Employment & Labor Insider

The delay is the result of Mr. Flores’ decision to pursue the action in federal court rather than in arbitration and to challenge the role of NFL Commissioner Roger Goodell in any potential arbitration. Mr. Flores has repeatedly lost this argument, but the game is not over. The issue is now before the U.S. Court of Appeals for the Second Circuit, and Mr. Flores has gotten a boost from a “friend of the court” brief filed by 12 law professors who argue that permitting Commissioner Goodell to serve as arbitrator “is unconscionable and contrary to the norms of fundamental fairness” and would incentivize employers across the country to employ similar dispute resolution processes.

The NFL scores first

Mr. Flores filed his lawsuit after he was terminated as head coach of the Miami Dolphins and not hired for head coach positions with the New York Giants, Denver Broncos, and Houston Texans. Mr. Flores seeks to represent a class of Black coaches and executives whom he contends were similarly discriminated against. He has been joined in his lawsuit by two other Black coaches, Steve Wilks and Ray Horton. Their inclusion brought in claims against their former employers, the Arizona Cardinals and the Tennessee Titans.

In a decision issued March 1, 2023, Judge Valerie Caproni of the U.S. District Court for the Southern District of New York issued a decision largely granting the NFL’s motion to compel arbitration. The NFL had argued that the coaches’ employment agreements required them to arbitrate disputes arising out of their employment in accordance with the NFL’s Constitution and Bylaws and Dispute Resolution Procedural Guidelines, which require disputes to be arbitrated before the Commissioner.

Judge Caproni determined that the coaches’ claims related to their employment with the Dolphins, Cardinals, and Titans must be arbitrated pursuant to the arbitration provisions in the coaches’ contracts with those clubs. Further, she held that the arbitration agreements cover the coaches’ claims against the NFL.

The arbitration provisions, however, do not cover the claims against the Broncos, Giants, and Texans because the coaches had no contracts with them. Thus, Judge Caproni ruled that the coaches could pursue those claims in federal court. Finally, Judge Caproni said that claims against the NFL related to the claims against the Broncos, Giants, and Texans, and therefore should also be heard in federal court. 

Reconsideration denied

In July 2023, Judge Caproni denied dueling motions for reconsideration of her initial order. The coaches’ argument for reconsideration rested largely on their argument that Commissioner Goodell would be biased as an arbitrator. In a footnote the judge expressed some concern about the fairness of the process, but she held that as a matter of law she could not prejudge the Commissioner’s actions as arbitrator and could only “address issues of bias in the administration of arbitration by examining whether the arbitrator demonstrated evident partiality in presiding over the arbitration.” 

Hail Mary to the Second Circuit

Federal appeals courts generally do not consider appeals from a trial court while the action is still going on, known as interlocutory appeals. Judge Caproni denied Mr. Flores’ request to certify an interlocutory appeal on the Court’s two prior orders, finding that the required exceptional circumstances were not present, while noting the “Second Circuit’s distaste for delaying the arbitral process through appellate review.”

The NFL and the clubs, meanwhile, had a right to – and did – appeal the portions of Judge Caproni’s order denying their motion to compel arbitration pursuant to the Federal Arbitration Act. Mr. Flores tried to cross-appeal, arguing that the issues to be decided on the NFL’s appeal also required reconsideration of the portions of the order compelling arbitration. In April 2024, the Second Circuit rejected Mr. Flores’ arguments and dismissed his appeal.

The law professors’ brief

As a result of these decisions, the case currently stands before the Second Circuit solely for the purposes of evaluating whether the lower court was correct in holding that the claims against the Broncos, Giants, and Texans – and inter-related claims against the NFL – were not subject to arbitration. The scope of the court’s review thus appears to be narrowly focused on the potential application of various contractual provisions.

Nevertheless, 12 professors with expertise in arbitration law, led by Imre Szalai at Loyola University New Orleans College of Law, have filed a brief urging the appeals court to consider more broadly the potential impact of upholding the NFL’s process through which any employment-related claims brought by NFL club employees are to be decided in an arbitration presided over by the Commissioner of the NFL.

