Hofstra Labor & Employment Law Journal Volume 16 | Issue 2 Article 4 1999 Some Keys to the NBA Lockout Grant M. Hayden Maurice A. Deane School of Law at Hofstra University Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/hlelj Part of the Law Commons Recommended Citation Hayden, Grant M. (1999) "Some Keys to the NBA Lockout," Hofstra Labor & Employment Law Journal: Vol. 16: Iss. 2, Article 4. Available at: http://scholarlycommons.law.hofstra.edu/hlelj/vol16/iss2/4 This document is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Hofstra Labor & Employment Law Journal by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact [email protected]. Hayden: Some Keys to the NBA Lockout ESSAYS SOME KEYS TO THE NBA LOCKOUT* Grant M. Hayden** I. INTRODUCTION When it came to labor relations in professional sports, basket- ball was always different. The National Basketball Association ("NBA") and the players' union were proud of the fact that they worked in the only major American sport that had never lost a game to a labor dispute.1 That all changed last year when, failing to come to agreement on a new contract, the NBA owners locked out the players for over six months, resulting in the cancellation of 423 regular season games. Basketball, it seemed, had descended into the greedy narcissism that plagued every other major sport. The 1998-99 NBA lockout, like the 1994 Major League Baseball strike, may have serious consequences for the future of the game. Already, the abbreviated training camps and compressed schedules have produced a spate of injuries and scores of ugly, low-scoring games. 3 And the effects of the dispute on the game * This Essay was written by invitation from the Hofstra Labor & Employment Law Jour- nal. ** Associate Professor of Law, Hofstra University School of Law. B.A. (1989), M.A. (1991) University of Kansas; J.D. (1995) Stanford Law School. I am indebted to Jacqueline New- mark and John Desiderio for their speedy research and to Kenneth Band, Luciano Hayden, and Joanna Grossman for their careful editing. I am also grateful to Boston Celtics rookie Paul Pierce, whose brilliant play and sunny outlook have renewed my interest in professional basketball. 1. See Mike Wise, Jan. 7 Is Stem's Deadline to Cancel Season, N.Y. TIMES, Dec. 24, 1998, at DI. 2. See Lockout at a Glance, THE StN, Jan. 5, 1999, at 3D. 3. See Mike Wise, Can Anybody Here Score? Swish Turns to a Clank, N.Y. TIMES, Feb. 23, 1999, atD1. Published by Scholarly Commons at Hofstra Law, 1999 1 Hofstra Labor & Employment Law Journal, Vol. 16, Iss. 2 [1999], Art. 4 Hofstra Labor & Employment Law Journal [Vol. 16:453 over the long run may be more difficult, if not impossible, to pre- dict. But those questions are best left to those who track television ratings and ticket office receipts. The more immediate ques- tion-the one put to me by the editors of this journal-is what the lockout contributed to labor law or, more generally, what the dis- pute tells us about the state of labor relations in the United States. So it is to those questions that I turn. II. THE LOCKOUT AND LABOR LAW DOCTRINE The most recent NBA labor dispute is unremarkable from a strictly doctrinal standpoint. The owners and the players' associa- tion were operating under a six-year collective bargaining agree- ment signed in 1996 after the owners engaged in a brief and es- sentially meaningless lockout.4 That agreement, however, contained a clause under which the owners could, after three years, reopen negotiations.5 Last spring, the owners exercised their rights 6 under the reopening clause, and when the two sides7 could not reach an agreement, the owners locked the players out. The centerpiece of the dispute-the lockout-was certainly nothing unique in the annals of labor history. Lockouts occur when employers attempt to put economic pressure on a group of em- ployees by refusing to allow them to work.8 Depending on the role they play in a labor dispute, lockouts are typically characterized as 4. See Clifton Brown, Deal Is a Lock, Not a Lockout, For the N.B.A., N.Y. TIMES, July 10, 1996, at Bl. That lockout was only meaningless in the sense that it lasted about ten minutes in the middle of the night in July; it was certainly meaningful as a show of the league's strength and as a harbinger of future league actions. The league had also locked out the players for about three months in 1995. That lockout ended in September 1995, upon owner ratification of a new collec- tive bargaining agreement. See Owners Approve Labor Deal, N.Y. TIMEs, Sept. 16, 1995, § 1, at 29; Murray Chass, N.B.A. Locks Out Players in FirstWork Stoppage, N.Y. TnIE, July 1, 1995, § 1, at 27. The 1995 agreement, however, was never signed by the players' union, giving rise to the short lockout and new agreement in 1996. See N.B.A. Negotiations Continue, N.Y. TIMES, June 28, 1996, at B14. 