Category Archives: NBPA

NBA Fans And Corporate Sponsors Hold The Greatest Power To Punish Donald Sterling

Yesterday, TMZ disseminated a recording</a> that allegedly contained Los Angeles Clippers owner, Donald Sterling, making racist comments about African-Americans. In the wake of the recording’s dissemination, NBA players, civil rights leaders and President Barack Obama have shared their disgust over the recording’s comments and have called for the NBA to take action against Sterling. In response to the recording, NBA commissioner Adam Silver held a press conference and indicated that an investigation into the recording is ongoing and that all sides will be afforded due process. While the NBA holds power to levy serious sanctions against Sterling should its investigation reveal the voice on the recording is his, for the time being, fans and corporate sponsors hold the greatest power to punish Sterling.

As noted above, the NBA has power to sanction Sterling should the voice on the recording belong to him. This ability is held in the commissioner’s “best interest of the game” power. Utilizing that power, Silver can institute investigations and subsequently levy sanctions into matters that affect the best interests of the game. However, it is unlikely that this power would be utilized to directly remove Sterling from his position as an NBA owner. That is because other documents, specifically the NBA franchise agreement, constitution and bylaws, govern that ability. While those documents are confidential, the league can reportedly only remove</a> an owner from his post if the team is embroiled in serious financial difficulties.

Thus, if the NBA’s investigation reveals that the voice on the recording is Sterling’s, it is likely that Silver will issue a combination of a fine and a suspension against Sterling. While Silver could issue a lengthy enough suspension to effectively motivate the 81-year-old Sterling to sell the team, doing so could invoke a legal challenge by Sterling. This legal challenge would likely arise, because Sterling would assert that because he has never been suspended by the NBA before, a suspension exceeding one season would be arbitrary and capricious.

Along with calling for the NBA to remove Sterling as an owner, others have called for the Clippers to refuse to play. While Clippers head coach Doc Rivers has indicated that the team has decided not to do this, the question remains whether the team legally could. Arguably, sitting out from a game would amount to a strike by Clippers players, as they would be boycotting their working conditions under Sterling. However, under the collective bargaining agreement the National Basketball Players Association signed with the NBA in 2011, strikes during the term of the collective bargaining agreement are not allowed. Thus, sitting out a game would violate the terms of the collective bargaining agreement and could open up the players to a labor law claim and also a breach of contract lawsuit.

Yet, another body of law arguably paves a way for the players to legally sit out from play. That is Title VII of the Civil Rights Act. Title VII grants employees the right to sit out from work to boycott an employer’s discriminatory practices. Arguably, Sterling’s conduct and a subsequent refusal to work by Clippers players would fall within the realm of Title VII. However, due to the collective bargaining and contractual issues discussed above, Sterling would likely wage a legal battle should players sit out of a game. Thus, it would be up to a court to decide whether players were within their legal right to not play. Given the legal intricacies of players sitting out from play, it is not a path they are likely to choose.

Given the legal issues limiting the message the NBA and its players can send to Sterling regarding his alleged racist comments, fans hold the greatest power in sending him a strong enough message that such speech will not be tolerated.  Forbes valued the Clippers</a> at $575 million in 2014. That valuation came after Sterling purchased the team for a mere $12 million some 33-years earlier. Thus, the Clippers are a team that fans, corporate sponsors and television broadcast network partners have built into a financial success through their ticket and merchandise purchases, partnership contracts and lucrative television broadcast contracts.

To send the greatest message to Sterling, fans should take a page out of the playbook of the 1960s Civil Rights Movement, which organized boycotts of companies that engaged in discriminatory behavior. The thought behind such movements is to hurt the companies’ bottom line so that they are pushed into adopting acceptable race relations practices. While sitting at home for the remainder of the playoffs will likely not be a strong enough move for fans to hit Sterling and the Clippers’ bottom line, over time, fans’ refusal to attend Clippers games will hurt the team’s bottom line. Additionally, the Clippers’ corporate sponsors should consider pulling their money from the team after reviewing their contracts, which likely include a morals clause. Finally, the team’s television broadcasting networks should consider similar action.

When news of Sterling’s alleged comments arose yesterday, many people cried out and said the comments were part of a pattern of behavior that has been ongoing for decades. Perhaps now is the time to end that behavior. If the NBA and its players are limited in how they can end the behavior, the power lies in the people and corporate entities who have helped line Sterling’s pockets. These individuals and corporations must pull back their monetary support of the team until Sterling not only issues an apology, but demonstrates that he has completely changed his beliefs and feelings towards people of races other than his.

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Job Opening: Executive Director, National Basketball Players Association

By:  Todd Burach, Ruling Sports Contributor (Twitter:  @ToddBurach)

By most accounts, LeBron James took over the decisive National Basketball Players Association Meeting at All Star Weekend in Houston as he would the fourth quarter of a playoff game. You can imagine the familiar look in his eye as if to say ‘this game has gone on too long, and I’m about to end it.’ On Saturday, February 16, in the middle of a successful showcase weekend for the NBA, twenty-four player representatives voted without dissent to remove Billy Hunter from his position as Executive Director of the NBPA. According to the NY Times, LeBron, along with respected veteran Jerry Stackhouse, “literally drove the discussion and rallied the players to make the change.” [1] In business, as in basketball, just give the ball to LeBron and get out of his way.

