Docket No. 11-CV-1215 UNITED STATES DISTRICT … Docket No. 11-CV-1215 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF TULANIA AVON BARKSDALE, OMAR LITTLE, and STRINGER BELL, individually

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Docket No. 11-CV-1215

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF TULANIA

AVON BARKSDALE, OMAR LITTLE, and

STRINGER BELL, individually and on behalf of all

others similarly situated,

Plaintiffs, v.

NATIONAL BASKETBALL ASSOCIATION

Defendant.

MEMORANDUM OPINION AND ORDER DAVID STERN, District Judge.

I. PROCEDURAL HISTORY This case represents two consolidated actions. The first involves Avon Barksdale seeking to

overturn the arbitration decision regarding his discipline made by the National Basketball Association (“NBA”) Commissioner, and the second action involves the NBA locking out the players after the Collective Bargaining Agreement (“CBA”) between the parties expired. Because Avon Barksdale is a named plaintiff in both cases, and because both cases involve the NBA, I have made the decision to consolidate these matters.

II. FACTUAL BACKGROUND

This action involves the parties’ respective motions to confirm and to vacate NBA Commissioner Ervin Burrell’s August 1, 2016 Arbitration Award, imposing a four-game suspension on Tune Squad point guard Avon Barksdale, pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and section 10 of the Federal Arbitration Act, 9 U.S.C. § 10.

A. ARBITRATION AWARD

Shortly after the conclusion of game seven of the Western Conference Finals on May 30, 2016, between the Tune Squad and the Monstars, NBA officials undertook an extensive investigation into the circumstances surrounding the Tune Squad’s alleged use of seemingly under-inflated basketballs during the game’s first half. On June 1, 2016, the NBA publicly announced that it had retained Maurice Levy and his law firm to conduct an “independent investigation,” together with NBA General Counsel, Cedric Daniels. The Investigation

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specifically was conducted pursuant to the NBA Policy on Integrity of the Game & Enforcement of Competitive Rules, dated February 11, 2014 ("Competitive Integrity Policy"), which provides, in part:

Policy on Integrity of the Game & Enforcement of Competitive Rules

The following updated memorandum was sent on February 11, 2014 to Chief Executives, Club Presidents, General Managers, and Head Coaches from Commissioner Burrell regarding the Policy on Integrity of the Game & Enforcement of Competitive Rules . . .

Actual or suspected violations will be thoroughly and promptly investigated. Any club identifying a violation is required promptly to report the violation, and give its full support and cooperation in any investigation. Failure to cooperate in an investigation shall be considered conduct detrimental to the League and will subject the offending club and responsible individual(s) to appropriate discipline.

The Competitive Integrity Policy is in Section A2 of the 2014 Edition of the Game Operations Policy Manual for Member Clubs ("Game Operations Manual").1

At the end of the Investigation, Levy compiled a written report (“Levy Report”) that includes the following narrative: During the course of the May 30, 2016 Western Conference Finals, the Monstars’ center Lester Freamon blocked a shot by Tune Squad point guard Avon Barksdale in the first half. A very observant referee noticed the ball did not bounce to the proper height once it hit the ground. He handed the ball to a member of the Monstars’ equipment staff, who used a pressure gauge and determined that the basketball was inflated to approximately 11 psi, i.e., below the range of 12.5 to 13.5 psi specified in Rule 2, Section I of the 2014 NBA Official Playing Rules ("Playing Rules"). NBA officials collected and tested eleven Tune Squad game balls and four Monstars game balls at halftime and concluded that all eleven of the Tune Squad's game balls measured below 12.5 psi. The Monstars’ balls were all inflated within the proper range and used in the second half of the game.

On July 15, 2016, the findings of the Daniels/Levy “independent” Investigation were made public. The Investigation included reviews of player equipment, security footage, text messages, call logs, emails, press conferences, League rules and policies, and interviews with no less than sixty-six Tune Squad and NBA personnel. The Levy Report concluded, "in connection with game seven of the Western Conference Finals, it is more probable than not that Tune Squad personnel participated in violations of the Playing Rules and were involved in a deliberate effort to circumvent the rules." Levy Report at 2. It determined that Tune Squad employees Jim McNulty, who was the Officials Locker Room attendant, and Bunk Moreland, who was a Tune Squad equipment assistant in charge of basketballs, "participated in a deliberate effort to release air from Tune Squad game balls after the balls were examined by the referee [on May 30, 2016]." Id.

1 The Game Operations Manual also provides the following as to game balls: Once the balls have left the locker room, no one, including players, equipment managers, ball boys, and coaches, is allowed to alter the basketballs in any way. If any individual alters the basketballs, or if a non-approved ball is used in the game, the person responsible and, if appropriate, the head coach or other club personnel will be subject to discipline, including but not limited to, a fine of $25,000.

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As to Barksdale, the Levy Report concluded that "it is more probable than not that Barksdale was at least generally aware of the inappropriate activities of McNulty and Moreland involving the release of air from Tune Squad game balls." Id. at 17. The Levy Report also concluded that "it is unlikely that an equipment assistant and a locker room attendant would deflate game balls without Barksdale's knowledge and approval." Id. at 19. The Levy Report acknowledged that "there is less direct evidence linking Barksdale to tampering activities than either McNulty or Moreland." Id. at 17. Barksdale has denied “any knowledge or involvement in any efforts to deflate game balls after the pre-game inspection by the game officials.” Id. at 129.

On July 18, 2016, William Rawls, NBA Executive Vice President, sent a "disciplinary decision" letter to Barksdale (“Rawls Letter” or “Letter”), stating: "your role in the use of under-inflated basketballs by Tune Squad in game seven of the Western Conference Finals . . . represents a violation of longstanding playing rules developed to promote fairness in the game." Rawls Letter at 1. The Rawls Letter informed Barksdale that "pursuant to the authority of the Commissioner under Article 46 of the CBA and the NBA Player Contract, you are suspended without pay for the first four games of the 2016-17 regular season." Id. at 2.

Barksdale, through the NBA Player’s Association (“NBPA”), immediately appealed the four-game suspension. He also moved to compel the testimony of NBA General Counsel Cedric Daniels at the arbitral hearing because Mr. Daniels had been designated co-lead investigator alongside Maurice Levy. On July 22, 2016, Commissioner Burrell denied the motion to compel the testimony of Daniels "[b]ecause Article 46 of our CBA does not address the permitted scope of witness testimony at appeals hearings, it is within the reasonable discretion of the hearing officer to determine the scope of the presentations and, where appropriate, to compel the testimony of any witnesses whose testimony is necessary for a hearing to be fair." Def.’s Countercl, Ex. 208 at 1. Burrell stated that "Cedric Daniels, does not have any first-hand knowledge of the events at issue here. Nor did he play a substantive role in the investigation that led to Mr. Barksdale’s discipline; his role was limited to facilitating access by Mr. Levy to witnesses and documents." Id. at 2.

Then, the Commissioner conducted an arbitration appeal hearing on July 25, 2016. One week later, he published his twenty-page Award and Final Decision on Article 46 Appeal of Avon Barksdale (“Award”), which upheld the four-game suspension. In the Award, Commissioner Burrell concluded as follows: "(1) Mr. Barksdale participated in a scheme to tamper with the game balls after they had been approved by the game officials, and (2) he willfully obstructed the investigation by, among other things, affirmatively arranging for destruction of his cellphone knowing that it contained potentially relevant information that had been requested by the investigators." Award at 13. "All of this indisputably constitutes conduct detrimental to the integrity of, and public confidence in, the game of professional basketball.” Id.

B. LOCKOUT

The Barksdale Plaintiffs are three professional basketball players who have been employed by the Defendants, the NBA and the thirty separately owned NBA teams. The NBA operates as a multiemployer bargaining unit in the business of putting on professional basketball exhibitions. The Barksdale Plaintiffs filed this lawsuit on behalf of themselves and similarly situated players alleging antitrust violations based on the Defendants' actions of imposing a “lockout” or a group boycott of the players; they seek injunctive relief.

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The rules and policies of the NBA are contained in the NBA’s CBA. The most recent CBA was due to expire at 11:59 p.m. on October 11, 2016, after the NBA had exercised its option to opt out of the final two years of the agreement. The owners and players, including the Plaintiffs and their union, the NBPA, continued to attempt and to negotiate a new CBA up until the day of the deadline. The NBPA and the players hoped to negotiate a new personal conduct policy in order to prevent the discipline situation involving Barksdale from happening again.

Prior to expiration, the NBPA had taken polls of its players to see if a substantial majority of them wished to disband the union if negotiations for a new CBA failed. A substantial majority of the players voted to end the collective bargaining status of the NBPA, if the NBPA leadership thought it was in the best interests of its players to do so. The player’s representatives voted to restructure the organization as a professional association rather than as a union. Based upon these polls, the NBPA decided to end the collective bargaining status of their union by disclaiming its interest in representing the players. At 4 p.m. on October 11, 2016, a mere eight hours before the CBA expired, the NBPA informed the NBA of its decision to disclaim any interest in representing the players, including the Barksdale Plaintiffs, in further negotiations. After this notice, the NBA filed an unfair labor practice claim with the National Labor Relations Board (“NLRB”) alleging that the NBPA disclaimer of interest was a sham because the disclaimer and subsequent filing of this action were merely intended to be used as leverage at the bargaining table and part of the collective bargaining process.

By that time the NBPA had also amended its bylaws to prohibit its members from engaging in collective bargaining with the NBA, individual teams, or their agents. The NBPA notified the NLRB to terminate its status as a labor organization and additionally filed an application with the Internal Revenue Service to be reclassified for tax purposes as a professional association. In its notice on October 11, 2016, the NBPA also informed the NBA that it would no longer represent players in grievances under the soon-to-expire CBA, so that players would have to pursue or defend any grievances with the NBA or individual teams on an individual basis. Upon the actual expiration of the CBA at 11:59 p.m. on October 11, 2016, the NBA instituted the lockout effective October 12, 2016, which prevented all NBA player employees from working.

The Barksdale Plaintiffs filed the present Complaint the same day the lockout began, October 12, 2016. It alleges that the lockout is a violation of federal antitrust law under section 1 of the Sherman Act. The Plaintiffs allege that the NBA and its thirty independently owned and operated teams jointly agreed and conspired to an unlawful group boycott and price-fixing arrangement that will economically harm the Plaintiffs. The Plaintiffs allege the lockout is aimed at shutting down the entire free agent marketplace, as well as a boycott of rookies and players currently under contract. The NBA claims that the lockout is exempted from antitrust scrutiny under the Sherman Act by the non-statutory labor exemption (“NSLE”).

