Employment & Labor Insider

Baltimore Ravens quarterback Lamar Jackson is one of the most skilled and exciting players in the National Football League. In 2019, he threw for 36 touchdowns and ran for seven more on his way to the Most Valuable Player award and has continued to thrive when not slowed by injuries. Consequently, Mr. Jackson’s employment status is of considerable interest.

Recent developments in Mr. Jackson’s employment have highlighted the role of the NFL Players Association in accordance with the National Labor Relations Act.

Jackson’s rookie contract

Mr. Jackson was drafted by the Ravens with the fifth overall pick in the 2018 NFL Draft. He subsequently signed a four-year contract worth $9.47 million, approximately $8 million of which was guaranteed. The contract also included a fifth-year option, solely within the club’s discretion. The length of the contract (including the option) was pre-determined by the collective bargaining agreement between the NFL and NFLPA. The salary amounts were effectively pre-determined by the collective bargaining agreement, which had limitations on compensation in rookie contracts.

Before the 2021 season, according to the deadline required by the collective bargaining agreement, the Ravens exercised their fifth year option on Mr. Jackson (for 2022). The collective bargaining agreement also required that Mr. Jackson be paid a salary equal to the average salary of the 10 highest-paid quarterbacks for the 2021 season (known as the “Transition Tender”), which was $23 million.

Before the 2022 season, the Ravens began negotiations with Mr. Jackson about a long-term contract extension. However, negotiations were complicated by the contract recently signed by another quarterback, Deshaun Watson. Mr. Watson signed a five-year, fully guaranteed $230 million contract with the Cleveland Browns in March 2022. Although star players regularly have 50-75 percent of their contract value guaranteed, Mr. Watson’s contract was unprecedented and deviated significantly from historical practices. The Watson contract became more problematic when Mr. Watson was suspended by the league for “sexual assault (as defined by the NFL).” (Mr. Watson has settled lawsuits brought by most of his accusers, and he has denied any wrongdoing.)  

Mr. Jackson is generally regarded as a better player than Mr. Watson and thus said that he too wanted a fully guaranteed contract. The Ravens have refused so far.

The Union’s exclusive authority

Mr. Jackson’s situation has been further complicated by the fact that he has been negotiating without an agent, an extremely rare occurrence. This is where the role of the Players Association is important.

Section 9 of the NLRA provides that unions, like the NFLPA, are the “exclusive representatives” of the unionized employees “for purposes of collective bargaining with respect to rates of pay, wages, hours of employment, or other conditions of employment.” In other words, an employer cannot negotiate the terms of a contract with an employee on an individual basis unless the union gives permission.

The NFLPA, like other players’ unions in American sports, delegates some of its exclusive negotiating authority to individuals certified by the union, such as sports agents. To obtain certification from one of these unions requires passing a test on the collective bargaining agreement, passing a background check, and meeting other personal and business-related criteria. The certified agents then must follow the NFLPA’s regulations or risk losing their certifications. These regulations limit an agent’s compensation to 3 percent of a player’s pay, though in practice agents often accept less. Although the news stories of unscrupulous agents are sadly often true, by and large the player agent community is skilled and committed to serving their clients.

To protect its player-members, the Players Association enlists the NFL in helping to enforce its authority under the NLRA. Article 48 of the NFL-NFLPA collective bargaining agreement provides that any contract negotiated with an agent not certified by the NFLPA is void. Further, any club that negotiates with an agent not certified by the NFLPA is subject to a $30,000 fine.

Jackson goes rogue

Mr. Jackson probably chose not to hire an agent to save the fees. Assuming he signed a $200 million contract negotiated by an agent, he would have owed the agent between $2 million and $6 million, based on a 1-3 percent commission range. 

Instead of using an agent, Mr. Jackson has received help in his negotiations from Players Association attorneys and contract specialists. This makes sense because the Players Association officials are certainly experts in these matters.

Nevertheless, Mr. Jackson and the Ravens have been unable to reach a new agreement. Last month, the Ravens exercised their right under the collective bargaining agreement to extend Mr. Jackson’s contract through the 2023 season at a value of $32.4 million. There are nuances, but the amount, known as the Franchise Tag, is generally equal to the average salary of the five highest-paid quarterbacks in the NFL. To complicate matters further, Mr. Jackson’s Tag is “non-exclusive,” meaning that he has until July 15 to negotiate a contract with another club. The Ravens would have a right of first refusal.

Now comes Mr. Jackson’s defiance of union authority. He has reportedly considered leaving the Ravens and has authorized a business partner to contact other clubs on his behalf. But the business partner is not an agent certified by the Players Association.  The Players Association was displeased with this development and persuaded the NFL to send a memo to its clubs, reminding the clubs that they can negotiate only with certified agents. The memo also instructed the clubs not to engage in discussions with Mr. Jackson’s associate.

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Mr. Jackson’s situation is not likely to be settled for a while. All parties have dug in their heels. Mr. Jackson would be well advised to retain capable representation, whether that be from the Players Association or from an agent certified by it.