The vote to dismiss Hunter came in response to the findings of an independent internal investigation of the NBPA by the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. While the report clearly states that the findings of the investigation do not show that Hunter engaged in criminal acts, the report found “the facts do show that, at times, Hunter’s actions were inconsistent with his fiduciary obligations to put the interest of the Union above his personal interest.” [2]  The referenced actions include not obtaining proper approval under the Union’s By-Laws for his current contract, receiving a $1.3 million payout for unused vacation time without adequate review, employing and contracting with several family members without full disclosure as well as the disinterested approval of Union leadership, and creating an atmosphere that discouraged challenges to his authority. The findings go on to list further actions including questionable investments, curious expenses, and failure to observe proper governance. Hunter and his representation have released a formal response to the Paul, Weis report, challenging many of the findings, and a legal battle is likely to ensue.

For the players, finding a replacement for Hunter is shaping up to be no easy task. It’s not that Hunter was so skilled and adept at his former post (in fact, the evidence would argue quite the contrary), the difficulty lies in the fact that a successful tenure as Executive Director of the NBPA requires an immensely diverse skill set. The individual must be well versed in labor law, seasoned at growing revenue for a global corporation, in tune with protecting the individual well-being of its members, while at the same time able to protect the collective interest of the whole. The role’s demanding requirements are analogous to LeBron’s role on a basketball court. His ability to score, rebound, assist, and play all-league defense led the Miami Heat to the 2012 NBA title. The players need to find an individual capable of wearing many hats, and given the demanding job requirements, the list of potential candidates has been sparse. David Falk, the long time agent for Michael Jordan, avowed, “If you offered me a billion dollars a year to do the job, I have no interest in doing it.”[3]  A source close to Donald Fehr, the current Executive Director of the NHLPA with a successful prior run as Executive Director of the MLBPA on his resume, quickly shot down his candidacy, saying he “has absolutely no plans to leave the NHLPA.”[4] Kevin Johnson, former NBA point guard and current Mayor of Sacramento, who is admirably fighting to keep the Kings in California, has been mentioned, however his second term as Mayor is not up until 2016[5].

Nearly a month removed from the decisive decision during All Star Weekend to replace Hunter, the search marches on for the Union’s next head. The players need someone to immediately reestablish credibility and a sense of order, then focus on growing the game, protecting their interests, and showing up at the next round of CBA negotiations better prepared. After the LeBron led meeting inHouston, many could argue that the proverbial ball of responsibility for ensuring that the right hire is made rests squarely in the King’s court. James has shown the ability to empower the players and has the prominence to get qualified potential candidates to listen. Heck, if LeBron called a certain someone at1600 Pennsylvania Avenue, I bet the man on the other end would at least pick up the phone, if only to appease the King.  With the direction of his league’sUnion in flux, it’s that point in the game where LeBron needs to call for the rock, give the look, and finish the play.

[1] “NBA Players Dismiss Union Leader” by Howard Beck. The New York Times, February, 16, 2013.

[2] “Report to the Special Committee of the National Basketball Players Association Concerning the Leadership and Business Practices of the NBPA: Executive Summary.” Page 1.

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Which Team Will Sign Dwight Howard?

By:  Richard Braun, Ruling Sports Intern (Twitter:  @RicBraun)

When the Nets traded for Joe Johnson last night, Dwight Howard’s desire to move to Brooklyn took a major hit. As a result, if he wants to maximize his future earnings, Howard is going to need to be open-minded about his future home.

Howard’s next contract will almost certainly be for the maximum salary allowed under the NBA collective bargaining agreement, which for him starts at $15.5 million in the first year of the contract. However, under the new CBA, players who re-sign with the team who owns their Bird Rights can get a maximum of a five year deal with 7.5% annual raises. A free agent, on the other hand, can only get a four year deal with 4.5% annual raises. Any team Howard is traded to gets his Bird Rights, which is why he has such a vested interest in where Orlando trades him – wherever he gets traded to can offer him significantly more money than anyone else. By forcing Orlando to trade him where he wants to go, he is trying to have his cake and eat it too.

His dream of going to Brooklyn, however, now appears unlikely of ever becoming a reality. Even though the Nets and Magic have engaged in trade talks that would send Brook Lopez and filler to Orlando for Howard, the Magic can get better deals elsewhere. Houston, Atlanta, and both Los Angeles teams can all offer much better deals for the Magic than Brooklyn can. And given the falling out Howard has had with the Orlando front office this past year, they are unlikely to do him any favors. And because of last night’s Joe Johnson trade, New Jersey no longer has any cap flexibility going forward, and would not be able to sign Howard as a free agent for anything more than the Mid-Level Exception.

This leaves Howard with two options – play out the season in Orlando and sign elsewhere in the offseason, hoping that Orlando agrees to a sign-and-trade so he can get the 5 year deal, or agree to sign an extension with whatever team he is traded to. If he isn’t traded, he stands to lose around $40 million for the life of the contract because of the lower annual raises and the shorter term deal.

Atlanta in particular now seems to offer Howard more than he originally thought was possible. After shedding the contracts of both Joe Johnson and Marvin Williams (sent to Utah for the expiring contract of PG Devin Harris), Atlanta is now loaded with enough cap space to make a run at two big time free agents next offseason. Not only is Howard potentially a free agent next offseason, but so is Chris Paul. Atlanta doesn’t need to wait that long, however. They could offer all-star big man Al Horford in a deal, which would trump just about any deal any team can offer. Horford has five years left on a deal that pays him $12 million annually, so Orlando could build around him for the long term. Atlanta could throw in promising PG Jeff Teague in a deal as well, and likely would need too in order to make salaries match up (as a non-luxury tax paying team, if Atlanta sends out less than $19.6 million in outgoing salary, they can bring back in that amount plus $5 million). The fact that Atlanta is Howard’s hometown is just icing on the cake. A Dwight Howard-Josh Smith tandem on the court would certainly be a menace defensively, and Atlanta would then be a major player in free agency in 2013.

