The NFLPA’s Lawsuit Against the NFL for Collusion

On May 23, the NFLPA filed a lawsuit against he NFL in the United States District Court for the District of Minnesota, Reggie White, et. al. v. National Football League, et. al.  The lawsuit comes after the conclusion of previous litigation that the NFLPA and NFL were parties to.  The relevant previous litigation is a final consent judgment entered on August 20, 1993 and a Stipulation and Settlement Agreement entered into most recently on August 8, 2006, and which has previously been amended.  The final consent judgement and Stipulation and Settlement Agreement were the result of the conclusion of lengthy antitrust litigation brought by NFL players against the NFL that stems from the early 1990s.   

The NFLPA asserts that it is bringing this lawsuit to enforce the Stipulation and Settlement Agreement, which both the NFL and players agreed to pledge their best efforts to implement with good faith and fair dealing.  Section 1 of Article XIII of the Stipulation and Settlement Agreement provides in relevant part that,

“No Club. . . shall enter into any agreement. . . with the NFL or any other club. . . to restrict or limit individual Club decision-making as follows:  (e) concerning the terms or conditions of employment offered to any player for inclusion, or included, in a Player Contract.”

Section 2 of Article XV of the Stipulation and Settlement Agreement provides that:

“Neither the parties hereto, nor any Club. . . shall enter into any agreement. . . which includes any terms that are designed to serve the purpose of defeating or circumventing the intention of the parties as reflected by (a) the provisions of this Agreement with respect to. . . Salary Cap.”

According to the NFLPA, the Stipulation and Settlement Agreement required the 2010 season to be uncapped.  As such, the NFLPA argues that the NFL and owners agreed that they would not collude to circumvent the uncapped year by creating a secret salary cap.  However, the NFLPA alleges that the NFL and its owners created a secret salary cap of $123 million for the 2010 season. 

According to the NFLPA, it only learned of the existence of the secret 2010 salary cap in March 2012, when New York Giants owner John Mara, who chairs the NFL Management Council Executive Committee, made comments about penalties imposed as a result of four teams’ spending during the 2010 uncapped season.  According to the lawsuit, four teams exceeded the 2010 secret salary cap:  the Redskins (allegedly exceeded the cap by $102,833,047.000; the Cowboys (allegedly exceeded the cap by $52,938,774.000; the Raiders (allegedly exceeded the cap by $41,914,060.00) and the Saints (allegedly exceeded the cap by $36,329,770.00).  Subsequently, the Redskins and Cowboys have had their salary cap amounts limited by the NFL for upcoming seasons. 

While the lawsuit alleges that four teams did not abide by the secret salary cap in 2010, it alleges that the remaining 28 teams did comply with the secret salary cap.  As such, the NFLPA is asserting that NFL players were damaged by at least $1 billion.  The NFLPA estimates that this $1 billion in damages equates to the amount that the players could have received in salaries had the teams not colluded to create a secret salary cap in an un-capped year.  Additionally, the NFLPA is seeking at least an additional $2 billion in damages, because it claims that under the Stipulation and SEttlement Agreement, the players are eligible for damages in the amount of the compensatory damages ($1 billion) plus two-times that amount.

Ultimately, the lawsuit alleges three counts:  Collusion in violation of Article XIII of the Stipulation and Settlement Agreement, Breach of Section 2 of Article XV and breach of the implied covenant of good faith and fair dealing.  As noted above, the NFLPA is seeking $3 million in compensatory and non-compensatory damages, as well as attorneys’ fees, costs, interest and other relief that the court deems just and proper.

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