Dabscheck, Braham --- "Sport, Human Rights and Industrial Relations" [2000] AUJlHRights 23; (2000) 6(2) Australian Journal of Human Rights 129
Sport, Human Rights and Industrial Relations
Braham Dabscheck
[*]
- Labour Market Controls in Professional Team Sports
- Forced Labour and Slavery
- Freedom of Choice in Employment: North America
- Freedom of Choice in Employment: United Kingdom and Australia
- Summary and Conclusion
The opening paragraph of the Universal Declaration of Human Rights proclaims ‘recognition of the inherent dignity and ... the equal and inalienable rights of all members of the human family’.[1] The Universal Declaration, and other human rights’ instruments, see freedom, or freedoms, associated with employment as integral to the attainment or recognition of human rights. For example, Article 4 of the Universal Declaration states that ‘No one shall be held in slavery or servitude, slavery and the slave trade shall be prohibited in all their forms’. A similar statement condemning slavery is contained in Article 8 of the International Covenant on Civil and Political Rights. In addition, the International Labour Organization, in 1930 and again in 1957, adopted conventions condemning and seeking the abolition of forced and compulsory labour[2].
Article 23(1) of the Universal Declaration of Human Rights states ‘Everyone has the right to work, to free choice of employment’. Article 6 of the International Covenant on Economic, Social and Cultural Rights declares that ‘The State Parties to the present Covenant recognise the right to work which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard these rights.’
Various human rights’ instruments recognise or acknowledge freedom of association and the right of workers to join trade unions to protect their employment rights. For example, Article 23(4), of the Universal Declaration of Human Rights[2] states ‘Everyone has the right to form and join trade unions for the protection of his rights’. Similar statements are contained in Article 8 of the International Covenant on Economic, Social and Cultural Rights[3], and Article 22 of the International Covenant on Civil and Political Rights,[4] respectively. The International Labour Organization has also adopted conventions upholding the independence of trade unions. In 1948 it adopted the Freedom of Association and Protection of the Right to Organise Convention[5] and, in 1949, the Right to Organise and Collective Bargaining Convention[6].
Players of professional team sports have been subjected to a series of labour market rules which have substantially curtailed their economic freedom and human rights. The major rules have been the reserve or option system (North America) and the transfer system[7] (United Kingdom, Western Europe and Australia) which binds a player to the initial club which employs them for the rest of their playing life.
In response, players have turned to collective action in the form of player associations/trade unions, seeking to remove or overcome abuses associated with such controls. Different leagues, and their respective constituent clubs, have been opposed to the formation and operation of player bodies. Leagues have portrayed player associations and their leaders as a foreign element, hostile to the operation and ‘good’ management of sport.
With the obvious exception of American baseball (see below), the courts, generally speaking, have struck down various labour market controls, which have restricted the employment rights of players. In the United States of America such controls have fallen foul of the Sherman Antitrust Act 1890[8] and the Clayton Act 1914[9]; in the United Kingdom and Australia the common law doctrine of restraint of trade;[10] and in Western Europe, in the 1995 Bosman case,[11] Article 48 of the Treaty of Rome[12], which ensures the free movement of workers within the European Economic Community.
The courts have found against such controls from the perspective of classic liberal or natural rights’ interpretations of human rights.[13] Such controls have been anathema to judges imbued with liberal values. They have been perceived as infringing unreasonably on the natural employment rights of players. The major argument of this paper is that the courts, in finding against such rules on the basis of individualistic or natural rights’ interpretations of human rights, have, paradoxically, enhanced the collective determination of employment conditions and provided a fillip to player associations.[14]
Unfavourable decisions before the courts have ‘encouraged’ leagues to enter into collective bargaining deals with player associations to protect various labour market controls. Such controls, enshrined in collective bargaining agreements negotiated at arms length in ‘good faith’, can be shielded from antitrust or common law actions. The content of such agreements – the extent of freedoms afforded and benefits provided to players – in turn, are a function of the bargaining strength and negotiating skills of the respective parties.
This paper is concerned with providing an examination of human rights dimensions of industrial relations in professional team sports. It is organised into five sections. Section one briefly describes the different labour market rules which operate in professional team sports. Section two examines various cases where courts have considered the ‘forced labour’ or ‘slavery’ aspects of such controls. The next two sections, which constitute the bulk of the paper, focus on how the courts have responded to rules which have restricted the ‘mobility’ and ‘freedom’ of players to obtain employment with alternative clubs, once their contracts with their ‘original’ clubs have expired. Section three surveys decisions in North America and section four the United Kingdom and Australia. The examinations of the case law in these two sections are integrated with analyses of developments and issues associated with the activities of player associations and the collective determination of employment conditions. Section five provides a conclusion, where the major threads of the discussion are drawn together.
Labour Market Controls in Professional Team Sports
League and club officials have consistently argued that sporting labour markets and, therefore, the contracts of players need to be strictly controlled to ensure the survival of their respective sports. It is argued that such controls help to bring about an equal distribution of playing talent among competing teams. It is claimed that without such restrictions rich clubs would secure the most skilled players and, through their continual domination of the competition, reduce the commercial viability of or destroy the sport. Subsidiary arguments justifying controls have been the need to maintain team stability, minimization of wages and costs, and a conviction that clubs should receive compensation for players who change clubs.
Cairns, Jennett and Sloane, in a survey of the economics of professional team sports, have said ‘it is relatively uncontroversial that labour market controls have not given equality of performance’.[15] The benefits of labour market controls are negligible or illusory and hardly justify the denial of players’ human rights. Moreover, there are alternative methods, consistent with employment freedom and/or human rights’ instruments, in which sporting equality can be achieved – namely revenue sharing or redistributing income between clubs.[16]
Three different types of labour market controls can be distinguished. They are recruitment of players, the movement of players between clubs, and the use of maximum wages. Excluding normal market mechanisms, where players and clubs negotiate (initial) contracts, two major types of recruitment have been used in professional team sports. The first is zoning. Clubs are given exclusive rights to the services of prospective players who reside in their particular allocated geographic area (zone). Players have no choice in the initial club that might employ them. Zones usually operate in tandem with residential requirements of certain periods, to restrict players from being able to take up employment with other clubs by moving to another zone. Zoning schemes have been a feature of Australian sports.
The second method of recruitment is the draft. With drafting, potential new players are placed in a common pool and are chosen (drafted) by clubs in terms of their reverse order in the competition in the previous year; with the process being repeated a number of times. Drafting, like zoning, denies players the ability to choose and/or negotiate with prospective clubs which might be prepared to employ them. Players can only obtain employment with the club which drafts them. The draft was first adopted in American football in 1935, spreading to other North American sports, and Australia in the late 1980s and early 1990s. In Australia this method of selecting new players is known as the ‘external’ draft.
Once a player signs with a club, leagues have developed a variety of rules which enable clubs to maintain control over and/or restrict the ability of players to obtain employment with other clubs. Six such rules can be distinguished – the transfer system, the reserve or option system, the ‘Rozelle’ rule, right of first refusal, assignment and the external draft.
Under the transfer system, a player who signs with a club is bound to that club for the rest of their playing life. A player, even though their contract with their original club has expired, can only move to a new club with the permission of their original club. The obtaining of such permission invariably involves the payment of a transfer fee to the original club in ‘compensation’ for the loss of the said player. Fees are also paid for players who change clubs or are bought and sold during the life of their contract. Transfer fees were first introduced in English soccer in 1891. They have been a mainstay of soccer worldwide, and were utilised for a large part of the twentieth century in Australian Rules football and rugby league.
The reserve or option system involves a contract whereby a club has a right (or option) to re-sign a player after the expiry of the contract. Given that each new contract contains an option clause, the club, in effect, has a perpetual right to the services of a player. The reserve system was first introduced in American baseball in 1879. It subsequently spread to other North American sports, and to Australian Rules football from the mid 1980s to mid 1990s.
Two variations of the reserve or option system have been developed. Prior to 1963 the rules of American football allowed players to play out their option year. That is, if a player chose to not sign a new contract, he or she could play out the option of his old contract subject to a mandatory ten per cent salary cut and, at the end of the option period, be declared a free agent. Such a player would then be enabled to seek employment with any club in the league. R.C. Owens used this device to change clubs in 1963.
Following this, the National Football League introduced the so-called ‘Rozelle’ rule to block this source of mobility and employment freedom for players. Under the ‘Rozelle’ rule, a club which obtained a ‘free agent’ had to compensate the club which had lost the so-called ‘free agent’. If the two clubs could not agree on compensation, National Football League commissioner Alvin Ray ‘Pete’ Rozelle was empowered to direct the acquiring club to compensate the club which ‘lost’ the player as he saw fit.
Under the right of first refusal, players, following the expiry of their contract with their current club, are able to enter into negotiations and ‘sign’ with a ‘new’ club. However, the player’s previous club can match the offer of the ‘new’ club, thereby negating the ability of the player to take up employment with a new club. The right of first refusal has been a feature of North American basketball and football and has also been used in Australian basketball, baseball and soccer.
Assignment enables clubs or leagues to relocate or (re-)assign players to another club. Assignment has been a feature of North American sports and has been used in Australian rules football and baseball.
