Earlier this week Federal District Judge Richard Berman vacated NFL Commissioner Roger Goodell’s arbitration award that upheld a suspension of New England Patriots Quarterback Tom Brady for four regular season games. The NFL had suspended Brady due to his alleged role in working with Patriots staff to deflate footballs with less air pressure than league regulation permits.
The NFL suspended Brady for four games after the law firm of Paul Weiss was retained by the NFL to conduct an “independent” investigation of the affair. The investigation found it “more probable than not” that Brady was “at least generally aware” of the equipment staff’s activities. Brady was suspended for four games based on his role in deflating the footballs and his failure to cooperate with the NFL’s investigation.
Brady, through his union, the NFL Player’s Association, appealed the suspension. Under the contract between the union and the NFL, the Commissioner or his designee can serve as the hearing officer. Goodell appointed himself hearing officer. At the hearing, the NFL was represented by the same law firm that conducted the league’s independent investigation of Brady and the Patriots. After a hearing, Goodell upheld Brady’s suspension. The parties then both went to court, the league to confirm the award and Brady and the Union to vacate the award.
Before going any further, it is important to understand exactly what burden Brady and the union faced. The Federal Arbitration Act gives great deference to arbitration awards. A court must accept the facts as the arbitrator determined them and must also accept the legal conclusions even if the arbitrator applied the law incorrectly. A colleague of mine at one of my prior firms once argued in the Second Circuit Court of Appeals to affirm the confirmation of an arbitration award in favor of the union. One of the panel judges caustically remarked that a first year law student could have done a better job than the arbitrator in interpreting the contract at issue. My colleague’s response was that arbitrators were held to lower standards than first year law students. After some laughter in the courtroom the judge nodded his head and said “That is true.” Award confirmed.
Despite this high level of deference granted to arbitrators, Judge Berman vacated the award, giving two general reasons for doing so.
First, the Court found that that the NFL had given Brady inadequate notice of the discipline he could face for the alleged misconduct. The court rejected the arbitrator’s comparison of Brady’s “general awareness” of the misconduct of others to players who used performance enhancing drugs and held that it was not comparable conduct for measuring a suspension. The court similarly found that no player had ever been disciplined for failing to cooperate with an investigation, and had no prior notice that a “general awareness” of wrongdoing by others could be the basis for discipline at all. The court also found that Brady was given no notice that he could be disciplined for a violation of the league’s “Competitive Integrity Policy” as opposed the league’s Player policies.
Second, the Court found that the arbitration process was “fundamentally unfair” because Goodell a) did not allow Brady to cross examine one of the two investigators who issued the independent report and b) denied Brady access to the investigative files. Berman noted that this was particularly problematic in this case because the league’s attorney at the hearing was the same firm that conducted the investigation of Brady. As a result of the lack of notice, and the failure to allow Brady access to witnesses and documents, Judge Berman vacated Goodell’s award. Brady’s suspension is nullified.
These arguments all seem reasonable if one were looking at the decision as a matter of first impression. But for anyone who has represented employees it is a decision that we only wish we could see more often. Most employees are “at will” and can be fired by their employer at any time. There is no review of these decisions no matter how arbitrary or unfair. Even in cases where laws prohibit discharge for certain reasons (such as unlawful discrimination) courts will give deference to an employer’s decision and all too often deny employees a hearing before a jury, saying that “no reasonable fact finder” could find that the prohibited reason occurred.
Finally, even those few union represented employees covered by collective bargaining agreements rarely get a thorough review of an arbitrator’s decision. The amount of discovery allowed in arbitration proceedings varies, but it is extremely rare for a court to review it in determining whether the arbitration comported with the fairness requirements of the Federal Arbitration Act. Similarly, courts rarely second guess the scope of notice to which the employee is entitled. Such determinations are almost always considered to be within the competence of the arbitrator.
In the Brady case, there may have been some skepticism from the Court due to the nature of the NFL’s arbitration process, which allows the league Commissioner to review the league’s own decision. The fact that the independent investigators turned around and became attorneys for the league at the hearing likely did not help either. Nevertheless, on this Labor Day let us hope that we can see a bit more skepticism of arbitrary actions by employers that deprive workers of their job.
UPDATE 4/25/2016: Today the Second Circuit Court of Appeals issued an opinion reversing the District Court and reinstating Brady’s four game suspension. In doing so, the Court held that the District court erred in failing to give appropriate deference to the arbitrator. The parties delegated the authority to arbitrate the dispute to Commissioner Goodell, and the Court held that he was entitled to the same level of deference as any other arbitrator. The majority opinion found that the findings, procedural rulings, and choice of penalty were all within the authority the union and the league delegated to Goodell under the terms of the contract. Chief Judge Katzmann dissented, arguing that Goodell’s authority was in fact limited by the contract to review the grounds originally imposed by the league, and that Goodell’s decision was improper in that he came up with is own rationale for suspending Brady, essentially pulling a bait and switch on the player.