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Stanford Law Review Online: The 2011 Basketball Lockout

Stanford Law Review

The Stanford Law Review Online has just published an Essay by William B. Gould IV entitled The 2011 Basketball Lockout: The Union Lives to Fight Another Day—Just Barely. Gould, a former chairman of the National Labor Relations Board, provides a succinct postmortem on the 2011 lockout:

The backdrop for the 2011 negotiations was the economic weapon once regarded as a dirty word in the lexicon of American labor-management relations—the lockout. This economic weaponry, endorsed by the Supreme Court since 1965, became the flavor of the two prior decades; baseball flirted with it in 1990, basketball in 1995 and 1999. One of hockey’s lockouts even resulted in the cancellation of the entire 2004-05 season. The lockout again was utilized in 2011 by recently peaceable football as well as by basketball. The owners gravitated towards the lockout tactic because in the event of strike (protesting changes in conditions in employment, which proved ineffective), players who crossed the union picket line could play and still sue in antitrust simultaneously. The lockout put more pressure on the players to settle. . . . The union now was represented by David Boies, who had only a few months before represented the NFL and successfully deprived that union of its only effective antitrust remedy—i.e., an injunction against the lockout, which would have required the owners to open the camps in early summer. Thus the basketball union now would not pursue the injunction remedy, notwithstanding the persuasiveness of Judge Bye’s dissenting opinion in the football case. Of course, Boies would have met himself coming around the corner if he argued for it in basketball.

He concludes:

Nonetheless, even though the union was stripped of its most effective antitrust remedy, litigation seems to have moved the parties together. It most certainly called the NBA’s bluff, in that the league’s regressive or inferior option was quickly forgotten. True, the NBA obtained givebacks that are estimated to be worth more than $300 million. Not only did it win on revenue sharing with the players—the players will possess between 49% and 51% as opposed to 57%—but more stringent luxury tax penalties for violators also have been instituted. As National Basketball Players Association Executive Director Billy Hunter said, the latter element constitutes the “harshest element of the new system.” At the same time, guaranteed contracts were preserved, restricted free agents will benefit from the reduction of the so-called “match period” when teams may match competing offers from seven to three days, which may encourage bidding on these players. The cap remains soft in that the so-called incumbent “Bird” players (named for Celtics superstar Larry Bird) may exceed the cap and have more expansive increases and lengths of contracts than other players. A so-called “amnesty” for bad contracts was permitted, in that even though the contracts must be paid, a player on each club may be waived and his salary not counted towards his team’s cap. What appeared to be a rout of the players in November emerged as a reasonable face-saving compromise.

Read the full article, The 2011 Basketball Lockout: The Union Lives to Fight Another Day—Just Barely by William B. Gould IV, at the Stanford Law Review Online.

Note: Updated quotation.