Rex P. Fennessey

Rex P. Fennessey Associate

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“Deflategate” In Context

You probably already know the background, but you may have missed the details.  To understand the recent decision by the federal court to overturn Brady’s suspension, the details are crucial.  This case also presents the issues many employers encounter when attempting to discipline unionized employees.

During last year’s AFC Championship Game between the New England Patriots and Indianapolis Colts there were reports that the Patriots were using “underinflated” footballs.  Following the game, the NFL ordered an investigation of the allegations.  That investigation was summarized in what has become known as the “Wells Report”, which found that the Patriots’ Officials Locker Room attendant Jim McNally and equipment assistant in charge of footballs John Jastremski both “participated in a deliberate effort to release air from Patriots game balls.”  The Wells Report also concluded that “it is more probable than not that [Patriots Quarterback Tom] Brady was at least generally aware of the inappropriate activities of McNally and Jastremski involving the release of air from Patriots game balls.”  Adopting the conclusions of the Wells Report, the NFL wrote Brady a letter informing him that it determined that he had failed to properly cooperate in the investigation, had engaged in “conduct detrimental to the integrity of and public confidence in the game of professional football”, and had therefore violated both his Player Contract and the Collective Bargaining Agreement between the NFL Players’ Association (that is, the union representing NFL Players) and the National Football League Management Council (that is, the organization representing team owners).

Under that Collective Bargaining Agreement, Brady had the right to appeal the discipline to an arbitrator, and Brady did so.  However, the Agreement gave the Commissioner of Football, Roger Goodel, discretion to serve as the arbitrator.  Goodel chose to serve as the arbitrator for Brady’s appeal.  The Players’ Association asked Goodel to recuse himself (that is, abstain) from hearing Brady’s appeal because it claimed that Goodel had, among other things, already made up his mind about the case.  Goodel refused to recuse himself.  Brady also requested all documents relating to the NFL’s investigation, but Goodel refused that request as well.  Although the co-lead investigator of the report was Executive Vice President and General Counsel Jeff Parish, Brady’s request that Parish testify at the hearing was also denied.

Not surprisingly, after the arbitration, Goodel – as arbitrator – issued a decision that found that “Brady knew about, approved of, consented to, and provided inducements and rewards in support of a scheme” to tamper with game balls, and further concluded that Brady obstructed the investigation into the underinflated balls. It therefore upheld the previous decision that Brady serve the four game suspension.

The Players’ Association appealed the arbitration decision to the United States District Court for the Southern District of New York.  The federal court vacated (basically, it threw out) the arbitrator’s decision for several reasons, two of which are summarized below:

  1. Lack of Notice of Rule and Consequences: Put simply, the Court found that it was long-standing NFL policy to tell players what they could be disciplined for and what the discipline for the violation would be. Here the Court concluded that Brady was neither informed that his alleged activities were not permitted nor was Brady told of what the consequences might be.  It is worth mentioning that the Court cited the other court decisions of Ray Rice and Adrian Petersen’s appeals, both of which found that these players were not given notice of the NFL’s “new” policy on domestic violence before being disciplined for violating it.

 

  1. Improper Denial of Testimony of Parish and Access to Investigation Documents: The Court found that, although arbitrators usually have wide discretion in allowing or denying certain evidence and testimony, it was the practice of the NFL to permit players to confront their investigators.  The Court noted that Parish’s testimony may have established that the investigation itself was not truly “independent” of the NFL.  The Court found Goodel’s denial of access to the investigation records was improper, particularly because the same law firm that conducted the investigation also represented the NFL at the arbitration.  In other words, the NFL had access to the investigation files during the arbitration; but Brady did not.

Brady had raised a number of other issues with the arbitration decision, but in light of its decision to vacate the award, the Court did not address those additional arguments.  The NFL has appealed the Court’s decision.  Now the United States Court of Appeals for the Second Circuit will hear the case.

To be clear: the Court ruling does not mean that Tom Brady was not involved in deflating the footballs used in the AFC Championship game.  Rather, the Court’s ruling focused on what appeared to be fundamentally unfair about the arbitration.  When one reviews the details of the process leading to arbitration and the arbitration itself, it is understandable why the Court might decide that the arbitrator (Goodel’s) decision should be thrown-out.

Why does the NFL choose to arbitrate disputes given its recent poor record of success in Court defending favorable decisions?  It helps to understand that, fame and money aside, the NFL’s member teams are employers and NFL players are their employees.  Those players are also represented by a union: the Players’ Association.  So the requirement to arbitrate disputes is required by the Collective Bargaining Agreement that was negotiated between the NFL and the Players’ Association.  In other words, the NFL has to arbitrate these claims under its contract with the Players’ Association.

The NFL, like other employers, has valid reasons to want to arbitrate claims of player discipline.  Despite the three million dollar investigation (and likely hundreds of thousands in attorneys’ fees more in the subsequent arbitration and court fights), it is still often cheaper for many employers to set up a grievance procedure that results in arbitration than to fight about every instance of discipline in Court.  Especially when dealing with unionized employees, where grievances about discipline are frequent, arbitration is the norm.

Any employer can learn from the NFL’s experiences in this case.  First, employers should make clear what employees can be disciplined for, and what the discipline for different infractions could be.  This is, of course, easier said than done; but the Court’s decision highlights the problem employers will face if they attempt to discipline an employee for something the employee claims he or she didn’t know was wrong.  The same is true of consequences: if the employee claims he or she didn’t know what the consequences were, it opens the door for an argument that the discipline does not fit the punishment.

Second, employers should conduct a thorough investigation and consider what that investigation actually uncovered.  It would be disingenuous to say that the Wells Report was not thorough, but consider what it actually concluded about Brady.  The most the Report was willing to say was that “it was more probable than not that Brady was at least generally aware of the inappropriate activities of McNally and Jastremski involving the release of air from Patriots game balls.”  So Brady probably knew about what someone else did.  The Court specifically noted that the Wells reports conclusion was a far cry from the conclusion that the arbitrator reached; which was the Brady “knew about, approved of, consented to, and provided inducements and rewords in support of” the deflation of the game balls.  As an employer, be willing to accept what an investigation actually concludes before deciding on discipline.

Finally, fairness matters.  If the Court’s decision here has a common theme, it is a perceived lack of fairness to Brady.  As an employer who strongly suspects an employee of improper conduct, it is difficult to see a situation the way a truly neutral third-party might see it. It was not unfair for the NFL to suspect Brady’s involvement of wrongdoing, but the way it conducted the subsequent investigation and arbitration also clearly raised doubts about whether Brady was given a fair hearing. As the Court’s decision makes clear, fairness – even to a millionaire football star – is a key part of the arbitration process.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters, for sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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