“Deflategate”: The End of NFL Arbitration?

Posted on by Sam DeBaltzo

In January, the New England Patriots’ (the “Patriots”) easy victory over the Indianapolis Colts in the AFC Championship was muddled by reports that eleven of the twelve footballs used by the Patriots were underinflated.1 This controversy quickly gained fame as “Deflategate” and the NFL, following an investigation; (1) suspended quarterback Tom Brady for four games; (2) fined the Patriots $1,000,000; and (3) made the team forfeit a 2016 first-round and 2017 fourth-round selection in the NFL Draft.2

Although the Patriots as an organization chose to accept the punishment, Tom Brady and the NFL commenced an appeals and negotiation process involving arbitration supervised by NFL Commissioner Roger Goodell.3 The results of the arbitration were cast into doubt and the parties ultimately agreed to bring the decision to the Southern District of New York.4 The Court overruled the suspension and condemned the NFL’s arbitrative efforts.5

The decision to bring the arbitration decision to the Southern District seems to be a win for the players, as the common thought is that “[t]he overarching problem is a culture of winking tolerance and a lack of clear standards.”6 Specifically, the NFL has been criticized for their arbitration methods and failure to be independent.7 In comparison with other sports leagues, the NFL does not have a requirement to use neutral arbitration.8

In some past cases, the NFL has used independent arbitrators to consider the cases.9 For example, the NFL’s suspension of Ray Rice was overturned by an independent arbitrator.10 In these cases, no appeal was taken to the courts.11 This may seem to some to suggest that as long as an independent arbitrator is used, no appeal to the courts will occur. However, one of these cases included a former Commissioner as the independent arbitrator.12 In the famous Bountygate scandal, former Commissioner Paul Tagliabue overruled the NFL’s suspension of players allegedly injuring others for pay.13 Although a former Commissioner is deemed an independent arbitrator, it appears that the fact that the players won in the previous cases separate them from Deflategate.

In the case at hand, Tom Brady showed the players that litigation is a strong alternative to arbitration. As the Judge noted, the Court generally defers to an arbitrator, “[t]he defense due an arbitrator does not extend so far as to require a district court to countenance, much less confirm, an award obtained without the requisites of fairness or due process.”14 Although a legitimate legal opinion, overruling an arbitrator is recognized by courts15 and third parties16 alike as uncommon, thus making Deflategate more significant than just allowing Tom Brady to play without suspension. The rarity of court order reversals makes the decision to do so in Deflategate significant because it sets a new precedent for future sports controversies.

I fear that the ruling in Deflategate may lead to the demise of NFL arbitration. Now, instead of siding with the NFL’s arbitrators, players and teams may “follow a philosophy of ‘get as close to the cliff’s edge as you can, but don’t fall over.’”17 There is less incentive to allow the NFL to function as a private entity, thus decreasing the efficiency of corporate governance while simultaneously raising Court costs and time.

Patriot’s owner Robert Kraft may have recognized this, as he released a statement charging the NFL’s attorneys for poor arbitration efforts yet noticeably avoiding blame against Commissioner Roger Goodell.18 The continued support of the Commissioner may be a strong sign that, although the Brady case was a victory for the Patriots, Kraft wants to avoid future upheaval of the system in place.19 Time will only tell whether players fall in line with tradition, but this ruling may be the end of efficient corporate resolutions in the NFL and the beginning of a “fair” but burdensome court-guided system.

  1. Gabrielle McMillen, Report: Eleven of 12 Footballs Used by Patriots in Title Game Were Underinflated, Sporting News, Jan. 21, 2015, http://www.sportingnews.com/nfl/story/2015-01-20/super-bowl-xlix-patriots-footballs-underinflated-bill-belichick-afc-championship-cheat-spygate. ↩

  2. Gregg Rosenthal, Tom Brady Suspended 4 Games, Plans to Appeal, Around the NFL, May 12, 2015, http://www.nfl.com/news/story/0ap3000000492185/article/brady-suspended-4-games-patriots-forfeit-2016-first-rounder. ↩

  3. Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, No. 15 Civ. 5916, 2015 BL 285883, at *1, *1-18 (S.D.N.Y. Sep. 3, 2015). ↩

  4. Id. ↩

  5. Id. at *1. ↩

  6. Marrianne M. Jennings, Ethical Issues: What the Financial World Can Learn From U.S. Football, Corp. Fin. Rev., at *1, *5 (2015), available at 2015 WL 3511319. ↩

  7. Nancy Armour, Deflategate Ruling More Evidence NFL Dictatorship is Failing, USA Today, Sep. 3, 2015, http://www.topicsports.com/armour-more-evidence-nfl-dictatorship-is-failing/. ↩

  8. Nancy Armour, Despite Another Embarrassment, Roger Goodell isn’t Going Anywhere, USA Today, Sep. 3, 2015, http://www.usatoday.com/story/sports/nfl/2015/09/03/armour-deflategate-roger-goodell-tom-brady-ruling/71637784/. ↩

  9. Nat’l Football League Mgmt. Council, 2015 BL 285883, at *19-20. ↩

  10. Id. ↩

  11. Id. ↩

  12. Kevin Clark, Tom Brady Wins, NFL Loses ‘Deflategate’ Case, Wall St. J., Sep. 3, 2015, http://www.wsj.com/articles/judge-rules-against-nfl-lifts-bradys-suspension-1441290243. ↩

  13. Nat’l Football League Mgmt. Council, 2015 BL 285883, at *20. ↩

  14. Id. at *18. ↩

  15. Id. ↩

  16. See Joseph Ax & Steve Ginsburg, U.S. Judge Tosses Tom Brady’s ‘Deflategate’ NFL Suspension, Reuters, Sep. 3, 2015, available at Westlaw 9/3/15 Reuters 21:46:43 (“It is rare for a federal judge to overturn an arbitrator’s decision, in part because the legal standard is quite stringent”). ↩

  17. Jennings, supra, at *3 ↩

  18. See Cork Gaines, Robert Craft Quietly Made the First Step in Rebuilding His Relationship with Roger Goodell, Bus. Insider, Sep. 3, 2015, available at 2015 WLNR 26212626 (Kraft also quietly slipped in one comment that appears to be an attempt to deflect blame away from commissioner Roger Goodell. . . Nowhere in the entire statement does Kraft mention Goodell by name or title even though it was Goodell who handed down the punishment and ruled on the failed appeal”). ↩

  19. Id. ↩

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