CBA Negotiations

Where everyone can be a striker: A brief look at sports labor law

A new year has arrived, and 2015 is upon us. Philadelphia Union fans wait expectantly for big news on a daily basis.

What? A big signing? Get real. I said Philadelphia Union.

No, the big news is whether the 2015 season is going to start on time, or whether there will be a delay as the players and owners duke it out over the terms of a new contract.

Both the players’ union and owners have been saying all the right things, and both appear optimistic about getting a new deal done quickly (they were before the most recent meetings, anyway). History in other sports has taught us that this is not always the case, however. As a result, soccer fans will soon be treated to a veritable alphabet soup on their Twitter feeds — MLSPU, CBA, NLRB, ULP, LBO — as pundits report on the progress of negotiations. Strikes? Lockouts? Replacement players? All kinds of unfamiliar terms will be sitting alongside “allocation money” and “transfer” in our soccer news.

What does it all mean? And why are we talking about contracts, anyway — don’t all the players have their own contracts?

Rest easy, soccer fans—I’ll try to explain it all to you. I’m even semi-qualified to do so.

A good place to start is with the source of all the hand-wringing: the collective bargaining agreement, or CBA. What is it, and why is it an issue?

CBA’s are essential — to owners

Since 1935, American workers (in the private sector, anyway) have had the right to band together in order to bargain over wages, hours, and working conditions of employment. Typically, this concerted action is taken through a union, which then bargains with an employer to establish the aforementioned wages and such. The agreement is, literally, a contract—a collective bargaining agreement.

In the sports world, CBAs are essential to players. While we know that players get to negotiate individual salaries, the CBA establishes things like salary minimums. CBAs also establish pension funds and other group insurance for players that would be impossible to accomplish in a one-on-one basis. Sports CBAs also address other things that fans might take for granted as being “automatically provided” by teams. For example, the NHL CBA provides, at Exhibit 36, that teams are to make certain items available to visiting teams. It may amuse you to learn that teams are obligated by the CBA to provide to visiting clubs one soccer ball. When you see pre-game shots of hockey players juggling a ball in the locker room, it’s no accident—the NHL players’ union asked for a soccer ball, and got it.

Typically, employers are not overly fond of unions or collective bargaining agreements. In sports, however, they have become essential. With the arrival of the salary cap concept, leagues need to have collectively-bargained agreements with players’ unions to make them lawful. This is because U.S. anti-trust law prohibits things like setting industry-wide wage caps. However, there is an exemption when such caps are part of a CBA. This is why the NBA and NFL players’ unions threaten to dissolve themselves at the end of every CBA — it’s a threat to owners as any such decertification would make existing salary caps illegal.

Ironically, MLS is one league that does not need a CBA. Well aware of the issues posed by anti-trust law, MLS got around the problem by establishing itself as a single-entity — one league owning all of the teams. Salary caps in this arrangement would not be restraining commerce across an “industry” (for example, 30 competing hockey franchises) but only within a single “office” (MLS). This approach may seem too clever by half, but it survived a challenge by the players in federal court.

Nevertheless, when MLS players opted to form the Major League Soccer Players Union (MLUPU), the league agreed to recognize it, and the parties have operated under two collective bargaining agreements. The most recent CBA — which expires on January 31, 2015 — included some improvements, such as the entry draft which was adopted in lieu of full-blown free agency.

A changing landscape and “good faith”

The last CBA was adopted in 2010. Since that time, the American soccer landscape has changed considerably. More money is flowing into the league than ever before. The players’ bargaining position has strengthened as a result, and one can see the MLSPU demanding higher salary caps, free agency, higher minimum salaries, as well as things players in the other sports take for granted — first class travel arrangements, for example.

Under the law, MLS is only required to bargain with the MLSPU. It is not compelled to agree to anything. That said, “bargaining” requires more than simply saying “no” to every player proposal, or adopting a “take it or leave it” approach. Bargaining must be done in “good faith,” with an open mind to the other side’s proposals.

So what happens if MLS refuses to bargain in good faith? The MLSPU could file unfair labor practice (ULP) charges with the National Labor Relations Board (NLRB). The NLRB is the federal enforcement agency for our country’s labor laws. If a charge is filed, the NLRB investigates the charge and, if there is merit to the allegations, will issue a complaint and prosecute the case against MLS. Typically, the remedy in bargaining situations is a notice posting where the employer essentially says “Sorry, it won’t happen again.” However, ULPs can have some teeth where an employer declares impasse and, as a result, unilaterally implements its last best offer (LBO). In those cases, the existence of unresolved ULPs will nullify any declared impasse, and an employer cannot simply impose its own contract terms.

As you can see, the details can get pretty confusing, and are not easily summarized in a paragraph. As the MLSPU and MLS are not anywhere near that stage, we can hold off on a more detailed explanation for another day.

Also, recent history has shown that sports leagues prefer to lockout employees instead of bargaining to impasse and then implementing their LBO. As this option is a very real one in sports, lockouts may be the subject of a separate piece in the near future. Again, however: There is nothing at this juncture that would indicate MLS is going to go down that road. Stay calm.

For now, hopefully this brief primer will help you understand why the CBA will be a big topic of conversation in the coming weeks.

Up next: a historical look at labor relations in professional soccer, focusing on the original North American Soccer League.

4 Comments

  1. What a great lead to a story!

  2. Great title; great info; thanks!

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