The 2011 National Football League Labor Dispute

Authors: Marcos A. Abreu, Brandon D. Spradley

Affiliations: United States Sports Academy

Corresponding Author:
Marcos Abreu
Doctoral Student
United States Sports Academy
One Academy Drive
Daphne, Alabama 36526
mabreu@students.ussa.edu
251-626-3303

Marcos Abreu is a doctoral student at the United States Sports Academy studying sports management.

Collective Bargaining & Conflict Management

ABSTRACT
In 2011, after two years of negotiations since the NFL opted out of the league’s Collective Bargaining Agreement, conflict between the players and owners increased and the relationship between employee and employer became dysfunctional. As a result, the NFLPA that represents the players during collective bargaining, decided to decertify. By announcing that the NFLPA no longer represented the players in collective bargaining before the current CBA expired, the players were able to invoke the Sherman Act that allowed the NFL players to file class-action anti-trust lawsuits against the NFL.

After the NFL players surrendered their collective bargaining rights and chose antitrust law instead of labor law, the following day, the NFL owners decided to lock the players out. Although there were many topics that NFL owners and players disagreed on during negotiations, the competition over TV revenue (resources) led to the frustration and impasse during the NFL CBA negotiations. Ultimately, after original negotiation deteriorated, Robert Kraft, owner of the New England Patriots, intervened to help the NFL owners and players end the lockout and agree to a new collective bargaining agreement.

The purposes of this paper is to examine the 2011 NFL labor dispute to identify which conflict management strategies Robert Kraft, owner of the New England Patriots, used to decrease the dysfunctional conflict between owners and players, as well as, the managerial skill that best facilitated the behavioral and attitudinal changes needed to finalize the new Collective Bargaining Agreement (CBA) which ended the lock out. The information presented in this paper could help management successfully resolve labor disputes by decreasing the attitudes and behaviors that facilitate dysfunctional conflict between the parties involved during negotiations.

Keywords: Collective Bargaining Agreement, Sherman Act, Brady v NFL, 2011 NFL Lockout, Conflict Management, Collective Bargaining Process, 2011 NFL Labor Dispute, Negotiation Process

INTRODUCTION
On May 20 of 2008, the National Football League (NFL) owners decided to opt out of the 1993 Collective Bargaining Agreement (CBA) (13). After owners exercised their opt-out clause, the relationship between the owners and players became dysfunctional. To resolve difference between owners and players DeMaurice Smith, Executive Director of the National Football League Players Association (NFLPA), and Roger Goodell, NFL Commissioner, agreed to a series of meetings on January 31, 2011 (5). During the agreed series of meetings with mediator George Cohen, Director of the Federal Mediation and Conciliation Service (a U.S. government agency that handles mediation), due to the inability by both sides to make concessions, negotiations came to a standstill on February 17, 2011 (4).

Before negotiating in front of federal mediator Cohen, in anticipation of a possible lockout, the NFL extended television contracts to provide guaranteed income of about $4 billion to the league if games were not played (37). Although the NFL argued that the television revenues were actually loans (37), during negotiations, it seemed like the players would have most of the leverage after District Judge David Doty of Minnesota, who holds jurisdiction over NFL labor matters, had ruled in favor of the players and blocked the owner’s access to four billion dollars of TV revenue for 2011 in the event of a lockout (1).

After Judge Doty’s verdict, despite two extensions during the talks overseen by mediator Cohen, the two sides could not agree on a new CBA (39). As a result, on March 11, 2011 the players rejected the owners’ final proposal and the NFLPA that represents the players during collective bargaining, decided to decertify (7). Once the NFLPA decertified, the Sherman Act was invoked and the players decided to file class-action anti-trust lawsuit with Eighth Circuit Court in Minnesota that accused the league of conspiracy and anticompetitive practices (2). The ten players involved in Brady v NFL also asked for an injunction to prevent the league from initiating a lockout (34).

