The NFL disagrees, but experts say the U.S. Supreme Court’s ruling today in the American Needle case could bolster the NFL Players Association in its ongoing labor negotiations with the league.
The Supreme Court ruled unanimously the league could not be considered a single entity, but rather must be treated as 32 separate competing businesses when it comes to the licensing of branded products, such as caps and jerseys. The court agreed with American Needle, an Illinois hat maker and former NFL licensee, which sued the NFL claiming the league violated antitrust laws when it gave Reebok an exclusive 10-year license for hats in 2000.
“Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned,” Justice John Paul Stevens wrote in the decision.
The Supreme Court’s decision sends the case back to the district court.
The NFL downplayed the decision.
“The decision will simply result in American Needle’s claim being sent back to the federal district court in Chicago, where the case will resume in its early stages,” the league said in a statement. “We remain confident we will ultimately prevail because the league decision about how best to promote the NFL was reasonable, pro-competitive, and entirely lawful. The Supreme Court’s decision has no bearing on collective bargaining, which is governed by labor law.”
The Players Association, however, lauded the ruling. In a statement, NFLPA Executive Director DeMaurice Smith called it, “not only a win for the players past, present and future, but a win for the fans.”
While the league says the decision has no bearing on labor negotiations, experts disagree.
Barry University law professor Marc Edelman said while bargaining is governed by labor laws not antitrust laws – if workers are represented by a union – the ruling strengthens the players' argument, if the union were to decertify and challenge the league under antitrust laws.
“If they decertify, they can’t be a union. If they decertified, the NFL would be allowed to put in place any terms they wanted,” Edelman said.
If the union decertified, and the league set wage and draft rules players didn’t like, players could challenge the league under antitrust laws. “The Players Association now has this sitting in their back pocket, the threat of decertification,” Edelman said.
Some observers suggest the decision may increase the pace of labor negotiations, which the players association says have been going slowly.
Gary I. Blackman, a partner in the sports law practice at Levenfeld Pearlstein LLC in Chicago, said in a statement that the ruling affects “all dealing by the NFL and leaves open the possibility of an antitrust claims and the scrutiny that follows in whatever it does, including in its dealings with its players. Antitrust laws have been a tool for the unions. The players union has always had the threat, for example, that it would disband and sue the league if ever it was locked out. Now, that tool is still in the toolbox."