NBA files federal lawsuit against players

[NOOOB]

Thanks. I have no articles to back that up, but it's my gut feeling on what the NBA's game plan is. I mentioned it yesterday, but if I'm the union I'd go back on the offensive and add a ULP claim saying the league's threat to void contracts is a ULP in itself. Basically, say it's a threat designed to force them to continue to bargain or risk losing guaranteed money. At the very least, it might be the distraction they need.

Edited to replace UPC with ULP. The acronyms are getting all jumbled in my head.

[DBoys]

Thanks. I have no articles to back that up, but it's my gut feeling on what the NBA's game plan is. I mentioned it yesterday, but if I'm the union I'd go back on the offensive and add a UPC claim saying the league's threat to void contracts is a UPC in itself. Basically, say it's a threat designed to force them to continue to bargain or risk losing guaranteed money. At the very least, it might be the distraction they need.

Did the league make a threat to try to void contracts if the union doesn't bargain a certain way? I don't think they did.

[DBoys]

However, with the lawsuit, I think the league's chosen negotiating path is beginning to emerge.

1 Ensure the union stays in place. Success with any of the lawsuit accomplishes that.
2 Document GAAP-legit losses that justify changes in the current system.
3 Make proposals consistent with curing those documented losses. Ask for nothing more than a reasonably profitable business, and accept nothing less.
4 If the players don't negotiate to solve the problem, don't budge.
5 Allow things to reach an impasse, unilaterally implement those changes that solve the losses, and restart the league with the new rules in place.

[NOOOB]

Did the league make a threat to try to void contracts if the union doesn't bargain a certain way? I don't think they did.

No, but they threatened to void Ks if the players don't agree to stay at the table (not decertify). The union could argue that it's their legitimate right to decertify, but the league is coercing them not to and instead accept their "unreasonable" terms.

[NOOOB]

1 Ensure the union stays in place. Success with any of the lawsuit accomplishes that.
2 Document GAAP-legit losses that justify changes in the current system.
3 Make proposals consistent with curing those documented losses. Ask for nothing more than a reasonably profitable business, and accept nothing less.
4 If the players don't negotiate to solve the problem, don't budge.
5 Allow things to reach an impasse, unilaterally implement those changes that solve the losses, and restart the league with the new rules in place.

I'd agree with 1-4, but add heavy snark to 2 and 3. As for 5, I think they don't budge and let the season go. Then see what the players' position is next summer.

[DBoys]

We can be snarky about the details behind those numbers (which we really don't know either way), but the crux is that the details might not matter at all. If those numbers are valid everywhere else and exhibit they're losing money, then their stance that they have to cure the loss problem with or without the union's cooperation would be considered completely reasonable.

Will they kill an entire season? As i see it ....If the league wins any part of the lawsuit, the union will see the handwriting on the wall and be eager for a new quick deal. If the league loses entirely, then they keep sitting only if they are really taking that huge financial beating and simply can't operate with anything approaching the status quo. That would be a revelatory situation.

[DBoys]

But you've been talking about a brave new world where the labor-management relationship is over. In that case, they are no longer "using economic force to obtain an agreement." They're forcing the players to accept work rules, whether they agree or not.

Not sure that's so. It flew under the radar, but the appeals court ruling in the NFL case said in part that when there's a decertification as part of the labor negotiation process, the league has the right to continue acting as if there's a union since what they are doing came from a labor negotiation sequence. That's why the lockout was permissible. Might it also also allow the league to go back to work under unilaterally-imposed rules if an impasse was reached, even if the union had decertified? The logic from that ruling would say yes.

[NOOOB]

On 2 and 3, to justify their stance on an impasse, the league wouldn't need numbers that the union accepts, they'd merely need audited GAAP-acceptable numbers that people like the IRS have no problem with. We can be snarky about the details behind those numbers (which we really don't know either way), but the crux is that the details might not matter at all. If those numbers are valid everywhere else and exhibit they're losing money, then their stance that they have to cure the loss problem with or without the union's cooperation would be considered completely reasonable.

Will they kill an entire season? As i see it ....
a If the league wins any part of the lawsuit, the union will see the handwriting on the wall and be eager for a new quick deal, trying to make lemons from lemonade. The alternative - lose a whole year of pay PLUS accept what the league wants to impose unilaterally after an impasse - would be a killer for the players.
b If the league loses entirely, then they keep sitting only if they are really taking that huge financial beating and simply can't operate with anything approaching the status quo. That would be a revelatory situation.

I don't disagree with the effectiveness of utilizing GAAP in making their argument in court. If the IRS accepts those numbers, the court probably will too. I made the snark comment only because I suspect that the GAAP numbers reflect losses (legitimate as the may be) that the players shouldn't have to bear. If the league's numbers include losses related to purchase price amortization and interest, I don't think the players should have to make up for such losses out of their pocket. Granted, that's based on my personal belief of what's fair, and nothing more.

I'd also add that I was surprised by the league's claim in response to Nate Silver's article that "The league lost money every year of the just expiring CBA. During these years, the league has never had positive Net Income, EBITDA or Operating Income" and "Put simply, none of the league losses are related to team purchase or sale accounting."

http://www.nba.com/2011/news/07/06/nba. ... index.html

If that turns out to be the case, then I'll be far more sympathetic to the owners. But based on the leaked accounting figures for the Nets and Hornets, there's at least some basis to doubt that assertion. I hate to parrot all of the "open the books" conspiracy theorists, but the ball's in their court. If they want to win my sympathies as a fan, show me the numbers. I'm glad they shared their numbers with the union and I recognize that the union has been pretty quiet about it. But I still want to see the them.