5. See Harvey Araton, For N.B.A. Players Union, What Goes Around Comes Around, N.Y. TudES, Nov. 1, 1998, § 8, at 7. The clause provided that the owners could renegotiate the contract if players' salaries exceeded 51.8 percent of basketball-related income. The salary figure reached 57 percent, and the owners reopened the collective bargaining agreement. See Mike Wise, It's TheirBall,andN.B.A. Owners Callfor Lockout, N.Y. TIMEs, June 30, 1998, at Cl. 6. See Mike Wise, Deflected Pact: N.B.A. Owners Reopening Labor Agreement, N.Y. TIMES, March 24, 1998, at Cl. 7. See -Wise,supra note 5, at Cl. 8. For a concise discussion of the legal status of a lockout, see ROBERT A. GORMAN, BASIC TEXT ON LABOR LAW: UNIONIZATION AND COLLECTIVE BARGAINING 355-62 (1976). http://scholarlycommons.law.hofstra.edu/hlelj/vol16/iss2/4 2 Hayden: Some Keys to the NBA Lockout 1999] Some Keys to the NBA Locokout either offensive or defensive. Offensive lockouts occur when an employer locks out its employees in order to pressure them to reach an agreement on terms favorable to the employer. Such a strategy may be deployed when an employer and union have reached a bargaining impasse.9 Defensive lockouts, on the other hand, occur when an employer locks out its employees to avoid potential harm to the employer's business, property, or goodwill that may be caused by an opportunistic strike called at the time of the union's choosing. Such lockouts may be used by an employer facing a whipsaw strike' or by an employer in a seasonal industry in which a well-timed strike at peak season could bring enormous economic pressure to bear on the employer." Whether offensive or defensive, however, the lockout is a tried and true means for an employer to seize the initiative in a labor dispute. The NBA lockout was a fairly straightforward use of this traditional economic weapon. The owners had exercised their contractual right to reopen negotiations, and those negotiations failed to produce a new agreement before the old one expired at the end of June 1998. The dispute proceeded in three stages. First, the owners engaged in an offensive lockout to put pressure on the players' union to reach an agreement. 2 That strategy was success- ful in that it ultimately resulted in a new contract with terms favor- able to the owners on January 6, 1999."3 The lockout, however, established no new legal precedent, broke no new legal ground, and contributed little to our understanding of the nature of the eco- nomic weapon. Indeed, it was this very lack of uniqueness-and, 9. See, e.g., American Ship Bldg. Co. v. NLRB, 380 U.S. 300 (1965) (principal Supreme Court case on the use of offensive lockouts). 10. A whipsaw strike occurs when a union strikes against competing employers in sequence. Unlike a simultaneous strike against all employers, a strike against a single employer allows its competitors to continue operations, thus placing enormous economic pressure on the struck em- ployer and, at the same time, reducing the expenditure of union resources. See NLRB v. Truck Drivers Local Union No. 449 (Buffalo Linen Case), 353 U.S. 87 (1957). 11. See, e.g., Duluth Bottling Ass'n, 48 N.L.R.B. 1335, 1359-60 (1943) (describing how an employer locked out its employees before they could strike in hopes of preventing a "spoilage of materials"). 12. While the seasonal nature of the basketball business may have made the lockout appear to be defensive, the owners were not faced with any real prospect of an impending strike by the players' union which, after initially balking at various provisions in their 1996 contract, had begun to view the terms of their current contract with increasing favor. See Araton, supra note 5, at 7. 13. See Mike Wise, With Little Time on Clock, N.B.A. and Players Settle, N.Y. TIMES, Jan. 7, 1999, at Al. Published by Scholarly Commons at Hofstra Law, 1999 3 Hofstra Labor & Employment Law Journal, Vol. 16, Iss. 2 [1999], Art. 4 Hofstra Labor & Employment Law Journal [Vol. 16:453 of course, the fact that it involved celebrities-that made the NBA lockout a good teaching tool for an introductory labor law class. The second major event of the labor dispute occurred in late July when the players' union, unconvinced of the typicality or le- gality of the lockout, filed an unfair labor practice charge with the National Labor Relations Board.