III. VACATING THE ARBITRATION AWARD ISSUED BY THE COMMISSIONER

A. LEGAL STANDARD

"Judicial scrutiny of arbitration awards . . . is limited, [but it] is sufficient to ensure that arbitrators comply with the requirements of the statute at issue." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647, 1655, 114 L. Ed. 2d 26 (1991) (quoting Shearson/Am. Express Inc. v. McMahon, 482 U.S. 220, 107 S. Ct. 2332, 2340, 96 L. Ed. 2d 185 (1987)). "The deference due an arbitrator does not . . . require a district court to . . . [confirm] an award obtained without the requisites of fairness or due process." Kaplan v. Alfred Dunhill of London,

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Inc., No. 96 Civ. 259 (JFK), 1996 U.S. Dist. LEXIS 16455, 1996 WL 640901, at *7 (S.D.N.Y. Nov. 4, 1996). Under the Federal Arbitration Act ("FAA"), an award “is subject to attack only on those grounds listed in [9 U.S.C.] § 10, and . . . requires that an award be enforced unless one of those grounds is affirmatively shown to exist." Wall Street Assocs. L.P, v. Becker Paribas Inc., 27 F.3d 845, 849 (2d Cir. 1994). For example, FAA § 10 provides that the Court may vacate an arbitral award "where the arbitrators were guilty of . . . refusing to hear evidence pertinent and material to the controversy." 9 U.S.C. § 10(a)(3). A "principal question for the reviewing court is whether the arbitrator's award draws its essence from the [CBA],” and “the arbitrator is not free to merely dispense his own brand of industrial justice." 187 Concourse Assocs. v. Fishman, 399 F.3d 524, 527 (2d Cir. 2005) (quoting Saint Mary Home. Inc. v. Serv. Emps. Int'l Union, Dist. 1199, 116 F.3d 41, 44 (2d Cir. 1997)). "[T]he arbitrator's task is to effectuate the intent of the parties. His source of authority is the [CBA], and he must interpret and apply [it] in accordance with the 'industrial common law of the shop' and the various needs and desires of the parties." United States v. Int'l Bhd. of Teamsters, 954 F.2d 801, 809 (2d Cir. 1992) (quoting Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011, 1022, 39 L. Ed. 2d 147 (1974)) (emphasis omitted).

It is the "law of the shop" to provide professional athletes with advance notice of prohibited conduct and potential discipline. In In the Matter of Reggie Langhorne ("Langhorne"), the arbitrator vacated the discipline of a player who refused to practice, holding that the player needed “notice as to what consequences would flow from his refusal to participate in . . . practice. Any disciplinary program requires that individuals subject to that program understand, with reasonable certainty, what results will occur if they breach established rules.” Slip op. at 25 (Apr. 9, 1994). In NFLMC v. NFLPA (Ricky Brown) (“Ricky Brown”), the arbitrator vacated a fine imposed on a player for missing a mandatory weigh-in and observed that "adequate notice is the fundamental concept in discipline cases." Slip op. at 10 (July 16, 2010). In the Bounty-Gate case, former National Football League (“NFL”) Commissioner Paul J. Tagliabue, appointed as arbitrator by Commissioner Goodell after Goodell recused himself, vacated a player’s suspension for allegedly obstructing the League's investigation into a team’s bounty program (involving alleged monetary incentives to injure opposing players). Slip op. at 1 (Dec. 11, 2012).2 Tagliabue stated: "There is no evidence . . . of past suspensions based purely on obstructing a League investigation. In my forty years of association with the NFL, I am aware of many instances of denials in disciplinary proceedings that proved to be false [but not a] suspension for such fabrication.” Id. at 13.

B. DISCUSSION

An arbitrator's factual findings are not open to judicial challenge, and we accept the facts as the arbitrator found them. See Westerbeke Corp. v. Daihatsu Motor Co., Ltd., 304 F.3d 200, 213 (2d Cir. 2002).

The Court is aware of the deference afforded to arbitral decisions, but, nevertheless, concludes that the Award should be vacated. The Award is premised on significant legal deficiencies, including (1) inadequate notice to Barksdale of his potential discipline (four-game suspension)

2 Available at: http://www.nfl.com/news/story/0ap1000000109668/article/paul-tagliabues-full-decision-on-%20saints-bounty-appeal

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and his alleged misconduct; and (2) denial of the opportunity for Barksdale to examine one of two lead investigators.

1. Inadequate Notice of Discipline and Misconduct

i. No Notice of Four-Game Suspension: Steroid Use Comparison

The Court finds Barksdale had no notice that he could receive a four-game suspension for general awareness of ball deflation by others, or participation in any scheme to deflate basketballs, and non-cooperation with the ensuing Investigation. Barksdale also had no notice that his discipline would be the same as a player who used performance enhancing drugs.

The Commissioner never specified what part of Barksdale’s discipline was attributable to alleged ball tampering and what part was attributable to non-cooperation (and, for that matter, what discipline was attributable to the destruction of Barksdale’s phone):

At the same time, in upholding Barksdale’s four-game suspension, the Commissioner concluded that it was appropriate to apply the same discipline that the NBA metes out for steroid use:

[T]he closest parallel . . . is the collectively bargained discipline imposed for a first violation of the policy governing performance enhancing drug[s] . . . In our most recent [CBA], the parties (a) agreed . . . that the level of discipline for a first violation [would be a four-game suspension] and (b) further agreed that a player found to have used both a performance enhancing drug and a masking agent would receive a six-game suspension. The four-game suspension imposed on Mr. Barksdale is fully consistent with, if not more lenient than, the discipline ordinarily imposed for the most comparable effort by a player to secure an improper competitive advantage and (by using a masking agent) to cover up the underlying violation.

Award at 16.

The "Policy on Anabolic Steroids and Related Substances" ("Steroid Policy") is sui generis. It cannot serve as notice of discipline to Barksdale or reasonably be used as a comparator for his four-game suspension for alleged ball deflation by others and for non-cooperation in the ensuing Investigation. The Steroid Policy is incorporated into the 2014 Player Policies, which describes "testing procedures," "procedures in response to positive tests or other evaluation," "suspension and related discipline," "appeal right," "burdens and standards of proof," and "discovery," none of which has anything to do with Barksdale’s conduct and/or his discipline.

The Court is unable to perceive "notice" of discipline, or any comparability between a violation of the Steroid Policy and a "general awareness" of the activities of others, or involvement in a scheme by others to deflate game balls, and non-cooperation in a basketball deflation investigation. Oral presentations before the Court did not clarify the Commissioner's reliance on the Steroid Policy. Also, the Award offers no scientific, empirical, or historical evidence of any comparability between Barksdale’s alleged offense and steroid use. Often, steroid use has to do with issues of health, injury, addiction, and peer pressure, among other factors. See Steroid Policy at 1-2 (listing factors related to the use of "Prohibited Substances," including "physiological, psychological, orthopedic, reproductive, and other serious health problems, [like] heart disease, liver cancer, musculoskeletal growth defects, strokes, and infertility"). None of these factors is (remotely) present here.

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The Court finds that no player alleged to have a general awareness of ball deflation activities of others, or who allegedly schemed with others to let air out of basketballs in a championship game, and also had not cooperated in an ensuing investigation reasonably could be on notice that their discipline would be the same as a player who violated the NBA Steroid Policy. "When it is clear that the arbitrator ‘must have based his award on some body of thought, or feeling, or policy, or law that is outside the contract [] and not incorporated in it by reference . . . the arbitrator has failed to draw the award from the essence of the [CBA].’" In re Marine Pollution Serve., Inc., 857 F.2d 91, 94 (2d Cir. 1988) (quoting Ethyl Corp. v. United Steelworkers, 768 F.2d 180, 184-85 (7th Cir. 1985), cert. denied 475 U.S. 1010, 106 S. Ct. 1184, 89 L. Ed. 2d 300); see also Bounty-Gate, slip op. at 6 ("[A] sharp change in sanctions or discipline can often be seen as arbitrary and as an impediment rather than an instrument of change.").

Barksdale contends that "[n]o player suspension in NBA history has been sustained for an alleged failure to cooperate with—or allegedly obstructing—an NBA investigation." Def.'s Mem. Supp. 9. He cites to Arbitrator and former NFL Commissioner Tagliabue’s comment in Bounty-Gate:

[T]he NFL fined Brett Favre $50,000 — but did not suspend him — for obstruction of a League sexual harassment investigation. [T]his illustrates the NFL's practice of fining, not suspending a player, for serious violations of this type. There is no evidence of a record of past suspensions based purely on obstructing a League investigation. In my forty years of association with the NFL, I am aware of many instances of denials in disciplinary proceedings that proved to be false [but] cannot recall any suspension for such fabrication.

Bounty-Gate, slip op. at 13 (emphasis in original). Thus, to the extent the Award seeks to sustain the non-cooperation finding based on “new” grounds relating to Barksdale discarding his phone (Award 1, 12-13, 17-18), this exceeds the arbitrator's authority. The court in NFLPA v. NFL (Adrian Peterson) ("Adrian Peterson") ruled that under the essence of the CBA, the arbitrator only has the authority to review the stated basis for the discipline, not to sustain it on different grounds. Adrian Peterson, No. Civ. 14-4990 (DSD/JSM), 88 F. Supp. 3d 1084, 2015 U.S. Dist. LEXIS 23843, 2015 WL 795253, at *6 (D. Minn. Feb. 26, 2015) appeal docketed, No. 15-1438 (8th Cir. Feb. 27, 2015)

It is the "law of the shop" to provide professional athletes with (advance) notice of prohibited conduct and of potential discipline. See, e.g., Langhorne, slip op. at 25 ("Any disciplinary program requires that individuals subject to [it] understand . . . what results will occur if they breach established rules."). Because there was no notice of a four-game suspension in the circumstances presented here, Commissioner Burrell "dispense[d] his own brand of industrial justice." 187 Concourse Assocs., 399 F.3d at 527 (citation omitted).

ii. No Notice of Any Discernible Infraction Barksdale argues that the basis for his punishment was the very narrow finding that he was “generally aware” of ball deflation by two members of the equipment staff. No NBA policy or precedent provided notice that a player could be subject to discipline for general awareness of another person's alleged misconduct (e.g., no player has ever been suspended for general awareness that a teammate was taking steroids).

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The Commissioner counters that he did not discipline Barksdale for being “generally aware” of a violation of the playing rules. But, the Award makes clear he suspended Barksdale for (1) for approving of, consenting to, and providing inducements in support of a scheme to tamper with game balls; and (2) for willfully obstructing the investigation.3

The Commissioner clearly relies on the Levy Report finding that Barksdale was "generally aware" of the alleged ball tampering misconduct of the equipment staff. The Letter sent to Barksdale unquestionably adopts the Levy Report finding that "it is more probable than not that Avon Barksdale was at least generally aware of the inappropriate activities of [the equipment staff] involving the release of air from game balls." Levy Report at 2. Moreover, the Letter to Barksdale says “the [Levy Report] established that there is substantial and credible evidence to conclude you were at least generally aware of the actions of the employees involved in the deflation of the basketballs and that it was unlikely that their actions were done without your knowledge." Rawls Letter at 1. The Burrell Final Award confirms that "[t]he Levy Report . . . formed the factual basis for the discipline imposed on Mr. Barksdale." Award at 2. Barksdale had no notice that he could be disciplined because of the "general awareness" of others' misconduct or that it was prohibited. As a matter of law, no NBA policy or precedent notifies players that they may be disciplined for general awareness of others’ misconduct. And, it does not appear that the NBA has ever punished players for such an alleged violation. The absence of such notice violated the "law of the shop." See Langhorne, slip op. at 25. The law of the shop “is equally a part of the [CBA] although not expressed in it.” United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 581-82, 80 S. Ct. 1347 (1960).

iii. No Notice of Suspension as Opposed to Fine

Barksdale argues that under the Player Policies, he had notice only of fines — not suspensions — for player equipment violations designed to gain a competitive advantage. With respect to "Other Uniform/Equipment Violations," the Player Policies state in relevant part, the following:

League discipline may be imposed on players whose equipment, uniform, or On Field violations are detected . . . , who repeat violations . . ., or who participate in the game despite not having corrected a violation when instructed to do so. First offenses will result in fines.

Player Policies at 15 (emphasis in original). Under the corresponding "2014 Schedule of Fines," a first offense of "other uniform/equipment violations" results in a fine of $5,512. Id. at 20.