Houston can also make a better offer than the Nets, and they appear willing to do so despite Howard’s refusal to agree to an extension there. Houston has six first round picks from the past three years, plus PG Kyle Lowry and the expiring contract of SG Kevin Martin. It makes for a decent offer, and certainly would be a better package than what the Cavs and Raptors got in return for their exiting superstars. If Howard was unwilling to resign in Houston, however, it would result in him passing up on a 5th year in his contract and the higher annual raises. He would be dependent on Houston agreeing to a sign-and-trade that would allow him play wherever he wants to play but still get his big contract.

Dallas is another team that has reportedly been on the fabled Howard “wish list”, but like Brooklyn they can offer very little. Dallas could sit on their cap space for one more year and hope Howard signs there as a free agent next offseason, but they risk coming away with nothing in that scenario. And again, Howard would be accepting less money, short of a sign-and-trade.

A sign-and-trade next offseason for Howard, whether he stays in Orlando or is traded to a place he doesn’t want to be long term, is a tricky proposition for him. A sign-and-trade occurs when a player signs with the team that owns his Bird Rights, but he is then traded immediately to another team. The benefit to the player is that he gets a bigger contract than he may have if he had just signed with a team as a free agent. The team, meanwhile, gets something in return in the trade, which usually isn’t much more than a trade exception but is better than nothing. A team gets a trade exception (TPE) when they trade a player into another teams cap space and does not get equal salary in return. You get one year from the date of the trade to use the TPE. Cleveland and Toronto both got trade exceptions when LeBron James and Chris Bosh were sent to Miami, but neither team used them. In fact, usually teams don’t use the TPEs when they get them – the Lakers had one after trading Lamar Odom last off-season, but have yet to use it and likely won’t. What this means for Howard is that he will be at the mercy of whatever team owns his Bird Rights – they could easily decide it is not worth it for them to get the TPE, and just let Howard walk.

All of this leaves Howard in a sticky situation unless he opens his mind about his future home. By overplaying his hand and being stubborn with his demand to go to Brooklyn, he risks missing out on the max contract he can earn. By agreeing to go to Houston or Atlanta, he will be making it much easier for Orlando to trade him and will guarantee him a massive contract extension.

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Former NBPA Executive Director Charles Grantham’s Analysis of the New NBA Collective Bargaining Agreement

From 1988-95, Charles Grantham served as the first executive director of the NBPA.  Grantham rose to the ranks of executive director after beginning work with the NBPA upon completing his MBA at the Wharton School at the University of Pennsylvania.  Prior to holding the position of executive director, Grantham served as the NBPA’s vice president of marketing and administration and executive vice president.  The vast roles that Grantham held at the NBPA provided him with extensive insight into the inner-workings of one of the nation’s most recognized labor unions.  As the Miami Heat and Oklahoma City Thunder face off in the 2012 NBA Finals after a shortened season caused by a labor dispute, Ruling Sports asked Grantham to provide his assessment of the labor deal that the NBA and NBPA struck in December 2011.

When asked to assess the deal that the NBPA was able to obtain for players in the new collective bargaining agreement, Grantham noted that when an employer locks employees out during the course of labor negotiations, the bargaining power shifts in such a way, that most of what the union can obtain for employees will not necessarily be characterized as “good.”  Grantham explained, “When you’re in the environment of a lockout, most if it will not be good.  It’s really about maintaining what you have.  At the end of the lockout, you look at how much you were able to keep and what you had to give away.” 

Given the negotiation predicament a union is placed in when management locks employees out, Grantham strongly suggests that unions work to fully negotiate a new collective bargaining agreement prior to the expiration of the collective bargaining agreement that is in place.  If completing a new agreement is impossible, Grantham  believes that the union should agree to extend the in-place collective bargaining agreement for one year, with the hope that a new collective bargaining agreement will be adopted during that time and a lockout or strike can be prevented.

Grantham’s basis for strongly suggesting that the NBPA work to enter into a new collective bargaining agreement or extend the term of an in-place collective bargaining agreement to prevent a lockout is based largely upon the career span of NBA players.  Reports indicate that the average career length of an NBA player is 4.8 years.  Given this, NBA players have a short time frame upon which they can capitalize upon their talents and secure enough financial resources to keep them financially afloat for a lifetime.  Missing games due to strikes or lockouts caused in part by the NBPA’s inability to negotiate a new labor agreement with the NBA, can substantially affect an NBA player’s earnings potential.  Thus, when the NBPA fails to reach an agreement with the NBA before a collective bargaining agreement expires, Grantham says that the union must ask itself, “For what reason may players lose some portion of their salary?”

In the case of the new collective bargaining agreement that the NBPA entered into with the NBA, Grantham does not believe that reason enough existed for the players to lose a portion of their salary as a result of the lockout which shortened the 2011-12 NBA season.  “What did you get in return for the lockout?  I don’t see much that was gained by the NBPA in the lockout.  In the long-term, they got a ten-year deal with an out after six years.  They lost 20 percent of their salary for what?  They came into an abbreviated season, and because the number of games was reduced, there’s the question of whether injuries could have been prevented through training camps and the number of games.  I just can’t put my arms around what the lockout gained for the players.  I know what it gained for management.” Grantham said.