The ‘internal’ draft is a uniquely Australian contribution to the player rules of professional team sports. Under the internal draft, current players who have not negotiated a new contract with their club are placed into a common pool and are selected by clubs through the external draft discussed above. The internal draft was introduced into Australian Rules football in 1988. It was also used, for a brief period, in rugby league in the early 1990s.
Two types of wage maxima have operated in professional team sports. Limits have been placed on the income that can be earned either by individual players or the team (league) as a whole, in what has been referred to as a salary cap. Individual wage maxima have operated in English soccer, a number of Australian sports and unofficially in American baseball. A salary cap was first introduced in American basketball in 1983 following negotiations between the National Basketball League and the National Basketball Players’ Association. Salary caps have spread to American football and a number of Australian sports.
Forced Labour and Slavery
As already mentioned the international community has adopted conventions condemning forced or compulsory labour and slavery. Article 2(1) of the International Labour Organisation’s Convention Concerning Forced or Compulsory Labour 1930 defines such labour to mean ‘all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily’. Article 1 of the 1926 Slavery Convention, adopted by the League of Nations, and the 1953 Amended By Protocol by the United Nations defines slavery as ‘the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised’, and states that the ‘slave trade includes ... all acts involved in the acquisition of a slave with a view to selling or exchanging him; all acts of disposal by sale or exchange of a slave acquired with a view to being sold or exchanged’.
It could be argued that many of the labour market controls which operate in professional team sports breach these conventions. Neither zoning nor drafts enable players to ‘voluntarily’ choose their employers. If players decide not to play with the club that fate has determined for them, they face the ‘menace’ and ‘penalty’ of being denied employment in their chosen profession. The various rules which take from players the ability to negotiate with prospective employers impose a ‘penalty’ of reduction in income and other entitlements.
‘Trades’ associated with the transfer system, the ‘Rozelle’ rule, right of first refusal and assignment require a player to play with a club with which he ‘has not offered himself voluntarily’. Transfer fees and other arrangements involving player trades involve ‘any or all of the powers attaching to the right of ownership ... [and] acts involved in ... acquisition ... with a view to selling or exchanging’.
There are three cases where actions have been mounted against such controls on the basis of forced or compulsory labour and slavery[17]. In 1970, Curt Flood claimed that baseball’s employment rules, through which he was traded by the St. Louis Cardinals to the Philadelphia Phillies against his will, constituted a form of peonage and involuntary servitude, in contravention of the Thirteenth Amendment of the Constitution of the United States of America. The Thirteenth Amendment, which was ratified in 1865 after the American Civil War, states ‘Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction’. Mr Justice Cooper of the United States District Court rejected Flood’s application. He said
‘A showing of compulsion is ... prerequisite to proof of involuntary servitude ... [Flood] is not compelled by law or statute to play baseball for Philadelphia. We recognise that under the existing rules of baseball, by refusing to report to Philadelphia [Flood] is by his own act foreclosing himself from continuing a professional baseball career, a consequence to be deplored. Nevertheless, he has the right to retire and embark upon a different enterprise outside organised baseball. The financial loss he might thus sustain may affect his choice, but does not leave him with “no way to avoid continued service” ...[quote omitted] Accordingly, we find that [Flood] has not satisfied the essential element of this cause of action, a showing of compulsory service.’[18]
In the early 1980s a Dutch soccer player, a Mr Muhren, brought an action before the European Commission of Human Rights. He maintained that his former club had set a prohibitive transfer fee on him, which precluded his ability to obtain employment with a club of his choice. He claimed that such fees were inconsistent with Article 4(2) of the European Convention on Human Rights. It states ‘No one shall be required to perform forced or compulsory labour’.
The reasoning of the European Commission on Human Rights in this case is similar to that of Mr Justice Cooper in Flood. The Commission said Article 4, Clause 2, contained two elements which required consideration. First, the labour or service must be performed against the person’s will; and second, the obligation to perform such labour or service ‘must be either unjust or oppressive or ... constitute an avoidable hardship’.
With respect to the first element, the Commission suggested ‘that prior consent is a decisive factor whether the work concerned should or should not be considered as being “forced or compulsory” ... the applicant freely choose to become a professional football player knowing that he would in entering the profession be affected by the rules governing the relationship between his future employers’. On the second element, the Commission concluded that even if the transfer fee system ‘produce[s] certain inconveniences ... it cannot be considered as being oppressive or constituting avoidable hardship’. It also found that such a system did not directly affect the player’s contractual freedom.[19]
In 1995 the Australian Soccer Players’ Association[20] claimed, in an action before the Australian Industrial Relations Commission, that the transfer system conflicted with the freedom of choice in employment as specified by Article 23(1) of the Universal Declaration of Human Rights (see above). In a decision which is noteworthy for its brevity on this point, the Australian Industrial Relations Commission found that while “Generally speaking restraints on players will, to some degree, impinge on players’ freedom of choice in employment ... it overstates the position to say that the compensation fee system conflicts with freedom of choice in employment.’[21]
On other occasions, the courts have seen fit to comment on, or draw attention to, the ‘servile’ nature of employment rules in professional team sports. In 1914, in American League Baseball Club of Chicago v. Chase, Mr Justice Bissell of the Supreme Court, Erie County, New York strongly criticised baseball’s reserve system. The case involved the Chicago club attempting to stop Hal Chase from taking up employment with the Buffalo club of the Federal League.
Mr Justice Bissell said, due to the reserve system ‘the baseball player is made a chattel’, and ‘would seem to establish a species of quasi peonage unlawfully controlling and interfering with the personal freedom of players’. He asked ‘But why should a player enter into a contract when his liberty of conduct and of contract is thus curtailed’? ‘The answer’, he said, ‘is that he has no recourse. He must either take the contract under the provisions of the National Agreement,[22] whose organization controls practically all of the good ball players of this country or resort to some other occupation’. Mr Justice Bissell also said
‘While the services of ... baseball players are ostensibly secured by voluntary contract a study of the [reserve] system ... reveals the involuntary character of the servitude which is imposed upon players by the strength of the combination controlling the labor of practically all of the players in this country ... The quasi peonage of baseball players ... is contrary to the spirit of American institutions and is contrary to the spirit of the Constitution of the United States.’[23]
In 1949 Daniel Gardella brought an action against baseball after being ‘blacklisted’ for having played in a rival Mexican league. As part of a 2/1 majority which found for Gardella, Mr Justice Frank of the United States Court of Appeals, Second Circuit, said
‘we have here a monopoly which, in its effect on ball-players like the plaintiff, possess characteristics shockingly repugnant to moral principle that, at least since the War Between the States, has been basic in America, as shown by the Thirteenth Amendment of the Constitution, condemning “involuntary servitude” ... For the “reserve clause”, as has been observed results in something resembling peonage of the baseball player[24] ... I may add that, if the players be regarded as quasi-peons, it is of no moment that they are well paid; only the totalitarian-minded will believe that high pay excuses virtual slavery. In what I have said about the nature of the contracts made with the players, I am not to be understood as implying that they violate the Thirteenth Amendment or the statutes enacted pursuant thereto. I mean simply to suggest that those contracts are so opposed to the public policy of the United States’.[25]
In 1991 Mr Justice Wilcox of the Federal Court of Australia, in an appeal action concerning the operation of the internal draft in rugby league, said ‘the right to choose between perspective employers is a fundamental element of a free society. It is the existence of this right which separates the free person from the serf.’[26]
Freedom of Choice in Employment: North America
Baseball’s reserve or option system rendered players dependent on the tender mercies of their clubs. Denied the ability to seek alternative employment, clubs could not only ‘persuade’ players to ‘agree’ to low salaries, but also devise means to escape contractual obligations. Clubs deducted sums for uniforms, travelling and medical expenses, and imposed fines for profanities expressed on the diamond and other misdemeanours. Players were also threatened with fines if their play or performance didn’t improve and, if it did, they were fined anyway because improved play now was an indicator of slacking in the past. Clubs also employed Pinkerton spies to watch over players in the conduct of their private affairs.[27]
Players resented the reserve system and the associated degree of control it afforded clubs/owners over their employment. On three occasions, during the early decades of baseball’s operation, they formed player associations in attempting to improve their lot. They were the National Brotherhood of Professional Baseball Players (1885-1890); the League Protective Players’ Association (1900-1902) and the Baseball Players Fraternity (1912-1918). The three lacked the leadership and organisational skills required to survive as entities in the baseball industry.[28]
The operation of these respective player associations coincided with periods where Orgnaized Baseball was challenged by rival leagues: the Players League (1890), when players with the aid of financial backers established ‘a league of their own’; the American League (1900-1902); and the Federal League (1914-1915).[29] Rival leagues provided players with the chance to seek alternative employment and, in turn, generated a series of actions which tested baseball’s reserve system.
