By: Michael Scheinkman
The application of federal antitrust laws to agreements between
employers and unions has been an area of seemingly endless tension,
since the product of collective bargaining will invariably minimize
competition. With the development and rapid growth of labor unions
in the early 20th Century, Congress and the courts soon noticed the
inherent contradiction between the goals of labor law, which sought
to encourage collective bargaining and employer-union negotiations,
and those of antitrust law, which attempted to foster free
competition. The plain language of the Sherman Act was so broad
that remedial action was necessary to shield labor activities from
antitrust scrutiny. Through several pieces of legislation, Congress
formed the statutory antitrust exemption, ensuring that labor
unions would not be considered conspiracies in restraint of trade,
and further exempting activities such as boycotts and secondary
picketing from antitrust laws. However, because these laws did not
protect employer-union agreements from antitrust scrutiny, the
Supreme Court chiseled a distinct and limited nonstatutory
exemption, noting that “labor policy requires tolerance for the
lessening of business competition based on differences in wages and
working conditions.” Yet, some federal courts have been more
tolerant than others, leaving the reach of the exemption
unclear. Recently, in Clarett v. National Football
League, the Second Circuit greatly expanded the nonstatutory
exemption, protecting a National Football League (“NFL”)
eligibility rule requiring that rookies be three seasons removed
from their high school graduation, even though this provision was
only incorporated by reference in the collective bargaining
agreement between the NFL and the NFL Players’ Association
(“NFLPA”).
This Comment disagrees with the Clarett court’s
decision to extend the nonstatutory exemption to the NFL
eligibility rule. It argues that the Second Circuit misinterpreted
distinguishable precedent as binding. Additionally, the court
erred in both steps of its analysis—first by rejecting the test
from Mackey while nevertheless applying its three factors,
and then in misapplying those three factors to the facts
presented.
Part I of this Comment outlines the origins of the nonstatutory
exemption and the theory underlying it. Part II asserts that the
Second Circuit erred in treating its factually distinguishable
prior cases as binding on its decision in Clarett. Part
III maintains that the court’s stated rejection of the Eighth
Circuit’s test from Mackey was meaningless, since the test it
applied in Clarett was virtually
indistinguishable. Lastly, Part IV asserts that the court
erred in its application of the three factors from Mackey.