The thrust of the professors’ argument is that an arbitration system in which a company’s executive can be the arbitrator for employment claims brought against that company “violates the norms of procedural fairness developed by the arbitration community for the resolution of statutory employment claims.” More specifically, the professors contend that a central tenet of the arbitration process is that both sides have a say in deciding who will be the arbitrator (which Mr. Flores realistically did not).

To the professors, “[e]nforcement of the NFL’s arbitration clause . . . could transform arbitration as it has been practiced for decades and damage the credibility of arbitration as a viable form of dispute resolution.” The professors argue that employers will “copy the NFL’s arbitration provisions[,]” “undermin[ing] the legitimacy and fairness of arbitration for hundreds of millions of workers and consumers.”

In contrast to the professors’ arguments, Judge Caproni had said that she could not prejudge the outcome of the arbitration, pointing out that if Commissioner Goodell ultimately presided over the arbitration in a biased way that compromised the fairness of the proceedings, Mr. Flores could ask the to have the arbitration decision vacated. Another judge from the Southern District of New York recently expressed the same opinion in denying a challenge by the New York Knicks to Commissioner Adam Silver of the National Basketball Association. That case involved a dispute between the Knicks and the Toronto Raptors. The court described the Knicks’ argument as “akin to a complaint about the officiating before the game has even started.”

In a phone call discussing the brief, Professor Szalai was not persuaded by this argument, insisting that arbitration should be protected against bias “at all stages” of the proceedings.

NFL arbitration in practice

The issues of bias raised by Mr. Flores and the professors are unlikely to come to pass. The NFL and Commissioner Goodell have faced similar claims in the past and deftly managed them. First, during the 2012 “Bountygate” proceedings – which included scrutiny from a federal judge – Commissioner Goodell appointed his predecessor, Paul Tagliabue, to preside over the appeal. Commissioner Tagliabue ultimately vacated all discipline against the players. (DISCLOSURE: I was part of the players’ legal team.) Then, in 2014, Commissioner Goodell appointed retired judge Barbara Jones to hear the appeal of Ray Rice when the Commissioner’s neutrality was questioned. More recently, in 2022, Commissioner Goodell designated former New Jersey Attorney General Peter Harvey as the arbitrator for Deshaun Watson’s appeal under similar circumstances.

The NFL knows that if Commissioner Goodell were to serve as the arbitrator for an appeal which concerns events about which he has substantial knowledge or involvement, any decision he renders would be vulnerable to being vacated by a court. Theoretically, any employer that considered adopting NFL-like arbitration provisions would come to the same conclusion. Nevertheless, Professor Szalai insists that the potential review of arbitration decisions after the fact continues to create too much risk of unfairness, particularly given the high standards for disturbing arbitration awards.

Professor Szalia believes the risk is particularly acute for civil rights claims arising out of federal statutes, like those brought by Mr. Flores. The professor contends there is a strong public policy providing that such claims must be adjudicated in a clearly fair and neutral way. For similar reasons, in 2022, Congress passed a law prohibiting mandatory arbitration of workplace sexual harassment and assault claims. The National Employment Lawyers Association, an advocacy group on the plaintiffs’ side, has called for the same treatment for civil rights claims, among others.

The NFL’s response is that the Commissioner holds a unique position that requires him to have broad authority to manage the league in such a way that is in the best interests of the game of football. Indeed, courts have long recognized and deferred to the authority of sports league Commissioners. Commissioner Goodell, with the assistance of both NFL and outside counsel, adjudicates many disputes each year that never become public. The NFL would thus argue that its dispute resolution process is fair and appropriate, and in the rare instances where his impartiality is reasonably questioned, he will step aside.

The Second Circuit has the ball

Professor Szalia admitted that the Second Circuit is unlikely to be persuaded by the professors’ arguments, given its prior decisions on arbitration and Commissioner authority. Moreover, given the limited nature of the appeal, the Second Circuit can probably rule without addressing Commissioner Goodell’s arbitral authority more generally.

It remains to be seen whether Mr. Flores will ever actually pursue his claims in arbitration and force the NFL’s hand. At the same time, it also remains to be seen whether any employers will adopt NFL-style arbitration provisions, as the professors fear.