John Montgomery Ward was the leading figure in the formation of the National Brotherhood- baseball and sports’ first union. The New York club sought an injunction restraining Ward from joining the Players’ League under the reserve clause in his 1889 contract. Mr Justice O’Brien of the Supreme Court of New York County declined this application, for two major reasons. The first was based on the common law notion that ‘a court of equity will not make a contract which the parties themselves have not made, and ... will not enforce an indefinite one’. Mr Justice O’Brien found that there was nothing in Ward’s 1889 contract which provided guidance on what would be the terms and conditions of his employment in 1890. He said, ‘Not only are there no terms and conditions fixed, but I do not think it is entirely clear that Ward agrees to do anything further than to accord the right to reserve him upon terms thereafter to be fixed.’
Secondly, Ward’s 1889 contract contained clauses which enabled the New York club to terminate his contract because he had violated it, and on ten day’s notice for any reason. Mr Justice O’Brien concluded that the reserve clause, set against this ten day term, suffered from a ‘want of fairness and of mutuality’.[30]
New York also sought an injunction restraining Ward’s teammate, Buck Ewing, from joining the Federal League. Mr Justice Wallace at the Circuit Court, New York, drawing on the decision in Ward, turned down this request.[31]
The players’ victories in these cases, however, proved to be pyrrhic. The Players’ League was deserted by its financial backers and collapsed, as did the National Brotherhood. To complete this inning of baseball history, in due course Organised Baseball altered player contracts to include clauses which stated that players received specific sums of money for ‘agreeing’ to the reserve clause, and that part of their ‘high’ pay was compensation for the ten day notice clause.
In 1902 Napolean Lajoie of Organised Baseball’s Philadelphia club signed to play with a Philadelphia club in the rival American League. The former club sought an injunction from the Supreme Court of Pennsylvania restraining such a move. It maintained that the reserve clause contained in Lajoie’s contract, particularly the two elements identified above, satisfied tests of mutuality and reasonableness as required by a court of equity. Mr Justice Potter agreed with this line of reasoning and restrained Lajoie from joining the American League’s Philadelphia club.[32] The jurisdiction of this decision was, of course, limited to Pennsylvania. Lajoie was traded to Cleveland in the American League. He was provided with the luxury of a short vacation whenever Cleveland played in Philadelphia, for fear of being arrested if he should visit that city.
Reference has already been made to the 1914 decision of Mr Justice Bissell in Chase where he found the reserve system reduced players to ‘chattels’ and ‘quasi-peons’. Organised Baseball’s Chicago club was attempting to block Chase from taking up employment with Buffalo in the Federal League. The case is also of importance because it constitutes the first attempt to utilise the Sherman Antitrust Act 1890 in the legal battles over players’ employment rights. The relevant sections hold:
- Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal...
- Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanour ...’[33]
Mr Justice Bissell found that ‘Organized Baseball’ is now as complete a monopoly of the baseball business for profit as any monopoly can be made. It is in contravention of the common law, in that it invades the right to labor as a property right, in that it invades the right to contract as a property right, and in that it is a combination to restrain and control the exercise of a profession or calling.’ Despite this finding, however, he could not accept ‘the proposition that the business of baseball for profit is interstate trade or commerce, and therefore subject to the provisions of the Sherman Act’.
Mr Justice Bissell defined commerce as the ‘interchange of goods, merchandise or property of any kind; trade; traffic ...’ Even though he described players as ‘chattels’ and ‘quasi-peons’, in other parts of his decision (see above), he did not accept the proposition that ‘baseball players are bought and sold and dealt in among the several states, and are thus reduced and commercialised into commodities’. He said, ‘We are not dealing with the bodies of the players as commodities or articles of merchandise; but with their services as retained or transferred by contract’ (Compare this with the statement elsewhere in his decision that players have no choice in their employment - see above). ‘Baseball’, he said, ‘is an amusement, a sport, a game that clearly comes within the civil and criminal law of the state, and it is not commodity or an article of merchandise subject to the regulation of Congress on the theory that it is interstate commerce’.[34]
At the end of 1915 the trade war between Organised Baseball and the Federal League came to an end, with the negotiation of a peace deal in Cincinnati. This agreement, however, did not satisfy the principals of the Baltimore club of the Federal League. The Baltimore Federals initiated legal action claiming that Organised Baseball was a monopoly in breach of the Sherman Antitrust Act 1890.
The action eventually found its way to the Supreme Court of the United States of America. In 1922 Mr Justice Holmes, speaking for a unanimous court, ruled against Baltimore, thereby exempting baseball from the reach of the Sherman Antitrust Act 1890. He said:
‘The business is giving exhibitions of baseball, which are purely state affairs. It is true that, in order to attain for those exhibitions the great popularity that they have achieved, competitions must be arranged between clubs from different cities and States. But the fact that in order to give exhibitions the League must induce free persons to cross state lines and must arrange and pay for their doing is not enough to change the character of the business ... the transport is a mere incident, not the essential thing. That to which it is incident, the exhibition, although made for money would not be called trade or commerce in the commonly accepted use of those words.’[35]
In 1923 in Hart the Supreme Court deliberated on the applicability of the Sherman Antitrust Act 1890 to vaudeville artists. A promoter claimed, relying on Federal Baseball, that the provision of vaudeville artists was purely a state affair, and that the transportation of such artists across state borders was ‘incidental’ to the performances supplied. The Supreme Court rejected this line of reasoning. Mr Justice Holmes, on behalf of the court, said the matter ‘was brought before the decision in the Base Ball Club Case, and it may be that which in general is incidental, in some instances may rise to a magnitude that requires it to be considered independently’.[36] By applying the Sherman Antitrust Act 1890 to vaudeville artists, Hart marked the beginning of the extension of the jurisdiction of the Sherman Antitrust Act to a range of activities and sports that the courts were prepared to characterise as ‘interstate commerce’. The exemption of baseball from this jurisdiction became an anomaly.
It is not until 1949 that the next major case concerning employment rules in North American sport occurs. The case involves baseball’s blacklisting of Daniel Gardella after playing in a Mexican League (see above). Gardella argued that the substantial sums baseball now received from broadcasting and television rights constituted a new factor which negated Federal Baseball. A 2/1 majority of the United States Court of Appeals, Second Circuit, accepted such reasoning.[37]
In 1953 the Supreme Court was provided with an opportunity to reconsider Federal Baseball. The case involved George Toolson of the New York Yankees who objected to being assigned to a minor league team. He maintained that baseball’s reserve system violated the Sherman Antitrust Act 1890. A majority of the court upheld Federal Baseball on the basis of stare decisis. The majority said
‘In Federal Baseball ... this Court held that the business of providing public baseball games for profit between clubs of professional baseball players was not within the scope of the federal antitrust laws. Congress has had the ruling under consideration but has not seen fit to bring such business under these laws by legislation having prospective effect. The business has thus been left for thirty years to develop, on the understanding that it was not subject to existing antitrust legislation ... We think that if there are evils in this field which now warrant application to it of the antitrust laws it should be by legislation.’[38]
Promoters of theatrical entertainments and boxing tried to shield themselves from antitrust actions following the Supreme Court’s decision in Toolson. On both occasions, in almost identical prose, the Supreme Court said that Toolson was a narrow application of stare decisis in upholding baseball’s exemption as granted in Federal Baseball.[39] In International Boxing Club, a majority of the court said, ‘Indeed, this Court’s decision in the Hart case, less than a year after the Federal Baseball decision, clearly established that Federal Baseball could not be replied upon as a basis of exemption for other segments of the entertainment business, athletic or otherwise.’[40]
Two subsequent cases, fourteen years apart, reaffirmed baseball’s privileged antitrust position. In 1957, William Radovich initiated proceedings against the National Football League who blacklisted him because he had previously played with a rival league. A majority of the Supreme Court found that ‘the volume of interstate business involved in organised professional football places it within the provisions of the [Sherman] Act.’ To the extent that this ruling ‘is unrealistic, inconsistent or illogical’, given decisions in Federal Baseball and Toolson, the majority said, ‘were we considering the question of baseball for the first time upon a clean slate we would have no doubts’.[41]
The second case, in 1971, involved basketballer Spencer Haywood. Under basketball’s rules players could only join, or be drafted to, clubs after having played four years in college. Haywood signed with Seattle prior to this effluxion of time; and the National Basketball Association barred his playing. Haywood maintained that such an action constituted a violation of the Sherman Antitrust Act 1890. The Supreme Court concurred. It simply said ‘Basketball ... does not enjoy exemption from the antitrust law’.[42]
In the early 1970s Curt Flood, with the backing of the Major League Baseball Players’ Association, challenged baseball’s reserve system. He objected to being traded by the St. Louis Cardinals, a club for which he had played for twelve years, to the Philadelphia Phillies. He claimed that such a trade violated antitrust and civil rights legislation, the common law and constituted a form of peonage and involuntary servitude in contravention of the Thirteenth Amendment of the United States’ Constitution. The peonage, involuntary servitude aspect of this claim has already been discussed above.
