## Facts

- The NFL, a multi-employer league of 32 clubs, maintained a draft eligibility rule requiring players to be at least three full football seasons removed from high school graduation.
- Maurice Clarett, a former Ohio State University running back, sought to enter the NFL Draft before meeting the three-season requirement.
- Clarett sued, alleging the eligibility rule unlawfully restrained trade in violation of § 1 of the Sherman Act by excluding him from the market for NFL player services.
- The district court held the rule was not protected by the nonstatutory labor exemption, found an unreasonable restraint of trade, and ordered the NFL to permit Clarett to enter the 2004 draft.
- The NFL appealed, arguing the eligibility rule arose from and operated within the collective-bargaining relationship between the NFL and the NFL Players Association (NFLPA).

## Issues

1. Whether the NFL draft eligibility rule is immune from antitrust scrutiny under the nonstatutory labor exemption because it is a term maintained within a bona fide collective-bargaining relationship.
2. If not immune, whether the rule violates § 1 of the Sherman Act as an unreasonable restraint of trade.

## Decision

- The Second Circuit reversed the district court.
- The court held the NFL’s draft eligibility rule is immune from antitrust scrutiny under the nonstatutory labor exemption.
- Because the rule was exempt, the court declined to reach the Sherman Act merits, including antitrust injury and reasonableness of the restraint.
- The Supreme Court denied certiorari, leaving the Second Circuit’s judgment in place.

## Legal Principles

- The nonstatutory labor exemption can bar antitrust challenges to restraints that grow out of and are maintained by a bona fide collective-bargaining relationship.
- Under *Brown v. Pro Football, Inc.*, a restraint intimately related to wages, hours, and working conditions, and connected to arm’s-length bargaining in a unionized labor market, is generally exempt from antitrust scrutiny.
- Eligibility rules governing entry into a unionized professional sports labor market may be treated as mandatory subjects of collective bargaining because they affect the supply of labor and, in turn, the wages, job security, and bargaining position of current employees.
- The exemption may extend to restraints affecting prospective employees who are not union members when the restraint concerns employment conditions that are the subject of the collective-bargaining relationship.
- When labor and antitrust policies conflict in this setting, federal labor policy favoring collective bargaining may require antitrust law to yield, absent circumstances taking the restraint outside the collective-bargaining framework.

## Conclusion

The Second Circuit held the NFL’s three-season draft eligibility rule fell within the nonstatutory labor exemption because it was bound up with the league’s collective-bargaining relationship with the NFLPA and closely tied to negotiable employment terms, rendering the rule immune from Sherman Act scrutiny and requiring reversal of the order permitting Clarett’s early draft entry.


Clarett v. Nat'l Football League, 369 F.3d 124 (2d Cir. 2004)