Arbitration In Name Only

In a class action brought by the defensive coordinator of the Minnesota Vikings football team, the United States Court of Appeals for the Second Circuit affirmed denial of the NFL’s effort to arbitrate the claims.

The claims

In January 2019, while still under contract as a coach with the Patriots, Flores interviewed for the position of head coach of the Broncos. He alleges that the Broncos discriminated against him  because of his race when they failed to hire him. A month later, in February 2019, Flores was hired as head coach of the Miami Dolphins.

At the time of his interview with the Broncos, Flores’s employment contract with the Patriots included two provisions bearing on the arbitrability of his claims. First, Flores agreed to a club-specific arbitration agreement with the New England Patriots. Second, Flores agreed “to comply at all times with, and to be bound by, the NFL Constitution,” which was incorporated by reference into his employment agreement “in [its] present form and as amended from time to time hereafter.” Section 8.3 of the NFL Constitution grants the NFL Commissioner “full, complete, and final jurisdiction and authority to arbitrate” several types of disputes, including “[a]ny dispute between any . . . coach . . . and any member club or clubs.”

Inasmuch as Flores’s claims against the Broncos and the NFL plainly fell outside his club-specific arbitration agreement with the Patriots, the District Court considered whether the NFL Constitution’s general arbitration provision applied to Flores’s claims and was enforceable. It found that the NFL Constitution’s arbitration provision applied to Flores’s claims but refused to enforce the arbitration provision. The District Court reasoned that the arbitration provision was illusory and unenforceable under Massachusetts state law because “the NFL and its member clubs have the unilateral ability to modify the terms of the NFL Constitution.” As a result, the District Court ordered that Flores’s claims against the Broncos and related claims against the NFL be litigated in federal court.

Holding

(1a) Flores’s agreement under the NFL Constitution to submit his statutory claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner—the principal executive of one of Flores’s adverse parties—provides for arbitration in name only and accordingly lacks the protection of the FAA.

(1b) Flores’s agreement to submit his statutory claims against the Broncos and the NFL to the unilateral discretion of the NFL Commissioner is unenforceable because the agreement fails to guarantee that Flores can “vindicate [his] statutory cause of action in [an] arbitral forum.”

(1c) That same unprotected and unenforceable agreement also cannot be used to compel Flores to arbitrate his claims against the Giants and Texans or related claims against the NFL.

(2) The District Court did not abuse its discretion by denying Defendants’ motion for reconsideration.

(Mike Frisch)