Barksdale contends that instead of applying the Player Policies, he was punished pursuant to violations of the Competitive Integrity Policy, which is only incorporated into the Game Operations Manual and given to Chief Executives, Club Presidents, General Managers, and Head Coaches, but not to players.

The Management Council responds that the Competitive Integrity Policy was not the source or basis for the discipline imposed here. Rather, the general "conduct detrimental" standard was the source of Barksdale’s discipline. Burrell argued Barksdale knew of the established rule 3 The Rawls Letter to Barksdale — unlike the Award — does not conclude that "Barksdale knew about, approved of, consented to, and provided inducements and rewards in support of a scheme by which, with Mr. Moreland’s support, Mr. McNulty tampered with the game balls." Nor does the Rawls Letter — unlike the Award — say that Barksdale "participated in a scheme to tamper with game balls after they had been approved by the game officials for use in the game . . . ." Compare Rawls Letter with Award at 13.

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governing the pressure of NBA game balls and had ample reason to expect that a violation of that rule would be deemed conduct detrimental.

A player's right to notice is at the heart of the CBA and our criminal and civil justice systems. While "[m]any controversies have raged about the cryptic and abstract words of the Due Process Clause . . . there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice . . . ." Texaco. Inc. v. Short, 454 U.S. 516, 102 S. Ct. 781, 795, 70 L. Ed. 2d 738 (1982) (quoting Mullane v. Bent. Hanover Bank & Trust Bo., 339 U.S. 306, 70 S. Ct. 652, 656, 94 L. Ed. 865 (1950)). Barksdale was on notice that equipment violations under the Player Policies could result in fines. He had no legal notice of discipline under the Competitive Integrity Policy because it was not given to players.

Arbitral precedent confirms that because Barksdale did not have notice of the Competitive Integrity Policy, he could not be disciplined under it. Retired Judge Barbara S. Jones (in Ray Rice) and U.S. District Judge David S. Doty (in Adrian Petersion) each held that the increased NFL penalties in a "new" policy for domestic violence could not be applied to Rice and Peterson, respectively, because these players (only) had notice of discipline under the 2007 . . . [p]olicy. "[T]he Commissioner has acknowledged that he did not have the power to retroactively apply the New Policy.” Adrian Peterson, 2015 U.S. Dist. LEXIS 23843, 2015 WL 795253, at *5 (D. Minn. Feb. 26, 2015) appeal docketed, No. 15-1438 (8th Cir. Feb. 27, 2015) (internal citations omitted); see also Ray Rice, slip op. at 7, 16 (same)4. Judge Doty held that "[t]his determination is consistent with prior NFL arbitration decisions recognizing the importance of notice in advance of discipline." Adrian Peterson, 2015 U.S. Dist. LEXIS 23843, 2015 WL 795253, at *5 n.4.

Commissioner Burrell contends that Barksdale’s discipline stems from the general CBA policy precluding players from engaging in any conduct that is "detrimental to the integrity of, or public confidence in, the game of professional basketball." CBA Art. 46 § 1(a). Burrell’s reliance on notice of broad CBA "conduct detrimental" policy for Barksdale’s discipline is legally misplaced. In NFL discipline cases, specifically the Ray Rice case and the Adrian Peterson case, the players could, perhaps, be said to appreciate that acts of domestic violence might be deemed "conduct detrimental." In both these cases, the players were disciplined only after findings were made under the specific domestic violence policy. See Adrian Peterson, 2015 U.S. Dist. LEXIS 23843, 2015 WL 795253, at *5-6; Ray Rice, slip op. at 16. An applicable specific provision within the Player Policies is better calculated to provide notice to a player than a general concept such as "conduct detrimental." See In re Lehman Bros. Holdings Inc., 761 F.3d 303, 313 (2d Cir. 2014') cert. denied sub nom. Giddens v. Barclays Capital Inc., 135 S. Ct. 2048, 191 L. Ed. 2d 956 (2015) ("To the extent that there appears to be conflict between these provisions, the specific governs the general.").

2. Improper Denial of Opportunity to Examine Designated Co-Lead Investigator

Barksdale contends the Commissioner’s denial of the testimony of Cedric Daniels at the hearing was fundamentally unfair because (1) the NBA publicly declared that Cedric Daniels was the co-lead investigator on the Daniels/Levy Investigation, and (2) Daniels reviewed the Levy Report and gave written comments before its release.

The Management Council responds the decision to exclude Daniels’ cumulative testimony was not challengeable because “arbitrators have substantial discretion to admit or exclude evidence.” 4 Available at: http://www.espn.com/pdf/2014/1128/141128_rice-summary.pdf

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Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 107 (2d Cir. 2013). Levy said Daniels played no substantive role in the investigation and any comments he gave on the report did not change the findings.

In determining what evidence to admit, "[a]n arbitrator need not follow all the niceties observed by the federal courts." Tempo Shain Corp. v. Bertek. Inc., 120 F.3d 16, 20 (2d Cir. 1997) (quoting Bell Aerospace Co. Div. of Textron v. Local 516, 500 F.2d 921, 923 (2d Cir. 1974)). "However, . . . an arbitrator 'must give each of the parties . . . an adequate opportunity to present its evidence and argument.'" Id. (quoting Hoteles Condado Beach v. Union De Tronquistas Local 901, 763 F.2d 34, 39 (1st Cir. 1985)). "A fundamentally fair hearing requires that the parties . . . present evidence and cross-examine adverse witnesses." Kaplan, 1996 U.S. Dist. LEXIS 16455, 1996 WL 640901, at *5; see also Tempo Shain, 120 F.3d at 20 ("[T]here was no reasonable basis for the arbitration panel to determine that . . . omitted testimony would be cumulative . . . . [T]he arbitration panel must "indicate in what respects [] testimony would be cumulative.")

Precedent demonstrates that professional athletes must have the opportunity to confront their investigators in arbitration hearings. See e.g., Bounty-Gate Pre-Hr'g Order No. 4 (in which the arbitrator ordered that Lead Investigator and NFL Vice President of Security be compelled to testify). In the Ray Rice appeal, Judge Jones held that the "key elements of a 'fundamentally fair hearing'" include a grievant's ability to "present evidence and cross-examine witnesses," and that an arbitrator should "compel[] the witnesses necessary for the hearing to be fair.” Ray Rice Order on Discovery and Hearing Witnesses at 1-2 (quoting Kaplan, 1996 U.S. Dist. LEXIS 16455, 1996 WL 640901, at *5). Judge Jones ordered the NFL’s Commissioner to testify in the Ray Rice arbitration and concluded that limiting “the available witnesses knowledgeable about the [evidence] to the individuals the NFL is willing to produce would prevent Mr. Rice from presenting his case and runs the risk of providing an incomplete picture of the [evidence] both parties have identified as critical." Id.

The Court finds that the Commissioner’s denial of Barksdale’s motion to compel the testimony of Daniels was fundamentally unfair. Given Daniel’s senior role General Counsel, and his designation as co-lead investigator with Maurice Levy, he would have valuable insight into the course of the Investigation and the content of the Levy Report. The Commissioner should have specified why Daniels’ testimony would have been "cumulative."

The Management Council does not deny that Daniels provided edits to the Levy Report in advance of its release. The Court recognizes that arbitrators are "endowed with discretion to admit or reject evidence and determine what materials may be cumulative or irrelevant." Abu Dhabi Inv. Auth. v. Citigroup. Inc., No. 12 Civ. 283 (GBD), 2013 U.S. Dist. LEXIS 30214, 2013 WL 789642, at *8 (S.D.N.Y. Mar. 4, 2013) aff'd, 557 F. App'x 66 (2d Cir. 2014) cert. denied, 135 S. Ct. 137, 190 L. Ed. 2d 45 (2014). However, the NBA cannot fairly suggest, without more than the testimony of it’s retained counsel, that the edits from Daniels were not significant or that his testimony would have been "cumulative." Levy acknowledged that he did not know the content of Daniel’s pre-release edits, and thus there was simply "no reasonable basis for the arbitration panel to determine that . . . [the] omitted testimony would be cumulative." See Tempo Shain, 120 F.3d at 20.

Denied the opportunity to examine Daniels at the arbitral hearing, Barksdale was prejudiced. He was foreclosed from exploring whether the Daniels/Levy Investigation was truly "independent," and how and why the NBA General Counsel came to edit a supposedly independent investigation report. Barksdale was also prejudiced because there was no other witness who was as "competent

11

to address the substantive core of the claim." See Commercial Risk Reinsurance Co. v. Sec. Ins. Co. of Hartford, 526 F. Supp. 2d 424, 429 (S.D.N.Y. 2007). As co-lead investigator with a senior in the NBA, Daniels was in the best position to testify about the NBA's degree of involvement in a proclaimed "independent" Investigation. The issues known to Daniels constituted "evidence plainly pertinent and material to the controversy," Tempo Shain, 120 F.3d at 19 (quoting 9 U.S.C. § 10(a)(3)), and the Commissioner’s refusal to hear such evidence warrants vacatur of the Award under 9 U.S.C. § 10(a)(3).

IV. IS THE LOCKOUT PROTECTED FROM ANTITRUST SCRUTINY BY THE NSLE?

A. APPLICABLE LEGAL STANDARD This Court will not be addressing whether an injunction of the NBA’s lockout of the players would be proper under the Norris-LaGuardia Act. The question of whether the NSLE protects the League’s lockout from antitrust scrutiny once the union has disclaimed interest is what we have been presented with today and it is the question we will be answering. In Radovich v. NFL, 352 U.S. 445, 451-52, 77 S. Ct. 309 (1957), the Supreme Court held that professional sports (with the exception of baseball) are not categorically exempt from the antitrust laws. The Barksdale Plaintiffs allege that the lockout itself violates section 1 of the Sherman Act as an agreement among competitors to eliminate competition for the services of professional basketball players in the U.S. market, which operates as a perpetual horizontal group boycott and price-fixing agreement. Section 1 of the Sherman Act states, “[E]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1. The non-statutory exemption has been inferred “from federal labor statutes, which set forth a national labor policy favoring free and private collective bargaining; which require good-faith bargaining over wages, hours, and working conditions; and which delegate related rulemaking and interpretive authority to the National Labor Relations Board.” Brown v. Pro Football, Inc., 518 U.S. 231, 236, 116 S. Ct. 2116, 135 L.Ed.2d 521 (1996) (internal citations omitted). The exemption exists not only to prevent the courts from usurping the NLRB's function of “determin[ing], in the area of industrial conflict, what is or is not a ‘reasonable’ practice,” but also “to allow meaningful collective bargaining to take place” by protecting “some restraints on competition imposed through the bargaining process” from antitrust scrutiny. Id. at 237. The Supreme Court has never delineated the precise boundaries of the exemption, and what guidance it has given as to its application has come mostly in cases in which agreements between an employer and a labor union were alleged to have injured or eliminated a competitor in the employer's business or product market. In the face of such allegations, the Court has largely permitted antitrust scrutiny in spite of any resulting detriment to the labor policies favoring collective bargaining. In the first case to deal squarely with the non-statutory exemption, Allen Bradley Co. v. Local No. 3, International Brotherhood of Electrical Workers, the New York City electrical workers union negotiated a series of agreements in which local manufacturers and contractors agreed to deal only with other manufacturers and contractors that employed the union's members. 325 U.S. 797, 799-800, 65 S. Ct. 1533, 89 L.Ed. 1939 (1945). A non-local manufacturer that was excluded from the market as a result successfully sued under the antitrust laws, establishing that these

