By now, almost everyone is familiar with Judge Berman‘s decision vacating Commissioner Roger Goodell’s award upholding a four-game suspension of New England quarterback Tom Brady in connection with the tampering of air levels in footballs during the 2015 AFC Championship game. Judge Berman found that Commissioner Goodell’s award was deficient in the following respects:
(1) that Brady had no notice that the conduct for which he was suspended — being generally aware of the misconduct of an equipment assistant and locker room attendant who deflated the balls and then refusing to cooperate with the subsequent investigation — was prohibited conduct for which he could be disciplined;
(2) that Brady was denied the opportunity to examine one of the two lead investigators who authored the investigative report upon which Commissioner Goodell relied, namely NFL Executive Vice President and General Counsel Jeff Pash; and
(3) that Brady was denied equal access to investigative files, including witness interview notes.
Judge Berman did not remand to correct these errors, but simply vacated the award.
Did Judge Berman Properly Follow the Standard for Review? How sound was Judge Berman’s decision?
From an analysis of his opinion and well-established Supreme Court authority he was supposed to follow, it may have been the Judge himself who overstepped his bounds. It is important to remember that Commissioner Goodell’s role was that of arbitrator; the collective bargaining agreement permitted him to assume that role if he so chose and he did so choose. The level of deference that courts must give an arbitrator is extreme: in essence, as long as the arbitrator is arguably construing or applying the contract, and acting within the scope of his authority, a court cannot overturn his decision. While Judge Berman superficially acknowledged this standard, it does not appear that he actually followed it. Instead, he appeared to apply some type of “common law of the workplace” to find that Brady’s treatment was fundamentally unfair.
The first sign that Judge Berman was straying from his role was his failure to cite or acknowledge any of the leading U.S. Supreme Court cases establishing the basic principles regarding judicial review of labor arbitration awards in the collective bargaining context. The Supreme Court repeatedly has emphasized that a court is not authorized to reconsider the merits of a labor arbitration award even though the parties may allege the award was decided on errors of fact or on a misinterpretation of the contract. The Supreme Court has explained this extreme deference as emanating from the federal policy inherent in Section 301 of the Labor Management Relations Act (LMRA) favoring the settlement of labor disputes by arbitration. In essence, the parties contracted for the settlement of their dispute by an arbitrator of their choice; if dissatisfied with his decision, they are free to select a different arbitrator in the future.
The Supreme Court’s Garvey Decision
In particular, Judge Berman did not cite or deal with the Supreme Court’s decision in Major League Baseball Players Ass’n v. Garvey. This was striking, as that case, like Brady’s, arose in the context of the review of an arbitrator’s award under the collective bargaining agreement of a professional players association. The facts and decision the Garvey case are worth reviewing, as they demonstrate just how deferential the Supreme Court expects courts to be:
Steve Garvey, an All-Star first baseman, alleged that his contract with the San Diego Padres had not been extended in the 1988 and 1989 baseball seasons as part of the owners’ collusion in the market for free agents that an arbitrator had found to have taken place. He sought damages under a framework that had been set up to determine and evaluate individual player’s claims for damages due to that finding of collusion. Garvey’s main piece of evidence was a letter from the Padres’ President, Ballard Smith, admitted to the non-extension of the contract due to the collusion. However, the arbitrator rejected Garvey’s grievance by discrediting the letter because it contradicted the President’s testimony in the earlier arbitration in which the collusion had been found to exist. Bizarrely, however, in that earlier proceeding the same arbitrator specifically had found that testimony to be non-truthful in concluding there had been collusion.