Given Grantham’s belief that the NBPA should strive to adjust its position in labor negotiations in a way to prevent players from missing games, how then does the executive director of the NBPA prepare players for labor negotiations?  According to Grantham, “The biggest component is getting the players mentally prepared for what these negotiations are about.  These are business negotiations; too often, we get bogged down in the legality of the negotiations.  We’re looking at an ever-growing economic pie.  What percentage of that pie do we perceive as being equitable and the players entitled to as the league’s performers?  You really should be preparing them for negotiations five to six years out from when the negotiations begin.  Timing is everything.  There are some things that you have to build in to get the players to understand the value of the union’s representation.  If you tell them that there is a collective bargaining agreement process every few years, and that everything that their life revolves around is contained in that collective bargaining agreement, then you can get them involved.  It takes the players’ support to make the union effective.  ”

One way to get players involved in the collective bargaining agreement negotiation process is to educate them upon the processes’ importance in their ability to collect lucrative salaries.  According to Grantham, “What a player has to understand, is that there were hundreds of players before him that fought through this process and enabled him to negotiate a fair share of the NBA’s revenue, so that he could enjoy a six-year, $50 million contract.”

While the most recent NBA lockout largely centered upon the NBA and NBPA’s negotiations over the percentage of revenue players would receive, Grantham believes that in going forward, the NBPA must begin finding leverage for itself by negotiating what he calls “quality of life issues.”  Grantham detailed this notion by explaining, “What’s harming most of our athletes today?  Dementia, mental incapacitation, the inability to maintain financial footing, making transitions after retirement and suicide.  For the first time, you can see that the real issues facing athletes are quality of life issues.  The real issues facing athletes today aren’t necessarily their salaries.  These are all things that unions can take a leadership position in, and a lot of it starts with collective bargaining agreement negotiation.  As salaries start to rise, and revenues continue to, quality of life issues are much easier for the union to obtain during negotiations.”

Finally, if the NBPA is unable to prevent the NBA from locking out players in the future due to stalled labor negotiations, Grantham believes that the union must find a way to circumvent a lockout other than decertification of the union.  Grantham noted, “There was a time that decertification worked, and that was many years ago.  It was before the legal system caught up with the system whereby a union would decertify itself to put more antitrust scrutiny on management.  Back then, the application of decertification was so new, that the machinery wasn’t tuned and the court couldn’t figure out that this was a maneuver.  More recently though, the courts have adjusted.  Ultimately, we all knew when the agreement expired that we would be facing a lockout.  The problem though, is what happens to the players in the meantime?  The NBPA could say, ‘We’ve got this lawsuit going which will allow the guys to keep working.’  That would be great, but that is not the way that the system works.  As a strategic plan, I no longer see the value of decertifying.  If anything, it was demonstrated in the recent NFL and NBA labor negotiations that the unions need to re-think that strategy going forward.”

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NBA Suspensions and Appeals

Nearly eight years ago, while playing for the Indiana Pacers, Ron Artest was handed the longest suspension in NBA history for his part in the “Malice in the Palace” brawl between the Pacers and the Detroit Pistons.  As a result of that suspension, Artest missed a total of 86 games.  Yesterday, Artest who recently changed his name to Metta World Peace, was ejected from the game between the Los Angeles Lakers and Oklahoma City Thunder, after elbowing the Thunders’ James Harden in the face.  World Peace’s actions yesterday clearly give rise to a suspension.  The real question, however, is how long he will be suspended, and what action he can take if the suspension is lengthy.

The NBA’s constitution grants NBA commissioner David Stern the right to assess fines or suspensions for a variety of reasons, including “conduct on the playing court” and “action taken. . . concerning the preservation of the integrity of. . . the game of basketball.”  Stern can issue fines or suspensions without much recourse by teams, players or the NBPA, so long as the fine is less than $50,000.00 and the suspension is for less than 12 games.  This is because, appeals to punishments of less than $50,000.00 or 12 games are heard by Stern.  Clearly, Stern has little reason to overturn his own sanctions.  As such, a player fined less than $50,000.00 or hit with a suspension of less than 12 games can plan on paying the fine or serving the suspension.

However, if and when Stern issues penalties above these thresholds, teams, players and the NBPA may file a grievance.  This grievance is not heard by Stern, but rather, by the NBA and NBPA’s grievance arbitrator.  In a sense, this is beneficial to the player or team opposing the NBA’s sanctions, as they are able to tell their side of the story to an unbiased third-party.  The hope for the player and team in doing this, is that the grievance arbitrator will completely do away with the punishment imposed by Stern, or severely decrease it.

In order to bring a grievance, several procedural items must be followed.  First, the grievance must be discussed with the party against whom the grievance is being brought against.  This is required with the hope that the parties will be able to settle their dispute before taking it to the arbitrator.  While in some cases this preliminary conversation may lead to a settlement of the dispute, it is again unlikely that Stern would change course and reduce his sanctions.

If the parties are unsuccessful in settling their dispute, then the team, player or NBPA may file written notice of the grievance with the NBPA.  At this point, the portion of the player’s salary that he is losing due to a suspension, or the amount of his fine, is placed in an interest-bearing account until the conclusion of the grievance process.  Ultimately, the parties meet at either the NBA or NBPA’s offices in New York City and the grievance arbitrator hears each side’s case.  Thereafter, a ruling is issued and the player’s fine or suspension is either upheld, modified or thrown out.

