<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:31311.wais]
ARBITRATION PROCESS OF THE NATIONAL FOOTBALL LEAGUE PLAYERS ASSOCIATION
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HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
DECEMBER 7, 2006
__________
Serial No. 109-156
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
U.S. GOVERNMENT PRINTING OFFICE
31-311 PDF WASHINGTON : 2006
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COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, Chief of Staff-General Counsel
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on Commercial and Administrative Law
CHRIS CANNON, Utah Chairman
HOWARD COBLE, North Carolina MELVIN L. WATT, North Carolina
TRENT FRANKS, Arizona WILLIAM D. DELAHUNT, Massachusetts
STEVE CHABOT, Ohio CHRIS VAN HOLLEN, Maryland
MARK GREEN, Wisconsin JERROLD NADLER, New York
J. RANDY FORBES, Virginia DEBBIE WASSERMAN SCHULTZ, Florida
LOUIE GOHMERT, Texas
Raymond V. Smietanka, Chief Counsel
Susan A. Jensen, Counsel
Brenda Hankins, Counsel
Mike Lenn, Full Committee Counsel
Stephanie Moore, Minority Counsel
C O N T E N T S
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DECEMBER 7, 2006
OPENING STATEMENT
Page
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Chairman, Subcommittee on Commercial and
Administrative Law............................................. 1
The Honorable Howard Coble, a Representative in Congress from the
State of North Carolina, and Member, Subcommittee on Commercial
and Administrative Law......................................... 2
WITNESSES
Professor Richard Karcher, Director, Center for Law and Sports,
Florida Coastal School of Law
Oral Testimony................................................. 4
Prepared Statement............................................. 7
Mr. LaVar Arrington, Linebacker, New York Giants
Oral Testimony................................................. 21
Prepared Statement............................................. 23
Mr. Richard Berthelsen, General Counsel, National Football League
Players Association
Oral Testimony................................................. 26
Prepared Statement............................................. 29
Larry Friedman, Esquire, Managing Director, Friedman & Feiger,
LLP, Dallas, TX
Oral Testimony................................................. 56
Prepared Statement............................................. 58
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Chris Cannon, a
Representative in Congress from the State of Utah, and
Chairman, Subcommittee on Commercial and Administrative Law.... 1
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Member,
Committee on the Judiciary..................................... 85
Prepared Statement of Carl Poston................................ 90
Letter submitted by the National Basketball Players Association
(NBPA)......................................................... 102
Letter submitted by the National Hockey League Players'
Association (NHLPA)............................................ 106
Item entitled, ``NFLPA Regulations Governing Contract
Advisors,''Letter submitted by Richard Berthelsen, General
Counsel, National Football League Players Association (NFLPA),
Washington, DC................................................. 108
Letter submitted by Bernard Parrish.............................. 159
ARBITRATION PROCESS OF THE NATIONAL FOOTBALL LEAGUE PLAYERS ASSOCIATION
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THURSDAY, DECEMBER 7, 2006
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:45 a.m., in
Room 2237, Rayburn House Office Building, the Honorable Chris
Cannon (Chairman of the Subcommittee) presiding.
Mr. Cannon. Given the constraints on time, I would like to
call this hearing to order, and I intend to submit my opening
statement for the record. I hope you will forgive me for that
but I think all the witnesses know what we are doing here.
So I would like to yield to Mr. Coble for 5 minutes and
then we will come back, and I will introduce the witnesses and
we will begin the testimony.
Mr. Coble.
[The prepared statement of Mr. Cannon follows:]
Prepared Statement of the Honorable Chris Cannon, a Representative in
Congress from the State of Utah, and Chairman, Subcommittee on
Commercial and Administrative Law
I would like to begin with a brief explanation of the
jurisdictional underpinnings of this hearing.
As many of you know, the Subcommittee on Commercial and
Administrative Law has jurisdiction over title 9 of the United States
Code, which deals with arbitration. That title was adopted nearly 60
years ago in an effort to alleviate pressure on the federal courts by
encouraging parties to arbitrate and settle differences before they
reached the stage of active litigation.
