Ahead of the
expiration on Jan. 31 of the current collective bargaining agreement
between MLS and the MLS Players Union, PSP contributor and labor lawyer Steve
Holroyd began our look at the issues surrounding the negotiations for a new CBA
with a primer on labor law
and terminology. He continues with a look at the lockout in pro
sports.
If you have questions about the MLS CBA negotiations, put
them in the comment section or tweet them to PSP using the hashtag #MLSCBA2015.
Steve will answer them in an upcoming post.
As we near the expiration of the MLS collective
bargaining agreement, the players have begun to rattle their swords,
threatening a strike as a real possibility.
While MLS has not countered with the threat of a lockout,
recent sports history has shown that to be a real possibility.
While most everyone knows what a “strike” is — workers
withhold their labor in order to put economic pressure on an employer to meet
bargaining demands — lockouts are not as familiar to sports fans. So here is a
quick primer.
What is a “lockout”?
Black’s Law Dictionary provides a simple, yet entirely
complete, definition: “An employer’s withholding of work and closing of
business because of a labor dispute.”
American labor law (found in the National Labor Relations
Act) does not define “lockout.” The Canada Labour Code does, however, and
provides about as good a summary as you will find: “‘lockout’ includes the
closing of a place of employment, a suspension of work by an employer or a
refusal by an employer to continue to employ a number of their employees, or to
aid another employer to compel that other employer’s employees, to agree to
terms or conditions of employment.”
Although MLS has three teams in Canada, it will likely
fall under the jurisdiction of the National Labor Relations Board (“NLRB”) in
the United States. For example, the NHL has allowed itself to be within the
jurisdiction of the NLRB when the NHLPA has filed charges with the American
agency. National Hockey League and its Constituent Member Clubs, 1999 WL
33454755 (N.L.R.B. Div. of Judges). Accordingly, the following answers
rely on American labor law.
Bear in mind that, while Canadian labour law may have
some significant differences, those differences may not come into play.
Why would MLS
owners lock out the players?
In any bargaining session, both labor and management have
sets of demands they want the other side to agree to.
The strategy, if employed by the owners, would be an
offensive lockout — a lockout called by management to assert economic
pressure on workers and, thus, gain a bargaining advantage over a union.
Are players paid during
a lockout?
No — this is the “economic pressure” the owners would
apply.
Are lockouts legal?
Yes.
Once upon a time, only defensive lockouts — ones that
were called to prevent imminent and irreparable harm to an employer (e.g., employee
sabotage) — were legal. Offensive lockouts were considered an
impermissible means by an employer to strengthen its bargaining position.
In 1965, however, the United States Supreme Court in American
Ship Building Co. v. National Labor Relations Board held that offensive
lockouts were a legal means to exert economic pressure on employees, with
certain limited exceptions.
When can the owners
lockout players?
In many collective bargaining situations, there comes a
point when one side or the other has moved as far as they are going to move
with regard to proposals on the table. This point in negotiations at which
agreement cannot be reached is called impasse.
Typically, strikes/lockouts do not occur until after
impasse has been reached. This is because the parties feel that the “economic
action” (i.e., strike or lockout) is the “push” needed to get the other side to
move off certain proposals and agree to others.
However, impasse is not a requirement before locking out
employees. That said, pre-impasse lockouts are examined by the NLRB and courts
much more closely than ones that occur after impasse has been reached.
American labor law requires the parties to meet certain
notice requirements and utilize the Federal Mediation and Conciliation Service
(“FMCS”) before a “economic action” can take place. Generally, one party is
required to give notice to the other 60 days prior to the collective bargaining
agreement’s expiration date, and must notify the FMCS within 30 days of that
notice of the existence of a dispute. If these conditions are met, parties may
undertake “economic action” sixty days after the notice is given or upon
expiration of the collective bargaining agreement, whichever is later.
Have the owners met
these requirements?
The current collective bargaining agreement is set to
expire on January 31, 2015. Given the status of negotiations at this
point, one must assume that the time targets have been met by both sides.
Is a lockout ever
illegal?
The NLRB, the agency empowered with enforcing American
labor laws, has stated that “assuming no motive to discourage union activity
[i.e., joining or supporting the union] or to evade bargaining exists, the test
is whether the lockout is inherently so prejudicial to union interests and so
devoid of significant economic justification that no specific evidence of
intent…is required.”
What if a lockout is
illegal?
If the MLSPU believes that a lockout is illegal, it
can file unfair labor practice charges with the NLRB. If the NLRB finds that
the lockout is illegal, it may seek injunctive relief, ending the lockout.
However, this action would not result in a new collective bargaining agreement
and, after a suitable “cleansing period,” the league would be free to lockout
players again.
