NBA Lockout: The New CBA Tone a Result of Legal Tipping Point?

What a difference a week makes. At the end of last week, a three day marathon of mediation meetings appeared to be working until suddenly it wasn't. Despondency resulted and it seemed like the last best chance had been flitted away when even the mediator himself essentially said, "what's the point?"

"No useful purpose would be served by requesting the parties to continue the mediation process at this time." - George Cohen

Fast forward seven days and we suddenly have Union head Billy Hunter and NBA Commissioner David Stern cracking jokes at each other like they're a modern-day Laurel and Hardy. Furthermore, they both seem to think that a deal is within reach.

Here is my question: what changed?

Henry Abbott at Truehoop offers three suggestions:

  1. George Cohen did not get a deal, but he pushed the negotiations along;
  2. There is still a chance, despite four weeks of the season having been canceled, to preserve a complete 82 game season;
  3. Union agent and certified pitbull Jeffrey Kessler was unofficially deported by Nets owner Mikhael Prokhorov
In the art and war of negotiation battles, it is reasonable that all of these suggestions have credence. I personally find merit in #1 and #3, but less so with #2. The one thing that Cohen seemed to bring into the mix was an ability to get people to buy into his philosophy, that agreeing on some of the little things could lead everyone on a path to agree on the bigger things. Also, the presence of Kessler could have been causing the same effect that the sudden appearance of billionaire Paul Allen did; no matter what was on the table, they were not going to bend on their positions. I find #3 less compelling because we already know that both sides were ready and willing to sit out a full season in order to win the day. If their resolve on that stance was to be believed, the elimination of four weeks of basketball probably did not have (or should not have) had a great effect on things. 

At the risk of writing something that could prove to be obsolete within a matter of hours, I do wonder if the sudden changing of the game came about via a pending legal decision.
(Fair warning: most of the analysis that follows is complete conjecture on my part where, even if it is true, would probably not ever be able to be verified anyway. So in other words, it's the perfect Internet post)

If we go back in time to the month of May, you might recall that the NBPA filed a charge with the National Labor Relations Board on May 24 (and another charge on August 2) arguing that the NBA is guilty of unfair labor practices in their dealings with the Union. Subsequently, the NBA filed a complaint in the federal district court which argued, among other things, that the lockout was legal and that the players should always be considered a part of a professional union, regardless of whether they chose to decertify. In sum, the two basic legal positions were:
  1. Players - you owners are violating the tenets of good faith bargaining as defined by collective bargaining labor law;
  2. Owners - you players have to deal with this lockout, because even if you "decertify," you're still acting like a union and that's what matters

Each side chose its own home court and have been waiting to see which way the wind blows. Regardless of the direction, you can see that whichever side prevails in either of these two forums, they would immediately have leverage in these ongoing negotiations. 

Movie Time

Remember this great scene from "Return of the king?" 

Suppose, for argument's sake, that Aragorn, Gimli, and Legolas jump off the boat, they taunt the armies of Sauron, and then right at the moment that they expect their ghost army to fly out and demolish everything, they realize that, whoops, ghosts can't cross bodies of water. The three brave and noble fighters who thought they had an entire indestructible army at their command suddenly realize that, nope, there are still only three of them. It kind of kills their mojo, yes?

In a similar way, I wonder if either the NBA or NBPA got wind that perhaps the NLRB decision, rumored to be coming down very soon, would fall in their favor. Suddenly the bravado that emboldened the parties might be rendered impotent because there is no (legal) army coming to save their day. Advance knowledge of the board's decision one way or the other has the potential to create an inordinate amount of leverage that could easily convince one side to play nice. If the charge has no merit, the players have to capitulate. If the charge does have merit, then the owners are on the verge of watching their lockout crumble in federal court.

Here in brief are some of the reasons why either side might have discovered that they were going to win:

1. The Players' Case

A week ago ESPN's legal expert Lester Munson wrote at length as to why the players had a good case against the NBA. 

The players insist in their NLRB complaints that from the outset of negotiations for a new collective bargaining agreement in August 2009, the owners have been making "harsh, inflexible, and grossly regressive 'takeaway' demands." What does that mean? It means, if the union is correct, that the owners want to take back from the players major benefits that the players have struggled to achieve in negotiations going back to 1995....

