ID Mr. Stephen L.

SportsLaw_(BakerVierra)_FO7

10: (Exam Number)

Exam Name: S ports Law__(Ba kerVi erra) _FO7
Instru ctor: Mr. Stephen L. BakerYMr. Kenneth F. Vierra

Grade:

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Exam taken with Soffest v8.S
 ID __0 Stephen L. ...

1)

POSSIBLE VIOLATION OF THE SHERMAN ANTI-TRUST ACT:

The Sherman Anti-Trust Act states that "every agreement, contract, or

conspiracy to constrict trade" is illegal. The three new rules are an agreement between the

clubs and the league and all three constrict trade in some way (1 Limits the fighters ability to

ply his trade 2. limits how much money the fighter can make & 3. requiers that a fighter pay

half his endorsement contracts to the league). Because they constrict trade, they would seer,

to be violations of the act. But Courts have incertered the term unreasonable, which gives rise

to the rule of reason The test is now "every agreement, contract or conspiracy to

unreasonably restrict trade" is illegal

It is possible for the challengers to avoid this rule of reason by claiming that the

new rules are per se violations of the act. This is an uphill battle. In order for for the court to

find a per se violation the rule must be so void of justice that it is illegal on it face, such as when

the action is a naked restaint with no other purpose than to stiffle competion. Mostly, we are

talking about price fixing, territorial exclusion, tie in agreements and boycotts. None of

specific examples seem to be applicable, the possible exception being rule 3. even though rule

3. does not envolve price fixing or the like, it may be deemed so void of justice as to be naked

on its face (if the lawyer is good enough). For out purposes, we will assume that all three new

rules are not per se violations.

THE NON-STATUTORY LABOR EXEMPTION:

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Mr
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ID: SportsLaw_(BakerVierra)_FO7 Stephen L.

The legue will also attept to avoid the rule of reason test with an affirmative

defense known as the non-statutory labor exemption labor exemption. The league will have to

meet each of three requirements to use this defense: 1) The parties must be parties to a CBA,

2) the new rules must be appropriate subject matter for the cba {specifically wages, hours, and

working conditions}, and the rules must have been subject to good faith negotiations.

Element one: Are the parties subject to the CBA?

As far as rule 2 and 3 are concerned, the parties can be easily defined as parties

to the CBA. As members of the union, all players are subject to the collective bargining

agreement along with the league. Bronco has another argument: He has never been in the

league and has never been a member of the union. He certainly wansn't a member when the

agreement was signed. His argument centers around the fact that he was not personally

represented at the bargining table. The argument makes sense, but the courts have ruled

otherwise. In past decisions, the courts have found the future players are subject to the C

because the Union reprents both current and future players. Therefor, rules 1,2, and 3 pass

element #1 of the NSLE.

Element two: Are the rules the appropriate subject matter of the CBA?

Rule 1: It is certainly debateable. It doesn't really effect wages, there is no

statement as to how much a fighter can make, it does basicly set a number of hours a person

under the age of 20 may work: zero, and it may have been seen as a rule concerning working

conditions by defining the type of work a person under 20 can do (none). These arguments are

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ID Mr
SportsLaw_(BakerVierra Fa? Stephen L

definate reaches, but a good lawyer may be able to get the court to see it thier way. It is

possible that rule one does satisfy the second element.

Rule 2: This rule directly impacts salary and therefor it satisfies the second

element of the NSLE test.

Rule 3: If may effect working conditions because it basically creates a fee for

marketing activities. this is a very big streach and probably does not satisfy the requirement.

do not think that it effects salary because it does not deal with how much money the athlete is

paid as a result of has participation in the league, it effects out side income

Element three: Are the rules the result of good faith negoations?

None of the three rules may be found in the collective bargining agreement,

for. The league may try to argue that rule one was bargained for because there were

discussions about it in the meetings This, however, is more likely to favor Bronco because he

can argue that if it was mentioned, but not agreed to, then it is likely that part of the final /

bargain was NOT to include an age limit in the CBA Since the three new rules were not I

bargained for at arms length they do not satisfy rule element number three

The league may try to argue that the language of incorpating the ~Ies

regulations as amended from time to time allows them to change the rules willy nil~.

clause is too vaugue to be enforced and does not allow the league to add labor rules that here

not bargained for at arms length so it doesn't save the leagues arguement.

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SportsLaw_(BakerVierra)_FO7 Mr Stephen L

Therefor, the leagues new rules are not exempt under the NSLE

SHERMAN ANTI-TRUST ACT AND THE RULE OF REASON:

Since the labor exemption does not apply it will now fall upon the plaintiffs to

show that the League has violated the Sherman Anti-trust act and the rule of reason. This is a

five element test:

ELEMENT ONE: Are there at least two parties?

There answer here is yes, there are at least two parties envoled in all three of the

new rules

ELEMENT TWO: Has the league attempted to restain trade?

On at least rules one and two there is an attempt to restain trade. The intent in

rule one is to prevent a person from praticipating in their trade and in rule two the intent is to

limit the amount of money a fighter can make by participating in their trade. Rule three is a little

more complicated. The intent is not really to restrain trade but rather to profit from trade. In

fact, the league would probably prefer that the players market themselves more so the league

can make more money

Rules one and two meet element two but rule three does not.

ELEMENT THREE: Is there an actual restaint in trade

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ID:
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ID sportsLaw_(BakerVierra Stephen L.

For rule one, yes. Bronco wants to ply his trade and cannot. for rule two, yes

no fighter can make negotiate for a higher salary than the one set forth in the rule. Rule three

no, for the same reasons as element two above

ELEMENT FOUR: Do the anti-competative effects outweight the pro-competive

effects

For rules one i think the answer is no. The saftey and dignaty of the sport may

be at risk. the league and its fans do not want to see a fighter get killed because he was to

young to be in the ring. this outweighs Broncos want to fight. Rule two is no: The league may

want to make sure that money is spread round to fighters, but this does not outweigh the anti-

competibe effect of letting fighters negotiate for their own salry, especially since there is a

salary cap that will already dictate the maxium a fighter can make ($400,000). Rule 3, Yes, for

the reasons outlined in element 2

ELEMENT FIVE: Is there a less restrictive means?

Rule 1 I'm sure that there are in fact less restrictive means, such as indiviual

assments of strength and skill. Thoose however may be deemed too subjective and difficult to

administer, so this rule will probably pass this test.

Rule 2: there are less restrictive means to make sure salaries are spread

around to other fighters, a minimum salary for instance.

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SportsLaw_(BakerVierra)_FO7 Mr Stephen L.

Rule 3: there are less restrictive means, taking less of t

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