With respect to the antitrust aspect of Flood’s claim the Supreme Court decided to follow stare decisis and reaffirmed its previous rulings in Federal Baseball and, more especially, Toolson. A majority of the court concluded that ‘Professional baseball is a business and it is engaged in interstate commerce’. They also found that ‘its reserve system [in] enjoying exemption from the federal antitrust laws, ... is, in a very distinct sense, an exception and an anomaly’. They added, the court’s earlier decisions in Federal Baseball and Toolson ‘have become an aberration confined to baseball’. Having said this, the majority, nonetheless, concluded that it was Congress’s duty to bring about an end to this aberration. They went on to add, if there was any inconsistency or illogic in their stance, that
‘If we were to act otherwise, we would be withdrawing from the conclusion as to congressional intent made in Toolson and from the concerns as to retrospectivity therein expressed. Under these circumstances, there is merit in consistency even though some might claim that beneath that consistency is a layer of inconsistency.[43]
In a dissenting judgement, Mr Justice Marshall indicated an alternative legal path for resolving employment issues in baseball and sport. He suggested exploration of federal labour law (the National Labor Relations Act 1935) as an alternative to antitrust actions.[44] Moreover, the Clayton Act 1914 provided deals negotiated by labour (and other) organisations with immunity from antitrust actions. Section 6 states
‘The labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.’
In 1946 there was a fourth abortive attempt to establish a players’ association in baseball. It was called the American Baseball Guild. Organised Baseball countered this attempt by providing players with some concessions and the introduction of a representative system, where discussions were held with players chosen from each club. In 1954 the Major League Baseball Players’ Association was formed. It was a rather inactive, passive body until the appointment of a former Steelworker Union official in the person of Marvin Miller in 1966. In the 1950s player associations were also formed - some of which were shortlived - in football, basketball and ice-hockey. As with baseball, it was not until the 1960s, and early 1970s, that these respective organisations became more active in protecting and advancing members’ rights.[45]
Following Flood, cases concerning players’ rights hinged on the extent to which leagues/clubs could use labour law to shield themselves from antitrust attacks. This, in turn, was dependent on the ‘nature’, or ‘state’, of collective bargaining within the respective sports. With the exception of baseball, America’s legal regime encouraged the growth of collective negotiations in professional team sports.
In 1972 in Boston Professional Hockey Association and Philadelphia World Hockey Club the courts were asked to adjudicate on ice-hockey’s reserve system, following players taking up employment with a rival league.[46] In both instances ice-hockey attempted to deflect antitrust attacks on the basis of an alleged labour exemption. The trial judges in both cases rejected such a defense. In Philadelphia World Hockey Club, Mr Justice Higginbotham, of the United States District Court, Pennsylvania, said it was unclear if the National Hockey League Players’ Association had been registered under the relevant provisions of the National Labor Relations Act 1935, hockey’s Board of Governors had not ratified ‘agreements’ negotiated with the players’ association, and that the reserve system had ‘never been the subject of bona-fide, good-faith collective bargaining’.[47] Similarly, in Boston Professional Hockey Association, Chief Judge Caffrey, of the United States District Court, Massachusetts, could not find any evidence that bargaining had occurred over the reserve clause.[48]
For want of the existence of collective bargaining agreements the courts also found against football and basketball’s respective employment rules.[49] In Smith, which found against football’s draft, Mr Justice Bryant, of the United States District Court, Columbia, said that courts needed to consider whether issues ‘have been “thrust upon” a weak players’ union by the owners’.[50] In Mackey, Mr Justice Larsen, of the United States District Court, Minnesotta, said that the ‘weakness’ of the union was an issue he took into account in finding against football’s ‘Rozelle’ rule. Even though two collective bargaining agreements had been entered into, he could find no evidence of ‘any trade-off or quid pro quo whereby the union had agreed to the Rozelle rule in return for other benefits.’[51]
Berry and Gould maintain that the courts’ concern in Smith and Mackey with employment conditions being ‘thrust upon a weak union’ constitutes ‘a misunderstanding of federal labor law policy and the realities of the collective bargaining process’. The notion of ‘good faith bargaining’ in American labour law has not been interpreted to mean that a party must move from its original position when negotiating. ‘Good faith bargaining’ is essentially an endorsement of a preparedness to take part in a process which involves discussions and negotiations. Parties, in agreeing to not pursue certain issues may be enabled to gain concessions on other issues which are of importance to them. Though, what comes out of bargaining will be highly dependent on the strength, strategic position and negotiating skills of the respective parties. Returning to the situation in American football in the mid 1970s Berry and Gould observed that ‘If the union had not ... relinquished bargaining rights [on the ‘Rozelle’ rule], it might not have had a collective bargaining agreement at all’.[52]
The National Hockey League and National Hockey League Players’ Association negotiated a collective agreement in 1976. A clause in this agreement stated that ice hockey’s employment rules were ‘fair and reasonable’. Dale McCourt, of the Detroit Redwings, objected to being assigned to the Los Angeles Kings as part of a compensation package following the Redwing’s acquisition of ‘free agent’ Rogation Vachon. In a two to one majority the United States Court of Appeals, Sixth Circuit, found that the collective bargaining agreement protected ice hockey’s assignment rule from antitrust attack.[53]
Labour law and/or the relative strength or skills of the parties in collective bargaining would now become the major determinants of players’ rights and employment conditions. Player associations could, however, use the actual or real threat of union decertification to negate the owners’ use of the labor exemption in antitrust actions as a tactic in collective negotiations.[54]
One North American player association encountered a new problem. Michels has written how labour organisations may become subject to an ‘iron law of oligarchy’. Amongst other things this involves a situation where leaders abuse their positions of power to further their own interests, at the expense of their members.[55] Such a fate befell the National Hockey League Players’ Association under the leadership of Alan Eagleson from the late 1960s to early 1990s. Staudohar reports that in 1994 Eagleson was indited on numerous counts of racketeering, embezzlement and fraud following an FBI investigation of his period as the National Hockey League Players’ Association director. The charges included misappropriation of union funds and receiving kickbacks from insurance brokers on league and disability coverage.[56]
Flood protected baseball, and its reserve system, from antitrust actions. Despite this, the Major League Baseball Players’ Association found a means to bring about the reserve system’s demise. Grievance disputes in baseball, in the absence of a viable players’ association, were traditionally ‘resolved’ by baseball’s commissioner. Following the appointment of Marvin Miller as its leader in 1966, the Major League Baseball Players’ Association sought to bring this practice to an end. In 1970 it convinced Organised Baseball that grievance disputes should be heard before a mutually agreed independent arbitrator, per the usual practice of North American collective bargaining agreements.
In 1975 players Andy Messersmith and Dave McNally declined to sign new contracts with their respective clubs and played out their option year. After playing out their options both players claimed they were free agents and could negotiate with the various clubs prepared to employ them. Organised Baseball disputed this line of reasoning. The issue was resolved by baseball’s new grievance procedure. Private arbitrator Peter Seitz ruled in favour of Messersmith and McNally.[57] Baseball’s reserve system could simply be brought to an end by all players playing out their option year.
Seitz’s decision substantially enhanced the strategic position of the players’ association in subsequent dealings with Organised Baseball. The choice which confronted the latter was negotiating an agreement acceptable to the players’ association which contained ‘some’ restrictions on player mobility or, in the absence of an agreement, free agency for all players. After a series of negotiations the parties agreed on a new system of rules to govern the future employment of baseballers. The most important of these was that after six years of major league service players would become free agents. They would then be able to negotiate with various clubs interested in obtaining their services.
Industrial relations in baseball has been characterised by distrust and rivalry since Seitz’s decision. Organised Baseball has strenuously attempted to reduce the freedoms afforded to players in the mid 1970s. The Major League Baseball Players’ Association has, just as strenuously, resisted such attempts. The ‘best’ example of such tensions is the 232 day lockout which disrupted the 1994 season, and, for the first time since 1904, brought about the cancellation of the World Series.[58]
In October 1998 President Clinton signed the Curt Flood Act 1998[59], which ended the exemption baseball’s employment rules had enjoyed from antitrust actions.[60] The 1994 lockout helped persuade Congress to respond to the Supreme Court’s request in Toolson, almost fifty years earlier, to overcome an ‘inconsistent’, ‘illogical’ and ‘anomalous’ decision which the court found itself unable or disinclined to rectify.
Freedom of Choice in Employment: United Kingdom and Australia
The players of English soccer objected to the various employment rules which were developed and imposed on them by the sport’s governing authorities. English soccer adopted a transfer system in 1891 and a maximum wage of four pounds per week in 1901. In 1893 and 1898 there were two abortive attempts to establish a players’ union. In December 1907 a third attempt proved more successful with the formation of the Association Football Players’ Union[61]: the oldest continuous players’ body in world sport. Among its objects the union sought to abolish ‘all restrictions which affect the social and financial position of players’ and to provide legal assistance to members ‘involving claims under the Workmen’s Compensation Act 1906,[62] recovery of wages due, and breaches of contract’.[63]
Once the union sought to act on these objects - particularly workers’ compensation claims - it encountered increasingly bitter opposition from both the Football League and Football Association. In 1909 the latter sought to bring about the destruction of the players’ union. Amongst other things, it required players to sign contracts for the 1909/1910 season renouncing their membership of the union. The determination of players to maintain their allegiance to the union - particularly the members of Manchester United, and, to a lesser extent, Newcastle United, the respective Cup and League champions of 1908/1909 - and a likely disruption to the commencement of the 1909/1910 season resulted in an ultimate backdown by the Football Association. It again agreed to recognise and negotiate with the fledging players’ body.