After the NFL players surrendered their collective bargaining rights by selecting the antitrust law, that following morning, the NFL owners decided to lock the players out (25). District Court Judge Susan Richard Nelson was chosen by random computer selection to hear the case (37). Meanwhile, in an attempt to bring the union back to the bargaining table, the NFL filed an unfair labor practice charge with the National Labor Relations Board (NLRB) that contended that the players failed to bargain in good faith and that the union’s decision to decertify itself was a sham to gain an edge in negotiating (37).

Although U.S. District Court Judge Susan Richard Nelson didn’t tackle the issue of the antitrust lawsuit filed when the union broke up, on April 11 of 2011, Judge Nelson mandated court-ordered negotiations between players and owners to begin in front of Chief Magistrate Judge Arthur Boylan, of the U.S. District Court (10; 11). Nelson, who agreed with U.S. District Judge Doty, also granted the players’ request to end the owners’ lockout in Brady v. NFL, on April 25, of 2011, claiming that players were likely to suffer harm by the lockout (22).

After Judge Nelson’s ruling, the NFL promptly filed for a stay of the injunction with the Eighth Circuit Court of Appeals, located in St. Louis, Missouri (37). To support her verdict, Judge Nelson interpreted from the Norris-La Guardia Act of 1932, which limits the use of injunctions in labor disputes excluding situations where “substantial and irreparable injury” is threatened (37). While the burden was placed on the league to prove to the 8th Circuit Appellate Court that the lockout was legal, the NFL’s attorney, David Boies, a specialist in antitrust law, argued that the Norris-La Guardia Act prohibited Judge Nelson from issuing the injunction to stop the lockout (37).

On April 29, 2011 a three judge panel of the Eighth Circuit Court of Appeals granted the NFL a temporary delay of the injunction (37). This meant that the NFL had a temporary stay of Nelson’s ruling that lifted the lockout and the league reinstated the lockout that same day giving the owners the leverage in negotiations (17). After court mandated negotiations resumed before U.S. Magistrate Judge Arthur Boylan on May 16 (3), the owners’ leverage further increased when on the appellate court granted the NFL’s appeal on July 8, finding that Judge Nelson applied the law incorrectly because the players were not suffering irreparable harm (37).

As a result of the Court of Appeals verdict, mandated negotiations before Judge Boylan deteriorated until Robert Kraft, owner of the New England Patriots, intervened to help the owners and players end the lockout in a set of secret negotiations (8). Although there were many topics that owners and players disagreed on, ultimately, the competition over the revenue from new TV agreements led to frustration and impasse during the 2011 labor dispute. From the owners’ perspective, salaries increased exponentially during the term of the expired CBA and, despite the fact that each team remained profitable, annual profits were shrinking and small-market teams would suffer the biggest financial losses if that trend continued (26).

On the other hand, the players insisted that the expired CBA agreement accurately reflected the fact that they take all the risks on the football field (39). The purposes of this paper is to examine the 2011 NFL labor dispute to identify which conflict management strategies Robert Kraft, owner of the New England Patriots, used to decrease the dysfunctional conflict between owners and players, as well as, the managerial skill that best facilitated the behavioral and attitudinal changes needed to finalize the new CBA which ended the lock out.

The information presented in this paper could help management successfully resolve labor disputes by decreasing the attitudes and behaviors that facilitate dysfunctional conflict between the parties involved during negotiations.

REVIEW OF LITERATURE

Definition of Conflict
Schramm-Nielsen (2002) defined conflict as “a state of serious disagreement and argument about something perceived to be important by at least one of the parties involved (28).” Kazimoto (2013) defined conflict as “the presence of discord that occurs when the goals, interests or values of different individuals or groups are incompatible and frustrate each other’s attempt to achieve objectives (20).” Although there are several definitions, in most descriptions; the parties involved must observe a conflict occurred; two or more parties must be involved in the disagreement; one or more of the parties must be involved in blocking behavior; and blocking behavior must result in an emotional response (35).