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agreements were “but one element in a far larger program in which contractors and manufacturers united with one another to monopolize all the business in New York City, to bar all other business men from that area, and to charge the public prices above a competitive level.” Id. at 809. Although the Court recognized that the union sought the agreements out of “a desire to get and hold jobs for themselves at good wages and under high working standards,” it held that the non-statutory exemption did not apply where unions “combine with employers and with manufacturers of goods to restrain competition in, and to monopolize the marketing of, such goods.” Id. at 798. Twenty years later, the Court considered two cases dealing with the non-statutory exemption. Although the Court again refused to apply the non-statutory exemption in the first, United Mine Workers v. Pennington, 381 U.S. 657, 85 S. Ct. 1585, 14 L.Ed.2d 626 (1965), it did apply the exemption in Local No. 189, Amalgamated Meat Cutters & Butcher Workmen v. Jewel Tea Co., 381 U.S. 676, 85 S. Ct. 1607, 14 L.Ed.2d 626 (1965). In Pennington, a small coal mine operator claimed that a miners union violated the antitrust laws by agreeing with large coal mine companies that the union would demand a higher wage scale from small coal mine operators in an effort to drive the small mine operators from the market. Echoing its decision in Allen Bradley, the Court held that while “a union may make wage agreements with a multi-employer bargaining unit and may in pursuance of its own union interests seek to obtain the same terms from other employers” without incurring antitrust liability, “a union forfeits its exemption from the antitrust laws when it is clearly shown that it has agreed with one set of employers to impose a certain wage scale on other bargaining units.” Pennington, 381 U.S. at 665. The Court, however, reached a different result in Jewel Tea, which involved a challenge to a CBA between the butchers union and meat sellers in Chicago, whereby the meat sellers agreed to limit the operation of meat counters to certain hours. See Jewel Tea, 381 U.S. at 679–80. The union sought the restriction not only to cabin the hours in the workday but also to diminish the threat posed to members' job security by evening sales of prepackaged meat and the nighttime use of unskilled labor. Id. at 682. Jewel Tea was one of the meat sellers that signed the agreement. It did so, however, only under pressure from the union and then challenged the hours restriction on antitrust grounds. Jewel Tea notably did not allege that the hours restriction eliminated competition among the meat sellers that made up the bargaining unit or that the union sought the hours restriction from Jewel Tea at the behest of other meat sellers. Id. at 688. A majority of the Court agreed that the hours restriction fell within the non-statutory exemption, but the Justices disagreed as to the reason for applying the exemption. Justice White, writing for himself and two other Justices, advocated that the application of the non-statutory exemption should be determined by balancing the “interests of union members” served by the restraint against “its relative impact on the product market.” Id. at 690 n.5. Applying that test, Justice White held that the hours restriction was

so intimately related to wages, hours and working conditions that the unions' successful attempt to obtain that provision through bona fide, arm's-length bargaining in pursuit of their own labor union policies, and not at the behest of or in combination with nonlabor groups, falls within the protection of the national labor policy and is therefore exempt from the Sherman Act.

Id. at 689–90.

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Concurring in Jewel Tea but dissenting in Pennington, Justice Goldberg, writing for himself and two Justices, found that no such balancing was necessary. Because federal labor law obligates the union and employer to bargain in good faith and permits unions to strike over those issues that relate to workers' wages, hours, or terms and conditions of employment, Justice Goldberg found that it would “stultify the congressional scheme” to CBAs on these so-called mandatory bargaining subjects to antitrust liability. Id. at 712. Therefore, according to Justice Goldberg, all “collective bargaining activity concerning mandatory subjects of bargaining under the [labor laws] is not subject to the antitrust laws.” Id. at 710. Another ten years later, in Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 95 S. Ct. 1830, 44 L.Ed.2d 418 (1975), the Court held the non-statutory exemption did not protect a union's agreement with a contractor that bound the contractor to deal only with subcontractors that employed the union's members. The challenged agreement was not a CBA, and the union did not represent the contractor's employees; rather, the contractor acceded to the agreement only after the union picketed one of its facilities. Id. at 619. The Court refused to apply the exemption to this “kind of direct restraint on the business market[, which] has substantial anticompetitive effects, both actual and potential, that would not follow naturally from the elimination of competition over wages and working conditions.” Id. at 625. The first notable application of the NSLE to professional sports came in the form of Mackey v. NFL, where the Court of Appeals for the Eighth Circuit first articulated the test for whether or not the NSLE would apply in antitrust challenges to a professional sports league. 543 F.2d 606, 614–15 (8th Cir. 1976). The NFL Players Association (“NFLPA”) challenged the NFL’s enforcement of the “Rozelle Rule” as an “illegal combination and conspiracy in restraint of trade denying professional football players the right to freely contract for their services.” Id. at 609. The “Rozelle Rule” restricted free agency by requiring the team that signed a free agent to compensate that player’s previous team in a “mutually satisfactory agreement[],” even though the player’s contract expired. Id. at 610-11. In Mackey, the Court’s test was whether the restraint at issue primarily affects only the parties to the collective bargaining relationship; whether the dispute concerns a mandatory subject of bargaining; and whether the agreement sought to be exempted is the product of bona fide arm’s length negotiation. Id. at 615. The Court used this test to find that the NSLE did not apply to the “Rozelle Rule” because it was not negotiated over and was therefore not the product of arm’s length negotiations.

B. DISCUSSION In the instant case, the NBA did not contest the fact that its lockout would be a violation of section 1 of the Sherman Act, but instead claimed that an implied NSLE shields the lockout from antitrust scrutiny. However, this exemption to the Sherman Act does not apply where the collective bargaining relationship has ended. See Brown, 518 U.S. at 231; Mackey, 543 F.2d at 606. The NSLE lasts only until the collapse of the collective-bargaining relationship. Brown, 518 U.S. at 250. The NSLE is an implied repeal of the Sherman Act where imposing antitrust liability would conflict with federal labor statutes. Id. at 236. Courts have held that the only circumstances in which an implied repeal is acceptable are where two statutes are irreconcilable. Morton v. Mancari, 417 U.S. 535, 550, 94 S. Ct. 2474 (1974). Therefore, courts can appropriately apply the NSLE only where it would be impossible to enforce labor laws if antitrust laws were applied. Brown, 518 U.S. at 237. The collective bargaining process is one area where this exemption applies because the National Labor Relations Act (NLRA) mandated bargaining over terms of employment would be futile if a resulting agreement were an antitrust violation. See Jewel Tea, 381 U.S. at 691. However, when employees are not represented by a

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union, there can be no possible conflict between labor law and the Sherman Act, because the labor law provisions governing collective bargaining do not apply. See Brown., 518 U.S. at 231; Mackey, 543 F.2d at 606. Faced with a conflict, a court must enforce the antitrust laws as written. See NBA v. Williams, 857 F. Supp. 1069, 1078 (S.D.N.Y. 1994), aff'd, 45 F.3d 684 (2d Cir. 1995); McNeil v. NFL, 790 F. Supp. 871, 885-86 (D. Minn. 1991). The NBA relies on language in Brown v. Pro Football, which states that the NSLE continues to apply until some point sufficiently distant in time and circumstances from the collective bargaining process. 518 U.S. at 250. However, this is not an appropriate parallel. See Brady v. NFL, 79 F. Supp. 2d 992, 1040 (D. Minn. 2011). In Brown, the Supreme Court examined the application of the NSLE to professional sports. Id. at 250. The NFLPA claimed the NFL violated antitrust laws when, after the CBA expired and the parties’ negotiations reached an impasse on the issue of salaries for practice squad players, it unilaterally implemented its last best offer of $1,000 a week. Id. at 235. The Supreme Court held that the NSLE applied to the employer conduct at issue, which took place during and immediately after a collective-bargaining negotiation, grew out of, and was directly related to, the lawful operation of the bargaining process, involved a matter that the parties were required to negotiate collectively, and concerned only the parties to the collective-bargaining relationship. Id. at 250. The issue in Brown was whether the NSLE allowed a multiemployer bargaining unit to jointly implement their last best offer after impasse. In deciding such implementation is allowed, the Court specifically noted their rationale, “to give effect to federal labor laws and policies and to allow meaningful collective bargaining to take place.” Id. at 237. Here, unlike in Brown, there is no tension between antitrust and labor law in the case at hand. Brown involved the unilateral implementation of a salary restriction once the players and the NFL had reached impasse on the issue, but here there was an impasse and then an end of the collective bargaining process with the decertification of the NFLPA. In Brown, the Court stated, “[O]ur holding is not intended to insulate from antitrust review every joint imposition of terms by employers for an agreement among employers could be sufficiently distant in time and in circumstances from the collective bargaining process that a rule permitting antitrust intervention would not significantly interfere with that process.” Id. at 250. This “sufficiently distant” language in Brown addresses the situation where the parties to a collective bargaining relationship have reached impasse but are still within an existing bargaining framework. Id. Here, there is no longer an existing bargaining framework because there is no union. Additionally, in Brown, the Court noted that there could be a place sufficiently distant in time and circumstance from the collective bargaining process that application of antitrust laws would not interfere with labor laws. Brown, 518 U.S. at 250 (quoting NLRB v. Truck Drivers, 353 U.S. 87, 96 (1957) and citing Jewel Tea, 381 U.S. at 710). The Court identified the collapse of the collective bargaining relationship evidenced by decertification of the union as an example of when the NSLE would no longer exist. Id. The NBA also points to the case of Powell v. NFL, where the United States Court of Appeals for the Eighth Circuit held that the NSLE continues to apply post impasse during an ongoing collective bargaining relationship. 930 F.2d 1293, 1303 (8th Cir. 1989). There, the players claimed that the NFL violated antitrust laws when, after the CBA expired, it maintained the status quo on all mandatory elements of bargaining in the expired agreement because the negotiations for a new CBA were unsuccessful. Id. at 1296. The court acknowledged that the exemption might eventually terminate notwithstanding the collective bargaining relationship but did not even suggest, let alone hold, that the NSLE would continue after the collective bargaining relationship had ended. In fact, the court stated, “[T]he Sherman Act could be found