In 1912 the players’ union backed player Harry Kingaby in an action against soccer’s transfer system. Kingaby had played for Aston Villa in 1906. He had been unable to establish himself as a regular member of the team and had joined a Southern League club in 1907. At the time, the Football and Southern leagues did not have an agreement on transfer fees for players moving between the two leagues. This is something they rectified in 1910. Aston Villa placed a £350 transfer fee on Kingaby, which was later reduced to £300 on appeal. For reasons which are unclear, Kingaby and the union did not base their case around the restraint of trade doctrine. Lord McNaughten in Nordenfelt in 1894 defined the doctrine as follows:
‘The public have an interest in every person’s carrying on his trade freely; so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and, therefore, void. That is the general rule. But there are exceptions. Restraints of trade and interference with individual liberty of action, may be justified by the special circumstances of a particular case. It is a sufficient justification, and indeed, it is the only justification, if the restriction is reasonable - reasonable, that is in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public.’[64]
Rather, Kingaby’s claim for damages was based on his loss of employment and the malicious charging of an excessive transfer fee. Mr Justice Lawrence dismissed Kingaby’s application. He found that the placement of a transfer fee did not constitute a tort; nor was there any evidence that Aston Villa had acted maliciously against Kingaby.[65]
Mr Justice Lawrence’s decision also contains a passing reference to the Trade Disputes Act 1906[66], as a possible defence against actions attacking soccer’s transfer system. Section 1 of the Act states ‘An act done in pursuance of an agreement or combination by two or more persons shall, if done in contemplation or furtherance of a trade dispute, not be actionable unless the act, if done without any such agreement or combination, would be actionable.’ Mr Justice Lawrence said his ‘judgment was not based on the Trade Disputes Act, though he doubted if it would not apply to the defendant’.[67] With these words Mr Justice Lawrence opened up the prospect of using labour law as a possible defence for leagues and clubs in restraint of trade cases; prior to the analogous use of such a strategy against antitrust actions in North America.
Costs were awarded against Kingaby and the players’ union. The union attempted to organise a game amongst members to raise funds to meet these costs. The Football Association decided not to grant permission for playing such a game. The union secretary, Alfred Owen, wrote a bitter letter to the Football Association over its stance. The Football Association and Football League would not agree to sanction a game until the union’s management committee disassociated themselves from Owen’s letter and publicly rebuked him. They acceded to this request. Owen resigned from his position as secretary. Harding, the union’s official historian, has said, ‘The Union had thus allowed its secretary to be hounded out of the game, a disgraceful episode and one that could do it no good in the eyes of its members ... [it was now] in virtual bankruptcy and impotent.’[68]
It was not until the 1950s, under the stewardship of secretary Cliff Lloyd, that the union (from 1958 renamed as the Professional Footballs’ Association) was able to reassert itself as a viable force in English soccer. In the mid 1950s it secured a ten per cent share of television rights; income which has placed it in good store to pursue the benevolent, welfare and transition to post-soccer career needs of members. Threatened strike action in 1961 brought about the abolition of maximum wages, which stood at £20 per week. In 1963 the players’ body backed Newcastle United player George Eastham in a challenge to soccer’s transfer system.
Following Kingaby, and prior to Eastham, there had only been one other occasion where the courts had ‘commented’ on the transfer system. In 1955 Ralph Banks fell out with his club Aldershot. Even though his contract with Aldershot had expired, under the transfer system his future employment was subject to the discretion of the club; who had placed a ‘high’ transfer fee on him. The issue before Mr Justice Rankin of the County Court was Aldershot’s attempt to evict Banks from premises provided by the club. The minutes of the union’s annual general meeting of 14 November 1955 record that Mr Justice Rankin said, ‘It is a penalty imposed on a professional player for his refusal to accept terms he considered unsatisfactory. As he cannot play elsewhere in Britain or the World it is a closed shop.’ The minutes also state that Mr Justice Rankin was not prepared to consider whether the transfer system was a restraint of trade because the case before him was primarily concerned with the possession of a house.[69]
The major issue before the court in Eastham was the ability of clubs to stop players from taking up employment with alternative clubs, following the expiry of contracts with their original clubs. Mr Justice Wilberforce described soccer’s employment rules as
‘an employers’ system, set up in an industry where the employers have succeeded in establishing a monolithic front all over the world, and where it is clear that for the purpose of negotiation the employers are vastly more strongly organised than the employees. No doubt the employers all over the world consider the system a good system, but this does not prevent the court from considering whether it goes further than is reasonably necessary to protect their legitimate interests.’[70]
He found rules which restricted the ability of players, out of contract, to take up alternative employment operated as a restraint of trade. The Football League mounted a number of defences in support of the transfer system. They argued that they encouraged clubs to invest in the coaching and training of younger players, aided the attainment of sporting equality, maintained team stability and prevented the poaching of players. Mr Justice Wilberforce rejected these defences. He found little evidence ‘that clubs in general do spend large sums in training professional players, other than apprentices’. Nor could he find any evidence that Newcastle United had expended the profit they had made in fees in the buying and selling of Eastham ‘in training the plaintiff to his present pitch of excellence’. He also concluded that the transfer system had not brought about the attainment of sporting equality. Staggered long term contracts could be used by clubs to ensure that players are not attracted to play with other, richer clubs. He also said that such contracts would help clubs to maintain team stability and prevent poaching of players by other clubs.[71]
Eastham and the players’ body’s victory in this case strengthened the latter’s hand in subsequent negotiations with the Football League and Football Association over members’ employment rights. In the mid 1960s, and again in the latter part of the 1970s, the Professional Footballers’ Association negotiated major changes to soccer’s employment rules which enhanced the human rights of members.
The mid 1960s changes included players being given a free transfer if clubs did not offer them contracts equal to last year’s terms, and the use of an independent tribunal to resolve salary disputes between players and clubs – with players to receive the terms of their previous contract during the dispute period. The changes in the latter part of the 1970s provided free agency for players aged 33, with five years service with a club. They also made players out of contract free to move to a new club, with a fee to be subsequently negotiated between the clubs concerned. If the clubs are unable to agree the fee will be determined by an independent tribunal.[72]
Australian courts have drawn on Eastham in their examination of professional team sports’ employment rules. In 1971 in Tutty, the High Court of Australia, on appeal, adjudicated on the reasonableness of the New South Wales Rugby League’s employment rules. The facts of Tutty are similar to those of Eastham. Balmain used the transfer system to block attempts by Dennis Tutty to obtain employment with other clubs, even though his contract had expired and he sat out of the game for a season. Like Mr Justice Wilberforce, the High Court found such rules to be an unreasonable restraint of trade.[73]
Since Tutty, the general practice of Australian courts has been to find against various employment rules which restrict the ability of players to obtain employment with alternative clubs.[74] Only three cases will be considered here, because of their connections with the activities of player associations in the respective sports.
Throughout the twentieth century different generations of players across a variety of Australian professional team sports have attempted to form player associations. Beginning with players of the Victorian Football League prior to World War One and continuing through to baseball players in 1997 there have been thirty examples of failed attempts to establish such bodies. With small memberships (sometimes widely dispersed), and members with limited incomes such player bodies have found it difficult to generate enough funds and obtain leaders to sustain themselves as viable organisations.[75] Australia currently has seven player associations; the majority of whom are only of recent vintage. The oldest is the Australian Football League Players’ Association which formed in 1973. The Rugby League Players’ Union was formed in 1979; The National Basketball League Players’ Association in 1989; the Australian Professional Footballers’ Association in 1993; both the Rugby Union Players’ Association and the Australian Cricketers’ Association in 1995; and, finally, the Australian Netball Players’ Association in 1997 – the only organisation representing female athletes.[76]
In Foschini in 1983 Mr Justice Crockett of the Supreme Court of Victoria found the then Victorian Football League’s transfer rules to be an unreasonable restraint of trade. As with Eastham and Tutty, South Melbourne, or the Sydney Swans as the club became known, blocked Silvio Foschini, an uncontracted player from joining St. Kilda. The case was further complicated by the fact that South Melbourne were relocating to Sydney and required players, such as Foschini, still a teenager, to also relocate. In his decision, Mr Justice Crockett also passed comment on the league’s zoning rules. He said
‘If the desire is, as claimed to assist the less successful sides by a better access to talented players I should have thought that the “draft” system ... would ... be a preferable system to zoning in Victoria.’[77]
Following Foschini the Victorian Football League substantially altered its employment rules. In 1985 it introduced a salary cap, the external draft in 1986 and the internal draft in 1988.[78]
Foschini’s action was bankrolled by St. Kilda. The then Victorian Football League Players’ Association – it changed it name in 1989 – played no part in the proceedings of this case. Foschini appears to have completely passed the Association by. There is no evidence that it attempted to use Foschini as a bargaining lever to enhance players’ employment rights, as had occurred in North America and the United Kingdom, following similarly favourable court decisions. Moreover, the Victorian Football League Players’ Association hardly had any input into the new employment rules developed by the Victorian Football League in the mid to late 1980s – the salary cap and the two drafts.