Can MLS lockout players
while still playing a season with replacement players?
In the United States, it is not unlawful for an employer
to use temporary replacements during an otherwise lawful lockout. The
“temporary” distinction is important, in that it means that if a union agrees
to the employer’s terms, all of the “temporary” employees must be dismissed and
the locked out workers brought back in.
In contrast, when an employee engages in an “economic”
strike (in other words, one designed to prod an employer to provide better
wages or benefits), he or she may be permanently replaced. This does not mean
the employee loses his job, however. Rather, it means that, once a union
accepts an employer’s proposals, or employees make unconditional offers to
return to work, an employer does not have to fire replacement workers, and the
strikers go on a “preferential rehire list.” As replacements leave employment
through attrition, discharge, etc., ex-strikers are then returned to work off
the list.
(If employees engage in an unfair labor practice strike
(i.e., one protesting violation of the law by the employer), however, they are
only “temporarily” replaced, as in a lockout situation. What constitutes an
“unfair labor practice strike” will not be addressed here, since we are
focusing on lockouts).
History has shown, however, that sports leagues are
content to simply “shut down,” and continue without replacements. As a result,
it is not likely that MLS will attempt to do so.
Can MLS players play in
other leagues, like the North American Soccer League, while being locked out?
Yes. With the collective bargaining agreement expired and
players locked out, there are no restrictions on players signing contracts and
playing in other leagues.
The x factor in this scenario is FIFA: presumably,
international football’s governing body may decree that MLS clubs retain the
right to their players, even in a lockout, and prohibit their playing with
other teams. If this occurs, expect to see anti-trust suits start to fly (as
they did in 1967, when FIFA attempted to blacklist players who played in the
unsanctioned National Professional Soccer League).
The only time I ever
hear about lockouts is when a sports league — like the NFL or
NBA — does it. Why is that?
A typical employer needs to be operating in order to stay
in business. If it does not make a product, that product cannot be sold, and no
revenue comes into the business. Not many business have the liquidity to
withstand such a situation. Further, the offensive lockout-with-temporary
replacements option is not very viable, for lots of reasons: it takes too long
to train replacements, individuals won’t take a job knowing it is only
temporary, etc.
Sports leagues, on the other hand, don’t have these
problems — guaranteed TV money, season ticket renewals, licensing revenues, and
the independent wealth of individuals owning teams gives sports leagues much
more leverage over players, who only get paid if they are playing.
While it used to be that owners would not lockout, and
would wait for players to strike (for example, MLB in 1972, 1981, and 1994-95;
NFL in 1968, 1974 and 1987; NHL in 1992; North American Soccer League in 1979),
they have since learned that they have a considerable economic advantage with a
lockout, and are much more proactive about using the tactic.
How long would an MLS
lockout last?
This is impossible to predict, of course, but it must be
recalled that the NHL remains the only sports league to have lost an entire
season (2004-05) to lockout, and lost significant parts of two other seasons
(1994-95 and 2012-13).
While the recent NFL and NBA lockouts ended much more
quickly, there are factors influencing players in both of those leagues that
are not present with NHL players. Stated plainly, NHL players appear better-positioned
to withstand the rigors of a lockout. Also, unlike NFL and (to a lesser extent)
NBA players, NHL players have viable employment opportunities in Europe and
Russia.
MLS players would appear to fall in between these two
scenarios — while they have other employment opportunities, they also tend to
make far less than NBA and NHL players.
Given the unmitigated
public relations disaster that was the 2004-05 NHL lockout, would MLS actually
go down that road?
Again, this is hard to predict…but keep a few things in
mind.
First, even while crowing about significantly increased
revenues over the past few years, MLS still believes it has issues that must be
addressed. Soccer is not yet the NBA or NHL when it comes to TV revenues and
such. As a result, the owners may insist on retaining the stringent cost
controls — low salary cap, no free agency — that have enabled it to survive so
far.
Second, the MLSPU knows about the improved TV contracts,
increased revenue from soccer specific stadia, and large contracts given to
Designated Players. Also, the MLSPU is aware that there are new owners in the
league with deep pockets and money to spend (the Manchester City/New York
Yankees alliance at NYCFC, for instance) who may themselves chafe against
restrictions on abilities to acquire the best talent, leading to a “divide and
conquer” scenario. To the players union, there may be no better time to hold
out for a better contract than the present.
In short, the parties are geared for hard bargaining, to
say the least. Whether this becomes a war before the start of the MLS season on
March 6 remains to be seen.
Author: Steve Holroyd
Philadelphia labor attorney and soccer coach, player, sabermetrician and
historian. Follow him on Twitter at @Section107RowA.
Source: Philly
Soccer Page
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