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applicable . . . if the affected employees ceased to be represented by a certified union.” Id. at 1303 n.12. Thus, court implied decertification gave way to an antitrust law. The NBA contends that from a policy standpoint the NSLE must still apply because the collective bargaining process would be hindered from the outset, and a multiemployer bargaining unit could not exist, if previously unionized employees could assert antitrust claims after abandoning their union. However, this claim assumes that a union's disclaimer is simply a step to advance the employees' bargaining position. The opposite, however, is true. When a union dissolves, workers abandon their rights under the labor laws to challenge, as unfair labor practices, the refusal of individual employers to bargain collectively. See NLRB v. Gissel Packing Co., 395 U.S. 575, 596 (1969). Thus, after a disclaimer, an individual employer can impose the terms and conditions of employment it desires without collective bargaining so long as the terms do not violate the antitrust laws. Employers can alter the workplace in fundamental ways that otherwise would violate NLRA provisions. When employees are organized, the employer cannot refuse to collectively bargain without committing an unfair labor practice. 29 U.S.C. § 158(a)(5). However, when unorganized employees attempt to reconstitute their union, the employer has a right to force them to seek an NLRB-supervised election even if a majority of the employees have already authorized the union to represent them. See Linden Lumber Div. v. NLRB, 419 U.S. 301, 309-10 (1974). Thus, there are serious consequences to dissolving a union. The NBA also argues that the NBPA has not disclaimed and it is still a representative of the players, thus the collective bargaining process is still ongoing. The NBA predicts that the Board will undoubtedly recognize that the NBPA’s purported disclaimer is not motivated by a desire to abandon unionism permanently. But there is no legal support for any requirement that a disclaimer be permanent. Employees have the right not only to organize as a union but also to refrain from such representation and, as relevant here, to “de-unionize.” 29 U.S.C. § 157. Nor is there any evidence of conduct by the players which is inconsistent with an unequivocal disclaimer. In Elec. Workers, Ibew (Texlite, Inc.), the NLRB explained that a “bare disclaimer” is one that is inconsistent with its ongoing conduct as a union. 119 N.L.R.B. 1792, 1798–99 (1958) (noting, among other things, that members of Local 59 “have continued to be members of” the union, and that the union's representative still functioned as the employees' representative). Similarly, in Capitol Market No. 1, the union “continued the picketing without interruption” after notifying the employer of its purported disclaimer. 145 N.L.R.B. 1430, 1431 (1964). The NLRB explained that a “good faith” disclaimer is the opposite of continuing to engage in union activities such as picketing. Id. at 1432. In short, a “good faith” disclaimer is one that is not inconsistent with the union's ongoing actions as its members' bargaining agent. Queen's Table, Inc., 152 N.L.R.B. 1401 (1965) (concluding that disclaimer was not in good faith based on finding “that the Union's entire course of conduct is inconsistent with its disclaimer”); Grand Central Liquors, 155 N.L.R.B. 295 (1965) (same). Likewise, a “bare disclaimer” is one not supported by the union's continuing conduct. Most importantly, in 1991, the NLRB's General Counsel issued an opinion in a factual context remarkably similar to that at issue here. In the wake of the Eighth Circuit's November 1989 decision in Powell, which concluded that the NSLE protected the League's free agency restrictions from any antitrust claims by the NFLPA, “the NFLPA Executive Committee decided to abandon all collective bargaining rights in order to allow player antitrust challenges to” those restrictions “to go forward free of the labor exemption defense.” In re Pittsburgh Steelers, Case 6–CA–23143, 1991 WL 144468, *1 (June 26, 1991). The General Counsel in the Pittsburgh Steelers matter addressed whether the NFL violated Section 8(a), which prohibits unfair labor

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practices by employers, by continuing to recognize the NFLPA as the players’ representative “following the NFLPA's disclaimer and reorganization, where another union is now trying to organize the players.” Id. The NFL had “refused to accept the disclaimer and reorganization,” and the rival purported union, the United Players of the NFL (UPNFL), filed a charge that the NFL's statements “created the impression that the NFLPA was still the players' bargaining representative,” thereby interfering in the new union's organizing campaign. Identifying as a “threshold question” the issue of “whether the NFLPA remains the players' collective-bargaining representative,” the General Counsel noted that the NFL contended that “the NFLPA's disclaimer and reorganization is a sham and that management has acted properly in continuing to recognize the NFLPA as the incumbent union.” Id. at *2. The General Counsel, however, concluded “that the disclaimer was valid,” and that “the NFLPA has not merely disclaimed representative status,” but also “restructured itself so that it no longer functions as a collective-bargaining agent.” Id. Accordingly, the General Counsel concluded that “the NFLPA is not a labor organization as defined in Section 2(5) of the Act,” and thus “there can be no Section 8(a)(2) violation since it cannot be said that the NFL has been attempting to deal with a ‘labor organization.’” Id. In the absence of a “labor organization,” the General Counsel stated that “[w]e conclude that the [Section 8(a)(2)] charge should be dismissed.” Id. “In summary, we conclude that the Section 8(a)(2) allegation is without merit because the NFLPA has effectively disclaimed its representational rights and has converted itself from a Section 2(5) labor organization to a trade association.” Id. at *4; see In re Cleveland Decals, Inc., 99 N.L.R.B. 745 (1952) (dismissing petition for decertification because “the Union's unequivocal disclaimer of interest in the Employer's employees cancels whatever vitality its certificate as bargaining representative might otherwise possess”); In re Federal Shipbuilding and Drydock Co., 77 N.L.R.B. 463 (1948) (dismissing petition for decertification and setting aside a previously issued “Direction of Election” after union disclaimed its status as exclusive bargaining representative of the employees because “to direct an election despite the Union's disclaimer, would not only be a waste of Federal funds, but would also almost certainly mean” the Employer could “refuse to engage in collective bargaining with [any union]”). Summarizing the Board's opinions on union disclaimers, the General Counsel provided a succinct standard. “In order for a union's disclaimer in representing a particular unit to be valid, it must be unequivocal, made in good faith, and unaccompanied by inconsistent conduct.” In re Pittsburgh Steelers, 1991 WL 144468 at *4 n.8. “Moreover, when a union has made a valid disclaimer, no question concerning representation exists and a decertification election will not be held because it would be an unnecessary waste of time and resources.” Id. Here, the NBA contends that the players “purported” disclaimer of their collective bargaining agent is a mere tactic that undermines the validity of the disclaimer. The players deny this, asserting that by disclaiming their union, they have given up the right to strike, to collectively bargain, to have union representation in grievances, to have union representation in benefits determinations, and to have union regulation of agents. Moreover, the players note that the disclaimer does not stand alone. The NBPA also (1) amended its bylaws to prohibit it or its members from engaging in collective bargaining with the NBA, the individual teams, or their agents, (2) filed notice with the Department of Labor to terminate its status as a labor organization, (3) filed an application with the IRS to be reclassified for tax purposes as a professional association rather than a labor organization, and (4) informed the NBA that it no longer would represent players in grievances under the soon-to-expire CBA, such that the players would have to pursue or defend on an individual basis any grievance with the NBA or the

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individual teams. This Court finds that the disclaimer is not a mere tactic because it results in serious consequences for the players. Moreover, this Court need not resolve the debate about whether their motive was influenced by the expectation of this litigation, because the NLRB's General Counsel has addressed this question too. “[T]he fact that the disclaimer was motivated by ‘litigation strategy,’ i.e., to deprive the NFL of a defense to players' antitrust suits and to free the players to engage in individual bargaining for free agency, is irrelevant so long as the disclaimer is otherwise unequivocal and adhered to.” In re Pittsburgh Steelers, 1991 WL 144468, at *2 n.8 (emphasis added). This Court notes that the actions of both sides are no doubt, in part, a litigation strategy, particularly where, as here, the parties have a long history of disagreements punctuated by uneasy and temporary truces. But because the disclaimer was unequivocal, the NBPA is not continuing to act as the players' bargaining representative, and because the players have given up very significant rights in doing so, any subjective motivation for disclaimer is irrelevant, as the Board's General Counsel has previously advised. Other policy arguments the NBA relies on are also unpersuasive. The NBA protests that deeming multiemployer bargaining unit lockouts as antitrust violations will violate the right of employers to lockout their employees under labor law. However, unlike the right to strike, codified at 29 U.S.C. §§ 157, 163, the ability of an employer to lockout employees is not guaranteed by statute. It is instead as an implied counterbalance to the right to strike. See Am. Ship Bldg. v. NLRB, 380 U.S. 300, 315 (1965); NLRB v. Cont'l Banking Co., 221 F.2d 427, 436 (8th Cir. 1955) (stating that a lockout could be justified as the statement of the employer's corollary to a union's right to strike). Thus, by dissolving a union, and therefore giving up the employees' right to strike without violating antitrust laws, their employer's corresponding ability to lockout loses its protection. The appropriate case to consider is McNeil v. NFL, where the court stated that once a union disclaims interest or decertifies, the NSLE is extinguished. 764 F. Supp. 1351, 1357-58 (D. Minn. 1991). While that case did not deal with a lockout, the factual context is insufficient to distinguish the case because under the broad ruling the NSLE is lifted entirely. Brady v. NFL, 779 F. Supp. 992, 1041 (D. Minn. 2011). The fact that in McNeil substantial time had passed since the disclaimer of interest is not an issue here because the ruling in McNeil was not based on any such temporal restrictions. Brady, 779 F. Supp. 2d at 1041. Additionally, “The NFL has identified no legal authority, controlling or otherwise, that stands for the proposition that the non-statutory labor exemption from antitrust liability, extends to protect the labor negotiation tool of a ‘lockout,’ as opposed to a mandatory term of collective bargaining, after a union has disclaimed any further representation of its members.” Id.

V. CONCLUSION

A. VACATING THE ARBITRATION AWARD

For the reasons stated herein, the Management Council's motion to confirm the arbitration award is denied and Avon Barksdale’s motion to vacate the arbitration award is granted. Barksdale’s four-game suspension is vacated, effective immediately.

B. THE LOCKOUT IS NOT PROTECTED FROM ANTITRUST SCRUTINY

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Because the collective bargaining relationship between the NBA and its players, including the Barksdale Plaintiffs, has ended, as evidenced by the dissolution of the union, the NSLE does not apply. Therefore, the lockout is an unlawful restraint of trade in violation of section 1 of the Sherman Act. David Stern, District Judge October 25, 2016

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Docket No. 11-831720

UNITED STATES COURT OF APPEALS FOR

THE EIGHTH CIRCUIT IN THE MATTER OF:

AVON BARKSDALE, OMAR LITTLE, and STRINGER BELL, individually and on behalf of all

others similarly situated,

Plaintiffs,--Appellees, v.

NATIONAL BASKETBALL ASSOCIATION

Defendant,--Appellant.

Appeal from the United

States District Court For

the District of Tulania

USDC No. 11-CV-1215 Before Judges POPOVICH, KERR and LUE

I. PROCEDURAL HISTORY This appeal comes to us from the United States District Court for the District of Tulania. The National Basketball Association (NBA) appeals the district court's holding that: the arbitration award given in Avon Barksdale’s disciplinary decision is vacated, and the NBA’s lockout of its players is not exempted from antitrust liability under the non-statutory labor exemption (NSLE). We will be addressing these issues in order.

II. DID THE DISTRICT COURT ERR IN VACATING THE ARBITRATION AWARD?

A. STANDARD OF REVIEW

We review a district court's decision to confirm or vacate an arbitration award de novo on questions of law and for clear error on findings of fact. Wackenhut Corp. v. Amalgamated Local 515, 126 F.3d 29, 31 (2d Cir. 1997). Because this dispute involves the assertion of rights under a collective bargaining agreement (“CBA”), our analysis is governed by section 301 of the Labor Management Relations Act (“LMRA”). Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509, 121 S. Ct. 1724, 149 L. Ed. 2d 740 (2001).

The LMRA establishes a federal policy of promoting "industrial stabilization through the [CBA]," with particular emphasis on private arbitration of grievances. United Steelworkers v.

20

Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960). The Act embodies a "clear preference for the private resolution of labor disputes without government intervention." IBEW, Local 97 v. Niagara Mohawk Power Corp., 143 F.3d 704, 714 (2d Cir. 1998).

Under this framework of self-government, the CBA is not just a contract, but "a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate." Warrior, 363 U.S. at 578. CBAs are not imposed by legislatures or government agencies. They are negotiated and refined over time by the parties themselves so as to best reflect their priorities, expectations, and experience. Similarly, the parties choose the arbitrators because of their expertise in the particular business and their trusted judgment to "interpret and apply [the] agreement in accordance with the 'industrial common law of the shop' and the various needs and desires of the parties." Alexander v. Gardner-Denver Co., 415 U.S. 36, 53, 94 S. Ct. 1011, 39 L. Ed. 2d 147 (1974). The arbitration process is "part and parcel of the ongoing process of collective bargaining." Misco, 484 U.S. at 38.