In 1988, and again in 1990, the Australian Football League Players’ Association agreed to the various terms contained in the Australian Football League’s standard player contract, with its various restrictions on player mobility and total earnings. In late 1992 the Australian Football League withdrew recognition of the players’ association. The threat of strike action and, more significantly, proceedings before the Australian Industrial Relations Commission and the possibility that the matters in dispute would be arbitrated, induced the Australian Football League to review its stance on recognition.
The parties eventually entered into a collective bargaining agreement for the 1994 and 1995 seasons.[79] It established a minimum wage of $7,500, minus deductions for board and lodging. While the 1994/1995 Collective Bargaining Agreement was silent on such issues it, in effect, endorsed the Australian Football League’s player rules – salary cap[80] and drafting. Subsequent collective bargaining agreements in Australian rules football have contained clauses whereby the Australian Football League Players’ Association agrees that the league’s rules
‘including and without limitation, restrictions on the freedom of players to transfer from one Club to another, restrictions on the total payment an AFL Club may give or apply for the benefit of a player ... are necessary and reasonable for the purpose of protecting the legitimate interests of the AFL.’[81]
The second case occurred in 1991 when the Full Court of the Federal Court of Australia found the New South Wales Rugby League’s internal draft to be an unreasonable restraint of trade.[82] This is the case where Mr Justice Wilcox likened the draft to serfdom (see above). This action was mounted by the then Association of Rugby League Professionals. It was the first time in the history of Australian sport that a players’ association had initiated action against a league’s employment rules – and they were successful to boot.
It might be thought that such a victory would have helped to consolidate the association’s position. Nothing could be further from the truth. Since the case the rugby league players’ body has virtually collapsed. Throughout most of the 1990s it has hardly had more than twenty members. In 1992 it failed in an attempt to negotiate a collective bargaining deal with the New South Wales Rugby League. In an apparent effort to consolidate its organisational effectiveness it merged with the Media, Entertainment and Arts Alliance. The next two to three years were devoted to disputes over members between the principals of the ‘new’ and ‘old’ unions. Players found themselves more concerned with cashing-in on the high salaries that were on offer during the trade war between the Australian Rugby League and Super League after 1995, than worrying about the concerns of a players’ organisation.[83] In 1997 the Media, Entertainment and Arts Alliance based organisation negotiated a ‘bare bones’ consent award with the Australian Rugby League, under the auspices of the Australian Industrial Relations Commission. The organisation that in 1991 had defeated the internal draft found itself agreeing to a grievance procedure where disputes would be resolved by an appeals committee of the Australian Rugby League.[84]
The third case involved the 1995 attempt by the then Australian Soccer Players’ Association to abolish the transfer system before the Australian Industrial Relations Commission (see above). The Commission concluded that the ‘system in its present form should be abolished’. However, it should not ‘be abolished until consideration has been given to whether something else be put in its place’, or whether it ‘could be modified so as to remove its unsatisfactory features’. The Commission went on to advocate that negotiations should occur between the parties under its auspices. The Commission also said that negotiations concerning modification of the transfer system should also include ‘all the terms of an agreement or award to cover the remuneration and conditions of employment of professional soccer players’. The Commission, added, that if the parties are unable to reach agreement ‘arbitration may be necessary’. The decision’s final sentence states, ‘Without pre-empting what the Commission might do at any time in the future, we reiterate our view that, on the evidence and material before us, the present [transfer] fee system should be abolished’.[85]
Since that decision two collective bargaining agreements have been negotiated in Australian soccer. In distinction to Australian Rules football, both agreements contain clauses which enhance players’ freedom of choice in employment. First, players who do not receive an offer of employment from their current club thirty days prior to the expiration of their contract on ‘terms and conditions no less favourable’ than their previous contract automatically become free agents. Second, players who are 26 years of age, or have played six seasons, automatically become free agents, and remain so for the balance of their careers in Australia.[86] The former clause models the practice that was adopted in English soccer after Eastham, and the latter, North American baseball following negotiations after Peter Seitz’ private arbitration brought an end to the reserve system.[87]
Summary and Conclusion
Fields and Narr have said that ‘The world is a field of struggle over [human] rights without any guarantee of success’.[88] Such an observation is apposite concerning human rights in professional team sports. From their inception, sports in North America, the United Kingdom, Western Europe and Australia adopted rules which severely limited the human rights and economic freedom of players. Players have resented such controls. They have looked for means, at worst, to mitigate their affects; at best, to bring about their abolition.
Players have employed two methods in their struggles to win back their rights. First, they have turned to collective action, forming player associations or trade unions. The earliest such bodies were formed in North America and the United Kingdom in the latter part of the nineteenth century, and Australia in the early years of the twentieth century. As Scoville has said ‘player associations are almost as old as professional team sports’.[89]
Player associations have had a chequered history in the annals of professional team sports. It is only in recent decades that they have experienced success in winning back players’ rights and obtaining improvements in income and associated entitlements. In the 1960s the Professional Footballers’ Association heralded the rise of player associations with its victories in abolishing soccer’s maximum wage and Mr Justice Wilberforce’s finding against the transfer system in Eastham. North American player associations, lead by the Major League Baseball Players’ Association achieved similar victories in the 1970s. It is only in the 1990s that Australian player bodies have come into prominence.
The second method has been to attack such controls in the courts. While judges have occasionally referred – to the ‘chattel’, ‘peonage’, ‘quasi-peonage’ or serfdom’ aspects of such controls they have found it difficult to strike down arrangements – which involve the trading, buying and selling of players – as a form of forced labour or slavery. Judges, however, imbued with natural rights and common law principles of freedom and individual liberty have found it easier to find against such rules on antitrust grounds, as in North America, or as restraints of trade, as in the United Kingdom and Australia.
Leagues have found their employment rules vulnerable to legal attack. A possible means of protecting themselves against such action is to have player associations endorse such, or modified, rules in collective bargaining agreements negotiated at arms length and in ‘good faith’. The courts, in defending the human rights of players on individualistic grounds have, paradoxically, enhanced the collective governance of sport. The courts have provided leagues with an incentive and, at times, have explicitly encouraged them to recognise and negotiate with player associations. The law, then, has provided a window of opportunity for the players of professional team sports to make use of collective action. This is not something which has traditionally been afforded to workers in other walks of life. It is a window, moreover, which would close if the leagues of various professional team sports adopted employment rules consistent with various human rights’ instruments developed by the international community.
[*] Braham Dabscheck is an Associate Professor in the School of Industrial Relations at the University of New South Wales, Sydney, Australia.
[1] Extracts from the various human rights’ instruments referred to here are drawn from Brownlie I (ed) Basic Documents on Human Rights (2nd ed, Clarendon, Oxford, 1981).
ILO Convention Concerning Forced or Compulsory Labour 1930, ILO Convention Concerning the Abolition of Forced Labour 1957 ibid, at 173-18[6]
[2] Universal Declaration of Human Rights, Art. 23(4) ibid, at 24
[3] International Covenant on Economic Social and Cultural Rights, Art. 8 ibid, at 120-121
[4] International Covenant on Civil and Political Rights, Art. 22 ibid, at 135-136
[5] ILO 87
[6] ILO 98
[7] This is a generic term. Such arrangements have sometimes been referred to as the retain and transfer system, or the transfer and compensation system.
[8] Sherman Antitrust Act 1890 (USA) (Fed)
[9] Clayton Act 1914 (USA) (Fed)
[10] The Australian Trade Practices Act 1974 (Cth) does not extend to ‘the performance of work under a contract of service’; that is employment contracts, per Section 4(1).
[11] See Opinion of Advocate General Lenz, ASBL Union Royale Belge des Societies de Football Association v. Jean-Marc Bosman (1995) Case C-415/93; and Union Royale des Societies de Football Association ASBL and Royal Club Leigois SA v. Jean-Marc Bosman, Case C-415/9, Court of Justice of the European Communities, 3, Luxembourg, 15 December 1995. The opinion and decision, and other relevant cases are reproduced in Blainpain R and Inston R The Bosman Case: The End of the Transfer System? (Sweet + Maxwell/Peeters, Leuven, 1996). For a commentary see Dabscheck B ‘Assaults on Soccer’s Compensation System: Europe and Australia Compared’ (1996) 13 Sporting Traditions 81.
[12] Treaty Establishing the European Economic Community 1957
[13] For overviews of debates concerning Human Rights see Davidson S Human Rights (Open University Press, Buckingham, 1993); Donnelly J Universal Human Rights in Theory and Practice (Cornell University Press, Ithaca, 1989); Fields AB and Narr WD ‘Human Rights as a Holistic Concept’ (1992) 14 Human Rights Quarterly 1; Stammers N ‘Human Rights and Power’ (1993) XLI Political Studies 70; Stammers N ‘A Critique of Social Approaches to Human Rights’ (1995) 17 Human Rights Quarterly 488; Galenkamp M ‘Collective Rights’ (1995) 16 Netherlands Institute of Human Rights 53; and Pritchard S ‘The Jurisprudence of Human Rights: Some Critical Thoughts and Developments in Practice’ [1995] AUJlHRights 2; (1995) 2 Australian Journal of Human Rights 3.
