequently, arbitration decisions are upheld because of the deference given to those decisions except where there are serious doubts about the legality of the process:

“The Court is fully aware of the deference afforded to arbitral decisions, but, nevertheless, concludes that the Award should be vacated. The Award is premised upon several significant legal deficiencies, including (A) inadequate notice to Brady of both his potential discipline (four- game suspension) and his alleged misconduct; (B) denial of the opportunity for Brady to examine one of two lead investigators, namely NFL Executive Vice President and General Counsel Jeff Pash; and (C) denial of equal access to investigative files, including witness interview notes. “

The Court’s decision was anchored in three primary findings: (1)that the arbitrator failed to follow the applicable law governing the CBA; (2)the player was denied due process or law by not having notice of the reasonable consequences that would be imposed for his conduct; and (3) the player was denied reasonable access to documentation and witnesses undermined the fairness of the arbitration.

The first two of these grounds were summed up by Judge Berman as follows:

“When it is clear that the arbitrator ‘must have based his award on some body of thought, or feeling, or policy, or law that is outside the contract[] and not incorporated in it by reference … the arbitrator has failed to draw the award from the essence of the collective bargaining agreement.” In re Marine Pollution Serv.. Inc., 857 F.2d 91, 94 (2d Cir. 1988) (quoting Ethyl Corn. v. United Steelworkers, 768 F.2d 180, 184-85 (7th Cir. 1985), cert. denied I 06 S. Ct. 1184); see also Bounty-Gate, slip op. at 6 (“In other words, rightly or wrongly, a sharp change in sanctions or discipline can often be seen as arbitrary and as an impediment rather than an instrument of change.”). It is the “law of the shop” to provide professional football players with (advance) notice of prohibited conduct and of potential discipline. See. e.g., Langhorne, slip op. at 25 (“Any disciplinary program requires that individuals subject to that program understand, with reasonable certainty, what results will occur if they breach established rules.”). Because there was no notice of a four-game suspension in the circumstances presented here, Commissioner Goodell may be said to have “dispense[d] his own brand of industrial justice.” 187 Concourse Assocs., 399 F.3d at 527 (citation omitted). “When the arbitrator’s words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement ofthe award.” United Steelworkers of Am. v. Enter. Wheel & Car Com., 80S. Ct. 1358, 1361 (1960).”

Brady had been disciplined pursuant to the Competitive Integrity Policy which is provided to Chief Executives, Club Presidents, General Managers, and Head Coaches. As a player, Brady was not provided with the Competitive Integrity Policy. Brady was given a document called League Policies for Players [Player Policies]. In relation to these two policies, Judge Berman specifically noted:

“This is what the players are given. And it’s interesting. It said ‘for players.’ What is not here is the competitive integrity rule [Competitive Integrity Policy] that Mr. Wells used in his report or anything about it…and it’s clear Mr. Wells didn’t use this [Player Policies]; he used the other one [Competitive Integrity Policy] … And by the way, the fine is $5,512 for the first offense. That’s it. That’s the only notice that a player has ever had about anything regarding equipment is in the [P]layer’s [P]olic[ies]”

The Players Association argued that “[t]he basis for Brady’s punishment was the very narrow finding in the Wells Report [and reiterated in the Vincent Disciplinary Decision Letter] that [Brady] was … ‘generally aware’ of ball deflation by two members ofthe Patriots equipment staff.” The League argued that Brady’s intentional deletion of his cell phone content upon being notified of the investigation violated his obligation to cooperate with the investigation and constituted an act that went beyond “general awareness” and was a separate basis for discipline.

The Court agreed with the Players Association finding no NFL policy or precedent provided notice that a player could be disciplined, including suspended, within the meaning of the Wells Report/Vincent Disciplinary Decision Letter finding of “generally aware”.

Question [Court]:

I am not sure I understand what in the world that means, that phrase. So, it says: at least generally aware of the inappropriate activities of Mr. McNally and Jastremski involving the release of air from Patriot game balls. So, I don’t know what that is. You know, did he [Brady] know that McNally took the balls unaccompanied into the bathroom? Did he know that in the bathroom, if in fact it happened, McNally deflated the balls? Did he know that McNally then went on to the field with the balls? See Decision at p. 25

Further, the player’s duty to cooperate with a league investigation was spelled out in an updated memorandum sent on February 11, 2014 to Team Coaches and Executives by Commissioner Goodell but not to players. So with regard to the deletion of cell phone content, Judge Berman did not find a substantive violation of a rule of which the player had been put on notice.[7]

The third ground that the Court anchored its determination on was the fact that Commissioner Goodell denied Brady’s request that certain investigative documents be turned over and that he be allowed to call NFL General Counsel Jeff Pash as a witness.