While no player wishes for a high fine or lengthy suspension, the benefit of either is that he receives the opportunity to present his case to a neutral third-party.  In this instance, World Peace maintains that his elbowing of Harden’s face was unintentional.  However, the game’s referees, the public at-large and numerous sports pundits seem to think otherwise.  Given World Peace’s history, along with a general outcry against contact in sports which may cause concussions, it is possible that Stern may levy a hefty punishment against World Peace.  If such action is taken, expect World Peace, the Lakers and/or the NBPA to challenge the sanction through the process outlined above.

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An Uneventful Start: The Beginning of the NBA Free Agent Contact Period

For many NBA fans, the news which came at the end of Thanksgiving weekend that the NBA and players had reached a tentative settlement agreement to the antitrust litigation filed by Carmelo Anthony and others, was likely the whipped cream on the pumpkin pie.  In other words, it was good news.

While all signs point to a new collective bargaining agreement being reached later this week and training camp opening soon thereafter, one annual NBA off-season event will likely be met with less fanfare than normal.

That event is the beginning of the free agency contact period.  Set to tip-off at 10:00 a.m. EST today, NBA teams can begin contacting free agents to work toward signing them to new contracts with their team.

While there is much speculation about which free agents will land where, today’s kick-off of this period will likely be less eventful than normal.

This is due to the fact that as noted above, a new collective bargaining agreement has not been finalized.  Thus, while teams largely have a sense of what the NBA’s new economic structure will look like, they cannot be entirely certain of what the final economic rulebook for teams will look like once the new agreement is adopted.  It would not be advisable for teams to begin negotiating with free agents without being fully aware of how much they can offer them salary-wise under the new collective bargaining agreement.  Therefore, other than for courting purposes, it does not make sense for teams to begin seeking out free agents until the new collective bargaining agreement is finalized and they know how their salary structure fits under the new salary cap and luxury tax system.

Thus, while news that teams can begin contacting free agents today is a positive reminder that fans are one step closer to seeing a season, fans should not expect a signing frenzy, or for their favorite players to hold hour-long press conferences to announce their decision as to which team they’ll be joining for the protracted 2011-12 NBA season.

However, once the new collective bargaining agreement is signed, diehard NBA fans should plan on refreshing their favorite sports news website frequently, as a flurry of free agency deals will likely be signed shortly thereafter in order to prepare for the start of NBA training camp on December 9, 2011.

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Next Steps: The NBPA’s Disclaimer of Interest

In the early days of the NBA lockout, NBA Commissioner David Stern referred to the possible decertification of the NBPA as a union as the “nuclear decision.”

Yesterday, after the NBA asserted that it was finished negotiating, players and NBPA representatives reviewed the most recent deal presented to them.  The players rejected the deal.  Subsequently, the NBPA disclaimed its interest as the players’ union.  Stern then announced that this season is the “nuclear winter.”

While the NBPA’s disclaimer of interest by no means signals the start of an all-out nuclear war, or even a unresolvable negotiating battle, there are several things to take into consideration given this new negotiation strategy.

Disclaimer of Interest versus Decertification

It is important to note that the NBPA disclaimed its interest as a labor union.  In turn, the NBA players did not decertify the NBPA as their union.

While the differences are slight, both actions ultimately end in the same result (namely, that the NBPA is no longer a functioning labor union representing the interests of NBA players in disputes with the NBA).  The main differences between a disclaimer of interest and decertification are which party pulls the plug on the union and how long it takes to pull that plug.

With disclaimer of interest, the union essentially indicates that it will no longer represent the employees (here, the players) in labor issues.  In terms of disbanding a union, disclaimer of interest is a quicker process, as union members do not have to vote to effectuate it.  Rather, as the trade association formerly known as the NBPA pointed out in its letter to players, only the NBPA executive committee and player representatives were required to vote to authorize the NBPA’s disclaimer of interest.

Decertification results when players vote to disband the union so that it no longer represents their interests in labor disputes.  Decertification requires that a vote of the employees take place before the National Labor Relations Board.  Thus, this requires more time and logistics than disclaiming the union’s interest.

Unleash the Lawyers:  The Antitrust Lawsuit

While both sides were likely highly advised by their respective outside legal counsel in earlier negotiations, the role of lawyers will only become greater now that the NBPA has disclaimed its interest.

Since the NBPA has disclaimed its interest, it cannot negotiate with the NBA on behalf of players.

Thus, the next move in this chess game will be for lawyers to file an antitrust lawsuit on behalf of the players.  This lawsuit will likely be a class action lawsuit, where the class will be defined as all NBA players.  However, it will likely have several named players representing various interest groups of NBA players, like the lawsuit filed on behalf of NFL players like Tom Brady, Drew Brees, Vincent Jackson and Von Miller against the NFL.

In order to ultimately wind up the dispute between the NBA and players, the antitrust lawsuit will need to be settled.  This settlement will be negotiated between each side’s respective lawyers, and as noted above, the trade association now known as the NBPA will not be involved in those negotiations.

Likely, the settlement will call for the end of the owners’  lockout of the NBA players.  The settlement of the antitrust lawsuit in and of itself will not lead to a new collective bargaining agreement, however.  This is because a collective bargaining agreement must be reached between an employer and a union.  Since the NBPA is no longer a union, a collective bargaining agreement cannot be negotiated until it re-claims its interest as the players’ union.

