First and Goal: How the NFL’s Personal Conduct Policy Complies with Federal Antitrust Law

Kelly M. Vaughan

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In April, 2007, National Football League (“NFL”) Commissioner Roger Goodell announced a new league-wide disciplinary policy.  The new policy attempts to address persistent criminal behavior among NFL players.

Under the NFL’s new personal conduct policy (Personal Conduct Policy or the Policy), Commissioner Goodell possesses full authority to impose a variety of penalties on players, ranging from monetary fines to “banishment from the League” for various offenses, including (but not limited to) illegal activity.  Typically, the NFL Collective Bargaining Agreement (the Collective Bargaining Agreement or the Agreement), the product of a lengthy collective bargaining process between the National Football League Players Association (NFLPA or Players’ Association) and the NFL, sets forth the policies affecting NFL players.  Nevertheless, Goodell imposed the Personal Conduct Policy upon the NFL teams unilaterally, without going through the process of amending the Collective Bargaining Agreement through a formal negotiation process.

Whether the antitrust exemption that courts afford the Collective Bargaining Agreement would apply to the Personal Conduct Policy as well is questionable because the parties did not amend the Collective Bargaining Agreement to incorporate the Personal Conduct Policy.  Circuits disagree on when to apply the nonstatutory labor exemption (the traditional exemption for collectively bargained agreements), and the Supreme Court has not expressed clear boundaries for the exemption’s application.  Absent an applicable exemption from the antitrust laws, to avoid antitrust liability the NFL would have to demonstrate that the procompetitive effects of the Personal Conduct Policy outweigh the anticompetitive effects of the Policy.

From a strictly antitrust perspective, collective action among buyers (in this case, the teams) to prevent a seller (the player) from providing services typically constitutes a group boycott, an action that the Supreme Court has traditionally found per se illegal.  However, because the NFL is a sports league structured as a joint venture, a court would likely not subject the organization to the per se rule.  Rather, a court would likely analyze the Personal Conduct Policy under a rule-of-reason analysis.

This Editorial and the full-length Note on which it is based argue that the Personal Conduct Policy should pass antitrust scrutiny, regardless of whether the nonstatutory labor exemption applies, because the NFL can present a legitimate business justification for imposing the Personal Conduct Policy collectively.

A. The National Football League

Currently, the NFL operates with thirty-two independently-owned teams located across the United States and enjoys monopoly power over the professional football market. A league constitution and bylaws govern the NFL and its member teams.  As Commissioner, Roger Goodell acts as the League’s chief executive officer and has wide-ranging oversight responsibility under the constitution and bylaws.

In 1968, the National Labor Relations Board (“NLRB”) recognized the NFLPA as the exclusive bargaining representative of all NFL players.  Consequently, the NFLPA and NFL must collectively bargain regarding employment terms such as wages, hours of employment, and working conditions.  The parties adopted the most recent Collective Bargaining Agreement in 2006.

The current Collective Bargaining Agreement does not explicitly reference the Personal Conduct Policy and specifically states that the Agreement may be amended only by written agreement.  The parties, however, did not amend the Agreement to include the Personal Conduct Policy.  In fact, the NFL adopted the Policy without any formal bargaining process, and the NFLPA never formally signed the Policy to indicate their agreement to its terms.  Although the NFLPA’s executive director at the time publicly supported the Personal Conduct Policy and Commissioner Goodell reportedly discussed the Policy with a panel of players, the Policy is not necessarily legally binding upon the NFL teams.

The Personal Conduct Policy applies to a wide breadth of activities, allows suspensions and the possibility of banishment, and gives the Commissioner the ability to suspend a player for behavior that does not result in a criminal conviction—or even criminal charges.  Additionally, the Personal Conduct Policy applies beyond just the players, as it applies to coaches, officials, and all full-time NFL employees as well.

B. Antitrust Law and Labor Law

Section One of the Sherman Antitrust Act declares that “[e]very contract, combination . . . or conspiracy, in restraint of trade or commerce among the several States . . . is declared to be illegal,” and applies to labor markets as well as product markets.1  To properly assert a Section One claim, a plaintiff must demonstrate anticompetitive harm that results from the agreement.  Additionally, the agreement must be between separate entities and affect interstate commerce.