Finding the arbitrator’s decision “completely inexplicable and border[ing] on the irrational,” the Court of Appeals for the Ninth Circuit vacated the award, finding the only justification for the arbitrator’s decision was “his desire to dispense his own brand of industrial justice.” Reversing, however, the Supreme Court claimed to be “baffled” by what the Court of Appeals did in light of the clearly expressed deferential standard for reviewing labor arbitration awards under Section 301. The Supreme Court acknowledged that the arbitrator’s ruling may have appeared to the Court of Appeals as “improvident or even silly,” but even so that did “not provide a basis for a court to refuse to enforce the award.” According to the Supreme Court, even when a federal judge considering the arbitration award is “convinced that the arbitrator committed serious error, it does not suffice to overturn [the arbitrator’s] decision.” This is also true when an arbitrator’s “procedural aberrations rise to the level of affirmative misconduct,” for a federal court may not “interfere with an arbitrator’s decision that the parties [players and owners] bargained for.”
Judge Berman Relied More on the Federal Arbitration Act Than Cases Under Section 301
Had Judge Berman paid closer heed to decisions such as Garvey, he might have been less inclined to wade into the weeds of assessing Commissioner Goodell’s claimed procedural aberrations. Judge Berman instead appeared to rely more heavily on cases applying the Federal Arbitration Act (FAA), which establishes four limited statutory grounds for vacating an arbitration award. Judge Berman zeroed in on the FAA’s exceptions allowing vacatur where the arbitrator is “guilty of misconduct . . . in refusing to hear evidence pertinent and material to the controversy” or in “exceeding his powers.”
The problem with relying on the FAA, however, is that the FAA has been held not to apply to labor disputes, although to be sure federal courts have often looked to the FAA for guidance in labor arbitration cases. Section 301, which does apply, does not provide statutory grounds for vacating a labor arbitration award, although, as seen, the Supreme Court has made clear what a court may not do. As the body of case law applying Section 301 has developed, the main reasons a court may vacate a labor arbitration award appear to be if (i) the award does not “draw its essence” from the labor agreement, meaning it conflicts with the express terms of the agreement, imposes additional requirements not expressly provided for in the agreement, or is based on “general considerations of fairness and equity” instead of the exact terms of the agreement; or (ii) it violates a well-settled and prevailing public policy.
The Problems With Judge Berman’s Findings
Judge Berman first found fault in Commissioner Goodell’s award because the Judge found that Brady did not have notice that he could receive a four game suspension for general awareness of a scheme to deflate footballs, or for non-cooperation with the NFL’s investigation. He also attacked Commissioner Goodell’s reasoning in looking to penalties for violations of the league’s steroid policy as a justification for upholding a four game suspension. He further found that Brady had no notice he could be suspended rather than fined. Citing decisions by other arbitrators involving NFL players, Judge Berman concluded that Commissioner Goodell violated the “law of the shop” by failing to find there was inadequately notice of prohibited conduct and potential discipline.
In all of this, however, Judge Berman was doing what the Supreme Court has stated a judge should not do: second-guessing the arbitrator. For example, the so-called “law of the shop” is not something akin to the common law that a court must follow. Rather, it is up to the labor arbitrator alone to interpret precedent by other arbitrators or, as the Supreme Court has put it, to simply to conclude “that he was not bound by” a prior arbitrator’s decision. Judge Berman relied heavily on decisions by other arbitrators in other high-profile NFL cases — such as “Bounty-Gate” and the Ray Rice and Reggie Langhorne cases — to find that Brady was entitled to the type of notice that Judge Berman thought he was entitled to. But that simply was not Judge Berman’s role to say.
Moreover, Brady’s notice contentions were acknowledged and rejected by Commissioner Goodell in his post-hearing detailed award that was also based on his assessment of the evidence — including Brady’s credibility and the exhaustive Wells investigative report upon which he relied. There can be no question that in so doing the Commissioner was “arguably construing or applying the contract,” which is all it took to require enforcement of his award. In short, the Commissioner was entitled to disbelieve that two equipment employees would take it on their own to deflate the footballs without the knowledge or involvement of the quarterback of the team, and to conclude that Brady’s awareness was conduct detrimental to public confidence in the integrity of the game. He also was entitled to believe that Brady deserved to be penalized for refusing to cooperate with the investigation and then destroying his cell phone rather than turn it over to the investigators, even if there was no specific rule that said he could not do this.