Our review of an arbitration award under the LMRA is, accordingly, "very limited." Garvey, 532 U.S. at 509. We are not authorized to review the arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement, but inquire only as to whether the arbitrator acted within the scope of his authority as defined by the CBA. Because it is the arbitrator's view of the facts and the meaning of the contract for which the parties bargained, courts are not permitted to substitute their own view. Misco, 484 U.S. at 37-38. The arbitrator's construction of the contract and assessment of the facts that are dispositive, "however good, bad, or ugly." Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2071, 186 L. Ed. 2d 113 (2013). We do not consider whether the punishment imposed was the most appropriate, or whether we are persuaded by the arbitrator's reasoning. It is not our task to decide how we would have conducted the arbitration proceedings, or how we would have resolved the dispute. Instead, our task is simply to ensure that the arbitrator was "even arguably construing or applying the contract and acting within the scope of his authority" and did not "ignore the plain language of the contract." Misco, 484 U.S. at 38. Even failure to "follow arbitral precedent" is no "reason to vacate an award." Wackenhut, 126 F.3d at 32. As long as the award "'draws its essence from the collective bargaining agreement' and is not merely the arbitrator's 'own brand of industrial justice,'" it must be confirmed. Niagara Mohawk, 143 F.3d at 714 (quoting United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960)); see also Garvey, 532 U.S. at 509; 187 Concourse Assocs. v. Fishman, 399 F.3d 524, 527 (2d Cir. 2005).5 In other words, even if we were “convinced” that the arbitrator “committed serious error,” the Award could not be vacated so long as the arbitrator was “even arguably construing or applying the [CBA] and acting within the scope of his authority.” Garvey, 532 U.S. at 509 (quoting E. Assoc. Coal Corp. v. Mine Workers, 531 U.S. 57, 62 (2000)); see Wackenhut, 126 F.3d at 32 (failure to “follow arbitral precedent” is not a “reason to vacate an award”).

5 This deferential standard is no less applicable where the industry is a sports association. We do not sit as referees of basketball any more than we sit as the "umpires" of baseball. Otherwise, we would become mired down in the areas of a group's activity concerning which only the group can speak competently. See Crouch v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 845 F.2d 397, 403 (2d Cir. 1988); Charles O. Finley & Co., Inc. v. Kuhn, 569 F.2d 527, 536-38 (7th Cir. 1978).

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If the arbitrator acts within the scope of this authority, the remedy for a dissatisfied party "is not judicial intervention," but "for the parties to draft their agreement to reflect the scope of power they would like their arbitrator to exercise." United Bhd. of Carpenters v. Tappan Zee Constr., LLC, 804 F.3d 270, 275 (2d Cir. 2015) (internal quotation marks omitted) (quoting T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329, 345 (2d Cir. 2010)). Against this legal backdrop, we turn to the decision below and the arguments advanced on appeal.

B. DISCUSSION

Article 46 of the CBA empowers the Commissioner to take disciplinary action against a player whom he "reasonably judge[s]" to have engaged in "conduct detrimental to the integrity of, or public confidence in, the [NBA]." Joint App. at 345, 353.6 A disciplined player is entitled to appeal to the Commissioner and seek an arbitration hearing, and the Commissioner may appoint either himself or someone else as arbitrator. Article 46 does not articulate rules of procedure for the hearing, except that "the parties shall exchange copies of any exhibits upon which they intend to rely no later than three (3) calendar days prior to the hearing." Joint App. at 346.

On this appeal, Barksdale does not contest the factual findings of the Commissioner. Nor does Barksdale dispute that the Commissioner was entitled, under Article 46, to determine that Barksdale’s "participat[ion] in a scheme to tamper with game balls" was "conduct detrimental" worthy of a four-game suspension. The parties disagree, however, as to whether other aspects of the CBA and the relevant case law require vacatur of the award.

The district court identified three bases for overturning Barksdale’s suspension: (1) the lack of adequate notice that deflation of basketballs could lead to a four-game suspension, (2) the exclusion of testimony from Daniels, and (3) the denial of access to the investigative notes of the attorneys who prepared the Levy Report. We conclude that each of these grounds is insufficient to warrant vacatur and that none of the Association's remaining arguments have merit.

1. Lack of Adequate Notice

The parties agree that the "law of the shop" requires the League to provide players with advance notice of "prohibited conduct and potential discipline." The district court identified several grounds for concluding that Barksdale had no notice that his conduct was prohibited or that it could serve as a ground for suspension.

i. The Player Policies

Barksdale’s chief ground for vacatur, relied upon by the district court, is that the Commissioner improperly suspended Barksdale pursuant to the "conduct detrimental" clause of Article 46 because he only had notice that his conduct could lead to a fine under the more specific "Discipline for Game-Related Misconduct" section of the League Policies for Players (the "Player Policies"). These Policies, which are collected in a handbook distributed to all NBA players at the beginning of each season, include a section entitled "Other Uniform/Equipment Violations."

Barksdale argues that the Commissioner could not impose a four-game suspension under Article 46 because the Player Policies mandated only a fine for equipment infractions. Barksdale also

6 Players are put on notice of the Commissioner's authority by way of the League Policies for Players and the NBA Player Contract.

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contends the award is defective because the Commissioner failed to make findings as to the applicability or interpretation of the Player Policies. See Clinchfield Coal Co. v. Dist. 28, United Mine Workers, 720 F.2d 1365, 1369 (4th Cir. 1983) ("Where . . . the arbitrator fails to discuss critical contract terminology, which terminology might reasonably require an opposite result, the award cannot be considered to draw its essence from the contract.").

This argument has a tortured procedural history. During arbitration, Barksdale disclaimed the applicability of the Player Policies, saying "I don't believe this policy applies either, because there is nothing here about the balls." Joint App. at 956. This change of position is itself grounds for rejecting Barksdale’s argument. See York Research Corp. v. Landgarten, 927 F.2d 119, 122 (2d Cir. 1991) ("[A] party 'cannot remain silent, raising no objection during . . . the arbitration proceeding, and when an award adverse to him has been handed down complain of a situation of which he had knowledge from the first.'" (quoting Cook Indus., Inc. v. C. Itoh & Co. (Am.) Inc., 449 F.2d 106, 107-08 (2d Cir. 1971)). We nonetheless exercise our discretion to address it. We conclude that the equipment provision does not apply and the punishments listed for equipment violations are minimum ones that do not foreclose suspensions.

a. Applicability of the Player Policies

Barksdale primarily relies on a statement in the "Other Uniform/Equipment Violations" section, which provides that "First offenses will result in fines." It argues that equipment violations include "ball or equipment tampering" and "equipment tampering such as ball deflation." But Barksdale finds language in this provision that we cannot locate. The provision says nothing about tampering with, or the preparation of, basketballs, and does not mention the words "tampering," "ball," or "deflation" at all. Moreover, there is no other provision of the Player Policies that refers to ball or equipment tampering, despite an extensive list of uniform and equipment violations ranging from the length of a player's stockings to the color of his wristbands.

On the other hand, Article 46 gives the Commissioner broad authority to deal with conduct he believes might undermine the integrity of the game. The Commissioner properly understood that a series of rules relating to uniforms and equipment does not trump the authority vested in him by the NBA to protect professional basketball from detrimental conduct. We have little difficulty concluding the Commissioner's decision to discipline Barksdale under Article 46 was "plausibly grounded in the [CBA]," which is all the law requires. See Wackenhut, 126 F.3d at 32.

b. 2014 Schedule of Fines

Even if the district court and Barksdale were correct, and they are not, that Barksdale could be punished only pursuant to the Player Policies and its "Other Uniform/Equipment Violations" provision, it would not mean a fine was the only available punishment. While the Player Policies do specify that, with regard to "Other Uniform/Equipment Violations," "[f]irst offenses will result in fines," the 2014 Schedule of Fines, which appears five pages later and details the fines for these violations, makes clear that the "[f]ines listed below are minimums." Joint App. at 384, 389. The Schedule of Fines goes on to specify that "[o]ther forms of discipline, including higher fines and suspension may also be imposed, based on the circumstances of the particular violation." Joint App. at 389. Read in conjunction, these provisions make clear that first offenders are not exempt from punishment, and serious violations may result in suspension. But even if other readings were plausible, the Commissioner's interpretation of this provision as allowing for a suspension easily withstands judicial scrutiny because his interpretation is at least

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"barely colorable," which is all that the law requires. See In re Andros Compania Maritima, S.A., 579 F.2d 691, 704 (2d Cir. 1978).

ii. Steroid Comparison

The district court also took issue with the Commissioner’s comparison between Barksdale’s conduct and that of steroid users. In his arbitration award, the Commissioner noted that the four-game suspension typically imposed on first-time steroid users was a helpful point of comparison because "steroid use reflects an improper effort to secure a competitive advantage in, and threatens the integrity of, the game." Finding such a comparison inappropriate, the district court held:

[N]o player alleged or found to have had a general awareness of the inappropriate ball deflation activities of others or who allegedly schemed with others to let air out of basketballs in a championship game and also had not cooperated in an ensuing investigation, reasonably could be on notice that their discipline would be the same as applied to a player who violated the NBA Steroid Policy.

Barksdale v. NBA, No. 11-CV-1215, slip op. at 6 (D. Tul. Oct. 25, 2016). Barksdale approaches this comparison differently, contending that the Commissioner's failure to punish Barksdale pursuant to the Player Policies "is only underscored by his reliance on the Steroid Policy." Appellees' Br. 45.

We are not troubled by the Commissioner's analogy. Deference means that the arbitrator is entitled to generous latitude in phrasing his conclusions. The comparison to steroid users did not violate a "right" Barksdale was entitled or deprived him of notice. While he may have been entitled to notice of his range of punishment, it does not follow that he was entitled to advance notice of the analogies the arbitrator might find persuasive in selecting a punishment within that range.

Accordingly, we believe the Commissioner was within his discretion in drawing a helpful, if somewhat imperfect, comparison to steroid users. In any event, we believe this issue is much ado about very little because the Commissioner could have imposed the same suspension without reference to the League's steroid policy.

iii. General Awareness

The district court also concluded that the award was invalid because "[n]o NBA policy or precedent provided notice that a player could be subject to discipline for general awareness of another person's alleged misconduct." Barksdale, slip op. at 7. This conclusion misapprehends the record. The award is clear that it confirmed Barksdale’s discipline not because of a general awareness of misconduct on the part of others, but because Barksdale both participated in a scheme to tamper with game balls and willfully obstructed the investigation by having his cell phone destroyed.

Barksdale argues that the Commissioner was bound to the Levy Report's limited conclusion that Barksdale was at least "generally aware" of the inappropriate activities of Tune Squad equipment staff. But Barksdale offers no persuasive support for its contention that the facts the Commissioner could properly consider was limited by the Levy Report. Nothing in Article 46 limits the authority of the arbitrator to examine or reassess the factual basis for a suspension. In fact, in providing for a hearing, Article 46 strongly suggests otherwise. Because the point of a

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hearing in any proceeding is to establish a complete factual record, it would be incoherent to both authorize a hearing and at the same time insist that no new findings or conclusions could be based on a record expanded as a result of a hearing.

Additionally, an important goal of the hearing was to afford Barksdale the opportunity to examine the findings of the Levy Report, and Barksdale availed himself of that opportunity. At the hearing Barksdale argued that the Levy Report’s conclusion was wrong because it relied on too many “unknowns” and that his testimony would prove he was not the type of person who would be involved in this type of conduct. In light of Barksdale’s effort to challenge the factual conclusions of the Levy Report by presenting exculpatory evidence, it would make little sense to accept his contention that the introduction and consideration of inculpatory evidence violates the Commissioner's broad authority to manage the hearing.