Thus, disclaimer of the NBPA’s status as the union is clearly a negotiation tactic used to facilitate the end of the NBA lockout.  In working toward the settlement of the antitrust litigation, it is likely that lawyers for both sides will negotiate key points of the new labor deal that the NBA and NBPA will ultimately reach, so that once the antitrust litigation is settled and the NBPA re-claims its interest, reaching a new collective bargaining agreement will take only a matter of days.

Pro’s and Con’s

There are several pro’s and con’s for the players resulting from the NBPA disclaiming its interest as the players’ labor union, and subsequently sending the players down a road involving antitrust litigation.

The greatest pro in pursuing antitrust litigation is the players’ new access to legal discovery.  Shortly after filing their antitrust lawsuit, lawyers for the players will engage in a discovery period with lawyers for the NBA.  In this discovery period, lawyers for the players will likely request to view the NBA’s financial statements.

At the crux of the lockout, has been the NBA’s argument that most owners have suffered serious losses in recent years.  In its most-recent offer to players, the NBA sought to decrease the players’ percentage of basketball-related income (“BRI”) by 7 percent from what the players earned under the last collective bargaining agreement.

The players didn’t accept this offer.  The players likely didn’t feel inclined to, because to date, they have not seen substantial proof that most NBA owners have suffered serious losses.

Thus, the legal discovery process is arguably one of the greatest tools to wrap up this dispute.  If owners have to open their books and can show significant losses on paper, it is likely that the players’ counsel will advise them to accept a lower percentage of BRI.  However, if the owners can’t put their money where their mouths have been for the past two years, players will first be happy that they did not accept a lower percentage of BRI and will subsequently demand an even higher percentage than they obtained in the last collective bargaining agreement.

There are several con’s in pursuing this strategy to end the lockout.  The first is the time involved and the second is the possibility that rogue factions may arise amongst the players.

Litigation is a time-consuming process.  While it is highly unlikely that the antitrust lawsuit will ever reach the trial phase, both sides will go through the motions of settling the lawsuit.  As noted above, this involves a discovery period, as well as other pre-trial motions and court appearances.  Thus, the filing of an antitrust lawsuit will not result in the swift conclusion of the lockout.

The other obvious con is the possibility that rogue factions of players may pop up.

Previously, all players were represented by the union and the players presented a fairly unified front throughout negotiations.  The disclaiming of the NBPA’s union status leaves open the possibility that different players may take different strategies to end the lockout.  While it is highly unlikely that different players will seek to hire different counsel and pursue multiple lawsuits, the fact of the matter is, that the possibility exists.

Additionally, only a handful of players will actually be named in the lawsuit.  This leaves open the possibility that those players can make extreme demands to benefit their own personal interests to settle the lawsuit.  Thus, certain players (i.e. those named) will arguably have their interests better represented in the settlement of the antitrust litigation.  Unlike collective bargaining where the interests of all players were represented by the union, with an antitrust lawsuit, the interests of the named players are represented.

While it certainly is  not a nuclear winter, this winter it’s more likely that NBA fans will be watching players’ moves in the court of law than the basketball court.


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Why Hasn’t the NBPA Decertified as a Union?

Why hasn’t the NBPA decertified as a union and pursued antitrust remedies to end the NBA lockout?

The lockout began on July 1, 2011.  Since then, some progress toward achieving a new collective bargaining agreement has been made.  However, the progress has been slow and steady, with neither side willing to make major concessions.  The slow nature of the negotiations is seen in the fact that the first month of the season has been canceled by NBA Commissioner David Stern.  Thus, players began missing their first round of paychecks this week.  Since games have been canceled without any sign that they will be made up in the future, the players have effectively permanently lost the associated paychecks.

Thus, it is not unreasonable to question why the NBPA has not disbanded its union to pursue another course of action (an antitrust lawsuit, which is only available to the players if they are not joined as a union) to get them back onto the court in a timely fashion.

Likely, there are several reasons why the NBPA has not decertified.  The first two are what I call “perfect world” scenarios, while the third is likely the real reason why their outside counsel team, led by Jeffrey Kessel, has not yet advised the union to decertify.

1.  Pride

The NBA has locked out its players three times:  in 1995, 1998 and now in 2011.  However, never once in its history, has the NBPA decertified as a union.  Thus, the NBPA and NBA have previously always been able to settle their labor disputes through negotiation, without having to involve the courts through the pursuit of antitrust remedies.

Therefore, it is plausible that there is a pride issue at stake when considering why the NBPA has not yet decertified as a union.

There is something to be said of the fact that the NBPA has never decertified.  Many will remember that recently, the NFLPA decertified early on in its recent labor dispute with the NFL.  To some, this signaled the weakness of the NFLPA’s bargaining power, in that it had to rely on outside help from a court to achieve a new collective bargaining agreement.

Thus, it’s plausible that the NBPA is prideful in its success in negotiating new collective bargaining agreements with the NBPA.  Attorneys know that oftentimes, a client’s pride in one arena or another limits the decisions it is willing to make with respect to a case.  Therefore, it would not be shocking to learn that Billy Hunter, Derek Fisher and the NBPA’s team do not want to decertify the union so as to not be the first men to disband a union that has historically had strong bargaining power.

2.  Belief

Closely associated with pride, is belief.  Arguably, the players have such a strong belief in the bargaining capabilities of the NBPA and its officials that they do not feel it is necessary to disband the union and pursue antitrust remedies to end the lockout.