And yeah, if the league prevails in their lawsuit, the players will definitely change their bargaining stance. I'm sort of with the players, but I'd rather see basketball next year. So I wouldn't lose any sleep if that was the outcome.

[NOOOB]

But you've been talking about a brave new world where the labor-management relationship is over. In that case, they are no longer "using economic force to obtain an agreement." They're forcing the players to accept work rules, whether they agree or not.

Not sure that's so. It flew under the radar, but the appeals court ruling in the NFL case said in part that when there's a decertification as part of the labor negotiation process, the league has the right to continue acting as if there's a union since what they are doing came from a labor negotiation sequence. That's why the lockout was permissible. Might it also also allow the league to go back to work under unilaterally-imposed rules if an impasse was reached, even if the union had decertified? The logic from that ruling would say yes.

Huh. That's a reasonable point. I didn't follow the NFL lockout very closely but I can see the parallel you're pointing out. Can you suggest a link so I can read up on it when I'm bored at work tomorrow?

[DBoys]

I wanted to pull out the wording for this discussion, but the direct link to the 8th's text of the ruling (where I read it) has now been disabled. Maybe someone can find another place where it's stored. I can't find it at the 8th Court archives, but here's the link to that if you wanna search. http://www.ca8.uscourts.gov/

[NOOOB]

Thanks. I'll look for it but if anyone's able to find it and post a link, that would be great.

[DBoys]

Did the league make a threat to try to void contracts if the union doesn't bargain a certain way? I don't think they did.

No, but they threatened to void Ks if the players don't agree to stay at the table (not decertify). The union could argue that it's their legitimate right to decertify, but the league is coercing them not to and instead accept their "unreasonable" terms.

While I don't agree with the way you see this, I don't think this would go anywhere ... nor do I think the complaints by both sides that the other is bargaining in bad faith will go anywhere either. While some of it may be legal maneuvering, mostly it's just noise. Neither side has any legal mandate to relent on anything they want. If one side says they want X and never budges, that is still considered bargaining in good faith.

[NOOOB]

Did the league make a threat to try to void contracts if the union doesn't bargain a certain way? I don't think they did.

No, but they threatened to void Ks if the players don't agree to stay at the table (not decertify). The union could argue that it's their legitimate right to decertify, but the league is coercing them not to and instead accept their "unreasonable" terms.

While I don't agree with the way you see this, I don't think this would go anywhere ... nor do I think the complaints by both sides that the other is bargaining in bad faith will go anywhere either. While some of it may be legal maneuvering, mostly it's just noise. Neither side has any legal mandate to relent on anything they want. If one side says they want X and never budges, that is still considered bargaining in good faith.

I'm not saying that it would go anywhere either. But it might create just enough noise to shift the narrative and detract from the losing position I think the players are in at the moment. And while there's no legal mandate that the players budge, I still think there's an argument that it's coercive to threaten them for trying to walk away. It's not great, but it passes the laugh test, which is often all you need in litigation.

[DBoys]

Actually, there's really one biggie that can get traction on a "failure to bargain" complaint. It's not your stance on what you want. It's walking away.

Otherwise, you're both allowed to keep demanding ...the owners have to have reasonableness if they ever want the chance to declare an impasse if things go nowhere, and the union has to have jobs if they want to work ...but within those boundaries, "strong pressure" placed on the other side is considered a legit part of the process.

I don't think either side is even remotely near crossing those boundaries, despite all the "you are wrong" "no you are" "I'm telling on you" "no I'm telling first" back and forth.

[killbuckner]

The words "from implementing their joint proposals in the absence of a CBA" and "from using economic force to obtain agreement" is strong language.

You are completely missing the point. The ruling was about the non-statutory labor exemption which is what exists BECAUSE OF A UNION. In absence of a union then this goes away.

[killbuckner]

if I'm the union I'd go back on the offensive and add a ULP claim saying the league's threat to void contracts is a ULP in itself

They already did this- they amended their original complaint to the NLRB to include it.

[killbuckner]

Players get cut, don't they? Do they get paid after they're cut?

Some do. It depends on which ones were able to negotiate for contracts that had guaranteed money. Just like in the NBA. The fact that the NBA teams are far more willing to give out guaranteed contracts is irrelevant.

[killbuckner]

I'm reaching back, but there's NBA v. Williams. A district court judge in NY initially ruled that the draft, right of first refusal for RFAs, and the salary cap were protected by the non-statutory exemption and (here's the kicker) even in absence of the exemption, such restrictions did not violate anti-trust law under the rule of reason. So there's one guy who thought a salary cap would be legal in absence of a union.

Interesting. I don't have time to track down the link and read the opinion now but I'm definitely curious what his reasoning was.

[killbuckner]

I suspect we're heading for a ruling that kills the tactic of "now we're a union, now we're not" that sports PA's want to play. We all can see through it as a sham tactic ...and judges aren't stupid.

And thats where we disagree. I think that the players are almost certainly better off decertifying the union long term UNLESS the owners offer them a good enough deal to recertify. And thats not a sham decertification- thats a legitimate use of the decertification process.

[ranger001]

And thats where we disagree. I think that the players are almost certainly better off decertifying the union long term UNLESS the owners offer them a good enough deal to recertify. And thats not a sham decertification- thats a legitimate use of the decertification process.

The NBA cannot survive long term without a union unless they contract considerably. If it comes to a choice of a contracted NBA with no union or a NBA with a hard cap I think most players will vote for a hard cap.