The issue before the Commissioner was whether the discipline imposed on Barksdale was warranted under Article 46, and that was the issue he decided. The Commissioner did not develop a new basis for the suspension, nor did he deprive Barksdale of an opportunity to confront the case against him. We see nothing in the CBA that suggests that the Commissioner was barred from concluding, based on information generated during the hearing, that Barksdale’s conduct was more serious than was initially believed.

Moreover, the Levy Report did not limit itself to a finding of "general awareness." It also found that "it is unlikely that [McNulty and Moreland] would deflate game balls without Barksdale’s knowledge and approval" or that they "would personally and unilaterally engage in such conduct in the absence of his awareness and consent." Joint App. at 114. The Commissioner's shift from "knowledge and approval" to "participation" was not a "quantum leap," but was instead a reasonable reassessment of the facts that gave rise to Barksdale’s initial discipline, supplemented by information developed at the hearing.

We therefore find that the Commissioner was within his discretion to conclude that Barksdale had "participated in a scheme to tamper with game balls." Because the parties agree that such conduct is "conduct detrimental," the district court erred in concluding that the Commissioner's deviation from the Levy Report's finding of general awareness was a ground for vacatur.

iv. Discipline for Non-Cooperation

The district court held and Barksdale contends that Barksdale’s suspension cannot be sustained on the grounds that he obstructed the Commissioner's investigation. The court reasoned that "[n]o player suspension in NBA history has been sustained for an alleged failure to cooperate with—or even allegedly obstructing—an NBA investigation." Barksdale, slip op. at 6. The League, on the other hand, argues that not only is the deliberate obstruction of a League investigation "conduct detrimental" within the meaning of Article 46, but also the destruction of the cell phone permitted the Commissioner to draw an adverse inference against Barksdale that supported the finding that he participated in the deflation scheme.

Barksdale’s argument is essentially procedural. Barksdale does not dispute that the Commissioner properly used the destruction of the cell phone to draw an adverse inference. In the face of this concession, Barksdale insists that because the award is invalid in light of the Commissioner's failure to discipline him under the Player Policies, the award cannot be salvaged on the alternative theory that Barksdale could have been suspended for his obstruction of the investigation. Specifically, Barksdale contends that "once it becomes clear that my non-cooperation led to the adverse inference about ball tampering, it's back to square one: The only

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penalty of which he had notice was the collectively bargained fine for equipment violations." Appellees' Br. 51. This argument fails for the simple reason that the Player Policies are inapplicable and suspensions may be imposed for violations of the League's equipment policies.

At oral argument, Barksdale contended, for the first time, that he had no notice that the destruction of the cell phone would be at issue in the arbitration proceeding.7 Ordinarily, an argument like this that is not raised in the briefs is waived and not appropriate for consideration on appeal. Littlejohn v. City of New York, 795 F.3d 297, 313 n.12 (2d Cir. 2015). However, because the parties discussed this issue at length during oral argument, we exercise our discretion to address it.

Barksdale’s assertion that he lacked notice that the destruction of the cell phone would be an issue in the arbitration has no support in the record. The League's letter to Barksdale notifying him of his suspension pointed to his failure to cooperate fully and candidly with the investigation, including by refusing to produce any relevant electronic evidence (emails, texts, etc.). Having been given clear notice that his cooperation with the investigation was a subject of significant interest, we have difficulty believing that either Barksdale or the National Basketball Players’ Association would have been surprised that the destruction of the cell phone was of importance to the Commissioner. The notion that Barksdale was unfairly blindsided by the Commissioner's adverse inference is further belied by the opening statement of Barksdale’s counsel at the arbitration, who defended Barksdale’s handling of electronic evidence:

We are also going to put in a declaration from a forensic person who dealt with the issue of e-mail and texts. And you know from your decision that [this] was an aspect of the discipline. . . .

[T]here were no incriminating texts being withheld or e-mails, and there never have been any incriminating texts or e mails. And now he has gone through and produces exactly what Maurice Levy had asked for at the time that existed at the time and exists today.

. . . He was following the advice of his lawyers and agents at the time. Joint App. at 953. Counsel for Barksdale later went further, directly acknowledging the destruction of the cell phone and referencing an expert declaration submitted in support of Barksdale. Whatever it says now about its expectations for the hearing, the NBPA and Barksdale had enough notice of the potential consequences of the cell phone destruction to retain an expert in advance of the arbitration to assist counsel in explaining why an adverse inference should not be drawn.

At oral argument, Barksdale further contended that the Commissioner was improperly punishing him for destroying his cell phone because he was required to institute a new disciplinary action (so that Barksdale could appeal any determination he had destroyed his cell phone). This argument fails because, as the original disciplinary letter says, Barksdale was punished for failing to cooperate, and it is clear from the Commissioner's decision that his cell phone destruction was part of the broader claim that he failed to cooperate. Further, as we stated with

7 By contrast, in its brief, the Association argued only that "Barksdale had no notice that he could be suspended for declining to produce his private communications." Appellees' Br. 51. Because the parties agree that the Commissioner properly drew an adverse inference based on the destruction of the cell phone, we need not confront this argument.

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regard to general awareness, nothing in Article 46 limits the arbitrator's authority to reexamine the factual basis for a suspension by conducting a hearing. Additionally, the Commissioner did not increase the punishment because of the destruction of the cell phone—the four-game suspension was not increased. Rather, the cell phone destruction merely provided further support for the Commissioner's determination that Barksdale had failed to cooperate, and served as the basis for an adverse inference as to his participation in the scheme to deflate basketballs.

Finally, any reasonable litigant would understand that the destruction of evidence, revealed just days before the start of arbitration proceedings, would be an important issue. It is well established that the law permits a trier of fact to infer that a party who deliberately destroys relevant evidence it had an obligation to produce did so in order to conceal damaging information from the adjudicator. See, e.g., Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 106-07 (2d Cir. 2002); Byrnie v. Town of Cromwell, 243 F.3d 93, 107-12 (2d Cir. 2001); Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998). These principles are sufficiently settled and there is no need for any specific mention of them in a collective agreement, and we are confident that their application came as no surprise to Barksdale.

v. Competitive Integrity Policy

The final ground for vacatur due to inadequate notice identified by the district court was Barksdale’s purported lack of notice of the Competitive Integrity Policy, which authorized the initial investigation. The district court reasoned that Barksdale was improperly suspended pursuant to the Competitive Integrity Policy, which is distributed only to teams, and not to players. This conclusion is incorrect because Article 46 properly supplied the basis for the suspension.

Barksdale does not defend the district court's analysis on appeal. The League in its initial punishment and the Commissioner in his arbitration award were both clear that Barksdale was disciplined pursuant to Article 46, not the Competitive Integrity Policy. The Competitive Integrity Policy, which says nothing about disciplining players, supplied the Commissioner with the authority to conduct an investigation and to require the Tune Squad' cooperation. The operative question for notice is whether Barksdale was aware that his conduct could give rise to a suspension. Article 46 put him on notice prior to the game that any action deemed by the Commissioner to be "conduct detrimental" could lead to his suspension.8

2. Exclusion of Testimony from NBA General Counsel

Prior to the commencement of arbitration proceedings, the Commissioner denied the Barksdale’s motion to call NBA General Counsel Cedric Daniels to testify at the arbitration about his role in the preparation of the Levy Report. The Commissioner did so on the grounds that Daniels did not play a substantive role in the investigation and the Levy Report made clear that it was prepared entirely by Levy’s investigative team. As an independent ground for vacatur, the district court held that it was fundamentally unfair to exclude Daniels from testifying because he would have valuable insight into the course and outcome of the Investigation and into the drafting and content of the Levy Report. Barksdale, slip op. at 10. Again, we disagree.

8 Determining the severity of a penalty is an archetypal example of a judgment committed to an arbitrator's discretion. The severity of a penalty will depend on any number of considerations, including the culpability of the individual, the circumstances of the misconduct, and the balancing of interests inherently unique in every work environment. Weighing and applying these factors is left not to the courts, but to the sound discretion of the arbitrator.

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It is well settled that procedural questions that arise during arbitration, such as which witnesses to hear and which evidence to receive or exclude, are left to the sound discretion of the arbitrator and should not be second-guessed by the courts. Misco, 484 U.S. at 40. Arbitrators do not "need to comply with strict evidentiary rules," and they possess "substantial discretion to admit or exclude evidence." LJL 33rd St. Assocs., LLC v. Pitcairn Props. Inc., 725 F.3d 184, 194-95 (2d Cir. 2013).

However, a narrow exception exists under the Federal Arbitration Act ("FAA"), which provides that an award may be vacated where "the arbitrators were guilty of misconduct . . . in refusing to hear evidence pertinent and material to the controversy." 9 U.S.C. § 10(a)(3). We have held that vacatur is warranted in such a circumstance only if "fundamental fairness is violated." Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997).9 There is little question that the exclusion of the testimony was consistent with the Commissioner's broad authority to regulate procedural matters and comported with the CBA. Thus, his ruling can be revisited in court only if it violated fundamental fairness, and we see no such violation.

The central issue in the arbitration was whether Barksdale engaged in conduct detrimental to the League. The "insights" Daniels might have had and the role he might have played in the preparation of the Levy Report were collateral to the issues at arbitration. The CBA does not require an independent investigation, and nothing would have prohibited the Commissioner from using an in-house team to conduct the investigation. The Association and the League bargained for and agreed in the CBA on a structure that lodged responsibility for both investigation and adjudication with the League and the Commissioner. Moreover, the Commissioner made clear that the independence of the Levy Report was not material to his decision, thus limiting any probative value the Daniels testimony may have had.

In any event, the Commissioner did receive extensive testimony from William Rawls about the initiation of the investigation and its initial stages, and from Maurice Levy regarding the investigation itself and the preparation of the report. All of this is compounded by the fact that when initially denying Barksdale’s request to call Daniels, the Commissioner noted that should the parties present evidence showing that the testimony of a witness is necessary for a full and fair hearing, he would be willing to revisit the NBPA's motion to compel testimony. Barksdale never renewed his objection or further pursued the issue. We thus conclude the Commissioner's decision to exclude the testimony easily fits within his broad discretion to admit or exclude evidence and raises no questions of fundamental fairness.

III. DID THE DISTRICT COURT ERR IN CONCLUDING THE LOCKOUT WAS NOT PROTECTED FROM ANTITRUST SCRUTINY BY THE NSLE?

9 The FAA does not apply to arbitrations conducted pursuant to the LMRA. We have never held that the requirement of "fundamental fairness" applies to arbitration awards under the LMRA, cf. Bell Aerospace Co. Div. of Textron, Inc. v. Local 516 Int'l Union, 500 F.2d 921, 923 (2d Cir. 1974) (applying, without explanation, 9 U.S.C. § 10(a)(3) (formerly § 10(c)) to an arbitration under the LMRA), but the circuits are divided on this question, compare Lippert Tile Co., Inc. v. Int'l Union of Bricklayers, 724 F.3d 939, 948 (7th Cir. 2013) ("[LMRA] review simply does not include a free-floating procedural fairness standard absent a showing that some provision of the CBA was violated."), with Carpenters 46 N. Cal. Ctys. Conference Bd. v. Zcon Builders, 96 F.3d 410, 413 (9th Cir. 1996) ("Although deference must be given to an arbitrator's decisions concerning procedural issues, . . . the courts may consider a claim that a party [was] denied a fundamentally fair hearing."). The League does not dispute the applicability of the "fundamental fairness" standard or contest Barksdale’s arguments about fundamental unfairness. It only argues that the Commissioner's procedural rulings did not violate the terms of the CBA. Regardless of which position we adopt, our result is the same, and we need not decide whether the "free-floating procedural fairness standard" applies to our review here.

