Collective bargaining agreements intersect with antitrust law and labor law. The Sherman Antitrust Act (“Sherman Act”) Sections 1 and 2 concern restrains on trade and monopolization. These sections act to prevent monopolization, promote competition and protect consumer welfare. The National Labor Relations Act (“Wagner Act”) provides for the right to form, join and assist labor organizations, the right to bargain collectively through representatives chosen by the workers and the right to engage in concerted activities like picketing and strikes.
In the world of professional sports, a league such as the NHL is not deemed a single entity but a collection of firms. Looking to the Sherman Act alone, when the teams combine to make an unreasonable restraint on trade, in which the net effect is anti-competitive and effects interstate commerce, the Sherman Act is violated. However, labor law’s Clayton Act, which exempts labor unions from being coined combinations, creates the statutory exemption through which all labor unions are lawfully created, including the player unions in the NFL, NHL and NBA. Additionally, judicially created non-statutory labor exemptions allow leagues and employers to combine and not fall under the Sherman Act. Not surprisingly, all of the judicial exemptions concern the collective bargaining process.
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