By facilitating settlements through arbitration, title 9 provides a
strong presumption that courts will enforce determinations arrived at
under this process.
Various aspects of title 9 have been considered by the Subcommittee
over the years. During the 106th Congress, the Subcommittee considered
the ``Fairness and Voluntary Arbitration Act,'' legislation dealing
with the arbitration procedure utilized to resolve disputes between
automobile manufacturers and their sales franchisees. The principal
item of contention was that franchisees asserted that they were forced
into contracts of adhesion that required them to agree to arbitrators
who, because of their relationship to the manufacturers, were not
perceived to be neutral.
Ultimately, legislation was passed by the 107th Congress and signed
into law. This measure provides a more even playing field between the
manufacturers and the franchisees in resolving disputes through
arbitration.
The Subcommittee has on other occasions exercised its jurisdiction
in this area. Also during the 106th Congress, the Subcommittee
conducted an oversight hearing entitled on the fundamental relationship
between franchisees and franchisors and whether there was any need for
more regulation. No further action was taken by the Subcommittee with
regard to that issue.
With respect to today's hearing, I approach this issue with a
completely open mind. I also want to note that it is not my intention
that this hearing be construed to influence any pending arbitration or
litigation. Rather, my intention is to objectively consider such issues
as whether the arbitration procedures employed by the National Football
League Players Association adequately protect the rights of all
interested parties and whether these procedures comport with the intent
underlying the Federal Arbitration Act.
Mr. Coble. Mr. Chairman, I thank you for that and I will
not take--Marty, I won't take as long as it takes to replay a
play on the NFL. I will be very brief, Mr. Chairman.
At one time professional players had little, if any,
ability to negotiate their salaries and contracts and now they
benefit from the ability to unionize and negotiate the
collective bargaining agreements which are supposed to serve
the best interest of all involved.
While I was not immediately concerned when I learned there
were potential problems with the National Football League
Players Association arbitration process, a close friend of mine
thought very differently about the matter. He recently passed
and I am saddened that he cannot be with us today to examine
what will be forthcoming at today's hearing.
His name, Mr. Chairman, was known to many of us. His name
was Jerris Leonard, a distinguished private attorney, elected
to the Wisconsin Senate, where he served as the Senate leader
and he then joined the Nixon administration to work in the
Justice Department's Civil Rights Division. Throughout Jerris'
legal practice and public service he spent a career furthering
and promoting civil rights and speaking out against injustice.
When Jerris said to me, on several times, that a flawed
process is more harmful than no process at all, I think he was
correct about that. Now, Mr. Chairman and colleagues, I have
not drawn a conclusion prior to today's hearing, but I want all
the members of our panel to know that if this process is indeed
flawed it is a serious problem because it undermines all that
has been done to protect the rights of professional football
players, which should be no different than any other citizen or
profession.
Mr. Chairman, I thank you for your patience and efforts in
conducting today's hearing. As you pointed out, the timing
couldn't be any worse in the waning hours of this session, but
I thank you for that, Mr. Chairman, and I yield back.
Mr. Cannon. I thank the gentleman. I am hoping there is
something historic that comes out of this. This is great.
For the record, I would like to ask unanimous consent that
it be admitted into the record, a statement by Ms. Jackson Lee
and a statement by Carl Poston with some addenda. Without
objection, so ordered.
[The information referred to can be found in the Appendix.]
Mr. Cannon. We would also like to ask unanimous consent
that Ms. Jackson Lee and Mr. Meehan be allowed to join us at
the dais and be allowed to ask questions. Without objection, so
ordered.
Without objection, all Members may place their statements
in the record at this point. Hearing no objection, so ordered.
Without objection, the Chair will be authorized to declare
recesses at this hearing at any point. Hearing no objection, so
ordered.
I ask unanimous consent that Members have 5 calendar days
to submit written statements for inclusion in today's hearing
record. Hearing no objection, so ordered.