Although there have been recent mumblings that Billy Hunter and Derek Fisher have not been seeing eye-to-eye as of late (an accusation both men deny), throughout the first four months of the lockout, the NBPA and players have set forth an image of solidarity.  This solidarity is best depicted by the fact that the only cries for decertifying the union were made by player agents, and not the players themselves.  To date, there has not been a single player who has publicly questioned the negotiation strategy of the NBPA.

That the players have not questioned the negotiation strategy of the NBPA is impressive.  That is not to say that the NBPA’s strategy is weak, but rather, that this has been a slow process.  Definitive movement has been made, though, as seen in the fact that the owners have come up at least three percent in the amount of basketball-related income they are willing to grant players.

Therefore, it is very likely that the NBPA’s belief in its own bargaining power is largely driving its disinterest in decertification.

3.  Lawsuit

Pride and belief are nice, but no lawyer advises his client to pursue a course of legal action on pride and belief alone.

Therefore, it’s more likely that the NBPA has not decertified because their legal counsel has advised them not to.

And the reason for this is clear.

In August, the NBA filed a lawsuit in federal court seeking declarations that the lockout is legal and protected from antitrust attack.  At the crux of the NBA’s lawsuit, was its belief that the NBPA was going to decertify as a union ans pursue antitrust remedies.

Arguably, the NBA’s lawsuit was a preventative measure.  The NBA’s lawyers are greatly familiar with the NBPA’s lead outside counsel, Jeffrey Kessler.  The two sides faced off earlier this year during the NFL lockout, with the NBA’s lawyers representing the NFL and Kessler representing the NFLPA.  In fact, the two lawyer teams have an extensive history, as they have represented their respective clients in all of their labor disputes in recent years.

Thus, because Kessler quickly advised the NFLPA to decertify and filed an antitrust lawsuit in the name of Tom Brady, it arguably was not unreasonable for the NBA’s legal team to believe he would pursue the same course of action with the NBPA.  However, the NBA’s legal team should have looked at the NBPA’s negotiation history to realize that the union has never disbanded (even under Kessler’s counsel) and hence, would be unlikely to do so (at least early on) during the current lockout.

In response to the NBA’s lawsuit, the NBPA filed a motion to dismiss, which will be ruled on today.

As noted above, the NBA is seeking a declaratory judgment in its lawsuit.  In order for a court to issue a declaratory judgment under 28 U.S.C. section 2201, an “actual controversy” must exist.  A “precise test” does not exist for determining what constitutes an “actual controversy.”  However, the United States Supreme Court has found that in determining whether an “actual controversy” exists, “. . . the question. . . is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issue of declaratory judgment.”  Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941).

In this instance, the best weapon Kessler and the NBPA have in their arsenal in arguing to move to dismiss the lawsuit, is that the NBPA has not decertified.  Thus, there is not a substantial controversy of sufficient immediacy to warrant the court to declare that the NBA lockout is legal.  This is because the NBPA has not questioned the legality of the lockout, since it has not decertified to pursue antitrust remedies which would in effect, question the legality of the lockout.

Therefore, more likely than not, the NBPA has not decertified because its lawyers have told it not to.

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Bargaining Power: The Strength of the NBPA

A lot can be said about the NBA lockout and the negotiations which have ensued in an attempt to end it and bring a basketball season to millions of fans.

However, one thing is certain:  The NBPA is a strong union.

The NBA lockout has persisted since July 1, 2011–nearly four months.  In the course of that time, both sides have met numerous times in an effort to reach a new collective bargaining agreement.  However, each time, they’ve come up short in accomplishing that goal.

Both the NBA and NBPA point their fingers at the other for being the protagonist in this drama which has already cut the NBA season short by two weeks.  The source of this finger-pointing is the various hard issues upon which the parties are unwilling to break from their bargaining stance.  The players clearly want more than 50 percent of basketball related income, which to date, the league has not offered.  It does not appear that the NBA is willing to grant the players 50 percent or more of basketball related income, unless the players make concessions in other arenas, such as the salary cap.

While there are many issues for the parties to sort through, the NBPA has remained a collective force throughout the negotiations.

Thinking back over the course of the past four months, one is hard-pressed to think of any NBA player who has publicly questioned the actions or strategy of the NBPA in attempting to end the lockout and negotiate a new collective bargaining agreement.  Additionally, save for a few players who have sought employment which largely differs from their typical profession, it appears that the  NBPA adequately advised the players over the previous few seasons as to how to save money in preparation for the financial difficulties a lockout would present.  Throughout the course of the lockout, very few players have publicly stated that the lockout has caused them financial difficulties, or they have found basketball-related positions.

That the NBPA has maintained solidarity over the past four months and has well-positioned its players financially in preparation of the lockout, increases the strength of its bargaining power.

As noted above, at least the first two weeks of the NBA season have been canceled.  Hence, the players have effectively lost the portion of their salary attributed to those two weeks, unless the NBA chooses to extend the season at a later date.  The NBA likely believed that in canceling the first two weeks of the season, it would cause the NBPA to cave and come off of some of its bargaining positions.

However, that clearly did not happen.  Last week, both parties met with a federal mediator for over 30 hours without reaching an agreement.  This week, they’ve met once with similar results.

While the players are clearly losing money due to 100 NBA games being canceled, they are not moving away from their bargaining position, because they were well prepared to lose that money.  If you talk to anyone familiar with NBA players, nearly all of them knew that this day was coming and most worked with financial planners to prepare for it.  Thus, by preparing its players in this way, the NBPA took one chip off of the NBA’s table.

