Legal Fumble? Deflategate and the Law

As we enter week three of the NFL season with the Patriots a pristine 2-0 thanks to the promising work of Jimmy Garoppolo and Jacoby Brissett, it is important to remember what brought us here: the (in)famous Deflategate controversy.  We here at the BBA have decided that now is the optimal time for us to cover the legal issues at stake in the case.

For those of you who have been living under a football-shaped rock for the last 18 months, Deflategate is the controversy over Tom Brady and the New England Patriots using under-inflated footballs.  It all started on January 18, 2015, in the AFC Championship game between the Patriots and Indianapolis Colts.  About six minutes into the second quarter, Colts linebacker D’Qwell Jackson intercepted a pass from Tom Brady and carried the ball to the sideline.  He noticed that the ball felt softer than usual and inquired about the level of inflation.

This led to an investigation by the league, the results of which were released on May 6, 2015, concluding that the ball at issue, as well as all of the other Patriots’ balls in use at that game, did not meet league inflation specifications of 12.5 to 13.5 pounds per square inch (psi).  Investigators found it “more probable than not” that two Patriots equipment employees deliberately broke league rules by using a needle to deflate the balls and that Tom Brady was “at least generally aware” of their actions.  The report went on to state that the equipment personnel would not “personally and unilaterally engage in such conduct in the absence of Brady’s awareness and consent.”

On May 11, 2015, the NFL announced that it would suspend Tom Brady four games and penalize the Patriots organization by eliminating a future first- and fourth-round draft pick and issuing a $1 million fine for “violations of the NFL Policy on Integrity of the Game and Enforcement of Competitive Rules.”  A few days later, Brady and the NFL Players Association (NFLPA) filed a joint appeal of his suspension and shortly thereafter NFL Commissioner Roger Goodell announced that he would hear the appeal himself.

In late July, Goodell upheld the four-game suspension, prompting successful appeals, first by Brady and the NFLPA to the U.S. District Court, and then by the NFL to the Second Circuit Court of Appeals.  To make sense of the situation, we brought in the experts to a program at the BBA earlier this week, discussing the arbitral law behind these decisions.  Led by moderator Lou Mandarini, Segal Roitman, LLP, presenters Joseph E. Santucci Jr., Schwartz Hannum PC, arbitrator Elizabeth Neumeier, and Jasper Groner, Segal Roitman, LLP, had a spirited discussion on the law in this area and its application to what has become one of the most (in)famous cases in New England.

The one clear takeaway from our distinguished panel was that the law in this area is unique and courts are reluctant to intervene or overturn arbitrators’ decisions.  Modern labor-arbitration law was founded in the 1960s with the so-called Steelworkers Trilogy, a series of Supreme Court cases establishing that disputes between unions and employers should, if at all possible, be handled through arbitration, and that arbitrators’ decisions should be subject to great deference.  The cases lay out precedent that Courts will not overturn arbitrators’ decisions even if they disagree with the decision or contract interpretation.  This deference also extends to professional sports leagues, demonstrated most notably in 2001 in Major League Baseball Players Association v. Garvey in which the Court stated that “judicial review of a labor-arbitration decision … is very limited.”

And this deference is for good reason in organized labor, where a typical case may pit an hourly wage earner against a large corporation.  With such a great power imbalance, it makes sense for unions to push for deference to arbitrators, since appeals can present prohibitive costs for their members.  As one presenter put it, arbitration is a substitute for courts everywhere, except in labor, where it is a substitute for a strike.  Obviously, most of the parties in arbitrated labor cases do not have anywhere near the spending power of the NFLPA or Tom Brady.

Yet, despite all this supposed deference, the District Court ruled for Brady and the NFLPA, nullifying the four-game suspension.  Judge Richard M. Berman found that Brady did not receive sufficient notice of the severity of the discipline handed down in this case.  While the holding warmed the hearts of Pats fans, our panelists were in agreement that it did not comport with established case law, a trend they say is sometimes seen in District Courts, where judges may not be as well versed in how to handle appeals, especially from arbitrations.  This is not a knock on the District Courts, as our presenters went on to explain: District Court appeals from labor arbitrations are fairly rare, and increasingly so, as private-sector unions have shrunk in proportion to the overall workforce.  The practice in this area is increasingly esoteric and thus it is reasonable to expect judges and clerks to not be up to speed on the case law.

In late April 2016, a three-judge panel of the Second Circuit Court of Appeals ruled 2-1 to reinstate Brady’s four-game suspension, getting it right in the eyes of our presenters.  The Court found that Commissioner Goodell acted within his powers under the collective bargaining agreement and that he did not deprive Brady of fundamental fairness.  The Court defaulted to the proper deferential standards stating,

The basic principle driving both our analysis and our conclusion is well established: a federal court’s review of labor arbitration awards is narrowly circumscribed and highly deferential — indeed, among the most deferential in the law. Our role is not to determine whether Brady participated in a scheme to deflate footballs or whether the suspension imposed by the commissioner should have been for three games or five games or none at all.  Nor is it our role to second-guess the arbitrator’s procedural rulings.

Our obligation is limited to determining whether the arbitration proceedings and award met the minimum legal standards established by the Labor Management Relations Act.

A subsequent petition for a rehearing in the Second Circuit was denied, and on July 15, Tom Brady announced on Facebook that he had decided to accept the suspension.

So, did it all work out?  While our experts thought so, their discussion led into some Monday morning quarterbacking, pointing out a couple of weak spots in the case.  Though Brady and the NFLPA hired a veritable who’s-who of top lawyers at an estimated cost of around $5 million, commenters noted that they were short on experience dealing specifically with employment arbitration issues.  Furthermore, the NFL’s collective bargaining agreement is extremely detailed, and contains a number of articles explicitly calling for arbitrators, and at times, neutral arbitrators, to handle certain situations, such as injury grievances.  However, the article at issue here (Article 46, Commissioner Discipline) does not actually mention arbitrators or arbitration at all.  Instead, it lays out a process for handling certain disputes and “action taken against a player by the Commissioner for conduct detrimental to the integrity of, or public confidence in, the game of professional football,” such as occurred here.  The article gives the Commissioner power to appoint one or more hearing officers of his choosing.

So, was this arbitration?  Should it have been subjected to such an extreme level of deference by the courts?  The NFLPA lawyers did not even make an argument along these lines.

They also never argued about the severity of the four-game suspension, which is a common issue in sports suspension arbitrations.  Given the brevity of both the NFL regular season (only 16 games) and the average NFL player’s career (roughly 3-4 years), suspensions can have a major impact on players’ earning power.  A suspension of the length handed down here could be argued to being akin to barring a typical employee from working at their job for two-to-three prime earning years.  While it may not be the most sympathetic argument in Brady’s case, given his wealth and uncommon longevity, this sort of argument has been used effectively in similar cases in the past.

Going forward, it will be interesting to see whether this issue will become a sticking point in the NFL’s next round of collective bargaining in 2021.  Will players be willing to take a stand to decrease the Commissioner’s power in these cases and demand neutral arbitrators?  Will they be willing to take a hit in other aspects, especially economically, to have greater say in these sorts of procedures?  The debate is something to look forward to in a few years, but for now, we’ll focus on October 9, when Tom Brady is scheduled to make his return against the Browns.

– Jonathan Schreiber
Legislative and Public Policy Manager
Boston Bar Association