The owners not only want changes in these basic structures, the players argue, but they are demanding those changes in "take it or leave it" terms without "appropriate tradeoffs." The players are describing something known in the labor world as "surface bargaining." They are saying that all of the meetings and all of the exchanges of proposals between August 2009 and June 30 of this year (when the contract expired and the lockout began) were sham maneuvers designed only to stall progress until a lockout was possible.

Munson describes the players' attack as two pronged: 1) they can argue that the lockout itself has been a sham because the owners never really intended to negotiate; or in the alternative, 2) the bargaining was done in good faith but the league took an unnecessarily harsh measure in locking out the players players, which came before the negotiation had reached an "impasse" (remember, the league could have filed an extension). 

It is important to note that in the players' corner is an NLRB that was appointed by the Obama administration, an administration that has been very kind to labor unions in the past three years. If the NLRB sides with the players and rules that the NBA did violate their duty to bargain in good faith and instituted a lockout without good cause, the board can request a federal court to issue an injunction against the lockout (a legal action called a 10(j) ). An injunction would mean that the lockout would cease to be, and that the players would have the right to go back to work. The legal elimination of the lockout would undercut the league's single most powerful negotiating chip. 

2. The Owners' Case

On the other side of the table, the owners have, according to Munson, been unusually involved and have "submitted considerable evidence to the NLRB in an effort to postpone an action that could destroy their lockout." Should the owners be worried? Three sports law professors don't seem to think so:

Gabe Feldman, Tulane Law Professor

"... it is a long shot that the NLRB will make a ruling that will have a significant impact on the result of this labor struggle. Anything is certainly possible, but it is more likely than not that the NLRB will not find that either side bargained in bad faith."

Gary Roberts, Dean of Indiana University Law School

"Labor law is absolutely 100-percent clear that strikes and lockouts are allowed without [an] impasse being reached...And the union's argument that the owners somehow failed to bargain in good faith because they made extreme demands also flies in the face of clear labor law. The duty to bargain in good faith does not undermine the right of 'freedom of contract,' a principle that says that either side is entitled to take firm and unbending substantive positions. As long as the owners are willing to keep meeting and talking, they are meeting the duty to bargain in good faith whether or not they make extreme demands and do not budge off of them. So absent some smoking gun in which owners are proven to have been bargaining with no effort to seek an agreement (which I am fairly sure does not exist) the union has little hope of prevailing on this NLRB complaint."

Roger Abrams, Northeastern University Law Professor

"I don't think the board will filed [sic] merit in either side's charge. This is tough and hard bargaining, accompanied by an employer lockout. There is no legal requirement that there be an impasse before either striking or locking out the other side. Even if the [NLRB] finds merit with the union's charge, it is most unlikely it will proceed to federal court under Section 10(j)...We are in for the long haul until someone calls 'uncle.' "

In sum, these three sports law experts argue that it does not appear that the NBA has done anything that has violated either the letter or spirit of labor law. Professor Roberts' comment in particular about the 'right to freedom of contract' is a powerful reminder that imbalanced contracts do not necessarily equate to negotiation in bad faith. Either side can reach for the moon and not be found to be dealing in bad faith. Bad faith is a legal standard, and "tough negotiating" doesn't by itself rise to the level necessary for a "good faith" violation to be found.

Conjecture

In weighing each of these sides to determine which one seems more compelling, it does seem to think that the league is in a better position. The professors' statements indicate that the league can take the Union's charges and essentially say, "yes, your claims are true, but it doesn't matter because we're allowed to do that." Labor law appears to be on the owners' side.

And yet, if this NLRB decision does somehow play into the fold of this week's change in tone, it makes more sense to think that it is the owners and not the players that are suddenly aware that they are without their (legal) army to back them up. If the players had gotten wind that the NLRB would not find favor in their charges, the biggest legal weapon in the players' arsenal would be gone. The Union would capitulate immediately.

However, that isn't the way it seems to look. A week ago, the owners were issuing ultimatums and appeared ready and willing to stand in the breach and absorb the losses in order to get their big win. In fact, David Stern himself admitted this fact earlier in the year:

"But I would tell you that most of those purchases are based on the assumption that the model will be changing."

If new owners were ready at arms years ago to take on the union in order to remake the league's business model, and at the 11th hour they had issued an ultimatum that they would not break beyond a certain point, well, the latter action certainly seems consistent with the former attitude. What is not consistent with this combative attitude is what we have seen and heard in the past few days from the owners. Their attitude changed from, "we have to have our system," to "we have to save the season." Something in them changed.

What changed?

Perhaps their legal leverage tipped.

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