In certain instances, however, the Supreme Court has determined that particular conduct is so harmful that it is considered per se illegal.  A group refusal to deal, also known as a boycott, is typically per se illegal; however, in National Collegiate Athletic Association v. Board of Regents of University of Oklahoma, the Supreme Court held that the per se rule should not apply to league sports because “horizontal restraints on competition are essential if the product is to be available at all.”2  Consequently, a court assessing a Section One case against the NFL would almost certainly not apply a per se analysis.

Instead, a court would apply a rule-of-reason analysis where the plaintiff must establish a prima facie case by demonstrating the harmful anticompetitive effects of the defendant’s conduct.  Common elements necessary to establish a prima facie case include (1) a showing of market power, (2) net anticompetitive effects, and (3) anticompetitive harm.  If a plaintiff establishes a prima facie case, the burden then shifts to the defendant to justify its actions by showing a procompetitive justification, meaning that the restraint actually encourages competition within the defined market.  Alleged justifications that purport to restrict competition in the public’s interest or for social welfare reasons are inadequate defenses under antitrust analysis.

A fundamental tension exists between antitrust law, which forbids any agreement among competitors that unreasonably lessens competition, and labor law, which condones potentially anticompetitive agreements that are conducive to harmony within an industry.  Consequently, Congress and the courts have established a framework to determine when antitrust liability is appropriate.

The antitrust laws are of particularly questionable efficacy in the area of collective bargaining.  National labor policy favors free and private collective bargaining to promote workers’ ability to organize their collective power in their best interest.  As a result of this policy decision, the Supreme Court has implied an exception from the antitrust laws, known as the nonstatutory labor exemption, in order to accommodate and encourage the collective bargaining process.  As a result of this exemption, courts often hold that terms that parties incorporate into a valid collective bargaining agreement fall outside the scope of antitrust liability.

Despite articulating guiding principles, the Supreme Court has never articulated precise boundaries regarding when courts should apply the nonstatutory labor exemption.  As a result, the various circuit courts have developed their own tests to determine when to apply the nonstatutory labor exemption to industries that engage in collective bargaining.  In Mackey v. National Football League, the Eighth Circuit set forth a three-part test, determining that the nonstatutory labor exemption would apply to an alleged restraint on trade where: (1) “the restraint on trade primarily affects only the parties to the collective bargaining relationship;” (2) “the agreement sought to be exempted concerns a mandatory subject of collective bargaining;” and (3) “the agreement sought to be exempted is the product of bona fide arm’s-length bargaining.”3  Under the Mackey test, a defendant must satisfy all three conditions in order for the exemption to apply.

In Clarett v. National Football League,4 however, the Second Circuit expressly declined to adopt the Mackey test and applied a much more open-ended standard.  The court looked at a variety of factors to determine “whether subjecting the NFL’s eligibility rules to antitrust scrutiny would ‘subvert fundamental principles of our federal labor policy.’” 5  Ultimately, the court held that the nonstatutory labor exemption could apply to the eligibility rules despite the fact that the rules were mandatory bargaining subjects and may affect prospective players who were not a party to the agreement.  The court did not consider the fact that the rules were not adopted through the collective bargaining process to be dispositive, as the rules were in the NFL Constitution and were well known to the NFLPA during the negotiation period.

C. Applying the Rule of Reason to the Personal Conduct Policy

To apply Section One, a court must find that an agreement exists between separate entities and that the agreement affects interstate commerce.  The Personal Conduct Policy constitutes an agreement among multiple entities—the thirty-two independently-owned NFL teams—to adhere to the disciplinary sanction that the NFL Commissioner decided upon and imposed.  Additionally, courts have long held that professional sports leagues, including the NFL, engage in interstate commerce.

The agreement also must not be exempt from the antitrust laws for other policy reasons.  Despite the circuit split regarding the application of the nonstatutory labor exemption, under both prevailing tests, a court likely would not apply an exemption to the Personal Conduct Policy.

Given previous application of the Mackey test, it is extremely unlikely that a court using this test would find the NFL’s Personal Conduct Policy to be the result of bona fide arm’s-length bargaining, because the NFL Commissioner unilaterally imposed the Personal Conduct Policy without engaging in any type of collective bargaining process and without amending the Collective Bargaining Agreement to include the Policy.

Additionally, the NFL’s Personal Conduct Policy affects a large number of people outside the collective bargaining relationship between the NFL and the NFLPA, including coaches, owners, and officials.  Accordingly, given that the Personal Conduct Policy fails to meet two separate factors of the Mackey test,a court applying this test is unlikely to apply the nonstatutory labor exemption to the Personal Conduct Policy.

Similarly, the Second Circuit would also likely determine that the nonstatutory labor exemption does not apply to the Personal Conduct Policy.  Although the Personal Conduct Policy probably constitutes a mandatory subject of collective bargaining, the court is unlikely to consider this fact sufficient to apply the nonstatutory labor exemption.  Unlike in Clarett, where the NFLPA knew of the eligibility rules during the collective bargaining process, the Personal Conduct Policy in its current form did not even exist during the last round of collective bargaining negotiations, and, consequently, the Players’ Association could not force collective bargaining on the issue if it felt negotiations were necessary.  Finally, in contrast to the eligibility rules, which are in the NFL Constitution and Bylaws, the Personal Conduct Policy is an entirely separate document that the Commissioner unilaterally imposed.  Neither the NFLPA nor the NFL teams formally assented to the Personal Conduct Policy.  Given the significant differences in the underlying facts that distinguish the Personal Conduct Policy from the situation surrounding the eligibility rules, it is likely that, after applying the Clarett test, the Second Circuit would determine that the nonstatutory labor exemption should not apply to the Personal Conduct Policy.

After disposing of these threshold issues, a court examining the Personal Conduct Policy would apply a rule-of-reason analysis to determine whether the Policy violates antitrust law.  Under a rule-of-reason analysis, a plaintiff would have to establish a prima facie case by demonstrating that the NFL teams have market power and that the teams’ agreement regarding the Personal Conduct Policy has a net anticompetitive effect on the market.  Here, the relevant market would probably be the labor market for professional football within the United States, and a potential plaintiff could easily demonstrate the NFL’s market power, as the NFL is the only elite employer of professional football players (in this context elite means highest grossing and most capable of paying high salaries) in the United States and, consequently, has monopoly power over the relevant market.

Next, a plaintiff would have to show anticompetitive harm resulting from the Personal Conduct Policy.  Given the Commissioner’s ability to suspend or banish a player from the NFL, a plaintiff may allege that the Personal Conduct Policy harms competition by preventing otherwise capable players from participating in professional football.  Additionally, a plaintiff could argue that by preventing eligible players from performing the service of competing in professional football games, the NFL teams essentially exclude an eligible seller from the market.  Finally, a plaintiff could note that a player’s suspension harms consumers by restricting their ability to express a choice in which players to support and by lessening the quality of the service provided.

After a plaintiff sets forth a prima facie case, the NFL must demonstrate that the procompetitive effects of the Personal Conduct Policy outweigh the potentially anticompetitive effects, which would require that the NFL show that the Personal Conduct Policy actually improves economic competition within the professional football labor market.  The NFL may justify the Personal Conduct Policy by arguing that, to protect the viability of the joint venture, the teams that make up the league must be able to collectively impose a meaningful disciplinary policy. Without collective agreement regarding the disciplinary policy, the purpose and effect of the policy would be diminished, as no individual team would have any incentive to adhere to the limitations of the suspension due to the risk of competitive players signing with competing teams.  Although the law requires typical competitors to make this type of decision individually, it does not require entities engaged in a joint venture to risk their own success on their partner’s cooperation.  Consequently, a court should find that the procompetitive effect of allowing the NFL to set disciplinary rules collectively in order to ensure that the product of professional football remains viable outweighs the anticompetitive effect on the few individuals who face commissioner suspensions or other disciplinary measures.


Kelly M. Vaughan is a 2011 J.D. Candidate at Cornell Law School.

This editorial is based on Ms. Vaughan’s Note: Kelly M. Vaughan, Note, First and Goal: How the NFL’s Personal Conduct Policy Complies with Federal Antitrust Law, 96 CORNELL L. REV. __ (forthcoming 2011).

Copyright © 2011 Cornell Law Review.

  1. See 15 U.S.C. § 1 (2004).
  2. 468 U.S. 85 100–01 (1984).
  3. Mackey v. Nat’l Football League, 543 F.2d 606, 613 (8th Cir. 1976).
  4. Clarett v. Nat’l Football League, 369 F.3d 124, 138 (2d Cir. 2004).
  5. See id. at 138 (quoting Wood v. Nat’l Basketball Ass’n, 809 F.2d 954, 959 (2d Cir. 1987).


  • I would check your last paragraph again. You acknowledge that the pro-competitive effect has to be economic in nature, and then provide a non economic effect (viability of the league). Equal competition on the field between teams has been denied several times as a pro-competitive justification. The PCP does have the effect of group boycotting certain players.

    Posted by carlpr, 07.26.11 

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