Our first witness is Dr. Richard Karcher. He is the
Director of the Center for Law and Sports at the Florida
Coastal School of Law. Professor Karcher obtained his
undergraduate degree from the University of Michigan, Dearborn,
and his law degree from Michigan State University College of
Law. Professor Karcher is an active commentator on sports law.
He has contributed to a sports law blog and has written several
law journal articles relating to athletes and sports agents.
Professor Karcher himself was a professional athlete, and looks
like one, by the way. Welcome. He spent 4 years prior to
college in the Atlanta Braves farm system.
Our next witness is Mr. LaVar Arrington, who is a
linebacker with the New York Giants. He is well known to the
people of Washington as he was a star player for the Washington
Redskins. Mr. Arrington was selected in the first round, second
overall, by the Redskins in the 2000 NFL draft. In the summer
of 2006, Mr. Arrington bought out his contract with the
Washington Redskins and became a free agent. He then signed a
contract with the New York Giants.
Mr. Arrington graduated from Penn State University in 1999.
During his last year at Penn State, Mr. Arrington earned the
Chuck Bednarik Award as the Nation's top defensive player and
the Dick Butkus Award as college football's premier linebacker.
He is a very scary guy in his line of work, but we are pleased
to have you.
Mr. Arrington has also developed himself into an off-field
NFL personality, starring in television shows, commercials and
feature stars in non-NFL magazines, including GQ, Maxim and the
Rolling Stone. Thank you for coming today.
Our next witness is Richard Berthelsen, General Counsel for
the NFLPA. Mr. Berthelsen has represented the NFLPA for 34
years. During his tenure at the NFLPA Mr. Berthelsen has also
been involved with professional soccer. Throughout the 1980's,
he served as General Counsel for two soccer league players
associations.
Mr. Berthelsen received his undergraduate degree from the
University of Wisconsin, and graduated in the top 10 from the
University of Wisconsin Law School. He served on the Board of
Directors of the Sports Lawyers Association since 1986 and was
a cofounder of the Association of Representatives of
Professional Athletes. He is also a member of the Board of
Advisers of the National Sports Law Institute.
Thank you for being here today.
Larry Friedman is our final witness. He is an attorney with
an extensive background in arbitration law. He currently
represents a sports agent who has been suspended by the NFLPA
and has filed a lawsuit in a Texas court against that
organization. He received his undergraduate degree from Queens
College, the City of New York, University of New York. He
received his law degree with honors from the University of
Minnesota. He is the managing partner of Friedman & Feiger,
LLP, a Dallas law firm.
I extend to our warmest regards and appreciation for you
being here.
You have 5 minutes. Please feel free to summarize. There is
a lighting system in front of you. This is a room that needs to
be revamped. Your lighting system is up here. We will tap the
dais when the red light goes on. You should feel comfortable
wrapping up at that point.
Pursuant to the direction of the Chairman of the Judiciary
Committee, I ask you all stand and raise your hand and be sworn
in.
[Witnesses sworn.]
Mr. Cannon. The record should show that the witnesses have
all answered in the affirmative.
Mr. Karcher, we would be pleased to hear your testimony
now. Thank you.
TESTIMONY OF PROFESSOR RICHARD KARCHER, DIRECTOR, CENTER FOR
LAW AND SPORTS, FLORIDA COASTAL SCHOOL OF LAW
Mr. Karcher. Thank you. Mr. Chairman and Members of the
Subcommittee, good morning and thank you for inviting me today
to give my testimony.
The NFLPA, unlike unions in the other sports, have been
aggressively disciplining agents over recent years. The NFLPA
would claim that there's an entire system of rules and
regulations that protect the NFLPA's disciplinary process as a
shield, more or less, from claims of arbitrary enforcement and
violations of due process. That system is made of the following
points, briefly.
The NFLPA is the exclusive representative of the players
under the NLRA, but they have chosen a unique system in which
third party agents represent the players in individual contract
negotiations. As a condition to certification, agents must
consent to the NFLPA's agent regulations unilaterally created
and amended by the union without any negotiation whatsoever.
The NFLPA's regulations have been upheld by the courts,
allowing the union unfettered discretion in its creation of the
regulations and amendments.
The NFLPA's regulations are drafted very broadly, leaving
the NFLPA complete discretion to determine whether an agent's
conduct falls within its provisions regarding what constitutes
prohibited conduct. As an example, they prohibit, quote, any
activity which reflects adversely on his or her fitness as a
contract adviser or jeopardizes his or her effective
representation of players.
CARD, which is a disciplinary committee of the NFLPA, has
the power to immediately suspend or revoke an agent's license
without a hearing and without an opportunity to be heard in,
quote, extraordinary circumstances, end quote. That definition
is determined by CARD, so CARD'S authority is not limited to
merely proposing discipline. If an agent appeals CARD's
suspension under such circumstances, the appeal shall not stay
the disciplinary action.
The same arbitrator has been both selected and paid for by
the NFLPA for the past 13 years. There's no right to discovery,
no pre-hearing or post-hearing briefs. Arbitrators' decisions
are not readily available so there really is no precedent. The
arbitrator is the last resort for the disciplined agent because
courts will typically not review the arbitrator's decision even
if the court believes that there were factual errors made by
the arbitrator or that the arbitrator applied the law wrongly.
So the question worth exploring today is whether the NFLPA
should be permitted to use this system as a shield and whether
one or more of the points making up this system should be
changed in a way that makes the disciplinary process more fair
to agents but at the same time preserves the legitimate
function of the union in looking after the best interest of the
players.
Under this system the NFLPA makes subjective assessments
about particular agents over others and these decisions will
naturally be affected by certain biases that the union may or
may not have against certain agents.
There are some recent suspensions that at least raise some
questions regarding arbitrary enforcement and due process.
Mr. Carl Poston's case. At the beginning of this year CARD
filed a complaint against Carl Poston for alleged malpractice,
recommending a 2-year suspension. Thus CARD made a unilateral
determination that Poston committed malpractice despite all of
the factual issues in dispute in that matter.
Poston then filed an appeal to the arbitrator and then
simultaneously filed suit in Federal court alleging that the
NFLPA violated its regulations in certain respects as well as
to seek a neutral arbitrator.
After Poston had to twice postpone the arbitration hearing
for legitimate reasons, the NFLPA officially suspended him
because according to them he, quote, used bad faith efforts to
delay, frustrate and undermine the hearing. Executive Director
Gene Upshaw criticized Poston publicly in the media for, quote,
making a mockery of our system and that this is not about him,
it's about our authority as the exclusive bargaining agent for
the players. They, the agents, work at our beck and call.
So a few questions arise out of the Poston situation: Is
this an extraordinary circumstance, as I referred to earlier,
under section 6B of the regulations that warrants immediate
suspension without a stay pending the appeal to the arbitrator?
What about the damage to Poston's reputation when he hasn't
even had a fact finder decide many factual issues and consider
his defenses? Is a 2-year suspension warranted under these
circumstances, especially when his client is not upset?
Upshaw's comments seem to indicate at least in part that
they are making decisions based upon emotion leading to--it
just leads to questions regarding arbitrary enforcement and due
process. That's the point, I think today, to raise the
questions about arbitrary enforcement and the due process of
the agents.
David Dunn is another situation in which he was suspended
for soliciting clients. Soliciting clients in the agent
business is very commonplace. However, the NFLPA singled out
Dunn for soliciting clients after he left his partnership with
Leigh Steinberg and suspended him for 2 years.
First, there's wide debate among lawyers, scholars,
including this one sitting here at the table speaking, and
judges whether soliciting clients is even misconduct. There's a
court decision that said that that's perfectly fine in
competition for client services.
Second, is the suspension warranted for 2 years when the
alleged solicitation involves clients that he used to represent
when he was with his partner Leigh Steinberg? Again, is the 2-
year suspension warranted when his own clients vehemently
oppose any disciplinary action whatsoever, just as in the
Poston case?
Dunn--I'll wrap this up. Dunn agreed to an 18-month
suspension which was essentially the effect of the original 2-
year suspension imposed upon him.
In light of the foregoing I believe that further hearings
on this issue are important and warranted, and I thank you for
your time.
[The prepared statement of Mr. Karcher follows:]
Prepared Statement of Richard T. Karcher
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Mr. Coble. [Presiding]. I thank you, Professor.
Mr. Arrington, you are recognized for 5 minutes.
TESTIMONY OF LaVAR ARRINGTON, LINEBACKER,
NEW YORK GIANTS
Mr. Arrington. First let me start by saying thanks for
having this hearing, Chairman Cannon.
Mr. Coble. Pull that mike closer, please.
Mr. Arrington. I usually don't have a mike to speak into.
Usually got to be loud.
But like I said, to reiterate, I'd first like to thank you
all for having this hearing. The Chairman isn't available,
Representative Lee isn't here, but thank you all for being here
to hear my testimony.
I have my written statement and it's been presented and
rather than read it I'll just, I guess, take a spin off of Mr.
Karcher and what he basically said about the process of how
things are conducted by the NFLPA, also as a current player in
the NFL. No one in this situation with Carl Poston and myself,
other than the representatives of the Washington Redskins, are
intimate with the details of the situation like we are so I
feel at liberty to be able to say that I have a firm
understanding and a firm grasp on what transpired during the
course of those contract negotiations.
With that being said, speaking from the heart, not reading
my statement, I just basically feel like in this situation as a
player when the player shows that he has a firm understanding
of what is transpiring, what is going on, and something
happens, then in that process I feel like as an employee for
the NFLPA, which is an association to help us and for us, that
our opinions should be valid, they should be heard, and
ultimately they should be respected. And I don't think that a
comment or comments being made about the player not
understanding well enough or not being able to understand
enough to represent himself enough to make a decision in terms
of whether an agent or anything else that has to do with the
player's personal affairs should be made by other individuals.
I think that once you take that from a player, it's on the
fence of what do you represent. Are you just somebody who puts
on pads and goes out on the field and give people entertainment
for a couple hours on Sunday, or are we legitimate people in
this society that make decisions? And I think in this situation
that comes into play because I definitely on numerous occasions
made sure that I communicated to the NFLPA that I did not have
anything inside of me that would warrant me to take action
against Carl Poston and what happened in the contract
negotiation process.
Ultimately in that situation, I call it ordeal because now
I'm a New York Giant I feel like as a result of it, and in that
ordeal there was an agreement made between the Redskins and
myself that there was no one at fault in this situation. And,
to me, if there's an agreement, a settlement that no one is at
fault, then how, and maybe--I'm not a law scholar or anything
like that, I'm not a lawyer, but I just think that using common
sense, how does a disciplinary act toward Carl Poston come
about when there was a compromise that was agreed to and it was
a no-fault compromise, but yet still out of that situation
there's a disciplinary act being taken against Carl Poston.
For me, I feel like that's a violation of Carl Poston and
his right to represent me as the athlete, but also it's a
violation to me as an NFL player. This is my seventh year in
the NFL, it's not my first or second, so I'd like to believe I
understand a lot about what this game is about. I'm actually a
well-versed historian on the game. I enjoy learning the game, I
enjoy knowing about the players and different things like that.
So taking that all into consideration, I am a professional,
avid professional in this game. I'm not someone who has come in
and gone just as quick as I came in. So I have been in this
game quite a while. I would say 7 years is quite a while. I
think the average is 3 minutes.
Anyway, wrapping it up, I'd like to say hopefully you guys
will take a look seriously as how what Mr. Karcher basically
alluded to, is how this process is done, how the arbitration
process is done within the NFL and with NFLPA and also present
some rulemaking decisions that kind of puts everybody on an
equal playing field.
Thank you for your time.
[The prepared statement of Mr. Arrington follows:]
Prepared Statement of LaVar Arrington
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Mr. Coble. Mr. Arrington, thank you. You heard my comments
about my late friend Mr. Leonard. I guess you knew him. For the
record I want you all to know I come into this hearing with an
open mind. Jerris Leonard was a very dear friend, and I know he
felt very compassionately about this issue, but I am open-
minded.
Now let me go informal here a minute. I think you and I
need to go vote.
Mr. Delahunt. I was going to suggest, Mr. Chairman, that
since you and I would probably cancel each other out, and
that's just speculation on my part, of course. And I don't
think it's a matter of substance, I think it's a procedural
matter.
Mr. Coble. I hate to miss the vote. He's on his way back
now. So why don't we suspend very briefly, gentlemen. As soon
as Mr. Cannon comes back, we'll resume. I'll go vote. And often
times, as my friends from Massachusetts says, often times we do
cancel each other out but we do so harmoniously, right?
Mr. Delahunt. Absolutely. We're pals.
Mr. Coble. You all suspend for a moment and we'll resume as
soon as he comes back.
[Brief recess.]
Mr. Cannon. [presiding.] We won't reconvene until the
people who have serious questions return. So at ease or
whatever we do.
Why don't we come back to order. Life is tough when you're
big and handsome and done something worthy to be remembered.
Thank you, Mr. Arrington, for your willingness to do those
pictures. It's very kind of you. When we shift majority there's
a lot of transition, especially on staff, and this may be the
highlight of the week for some our folks here.
My understanding is that Mr. Arrington has given his
testimony but we're still waiting to hear from Mr. Berthelsen.
So we'll just take a moment while people sit down and get some
order here. Then we'll proceed.
I apologize. We had a vote. I ran over early to vote, so I
apologize for missing your testimony, both Mr. Karcher and Mr.
Arrington. Those who were here will be on their way back, and
Ms. Jackson Lee was really one of the principal reasons why
we've done this hearing and she's here now. If others get back,
fine; if not, we'll give her some time to do questioning and go
from there.
Again, we appreciate your indulgence here. Our process is
awkward, the day is awkward, but the issue is important.
Mr. Berthelsen, would you like to--we recognize you for 5
minutes.
TESTIMONY OF RICHARD BERTHELSEN, GENERAL COUNSEL, NATIONAL
FOOTBALL LEAGUE PLAYERS ASSOCIATION
Mr. Berthelsen. Thank you, Mr. Chairman, Members of the
Subcommittee. I'm very fortunate to have the opportunity to
speak with you this morning. I appreciate the invitation. I
wish I would have a little bit more than 5 minutes, but I will
try to be as brief as I can.
Mr. Cannon. I'm sure you will have an opportunity to
expound during the questioning period.
Mr. Berthelsen. Thank you very much.
A bit about myself. I have been an attorney employed full
time by the National Football League Players Association since
1972, so I have been with the organization for over 34 years.
We were the first sports union to implement an agent regulation
program, and as general counsel of the union at the time it
became my job to research this area and to see what was done in
other industries and what was legal and what was not legal, and
I read among other things a Supreme Court case by the name of
H.A. Artists, which established and is still good law that
unions not only have the right but the obligation to regulate
agents who do individual salary bargaining for their members,
and in fact the agent really is the agent for the union under
that approach and under the law. And so I have always followed
that.
It's been suggested that we use the law as a shield. Quite
the contrary. I looked at the law to begin with and saw what
was allowed and proposed a more liberal system to the board of
player reps, but they are our governing body. They are the ones
who implemented these regulations with several changes which
they desired.
The format for the disciplinary nature of our program is
first, last and always dependent on the actions of players like
Mr. Arrington. Mr. Arrington is a player in a real sense. I'm
here representing seven other players who happen to disagree
with him about what happened in this case. We call it CARD,
it's the Committee on Agent Regulation and Discipline. It
includes Troy Vincent, our current President who plays for the
Redskins; Trace Armstrong, a past President; Robert Smith, who
played for the Vikings; Tony Richardson, who now plays for the
Vikings; