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NFL Won't Be Able to Push Flores, Gruden Cases Into Goodell-Led Arbitration Since League Is A Party

Updated: May 2, 2022

(Photo by Getty Images)

By Daniel Wallach

In the realm of adjudicating player discipline cases under Article 46, Roger Goodell has been famously described--not inaccurately---as 'the judge, jury and executioner.' And even the appellate judge too.

This is because the collective bargaining agreement between the players and the league gave the NFL Commissioner broad disciplinary authority to impose discipline in the first instance and then to review the correctness of his own decision in the event an appeal was filed by the accused player through the NFLPA.

But where the league itself is a defendant and its own conduct is directly at issue--such as in the case of the recent lawsuits filed by Brian Flores and Jon Gruden--can the NFL similarly bank on language in the two coaches' employment agreements with their former teams to force these recently filed lawsuits into private arbitration before Commissioner Goodell, who for all intents and purposes is the league's CEO?

In a word, no.

Are we really that brainwashed from 'Deflategate' to believe such a scenario is plausible, much less likely?

Unlike the player discipline cases, such as those involving Tom Brady, Adrian Peterson and Ezekiel Elliott, there is no CBA in effect here. (Nor has there even been any completed arbitration--a highly significant fact given the longstanding reluctance of federal courts to interfere with already-completed arbitration proceedings).

Rather, the hook on which the NFL will be seeking to have its own chief executive performing the role of 'neutral' arbitrator to decide the fate of serious accusations against the league--and potentially subjecting the league to millions of dollars in damages and industry-shifting injunctive relief--is standardized language in most NFL coaches' contracts acknowledging that the agreement "shall be governed by and construed in accordance with the Constitution, Bylaws, rules, and regulations of the National Football League." To that end, section 8.3(E) of the NFL Constitution and Bylaws provides that "[t]he Commissioner shall have the full, complete and final jurisdiction and authority to arbitrate . . . [a]ny dispute involving a member or members in the League or any players or employees of the members of the League or any combination thereof that in the opinion of the Commissioner constitutes conduct detrimental to the best interests of the League or professional football."

By the way, this seemingly broad arbitration language isn't even expressly included in the agreement between the coach and the team. Rather, it appears only in the NFL Constitution and Bylaws, which is referred to in the coach's employment agreement with the team and which the coach "acknowledges that he has read"--a rather oblique way of shoehorning seemingly important arbitration language into an agreement without actually including it. (While there is a more specific arbitration provision in most coaches' contracts, that provision only empowers the Commissioner to arbitrate "all matters in dispute" between the coach and the Club, including any disputes "arising under" the contract, which would seemingly have no applicability to the Gruden case since he is not suing the Raiders--or to large chunks of the Flores case, which raises broader claims against the NFL).

Putting aside the question of whether there is even a valid agreement to arbitrate, the more salient point is whether an arbitration clause installing the NFL Commissioner as the final arbiter of any and all claims asserted against the league--you know, the one that employs him to the tune of $63.9 million per year--is even enforceable.

The issue here is one of bias. To that point, the United States Supreme Court has stated that "[w]e cannot believe that it was the purpose of Congress to authorize litigants to submit their cases and controversies to arbitration boards that might reasonably be thought to be biased against one litigant and favorable to another." In the case of completed arbitrations, federal courts may vacate an award where there is 'evident partiality'--a fancy term for arbitrator bias, such as when the arbitrator has a relationship with one of the parties to the arbitration.

But, where, as here, the arbitration has not yet taken place and the dispute centers on whether a contractual arbitration provision should be enforced, the standard of review is slightly less onerous. The law is well settled that “in an appropriate case, the courts have inherent power to disqualify an arbitrator before an award has been rendered.” Under New York law, the proper standard of review for the disqualification of an arbitrator 'is whether the arbitration process is free of the appearance of bias." As New York courts have stated, any such bias "must be clearly apparent based upon established facts, not merely supported by unproved and disputed assertions." (Notably, neither the NFL Constitution and Bylaws or the employment agreements at issue make any reference to the Federal Arbitration Act (a federal law), only that the Commissioner (and not a designee) would conduct the arbitration. For this reason, the law of New York--where the NFL is headquartered--may be relevant).

This isn't even a close call. It is inconceivable--to me at least--that a judge would countenance allowing an NFL executive to serve as the arbitrator of a dispute where the NFL itself is being accused of tortious conduct and that same employee is directly implicated in the alleged misconduct at issue and will undoubtedly be a material fact witness in both cases. This indisputably rises to the level of a "clearly apparent" conflict of interest sufficient to justify the court's denial of the NFL's motion to compel arbitration in both the Flores and Gruden lawsuits.

A recent decision involving minor league baseball reinforces this obvious conclusion. In Nostalgic Partners, LLC (d/b/a The Staten Island Yankees) v. New York Yankees Partnership, a one-time minor-league affiliate of the New York Yankees sued the Yankees and Major League Baseball for tortious interference with contractual relations over the latter's decision to terminate the team's longstanding affiliation with the Yankees, and, in doing so, to interfere with the terminated minor-league affiliate's contracts with third parties. The Yankees promptly filed a demand for arbitration before the Commissioner of Major League Baseball, per a contractual arbitration provision.

The plaintiff minor-league team moved to stay the arbitration, arguing that it would be "absurd" for the MLB Commissioner--as a highly paid employee of one of the main defendants--to consider and issue a declaratory judgment deciding whether the minor-league team's claims against the New York Yankees and MLB had any merit. Citing the "appearance of bias" standard recognized under New York law (and emanating from a 1968 U.S. Supreme Court decision), the minor-league team stated that "[t]he Commissioner, as the head of MLB, plainly has an interest in ensuring that the NY Yankees – and by extension, MLB – avoid any negative consequences stemming from the NY Yankees’ support for and participation in MLB’s restructuring of its relationship with minor league baseball clubs and leagues. . . . As such, the Commissioner may well be 'deaf to the testimony or blind to the evidence presented' and there is certainly 'a real possibility that injustice will result.'”

In a December 17, 2021 decision, Justice Barry Ostrager of the New York County Supreme Court granted the minor-league team's motion to stay arbitration. In his decision, he reasoned that "[b]ased on the appearance of impropriety, the Commissioner of Major League Baseball should not arbitrate a dispute of claims that are asserted against Major League Baseball."

This decision--which was appealed last week to New York's Appellate Division--will likely be cited as precedent by plaintiff's counsel in both the Flores and Gruden cases, especially given the paucity of case-law involving attempts by professional sports leagues to enforce contractual arbitration provisions that would install league executives as the arbiters of tort claims filed against the leagues.

Finally, the class-action status of the Flores lawsuit provides yet another compelling reason why the contractual arbitration provision should not be enforced (well, at least not in the Flores case). For all of Commissioner Goodell's supposed arbitral talents, resolving 'class-wide' claims does not appear to be among them. In fact, no NFL Commissioner has ever arbitrated a class action lawsuit in his capacity as the NFL Commissioner. Putting aside the question of whether other minority coaches and GM candidates are even subject to the mandatory arbitration language in their contracts with NFL teams--or whether they have NFL contracts at all (see college coaches)--it is highly dubious that 'class-wide' claims-spanning potentially 100 or more individuals could be effectively vindicated before an NFL Commissioner with no class action experience, much less a law degree.

Daniel Wallach is the co-founder of Conduct Detrimental. He is a nationally-recognized gaming and sports betting attorney. You can follow him on Twitter at @WALLACHLEGAL.

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