[14] For discussions of the ‘merging’ of individual and collective sports labour law see Berry RC and Gould WB ‘A Long Deep Drive to Collective Bargaining: Of Players Owners, Brawls and Strikes’ (1981) 31 Case Western Reserve Law Review 685; Berry RC, Gould WB and Staudohar PD Labor Relations in Professional Sports (Auburn House, Dover, Massachusetts, 1986); and Opie H and Smith G ‘The Withering of Individualism: Professional Team Sports and Employment Law’ [1992] UNSWLawJl 14; (1992) 15 University of New South Wales Law Journal 313.
[15] Cairns J, Jennett N and Sloane PJ ‘The Economics of Professional Team Sports: A Survey of Theory and Evidence’ (1986) 13 Journal of Economic Studies 3, at 33.
[16] For discussions concerning revenue sharing see ibid; Davenport S ‘Collusive Competition in Major League Baseball: Its Theory and Institutional Development’ (1969) 13 American Economist 6; Noll RG (ed) Government and the Sports Industry (Brookings Institution, Washington D.C. 1974); Dabscheck B ‘Sporting Equality: Labour Market vs. Product Market Control’ (1975) 17 The Journal of Industrial Relations 174; Atkinson SE, Stanley LR and Tschirhart J ‘Revenue Sharing as an Incentive in an Agency Problem’ (1988) 19 Rand Journal of Economics 27; Zimbalist A Baseball and Billions: A Probing Look Inside the Big Business of Our National Pastime (Basic Books, New York 1992); and Fort R and Quirk J ‘Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues’ (1995) XXXIII Journal of Economic Literature 1265.
[17] Lowenfish L The Imperfect Diamond: A History of Baseball’s Labor Wars (Revised ed., Da Capo, New York, 1992), at 69 refers to a decision by a Mr Justice Talty of the St. Louis City Circuit Court, who in 1902 denied an injunction against Jack Harper moving to a rival league, on the basis that baseball’s reserve system was a form of involuntary servitude. This matter is also referred to in Seymour H Baseball: The Early Years (Oxford University Press, New York, 1989), at 315; and Burk RF Never Just A Game: Players, Owners and American Baseball to 1920 (The University of North Carolina Press, Chapel Hill, 1994), at 154.
[18] Flood v. Kuhn (1970) 316 F. Supp. 271 at 280-281. The matter was finally determined before the Supreme Court on antitrust principles. See Flood v. Kuhn [1972] USSC 137; (1972) 407 U.S. 258.
[19] X v. The Netherlands, Application No. 9322/81, 32 EHRR 180 at 183
[20] In 1999 it changed its name to the Australian Professional Footballers’ Association.
[21] Media, Entertainment and Arts Alliance v Marconi Fairfield Soccer Club and Australian Soccer Federation, Australian Industrial Relations Commission, Dec 1285/95 S Print M2565, Sydney, 9 June 1995, at 56. The soccer players merged with the Alliance in 1993, and went their own way in 1998.
[22] An agreement between the various clubs/owners in baseball, which enshrined the rules that governed its operation.
[23] American League Baseball Club of Chicago v. Chase, 149 NYS 6 (1914), at 12, 17, 13 and 19. Though, as will be shown below, when it came to the issue of antitrust, Mr Justice Bissell was less strident in his criticisms and analysis of baseball’s employment rules.
[24] A reference to Chase ibid.
[25] Gardella v. Chandler, 172 F. 2d 402 (1949), at 409 - 410.
[26] Adamson v. New South Wales Rugby League Limited, [1991] FCA 425; (1991) 31 FCR 242, at 267 + 268. Also see Adamson v. New South Wales Rugby League Limited[1991] FCA 9; , (1990) 27 FCR 535 for the decision of the trial judge.
[27] For details concerning such practices see Burk above, note 9.
[28] For details concerning their respective histories see ibid; Lowenfish above, note 9; Seymour above, note 9; Seymour H Baseball: The Golden Age (Oxford University Press, New York, 1971); Dworkin JB Owners Versus Players: Baseball and Collective Bargaining (Auburn House, Boston, 1981); and Voigt DQ ‘Serfs versus Magnates: A Century of Labor Strife in Major League Baseball’ in Staudohar PD and Mangan JA (eds) The Business of Professional Sports (University of Illinois Press, Urbana and Chicago, 1991), 95-114.
[29] For details consult Seymour above, note 9, and Seymour above, note 20.
[30] Metropolitan Exhibition v. Ward, 9 NYS 779 (1890), at 781, 784 and 783.
[31] Metropolitan Exhibition v. Ewing, 42 F 198 (1890) Circuit Court S.D. New York
[32] Philadelphia Ball Club v. Lajoie, 51 A 973 (1902).
[33] Also see Sections 2, 3 and 4 of the Clayton Act 1914.
[34] American League Baseball Club of Chicago v. Chase, 149 NYS 6 (1914), at 16 and 17
[35] Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, [1922] USSC 111; 259 U.S. 200 (1922), at 208 and 209
[36] Hart v. BF Keith Vaudeville Exchange, [1923] USSC 131; 262 US 271 (1923), at 274 Is this the name of the case you are referring to in the text?
[37] Gardella v. Chandler, 172 F. 2d 402 (1949)
[38] Toolson v. New York Yankees, [1953] USSC 115; 346 U.S. 356 (1953), at 356 and 357
[39] United States v. Shubert, [1955] USSC 13; 348 U.S. 222 (1955); United States v. International Boxing Club of New York, [1955] USSC 12; 348 U.S. 236 (1955)
[40] International Boxing Club at 242. See Shubert, at 229 for a similar statement.
[41] Radovich v. National Football League, [1957] USSC 46; 352 U.S. 445 (1957), at 452
[42] Haywood v. National Football League, [1971] USSC 38; 401 U.S. 1204 (1971), at 1205. For the subsequent decision of the lower court see Denver Rocketts v. All – Pro Management, 325 F. Supp. 1049 (1971).
[43] Flood v. Kuhn, [1972] USSC 137; 407 U.S. 258 (1972), at 282-284
[44] ibid, at 294-296. Also see Jacobs MS and Winter RK ‘Antitrust Principles and Collective Bargaining by Athletes: Of Superstars in Peonage’ (1971) 81 The Yale Law Journal 1 which is referred to in Mr Justice Marshall’s dissent.
[45] For details concerning the development of player associations in this period see Berry, Gould and Staudohar above, note 6; Dworkin above, note 20; Voigt above, note 20; Lowenfish above, note 9; Miller M A Whole Different Ball Game: The Sport and Business of Baseball (Birch Lane, New York, 1991); Korr CP ‘Marvin Miller and the New Unionism in Baseball’ in Staudohar and Mangan above, note 20, 115; and Staudohar P.D. Playing for Dollars: Labor Relations and the Sports Business (ILR Press, Ithaca, 1996).
[46] Boston Professional Hockey Association v. Cheevers, 348 F. Supp. 261 (1972); Philadelphia World Hockey Club v. Philadelphia Hockey Club, 351 F. Supp. 462 (1972)
[47] Philadelphia World Hockey Club, at 497, 483 and 485
[48] Boston Professional Hockey Association, at 267
[49] See Kapp v. National Football League, 390 F. Supp. 73 (1974); Kapp v. National Football League, [1978] USCA9 1112; 586 F. 2d 644 (1978); Smith v. Pro-Football, 420 F. Supp. 738 (1976); Smith v. Pro-Football, [1979] USCADC 35; 593 F. 2d 1173 (1978); Robertson v. National Basketball Association, 389 F. Supp. 867 (1975); and Robertson v. National Basketball Association, [1977] USCA2 564; 556 F. 2d 682 (1977)
[50] Smith v. Pro-Football, 420 F. Supp. 738 (1976), at 743
[51] Mackey v. National Football League, 407 F. Supp. 1000 (1975), at 1010 and 1009. Also see Mackey v. National Football League, [1976] USCA8 568; 543 F. 2d 606 (1976), especially at 616; and Reynolds v. National Football League, [1978] USCA8 491; 584 F. 2d 280 (1978).
[52] Berry and Gould, above, note 6, at 768 and 769
[53] McCourt v. California Sports, [1979] USCA6 452; 600 F. 2d 1193 (1979)
[54] For details concerning the trajectory of collective bargaining in football, basketball and ice-hockey see Berry, Gould and Staudohar above, note 6; and Staudohar above, note 37.
[55] Michels R Political Parties: A Sociological Study of the Oligarchic Tendencies of Modern Democracy (Dover Publication, New York, 1959)
[56] Staudohar above, note 37, at 149. For other examinations, or rather critiques, of Eagleson see Cruise D and Griffiths A Net Worth: Exploding the Myths of Pro Hockey (Viking, Toronto, 1991); and Conway R Game Misconduct: Alan Eagleson and the Corruption of Hockey (MacFarlane Walters and Ross, Toronto, 1995)
[57] See Seitz P ‘Are Professional Sports or Business? Or How Much Would You Pay for Catfish Hunter?’ Industrial Relations Research Association 29th Annual Proceedings (Madison, 1976/77), 324-328. Also see Kansas City Royals Baseball Corporation v. Major League Baseball Player Associations, [1976] USCA8 101; 532 F. 2d 615 (1976) where Organised Baseball unsuccessfully appealed Seitz’s decision.