The Court cited the Ray Rice case, in which the judge held that the “key elements of a ‘fundamentally fair hearing”‘ include a grievant’s ability to “present evidence and cross-examine witnesses,” and that an arbitrator should “compel(] the witnesses necessary for the hearing to be fair.” Def.’s Countercl. Ex. 166E, Ray Rice Order on Discovery and Hearing Witnesses at 1-2 (quoting Kaplan, 1996 WL 640901, at *5). Commissioner Goodell was ordered to testify in the Ray Rice arbitration with the Court concluding that “[t]o limit the available witnesses knowledgeable about the content of that meeting to the individuals the NFL is willing to produce would prevent Mr. Rice from presenting his case and runs the risk of providing an incomplete picture of the content of a meeting that both parties have identified as critical.” Id.

There was precedent for the League’s argument that arbitrators are “endowed with discretion to admit or reject evidence and determine what materials may be cumulative or irrelevant.” Abu Dhabi Inv. Auth. v. Citigroup. Inc., No. 12 Civ. 283 (GBD), 2013 WL 789642, at *8 (S.D.N.Y. Mar. 4, 2013) aft’d. 557 F. App’x 66 (2d Cir. 2014) cert. denied, 135 S. Ct. 137, 190 L. Ed. 2d 45 (2014). Nevertheless, Judge Berman found that Commissioner Goodell improvidently limited Brady’s right to due process by limiting his access to specific documents and witnesses.

ENDNOTES:

[1] Both the NFL & NBA CBA’s are notable for the multiple provisions defining various types of arbitrators. This article is limited to discipline imposed by the Commissioner or his designee for game related player conduct.

[2] “On May II, 2015, Vincent sent a (separate) “disciplinary decision” letter to Brady, stating: “The Commissioner has authorized me to inform you of the discipline that, pursuant to his authority under Article 46 of the CBA [Collective Bargaining Agreement], has been imposed on you for your role in the use of under-inflated footballs by the Patriots in this year’s AFC Championship Game. This activity represents a violation of longstanding playing rules developed to promote fairness in the game.” Vincent Letter to Brady cited at page 9 of Judge Berman’s Decision.

[3] Paragraph 15 of the standard NFL Player Contract states as follows: Player recognizes the detriment to the League and professional football that would result from impairment of public confidence in the honest and orderly conduct of NFL games or the integrity and good character of NFL players. Player therefore acknowledges his awareness that if he accepts a bribe or agrees to throw or fix an NFL game; fails to promptly report a bribe offer or an attempt to throw or fix an NFL game; bets on an NFL game; knowingly associates with gamblers or gambling activity; uses or provides other players with stimulants or other drugs for the purpose of attempting to enhance on-field performance; or is guilty of any other form of conduct reasonably judged by the League Commissioner to be detrimental to the League or professional football, the Commissioner will have the right, but only after giving Player the opportunity for a hearing at which he may be represented by counsel of his choice, to fine Player in a reasonable amount; to suspend Player for a period certain or indefinitely; and/or to terminate this contract.

[4] During the New Orleans Saints Pay-for-Performance investigation (“Bounty-Gate”), Commissioner Goodell recused himself, and appointed, as independent arbitrators, former U.S. District Judge Barbara S. Jones and former NFL Commissioner Paul J. Tagliabue

[5] Judge Berman noted in his Decision that Goodell failed to address the fact that Pash had reviewed a draft of Well’s report of investigation before it was finalized and made public.

[6] On July 29, 2015, the National Football League Players Association (“Players Association” or “Defendant”) filed a Petition to Vacate the Arbitration Award in the United States District Court for the District of Minnesota. The Minnesota matter was immediately transferred to the Southern District of New York under docket number 15 Civ 5982 by U.S. District Judge Richard H. Kyle pursuant to the”first-to-file”rule. See National Football League Players Association v. National Football League Management Council, Civ. No. 15-3168 (RHK/IHB), slip op. at 2 (D. Minn. July 30, 2015). The Minnesota district court had been favorable to the NFLPA during litigation dating to the 1980s.

[7]“Actual or suspected violations will be thoroughly and promptly investigated. Any club identifying a violation is required promptly to report the violation and give its full support and cooperation in any investigation. Failure to cooperate in an investigation shall be considered conduct detrimental to the League and will subject the offending club and responsible individual(s) to appropriate discipline” (Sec. A2 of the Game Operations Manual for Member Clubs. (2014 ed. Game Operations Manual)