Process of Conflict
Pondy (1967) suggested that the stages of conflict includes; the latent stage which occurs over competition for resources, an ambition to be independent, and a separation of subunit goals; the perceived stage which occurs once the party or the parties involved become aware of the potential for a conflict; the felt stage which occurs when emotions are encountered; the manifest stage which occurs when the party or parties involved exhibit argumentative behavior; and the aftermath stage in which the conflict could be either resolved or become the foundation for future conflict (35).

Sources of Conflict
Rahim (2002) suggested that conflict occurs when; a party is required to engage in an activity that is different with his or her interests, a party holds behavioral preferences; a party wants some mutually required resource that is in short supply; a party possesses resources and goals that are obvious in guiding his or her behavior but are apparent to be exclusive of the resources and goals held by the other(s); two parties have partially exclusive behavioral preferences regarding their joint actions, two parties are interdependent in the performance of functions or activities (31).

Levels of Conflicts
Although Heffron (1989) suggested that some level of conflict is necessary within an organization, Lippit (1994) would later point out that too much conflict can be dysfunctional in terms of reducing cooperation, disrupting communications, destroying morale, polarizing individuals and groups, producing irresponsible behaviors, and creating suspicion and distrust (40). When management wants to determine the level of conflict within an organization, Brown (1995) recommended examining the relationship among individuals or groups in terms of their attitudes, behaviors, and the underlying structure that influence the interaction between individuals or groups (40).

If the diagnosis indicates that there is too much dysfunctional conflict, management should use conflict strategies that focus on changing the attitude and behavior of the party or parties involved (35). Brown (1995) suggested changing the attitudes of the group so that the various groups have a better understanding of the relationships between them; this will facilitate changing the behavior of the group from behaviors that promote conflict into one that is more constructive (40). Kelman (1964) suggested that influencing change will depend on the importance that the subject attaches to attaining their goal, willingness to accept this particular opinion, and the power of the influencing agent (20).

Conflict & Professional Sports
In the context of professional sports organizations like the NFL, when conflict occurs between owner and players it is considered vertical (35). Normally, economic issues, particularly wages, are the source of conflict (38). In general, the laws and guidelines of the CBA govern the business relationship between owners and players in addition to resolve disputes between one another (33). A league’s CBA establishes specific elements of operations, such as; league’s duration, talent distribution mechanism, salary containment mechanism, salary inflators, employee termination procedures, workplace integrity and discipline, dispute resolution systems, salary cost-containment mechanism, and other general regulations (27; 33).

Although a league’s CBA could help to resolve conflict that influence specific elements of operations, when the agreement expires, the negotiation process allows owners and players to communicate and resolve conflict that could hinder the working relationship during the formulation of a new agreement (33). Besides giving employees in private industry the right to join unions, the National Labor Relations Act (NLRA) of 1935 (as amended by the Taft-Hartley Act of 1947) regulates the bargaining processes, and requires that the parties bargain in good faith over the term and conditions of employment (38).

Although the federal law requires that the parties involved bargain in good faith over mandatory issues like terms and conditions of employment, which are established in a league’s CBA, it does not require the parties to bargain permissible issues nor does it regulate outcomes (38). During the bargaining processes, owners are required to continue the mandatory contract provisions until a new contract is reached or until a good faith impasse has been reached (38). To ensure that the rights provided to employees are not restricted by employers, the law is administered by the National Labor Relations Board (NLRB) (38).

Conflict & Collective Bargaining Process
During the collective bargaining process, while the owners represent themselves, the players are represented by the players union (38). Before the negotiation process begins, the negotiators for both sides must select a negotiation approach. During positional bargaining, “alternative solutions that meet particular interests or needs are selected by a negotiator, ordered sequentially according to preferred outcomes and presented to another party in an effort to reach agreement (24).” In the principal of negotiation theory this type of bargaining is labeled distributive (38). In positional or distributive bargaining situations it is significant for a negotiator to understand the resistant point or of their opponent (38).

The resistant point, which is also referred to as the reservation point by Leigh Thompson, is the bottom line or the least the other party will accept (38). On the other hand, interest-based bargaining allows “the parties in a collaborative effort to jointly meet each other’s needs and satisfy mutual interests (24). In the principal of negotiation theory this type of bargaining is labeled integrative (38). When negotiations involve an interest-based or integrated approach, since both parties seek to achieve their bargaining objectives without harming the other party, the parties must exchange information in an atmosphere of respect and mutual trust to expand the amount of available resources so that they both can achieve their goals (38).

This type of approach often produces wiser decisions in a shorter amount of time with less incidence of confrontational behavior (24). Once negotiators select an approach to negotiation, Fisher and Ury (1981) mentioned that information should be gathered (SWOT), assessments should be performed from all potential partners’ viewpoint, an agenda needs to be set on all issues that need to be negotiated, proposal presentation must be performed from all potential partners’ viewpoint, flexibility should allow for alternative proposals, exchange of concession with value should occur, and the formal deal closure (35).

For an agreement to come about, a positive bargaining range must be established (38). “The bargaining range is the region between the two parties’ resistance points. A positive range exists if there is some point between the resistance points, which could result in an agreement between parties (38).” If a positive bargaining range is not established between the two parties and negotiations lead to an impasse, a third-party intervention (mediation) allows a person who is not associated with the conflict to be brought in to try to resolve the dispute (35).

Although mediation could help to stimulate talks and allow the parties involved to make up their own mind on the final outcomes, since the third-party arbitrator’s decision is binding on the parties, one or both of the parties may be less committed to the arbitrator’s decision than to a mutually agreed-upon resolution (38). After a third-party intervention has taken place, if negotiations are still at an impasse and the current CBA has expired, the NLRA allows the owners to impose their last, best offer as the new set of rules to govern the NFL and its relationship with the players (15).

The “Best Alternative to a Negotiated Agreement,” or BATNA is the most preferred course of action, which results if there is no agreement between parties (38). Owners use BATNAs to influence the behavior of the players in negotiation situations when they have insured a stream of income that would continue even if the games are not played (38). If the players do not accept the owner’s last, best offer, the NRLA allows the owners to lock the players out (15). A lockout is the “withholding of employment by an employer from its employees for the purpose of either resisting their demands or gaining a concession from them (15).”

Conversely, upon reaching a bargaining impasse, the NLRA protects the players’ right to strike (15). When negotiations result in work stoppage one of the parties is seeking a fundamental change to an important collective bargaining issue that impacts the league’s underlying business model in a drastic fashion (33). When work stoppage occurs and there are deep-seated aggregate issues [between management and labor], or distributional issues [regarding revenue], or personality issues exacerbate the dispute; Economist Andrew Zimbalist, a professor at Smith College, mentioned that “often there’s not trust or good communication between sides and a new leader wants to establish himself (32).”

Besides the right to strike, the NLRA also protects the players’ right to decertify and bring an antitrust suit (15). Decertification allows employees to formally retract the authority of their union to participate in collective bargaining on their behalf (15). Since court decisions in professional sports indicate that a sports union cannot bring an antitrust suit, by dissolving the players union, the players are able to invoke the Sherman Antitrust Act of 1890 (15). The Sherman Antitrust Act (as amended by the Clayton Act of 1914) prohibits agreements that unreasonably restrain trade, and provide damages for violations (38).

The antitrust federal laws requires players to select labor law (collective bargaining) raising the antitrust shield that prevents them from attacking rules under the antitrust laws or antitrust law (individual bargaining and litigation) that lowers the shield allowing the players to end the collective bargaining relationship (15).