[58] For accounts of these various developments in baseball see Dworkin above, note 20; Lowenfish above, note 9; Miller above, note 37; Berry, Gould and Staudohar above, note 6; Staudohar above, note 37; Jennings KM Swings and Misses: Moribund Labor Relations in Professional Baseball (Praeger, Westport, 1997); and Marburger DR (ed) Stee-Rike Four! What’s Wrong with the Business of Baseball (Praeger, Westport, 1997).
[59] Curt Flood Act (1998) (USA) (Fed)
[60] Major League Baseball Player Associations, Press Release, 28 October 1998.
[61] In 1958 it changed its name to the Professional Footballers’ Association.
[62] In 1909 the Court of Appeal ruled that footballers were covered by the Act. See Walker v Crystal Palace Football Club Limited [1910] 1 KB 87.
[63] Athletic News, 23 March 1908
[64] Nordenfelt v. Maxim Nordenfelt Guns and Ammunition, [1894] AC 535, at 565.
[65] The Times, 28 March 1912 Also see Grayson E Sport and the Law (Second Edition) (Butterrworths, London, 1994), at 10 and 63-65.
[66] Trade Disputes Act (1906) (UK)
[67] The Times, 28 March 1912
[68] Harding J For the Good of the Game: The Official History of the Professional Footballers’ Association (Robson, London, 1991) p 103.
[69] Minutes, Association Football Players’ and Trainers’ Union, Annual General Meeting, 14 November 1955. In 1919 the union changed its name to include trainers. Also see Grayson, above, note 56 at 8 and 9.
[70] Eastham v Newcastle United Football Club [1964] Ch 413, at 438
[71] Eastham v. Newcastle United Football Club [1964] Ch 413, at 430-431, 436 and 433.
[72] For examinations of developments concerning English soccer and the associated role of the players’ union/association see Harding, above, note 58; Dabscheck B ‘“A Man or a Puppet?”: The Football Association’s 1909 Attempt to Destroy the Association Football Players’ Union’ (1991) 8 The International Journal of History of Sport 221; Dabscheck B ‘“Defensive Manchester”: A History of the Professional Footballers’ Association’ in Cashman R and McKernan M (eds) Sport in History: The Making of Modern Sporting History (University of Queensland Press, St Lucia, 1979), 227; and Dabscheck B ‘Beating the Off-side Trap: The Case of the Professional Footballers’ Association’ (1986) 17 Industrial Relations Journal 350.
[73] Buckley v. Tutty, [1971] HCA 71; 125 CLR 353 (1971). Also see Tutty v. Buckley [1970] 3 NSWR 463.
[74] Other relevant cases include Hawick v. Flegg, (1958) 75 The Weekly Notes 255 (rugby league; League management committee didn’t follow due process in administration of rules); Elford v. Buckley [1969] 2 NSWR 170 (rugby league; dispute over oral contract, rules not a restraint); Hall v. Victorian Football League, [1982] VicRp 6; [1982] VR 64 (Australian rules football, decided in 1977; zoning rules an unreasonable restraint); Hoszowski v. Brown, Supreme Court of New South Wales, no 1667 of 1978, unreported (soccer; player able to change clubs, transfer system not a restraint); Adamson v West Perth Football Club, [1979] FCA 81; (1979) 27 ALR 475 (Australian rules football; transfer system barring player from changing leagues an unreasonable restraint); Walsh v. Victorian Football League, [1983] FCA 327; (1983) 74 FLR 207, (Australian rules football; transfer system, difficult issues of law re Trade Practices Act 1974 and restraint of trade, matter should proceed to trial); Hughes v. Western Australian Cricket Association, (1986) ATPR 40-676 (cricket; disqualification for playing in rival league void); Hawthorn Football Club v. Harding [1988] VicRp 6; [1988] VR 49 and Buckenara v. Hawthorn Football Club [1988] VicRp 5; [1988] VR 39 (Australian rules football; option clause not an unreasonable restraint of trade); McCarthy v. Australian Rough Riders Association (1988) ATPR 40-836 (rodeo; rules barring joining rival association unreasonable restraint of trade); Carfino v. Australian Basketball Federation (1988) ATPR 40-895 (basketball; barring movement to another club in league an unreasonable restraint of trade); Barnard v. Australian Soccer Federation (1988) ATPR 40-862 (soccer; rules barring playing with a rival league an unreasonable restraint of trade); Nobes v. Australian Cricket Board, Supreme Court of Victoria, no 13613 of 1991, unreported (cricket; zoning and residential qualifications an unreasonable restraint of trade); Canberra Bushrangers Baseball Team v. Byrne, Supreme Court of the Australian Capital Territory, no SC 707 of 1994, unreported (baseball; option clause, not tested, absence of contract); and Penrith District Rugby Football League Club v. Fittler and Sing, Supreme Court of New South Wales, no. 4562/3 of 1995, unreported (rugby league; contracts with club void as club had joined rival ‘Super’ league).
[75] For details concerning these various failed attempts see Dabscheck B ‘Playing the Team Game: Unions in Australian Professional Team Sports’ (1996) 38 The Journal of Industrial Relations 600; and Dabscheck B ‘Australian Baseball’s Second Unsuccessful Attempt to Establish a Players’ Association’ (1998) 14 Sporting Traditions 87.
[76] The majority of these organisations have changed their titles. Their current titles are provided here.
[77] Foschini v. Victorian Football League, Supreme Court of Victoria, no 9868 of 1982 (unreported), at 25.
[78] For a critical analysis of these changes see Dabscheck B ‘Abolishing Transfer Fees: The Victorian Football League’s New Employment Rules’ (1989) 6 Sporting Traditions 63.
[79] For an account of these developments see Dabscheck, ‘Playing the Team Game ...’ above, note 64, at 618-621.
[80] Buti A ‘Salary Caps in Professional Team Sports: An Unreasonable Restraint of Trade’ (1999) 14 Journal of Contract Law, 139 argues that the courts would strike down salary caps. See Johnston v. Cliftonville Football and Athletic Club, [1984] N1 9. For further discussion concerning salary caps in Australia see Pengilley W ‘Sporting Drafts and Restraint of Trade’ [1994] QUTLawJl 5; (1994) 10 Queensland University of Technology Law Journal 89, at 114-116; and in North America see Foraker SJ ‘The National Basketball Association Salary Cap: An Antitrust Violation?’ (1985) 59 Southern California Law Review 157; and Daspin DA ‘Of Hoops, Labor Dupes and Antitrust Ally-Oops: Fouling out the Salary Cap’ (1986-1987) 62 Indiana Law Journal 95.
[81] Australian Football League – Australian Football League Players’ Association, Collective Bargaining Agreement, 1995/98, Clause 21, Schedule A. Similar language appears in Clause 6 of the Australian Football League – Australian Football League Players’ Association, Collective Bargaining Agreement, 1998-2003; and Clause 11 of the National Basketball League - National Basketball League Players’ Association, Collective Bargaining Agreement, 1996-98.
[82] Adamson v. New South Wales Rugby League Limited, [1991] FCA 425; (1991) 31 FCR 242.
[83] For details concerning these developments see Dabscheck, ‘Playing the Team Game ...’ above, note 64, at 616-617.
[84] Media, Entertainment and Arts Alliance v. Balmain District Rugby League Football Club, Australian Rugby League Players Award 1997, Australian Industrial Relations Commission, A2491 AS Print P5383, 25 September 1997.
[85] Media, Entertainment and Arts Alliance v. Marconi Fairfield Soccer Club and Australian Soccer Federation, Australian Industrial Relations Commission, Dec 1285/95 S Print M2565, Sydney, 9 June 1995, at 69-70, 79-80.
[86] Ericsson Cup Collective Agreement, 1996-1999, Schedule B; and Soccer Australia – Australian Professional Footballers’ Association, Ericsson Cup Collective Agreement 1999-2001, Schedule B.
[87] The Rugby Union Players’ Association was formed following a battle between rival ‘leagues’ when Rugby Union turned professional. The players’ association agreed to stay with the establishment after the signing of a letter that 95 per cent of television rights would be distributed at the ‘direction’ of the players’ association. Once the rival ‘league’ disappeared the players’ association experienced problems enforcing this direction. It commenced legal proceedings before the Supreme Court of New South Wales, and, after an initial victory on a procedural matter, subsequently negotiated a comprehensive collective bargaining agreement. In 1997 Australian cricketers threatened strike action in gaining recognition and negotiating a collective bargaining deal, which substantially increased the income of Sheffield Shield players. In 1998 netballers also negotiated a collective deal. For details concerning these developments see Dabscheck B ‘Trying Times: Collective Bargaining in Australian Rugby Union’ (1998) 15 Sporting Traditions 25; Dabscheck B ‘Running to the Same End: The Australian Cricket Pay Dispute’ (1999) 71 A Q Journal of Contemporary Analysis 52; and Dabscheck B ‘A Safety Net for Netballers’, (1998) 8 Australian and New Zealand Sports Law Association Newsletter 9.
[88] Fields and Narr above, note 5 at 6.
[89] Scoville JG ‘Labor Relations in Sport’ in Noll (ed) above, note 8 at 206.