Judge Berman was on similarly weak footing in attacking the punishment meted out (suspension versus fine) because he thought it was error for Commissioner Goodell to uphold the penalty by borrowing from the schedule of penalties for violations of the league’s steroid policy. Again, such judgment calls are quintessentially for the arbitrator, and the suspension penalty echoed the penalty that the Patriots themselves had issued to its equipment employees for their roles.
Relying on the FAA, Judge Berman further justified his decision to vacate Commissioner Goodell’s award based on the latter’s refusal to allow Jeff Pash to testify at the arbitration hearing. Judge Berman found this to be “fundamentally unfair,” because Pash was the co-lead investigator of the investigation, known as the Wells Report. Commissioner Goodell had excluded Pash because Pash had not in fact played substantive role in the investigation, his role having been limited to comments on the draft of the report. Commissioner Goodell moreover regarded any testimony by Pash as cumulative, as Wells, the report’s architect, was allowed to testify. But Judge Berman determined that Pash would have had valuable insight into the course and outcome of the investigation and into the drafting and content of the Wells Report. Therefore, he found that Brady was prejudiced because he could not explore how truly independent the report was.
Again, Judge Berman appeared to have simply second-guessed Commissioner Goodell, given that Commissioner Goodell had substantial discretion to admit or exclude evidence without having to “follow all the niceties observed by the federal courts.” Commissioner Goodell had at least a colorable basis for excluding Pash’s testimony. Indeed, his rationale for excluding that testimony was that which a court might have applied. Further, Judge Berman’s conclusion as to how Brady was prejudiced appeared speculative as to whatever additional value Pash’s testimony would have supplied.
Judge Berman came closest to presenting a valid basis for vacating the award in his determination that Commissioner Goodell had improperly denied Brady equal access to Wells’ investigative files and interview notes. Commissioner Goodell had justified his denial of access to those files, including interview notes, because they had played no role in the disciplinary decisions, which were based on the Wells Report itself. But as Judge Berman observed, the Wells Report was based on those notes. Furthermore, compounding the prejudice to Brady was that Wells’ law firm, Paul, Weiss, acted as both independent counsel and as retained counsel to the NFL during the arbitration hearing. NFL counsel therefore had access to the investigate file for direct and cross examination while Brady had no such access.
These observations have some merit. After all, it does not seem fair that Brady had no access to the notes and interviews upon which the report was based, especially when the same law firm that produced the report also represented the NFL at the arbitration hearing. But Article 46 of the collective bargaining agreement expressly limited discovery to the exchange of exhibits upon which the parties intended to rely at the hearing. The Commissioner’s decision to deny additional discovery was based on his interpretation of that provision, such that it at least arguably “drew its essence” from the collective bargaining agreement. Furthermore, as stated, Commissioner Goodell asserted that the investigation notes played no role in his decision on appeal, and other notes had been provided, such as the interview notes from the NFL’s own investigators.
Judge Berman Should Have Remanded
The final error in Judge Berman’s decision is that he did not remand the case. The procedural and due process errors appeared to be correctable. For example, Judge Berman could have instructed Commissioner Goodell to reconvene the hearing to allow Brady to access the Wells investigative files and to call Pash as a witness. In the Garvey case, the Supreme Court expressly criticized the Ninth Circuit for not remanding, because by not remanding the court in essence was deciding the case. Here, too, Judge Berman in essence was resolving the dispute, and without even making any judgment as to whether Brady did or did not have a role in the tampering that took place.
Immediately after Judge Berman issued his decision, the NFL announced it was appealing. Based on Judge Berman’s apparent failure to properly follow the applicable highly deferential standard, the NFL’s chances for success on appeal appear to be good.
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