NFL arbitration agreement is invalid

Professional football coaches sued that National Football League for racial discrimination, but the NFL moved to compel arbitration because the plaintiffs signed an arbitration agreement. Normally, the courts uphold arbitration agreements on the basis that the parties signed a contract and and deal is a deal and, let's face it, federal courts like arbitration because that's one less case to worry about and the understanding is that JAMS and AAA have good "neutrals" who can do the case justice. But there are exceptions, and this case highlights one of them.

The case is Flores v. New York Football Giants, issued on August 14. This is a putative class action, so the venue will determine if the plaintiffs recover a ton of money (thanks to a sympathetic jury) or a lesser amount (thanks to a single arbitrator). The venue may also dictate who wins or loses, as most plaintiffs want a jury of normal, everyday people, and not a stuffy arbitrator. 

The problem for the NFL is that the arbitration mechanism is not JAMS or AAA but the NFL Commissioner's office. Under the Federal Arbitration Act, arbitration agreements are legal and will be enforced against the plaintiff if the arbitration mechanism provides sufficient due process rights for the plaintiff. You'll get that in JAMS or AAA arbitrations, more or less, but enough to make it a fair fight. The Court of Appeals (Cabranes, Lynch and Lohier) notes, in an effort to be clever, that you can settle disputes in any number of ways, including playing ping pong or flipping a coin, but the FAA demands much more than that.

The problem for the NFL is that the arbitration clause sends the dispute to the NFL Commissioner, who has authority to rule for one party or the other. But that is not an independent forum under the FAA. The Commissioner works for the NFL and, really, the Commissioner is the NFL itself. That is not a fair fight. The other problem with the agreement is that it does not provide the procedure for resolving the dispute in arbitration. That means the Commissioner unilaterally dictates the arbitral procedure. The NFL constitutional procedure "bears virtually no resemblance to arbitration agreements as envisioned and as protected by the NFL."