Furthermore, by promoting solidarity, the NBPA remains a strong force at the negotiation table.  There are not fractions of players who are publicly calling for the NBPA to be decertified as a union.  Such calls for decertification understandably undermine the negotiating power of the union.  Rather, the only calls for decertification have been made by player’s agents who stand to lose a large chunk of money if the entire season is not played.

Likewise, there are not any players who are vocalizing concern of the NBPA’s negotiation strategy in public.  This similarly benefits the union, as the league understands that it is negotiating a new collective bargaining agreement with all of its players.  Thus, the league must make offers which benefit the Kobe’s and LeBron’s to the sixth man on the bench.

Throughout its history, the NBPA has never decertified.  This history signals to the NBA that if it wants a new collective bargaining agreement, it is going to have to negotiate it directly with the players through their union representatives and not through court proceedings spurred by antitrust action.

Ultimately, remaining unified as a union may best serve the needs of the players now and in the future, as it sets a precedent that the NBPA is a union which will not crumble in the face of labor adversity.  Although fans would prefer that the NBPA take whatever course grants resolution the quickest and presents an NBA season the soonest, by sticking to its current negotiating path, the NBPA is setting a standard that the league must negotiate with it fully and fairly now and in the future.

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Where Do They Go From Here: Ending the NBA Lockout

The first two weeks of the 2011-12 NBA season are history, as NBA commissioner David Stern canceled them after the NBA and NBPA were unable to reach a labor resolution by October 10.

The two sides have been attempting to negotiate an end to the NBA-imposed lockout, which began on July 1.  However, the parties have arguably reached an impasse in negotiations over issues including how to divide basketball-related income (“BRI”) and whether to impose a hard salary cap.

What options does each side have at this junction?

1.  Keep Negotiating

While not encouraging for fans seeking for a quick fix to save the NBA’s 82-game season, arguably, the parties’ best option would be to maintain the status quo and continue negotiating.

Save for those owners unprepared to take the financial hit of losing a significant number of games and those players who didn’t heed the advice of their financial planners over the past two years and put away for the lockout’s rainy days, both parties appear to be relatively unified in support of their desires in a new collective bargaining agreement.  Reports have noted the fact that there have not been any players who have voiced anger with the NBPA’s negotiating strategies.  This claim is bolstered by the fact that it was not players, but agents, who led recent calls to decertify the NBPA and move forward with antitrust remedies.  Although owners are divided as to how to split television revenue amongst themselves, they have likewise presented a unified front during negotiations.

Each side’s respective unity demonstrates its strong negotiating power.  A party’s negotiating power largely determines how successful it will be in achieving the deal it seeks.  There’s an old saying, that a settlement is effective if both parties walk away from the table unhappy after signing it.  Here, neither party is backing down from its demands for a new collective bargaining agreement.  Thus, this signals that neither party is unhappy with its bargaining power.  Given this, it is arguable that the parties should keep negotiating in an attempt to corner the other into an uncomfortable bargaining situation.  Once one party begins making concessions, that will likely force the other’s hand into making concessions.

In choosing to continue to negotiate,  both sides will likely hope that the National Labor Relations Board (“NLRB”) will rule on each of their complaints filed with the NLRB.  Given that negotiations appear to have reached a standstill, it is possible that a NLRB decision is forthcoming, since the NLRB has been known to issue its rulings at strategic times during labor negotiations.  A favorable ruling by the NLRB would likely tip the negotiating balance in the favor of the party ruled for.  This windfall could be the force necessary to break the negotiation impasse and lead parties to agreeing upon a new collective bargaining agreement.

The problem with choosing this strategy, is that it will take time to see formative results.  In recent weeks, the NBA and NBPA have met numerous times and from reports, it appears that little progress has been made between the parties in terms of agreeing on key issues like BRI and what type of salary cap to adopt.  As players begin missing paychecks and owners start losing revenue from games, it is likely that one or both sides will feel inclined to either budge from their negotiating tactics or search for alternative ways to end the lockout.

2.  Decertification

On the day the lockout began, I wrote about why the NBPA should wait until November (if at all) to decertify as a union.  Decertifying the NBPA would allow the players to pursue antitrust remedies.  Likely, if the players went this route, the first thing their lawyers would seek to do, is enjoin the lockout (as the NFL players did earlier this year upon decertifying the NFLPA).

However, although I previously suggested that the NBPA wait until November to decertify (since that is when players would miss their first paychecks, thus disturbing the status quo), if the players want to pursue this option they may want to act sooner rather than later.

This is due to the fact that in August, the NBA filed a lawsuit seeking in part, declarations that the lockout is lawful and immune from antitrust attack.  The NBPA filed a motion to dismiss this lawsuit.  The parties will make oral arguments in support of their respective position before a judge on November 2.

While it would arguably be an unscrupulous legal move, if the NBPA has any real interest in decertifying, it may want to do it before oral arguments are set to be heard.  It is unknown how the judge will rule.  There’s always a possibility that the judge will side with the NBA and declare the lockout lawful and remove antitrust remedies from the players’ arsenal.  This would in effect force the NBPA to continue negotiating with the NBA to end the lockout, or hope for a favorable ruling by the National Labor Relations Board (“NLRB”).

In contrast, decertifying will not ensure that the bulk of the season will be saved.  Fans will remember that a resolution to the NFL lockout came over one month after the NFLPA decertified.  Decertification entails a legal battle and as such, requires time in order to achieve a remedy.  In deciding which road to travel to end the lockout, the NBPA must be cognizant of the time and legal costs associated with decertification.

Whichever path the parties choose, one thing is certain:  Fans want a season sooner rather than later.

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