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A. STANDARD OF REVIEW We will review the District Court’s conclusions de novo. An exemption to the antitrust laws for activities related to collective bargaining traces its origin to sections 6 and 20 of the Clayton Act, 15 U.S.C. § 17 (1988), 29 U.S.C. § 52 (1988), and to the Norris–LaGuardia Act, 29 U.S.C. § 101 et seq. (1988). Clayton Act section 6 excludes human labor from the definition of a commodity and provides that the antitrust laws do not prohibit labor organizations. Section 20 of that Act, along with the Norris–LaGuardia Act, limits the authority of federal courts to enjoin specified union activities. While none of these statutory provisions is phrased in terms of an exemption from the Sherman Act, the Supreme Court has interpreted them generally to waive antitrust liability for unilateral union conduct such as boycotts and picketing. See H.A. Artists & Assoc., Inc. v. Actors' Equity Ass'n, 451 U.S. 704, 714–15, 101 S. Ct. 2102, 2108–09, 68 L.Ed.2d 558 (1981); United States v. Hutcheson, 312 U.S. 219, 232, 61 S. Ct. 463, 466, 85 L.Ed. 788 (1941). This exemption, known as the statutory labor exemption, does not exempt bilateral activity, such as “concerted action or agreements between unions and nonlabor parties.” Connell Constr. Co., Inc. v. Plumbers & Steamfitters Local No. 100, 421 U.S. 616, 622, 95 S. Ct. 1830, 1835, 44 L.Ed.2d 418 (1975). However, the Supreme Court has recognized that

a proper accommodation between the congressional policy favoring collective bargaining under the NLRA and the congressional policy favoring free competition in business markets requires that some union-employer agreements be accorded a limited nonstatutory exemption from antitrust sanctions.

Id. Unlike the statutory exemption, this nonstatutory exemption is available to both unions and employers. See Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 847 n. 14 (3d Cir.1974); see also, e.g., Powell v. NFL, 930 F.2d 1293, 1303 (8th Cir.1989), cert. denied,498 U.S. 1040, 111 S. Ct. 711, 112 L.Ed.2d 700 (1991). Although the Supreme Court has recognized a NSLE to the antitrust laws, the scope of the exemption never has been conclusively delimited. Instead, the Court's cases in this area mark out only the general boundaries of the doctrine. The Court's first major decision addressing a restraint on competition imposed through the collective bargaining process came in Allen Bradley Co. v. Local No. 3, Int'l Bhd. of Elec. Workers, 325 U.S. 797, 799–800, 65 S. Ct. 1533, 1535–36, 89 L.Ed. 1939 (1945), in which a local union of electrical workers in New York City reached an agreement with local manufacturers and contractors requiring the contractors to buy equipment only from manufacturers employing union members, and the manufacturers to sell only to contractors employing union members. This arrangement severely curtailed competition from firms outside the city, inflating prices for electrical equipment in the local market. Id. at 800. When excluded manufacturers challenged the agreement under the Sherman Act, the union claimed an exemption from antitrust liability. The Supreme Court rejected this claim, concluding that “Congress never intended that unions could, consistently with the Sherman Act, aid non-labor groups to create business monopolies and to control the marketing of goods and services.” Id. at 808. The Court reached a similar conclusion two decades later in United Mine Workers v. Pennington, 381 U.S. 657, 85 S. Ct. 1585, 14 L.Ed.2d 626 (1965), in which it addressed an antitrust challenge to a contract between a union and large coal mining companies by which the union agreed to impose a new, higher wage upon smaller coal companies as part of a concerted effort to drive the smaller firms from the industry. A majority of the Court rejected the union's claim to an exemption from the Sherman Act. Id. at 661. While Justice White's opinion for the Court

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acknowledged that “a union may conclude a wage agreement with [a] multi-employer bargaining unit without violating the antitrust laws and . . . may as a matter of its own policy, and not by agreement with all or part of the employers of that unit, seek the same wages from other employers,” it held that “a union forfeits its exemption from the antitrust laws when it is clearly shown that it has agreed with one set of employers to impose a certain wage scale on other bargaining units.” Id. at 664–65. Pennington's promise of a nonstatutory labor exemption to the Sherman Act was realized in a companion case, Local No. 189, Amalgamated Meat Cutters & Butcher Workmen v. Jewel Tea Co., Inc., 381 U.S. 676, 85 S. Ct. 1596, 14 L.Ed.2d 640 (1965). There, the Court, in opinions by Justices White and Goldberg, applied the exemption to shield from antitrust liability a multi-union, multi-employer agreement to close food store meat departments at 6 p.m. to prevent butchers from being replaced by self-service markets or unskilled workers during night hours. Justice White, writing for three justices, balanced the interest of union workers against the impact on the product market, finding the restriction on working hours to be of “immediate and direct” concern to union members and noting that the subject matter of the agreement—employees' working hours—was “well within the realm of ‘wages, hours, and other terms and conditions of employment’ about which employers and unions must bargain” under the NLRA. Id. at 691. Justice Goldberg, writing for three other justices, went further, concluding that all “collective bargaining activity concerning mandatory subjects of bargaining under the Labor Act is not subject to the antitrust laws.” Id. at 710. Finally, in its most recent opinion on the subject, the Court in Connell Construction, 421 U.S. at 616, held the nonstatutory exemption inapplicable where a plumbers union forced a general contractor to sign an agreement requiring the contractor to subcontract construction work only to firms maintaining CBAs with the union. The Court found that this arrangement “indiscriminately excluded nonunion subcontractors from a portion of the market, even if their competitive advantages were not derived from substandard wages and working conditions but rather from more efficient operating methods.” Id. at 623. The Court stated:

This kind of direct restraint on the business market has substantial anticompetitive effects, both actual and potential, that would not follow naturally from the elimination of competition over wages and working conditions. It contravenes antitrust policies to a degree not justified by congressional labor policy, and therefore cannot claim a nonstatutory exemption from the antitrust laws.

Id. at 625. A lockout is a lawful, protected economic tool of good faith collective bargaining. See Lodge 76, Int'l Ass'n of Machinists v. Wise Emp't Relations Comm'n, 427 U.S. 132, 147 (1976) (using economic leverage, should more peaceful tactics be unfruitful, is the right of the employer as well as the employee); NBA v. Williams, 45 F.3d 684, 689 (2d Cir. 1995) (holding that Congress approves multiemployer bargaining unit lockouts); Powell v. NFL, 930 F.2d 1293, 1302 (8th Cir. 1989) (holding that a lockout is a legal tool that employers may use in a labor dispute). The NSLE insulates from antitrust scrutiny certain decisions of multiemployer bargaining units that might otherwise be anticompetitive. See Brown v. Pro Football Inc., 518 U.S. 231, 237 (1996). The exemption is designed to keep instability and uncertainty from entering the collective bargaining process and reflects Congress's intent to prevent judicial use of antitrust law to resolve labor disputes, which are inappropriate for antitrust resolution and have their own

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canon of law. Id. at 236, 242. This federal labor policy encourages multiemployer bargaining and the NSLE insulates from antitrust scrutiny certain decisions of multiemployer bargaining units, which may otherwise be deemed antitrust violations. Brown, 518 U.S. at 237 (finding that the implicit exemption recognizes that, to give effect to federal labor laws and policies and to allow meaningful collective bargaining to take place, some restraints on competition imposed through the bargaining process must be shielded from antitrust sanctions).

The Supreme Court has held that the NSLE continues to apply until there has been a sufficient distance in time and circumstance from the collective bargaining process that a rule permitting antitrust intervention would not interfere with that process. Id. at 250. The current situation is not sufficiently distant in time and circumstances from the collective bargaining process as required by Brown. Id. This lawsuit was filed the very day the NBPA disclaimed its interest in representing the players. Even if the circumstances were sufficiently distant, as evidenced by the NBPA's disclaimer, the case is not sufficiently distant in time from the collective bargaining relationship to justify extinguishing the NSLE. The Appellees cannot simply flip a light switch to extinguish a multi-year collective bargaining relationship in a moment's notice. The parties were at the bargaining table hours before this lawsuit was filed. In this regard, the Supreme Court's holding in Brown, reaffirms the Eighth Circuit's holding in Powell, 930 F.2d at 1303-04. The court in Powell noted that the exemption applies “as long as there is a possibility that proceedings may be commenced before the [NLRB] or until final resolution of Board proceedings and appeals therefrom.” Id. Given that the NBA's unfair labor practice claim with the NLRB is yet unsettled and that the NLRB is not compelled to find a valid disclaimer of interest simply because the union uses the word, indicates that there cannot be a final resolution to the proceedings before the NLRB in this matter. See Brown, 518 U.S. at 250; Powell, 930 F.2d at 1303-04.

B. DISCUSSION The district court found the NSLE non-applicable to the lockout because there was no longer a collective bargaining relationship. The district court relies on language in Brown, stating that dissolution of a union may be a circumstance indicating that there is no longer a collective bargaining relationship. Barksdale, slip op. at 14 (citing Brown, 518 U.S. at 250). However, this reliance is based upon a portion of the opinion read out of context. The full passage on which the district court relies also states that while extremely long impasse and defunctness of the union might qualify as the collapse of a collective bargaining relationship, the court did not need to decide whether or where within these outer boundaries of the collective bargaining relationship that the NSLE no longer applied, and that it would be inappropriate to do so without seeking the views of the NLRB. Brown, 518 U.S. at 250. Thus, the Supreme Court identified the cessation of a union's existence as a potential outer boundary, but expressly declined to adopt the view that a union's decertification or disclaimer of interest would extinguish the NSLE. The Appellees seek to distinguish Brown on the basis that it dealt with impasse, a principal still involved in a collective bargaining process. However, the Court in Brown made clear that courts should look to the underlying purpose of the non-statutory exemption in determining whether it applies. Id. at 243. Additionally, public policy dictates that to allow a disclaimer of interest by a union in order to extinguish the NSLE would be to frustrate federal labor law, as it would place employers in an untenable catch-twenty-two if a union representing the employers of a multiemployer bargaining unit disclaimed or threatened to disclaim interest. The employer would be forced to either

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maintain the lockout, which is the impetus for this case, or produce their product jointly, which would most certainly lead to additional antitrust violations. The Supreme Court recognized in Brown that Congress has determined that labor laws trump antitrust laws because labor peace is best achieved at the bargaining table and not in a courtroom. See Id. at 237. Thus, the entire purpose of the NSLE is to prevent instability and uncertainty from entering the collective bargaining process, both before and after negotiations have broken down. The threat of instantaneous antitrust liability if a union disclaimed interest, which the Appellees seek, would clearly introduce instability throughout the collective bargaining process. Under the Appellees' theory, the NBA is liable for antitrust violations if it either ceases or continues its operations. Such a “heads I win, tails you lose” interpretation cannot be considered sound law. This principal is why the Supreme Court held in Brown that the non-statutory exemption continues to apply until there has been a sufficient distance “in time and in circumstances from the collective bargaining process that a rule permitting antitrust intervention would not significantly interfere with that process.” Id. at 250. Because the Appellees cannot demonstrate to this Court that the NBPA's disclaimer of interest somehow extinguished the collective bargaining relationship and, as a result, the NSLE, mere hours after the parties were at the bargaining table, the NSLE is applicable in this case, and the lockout is protected from antitrust scrutiny.

IV. CONCLUSION

For the foregoing reasons, we REVERSE the judgment of the district court on both holdings and REMAND with instructions for the district court to confirm the arbitration award and find that the lockout is protected from antitrust scrutiny.