Home Field Advantage: The NFL and Arbitration

The NFL understands home field advantage. And, so it should come as no surprise, that if given the choice, its chosen turf to resolve disputes is arbitration.

Arbitration is a private forum for dispute resolution. It is considered faster and more cost-effective as compared to litigation, but in exchange, arbitration comes with fewer discovery rights and less appellate review. The desirability of those factors largely depends on which side of the "v" you are on (as in plaintiff v. defendant, not Bills v. Dolphins).

A little arbitration primer: How does a dispute end up in arbitration? Generally, the party seeking to compel arbitration must show 1) an agreement to arbitrate, 2) that the claims fall within the scope of the arbitration agreement, and 3) that the party moving to compel arbitration has not waived the right to arbitrate.

Last week, a federal judge in the Southern District of New York allowed Brian Flores' racial discrimination claims against the Broncos, Giants, and Texans, and the related claims against the NFL to proceed in court. At the same time, the Court compelled arbitration of all of the other claims--Flores' claims against the Dolphins and Wilks' and Hortons' (both Black coaches) claims against their respective NFL teams. Both sides have claimed this ruling as a W.

Under the first prong of the analysis, the Court examined whether there was an agreement for Flores to arbitrate his disputes. Flores had three employment agreements: one with the Patriots, one with the Dolphins, and one with the Steelers. (As an aside, the Court ruled that the Flores-Steelers contract was not binding because Commissioner Goodell never approved the contract, and the contract expressly stated that it only became binding and valid after the Commissioner approved it.). The Court ruled that the Flores-Patriots contract incorporated the NFL Constitution, which contains an arbitration agreement, and that the arbitration agreement was broad enough to apply to Flores' claims against the Broncos (he interviewed for the Broncos head coach position while still under contract with the Patriots). However, under Massachusetts law, that contract was unenforceable because it gave the NFL the right to make unilateral changes. Thus, the Court ruled that Flores' claims against the Broncos were not subject to an enforceable arbitration agreement. As for Flores' claims against the Giants and Texans, the Court found there was no agreement to arbitrate those claims.

The order is very interesting (well, depending on what you find interesting) for several reasons. Primarily, we will now see how the litigation unfolds for Flores' claims against the Broncos, Giants, and Steelers with full discovery rights. That could have a huge impact on the outcome of the case, as well as the settlement calculus for the NFL and its member teams. The order also touches on two other interesting arbitration issues: who decides issues regarding the arbitrability of the claims? and when can a non-party compel arbitration? Stay tuned for my thoughts on these topics!