DISCUSSION
In 2011, after original CBA negotiations deteriorated and the relationship between the owners and players became dysfunctional, Robert Kraft, owner of the New England Patriots, intervened to help the owners and players end the lockout. When dysfunctional conflict occurs, Kanter, Stein, & Jick (1992) mentioned that leaders may function as change agents responsible for creating a vision, identifying the need for change, and implementing the change itself (18). To determine involvement, Nugent (2002) proposed that management must determine whether an intervention is needed, the appropriate type of intervention, whether they are the best person to mediate, and if independent assistance is needed if they intervene (35).

Although there are several conflict management strategies to select from, to successfully manage conflict and change the dysfunctional behaviors and attitudes of the owners and players, Robert Kraft implemented the confrontation and negotiation approach as a means of resolving owner and player differences. Owners and players usually use confrontation and negotiation as a means to resolving conflict over contracts and salaries (35). During confrontation, the parties involved in a conflict meet face-to-face in an effort to resolve their differences (35). Maturity will be required since both sides will be asked to face facts and put aside emotions during the decision making process (35).

Although confrontation could be risky, once the parties involved in a conflict agree to come together, negotiations can commence (35). After original CBA negotiations deteriorated, in an effort to make progress on difficult issues between owners and players, Mr. Kraft assisted in the creation of a smaller group of negotiators devoid of lawyers (36). Mr. Kraft believed that a deal could be done sooner if the owners and players sat down on both sides, and tried to get the lawyers away from table (29). This allowed negotiators to be more effective at finding mutually agreeable and beneficial solutions to some of the intractable points in the contract (30).

To manage conflict during the smaller negotiation sessions, Kraft used the compromise and collaboration strategies to encourage owners and players to find mutually beneficial solutions to complex issues. Compromise is a strategy which is best used when both parties are committed to conflicting goals and there is equality in terms of power (40). In order to gain an agreement during the implementation of the compromise strategy, effective leaders encourage team members to accept concessions when necessary to maintain a level of productivity rather than continuing to debate or argue (21). Concession bargaining is a common employer response to economic difficulties that threaten profitability (38).

For concessions to occur, the conditions required include; open communication, honest sharing of information, willingness to work collaboratively to resolve issues, and sufficient time to analyze and solve difficult problems (38). Management must convince the union to give back previously won gains, in turn; the union leadership must convince the membership that concessions are unavoidable (38). Kraft played a key role in convincing the NFL owners who were still committed to opposing goals to make concessions on issues like the rookie wage system, so that the negotiations could move forward, and agreement could be reached (30).

Once the owners agreed to make some concessions on issues of conflict, Mr. Kraft and the other 31 owners collaborated with the union to find a common ground. Collaboration is suggested if both parties seek mutual problem solutions that satisfy both parties (40). Collaboration could help nurture an environment of support that allows the parties involved in negotiations to function effectively to resolve conflict (21). During the implementation of collaboration, a gatekeeper role must be established in each partner organization to ensure appropriate and accurate communication between partners and also within each organization (35).

As one of the key negotiators for the owners during collaboration efforts, besides being the single biggest supporter of the players during disagreement between fellow owners, Mr. Kraft worked hard to forge a bond with Executive Director of the NFLPA, DeMaurice Smith (6). As a result, during collaboration efforts, Mr. Kraft gained the trust of the NFLPA and its membership. Rousseau et al. (1998) defined trust “as ‘a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another’ (23). Trust is critical throughout a negotiation; it enhances and facilitates the negotiation process, and often holds deals together (23).

Child and Faulkner (1998) suggested that trust evolves from expectations between partners (calculative trust), calculative trust could become mutual understanding once sharing occurs and alliances is implemented, and mutual understanding can become bonding as the strategic alliance continues to evolve (35). Ultimately, as the alliance evolves, so too should trust, if each partner recognizes the positive benefits gained, the mutual investment of each partner, and the increasing potential costs of breaking the alliance (35). In the context of professional sports, while the lack of trust makes management reluctant to share delicate financial information with the union, mistrust makes the union suspicious of management’s motivations and accuracy of the information management provides (38).

