On March 1, 2023, the federal district court for the Southern District of New York issued its decision on arbitration in the class action filed by former Dolphins coach Brian Flores and others against the NFL for racial discrimination. Flores v. NFL, No. 22-CV-0871 (S.D.N.Y. March 1, 2023) (click here for a copy of the decision).
From the perspective of arbitration, the case involves multiple parties and teams and multiple agreements. With the variation in scenarios relevant to arbitration, the court ultimately compelled arbitration of certain claims and rejected arbitration for others. The opinion contains some basic lessons about implementing arbitration agreements. For example, with respect to one agreement, the court refused to compel arbitration because Commissioner Goodell did not sign the agreement, and the agreement provided that it became valid only upon approval by the Commissioner. This reminds me that one can have a well-drafted arbitration clause, but if the clause is implemented improperly, it could be invalid. Also, with respect to another agreement, the court, relying on particular state law, found that the NFL’s ability to modify the terms of the agreement unilaterally, without advance notice, made the agreement illusory and unenforceable. I’ve seen other decisions recognizing that the ability of one party to modify an agreement may be appropriate if the agreement requires advance notice of such changes before they go into effect.
The opinion also contains an interesting discussion of whether Goodell, whose salary is determined by the owners of NFL teams, can be an unbiased arbitrator when hearing cases against the NFL and its teams. The court ultimately found that the parties had consented to the choice of Goodell as an arbitrator, and at this early stage, the possibility of bias is not a reason to refuse enforcement of the contracts. The court, in footnote 25, recognizes some prior decisions had refused to compel arbitration where the commissioner of a sports league would serve as the arbitrator, but the court weakly distinguished these prior decisions as involving the laws of states not at issue in this case. (Does this mean neutrality is not a federal standard embodied by the FAA, but depends on state law, which can differ?)
One’s right to be free from discrimination is not based on a contract, of course. And for many reasons, I personally struggle with the view that these civil rights claims should be subject to arbitration, which is based on a contract. The FAA is designed for disputes that arise out of a contract. Also, I can understand the Commissioner ruling on matters about the rules of football (although I’m still upset about the no call in the Saints-Rams NFC Championship Game in 2019!). But I would prefer civil rights claims, which are of critical importance in our society, to be heard in public court, with broader procedural protections.
Here’s a quote from a prior op-ed I wrote for the Chicago Tribune about this case:
If the league wishes to pay more than lip service to social justice, the NFL should waive any claim to arbitration and allow this discrimination case to be heard in open court. An entertainment organization that makes billions per year from players — who risk concussions and devastating injuries on every play — should be supportive of workers who are courageous to speak out openly about their lives having value.