A federal appeals court Friday reinstated the NFL Players Association’s collusion claim accusing the league and its teams of operating with a secret and improper salary cap in the sport’s uncapped year in 2010.
The complaint had been dismissed by U.S. District Court Judge David S. Doty in December 2012. Doty ruled that the players’ union had agreed in 2011 not to bring such an action.
But the union continued to pursue the case and the U.S. Court of Appeals for the Eighth Circuit reinstated it. In its ruling released Friday, the appeals court wrote that its “holding should not be read as in any way expressing a view on the merits of the Association’s… motion.” The appeals court’s ruling said that “the Association bears a heavy burden in attempting to convince the district court that the Dismissal was fraudulently procured. We hold only that the Association should be given the opportunity to meet this burden.”
The NFLPA issued a written statement Friday that said: “Our union will always pursue and protect the rights of its players. We are pleased that the Eighth Circuit ruled that players have the opportunity to proceed with their claims. Through discovery and a hearing, we can understand how collusion took place. We have notified the NFL of its obligations to preserve all relevant documents and communications.”
The NFL expressed confidence that it ultimately will prevail in the case.
“As the Court emphasized, today’s decision is entirely procedural in nature,” the league said in a written statement. “Far from validating the Union’s claim, the Court specifically highlighted the heavy burden that the NFLPA faces in establishing this claim, and we remain highly confident that the claim will be dismissed yet again.”
The union filed the collusion complaint in May 2012, accusing the NFL and teams of operating with a secret salary cap of $123 million per club during the uncapped year. The union alleged that the league and teams improperly conspired to restrict players’ salaries and estimated that the secret salary cap cost players $1 billion or more, possibly resulting in total damages of more than $3 billion under the terms of the labor agreement.
The league denied that collusion took place and maintained that the union agreed not to bring such a case, both in the sport’s 2011 labor deal and in a separate agreement between the parties. Doty wrote in his ruling dismissing the case that “the NFLPA released the claims it attempts to assert in the underlying action.”
The union filed the collusion case in 2012 one day after an arbitrator dismissed a case by the Washington Redskins and Dallas Cowboys challenging the salary cap penalties imposed on them earlier that year by the NFL, with the union’s consent, for the manner in which the teams structured players’ contracts during the uncapped year. The Redskins were given a $36 million salary cap reduction over two years and the Cowboys were given a $10 million reduction over two years.
The league ruled that the Redskins and Cowboys technically violated no salary cap rules but attempted to gain an unfair competitive advantage. The teams denied wrongdoing and took the case to arbitration. But the arbitrator dismissed the case and ruled that the teams could not bring such an action because the agreement between the league and union on the penalties had amounted to a proper amending of the collective bargaining agreement.