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With disclaimer of interest, the union essentially indicates that it will no longer represent the employees (here, the players) in labor issues.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Decertification results when players vote to disband the union so that it no longer represents their interests in labor disputes.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.

3 thoughts on “Next Steps: The NBPA’s Disclaimer of Interest

  1. Thank you! Nicely explained. Can anyone explain why, although I’m always rooting for underdogs, at all sports negotiations my heart is with owners? I can’t explain it myself.

  2. Great article..
    When do u think the lawyers from both sides will meet..
    I have heard a court date of feb, which means the season is washed out..
    Will the lawyers meet before that

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