Ultimately, besides the promotion of player health and safety as well as a new rookie compensation system, the overall players’ share was estimated at 47 percent (55 percent of the league’s broadcast revenue, 45 percent of merchandise sales and promotions from NFL Ventures, and 40 percent of local club revenue, mainly from tickets) (37; 16). The salary cap was set based on a combined share of “all revenue” with no expense reductions (16). According to a player source, “the “all revenue” model works on a percentage of the whole pie. That means no wondering if the 2012 revenue will be what the league projects it to be and guarantees the players a fixed percentage of total revenue (9).”

At the press conference announcing the new CBA agreement, Mr. Kraft mentioned that “the end result is we’ve been able to have an agreement that I think is going to allow this sport to flourish over the next decade. And, we’ve done that in a way that unique among the major sports that every team in our league, all 32, will be competitive (12).” Child & Faulkner (1998) noted that the main goal as a negotiator is to successfully develop a relationship between the parties involved that could enable them together to successfully negotiate an agreement, without either partner needing to accept loss of identity or ultimate independence (35).

When asked about Mr. Kraft’s involvement in the negotiation process, President and CEO of the New York Giants, John Mara, mentioned that “he had a tremendous influence over this whole process. I don’t really think we would have been standing out in front of the union headquarters announcing this deal if he had not been involved (6).” After thanking Myra Kraft for allowing Mr. Kraft to participate as one of the negotiators, former center for the Indianapolis Colts, Jeff Saturday, stated that Mr. Kraft helped save football and that the players were gracious for his family and for the opportunity he presented to get this deal done (12).

Summary
When dysfunctional conflict occurs, the confrontation strategy could lead to negotiations that can bring resolve. During confrontation, management must learn to stay neutral to properly identify the needs and concerns of the party or parties involved in the conflict. Management should also listen and acknowledge everyone by giving each party the opportunity to speak. It is important to note that during confrontation and negotiation, management must communicate areas of agreement and clarify areas of difference. Once the problem is clarified, if conflict is unavoidable, the negotiations can begin.

During negotiations, if both parties are committed to opposing goals and there is parity in terms of power, researchers recommended using the compromise strategy. On the other hand, if both parties seek mutual problem solutions that satisfy both parties, research has proven that the use of collaboration strategies will allow management to foster an environment of cooperation that typically enables employees to find a resolution with mutual gain. Ultimately, during negotiations, it is important to build relationships which enable the parties involved together to successfully negotiate an agreement, without either partner needing to accept loss of identity or ultimate independence.

Conclusion
The managerial skill that best facilitates the behavioral and attitudinal changes needed to implement the conflict managerial strategies selected by Mr. Kraft is communication. Communication is “the process by which a person, group, or organization (the sender) transmits some type of information (the message) to another person, group, or organization (the receiver) (14).” During the collective bargaining process, Mr. Kraft’s ability to constantly communicate honest information helped him build trust. Since trust is integral to the exchange of information, to be trustworthy, a negotiator must work to establish and maintain credibility (23).

Once credibility is established, a negotiator can develop a reputation for honesty, which is essential for a negotiator to maintain positive working relationships in all considered affiliations (23). Kanter & Mirvis (1989) noted that “change recipients seek certainty in the form of frequent, honest information related to change efforts. Insufficient or improper communications create cynics who doubt the truth of their leaders’ messages (18).” Failure of communications could be “moderated by increasing the knowledge and diagnosis prior to a formal or structured intervention. The acquisition of knowledge and the diagnosis of conflict usually require, amongst other competencies, those of communication and negotiation (19).”

APPLICATION TO SPORT
The information presented in this review paper could help management successfully resolve labor disputes by decreasing the attitudes and behaviors that facilitate dysfunctional conflict between the parties involved during negotiations.

Acknowledgement: None

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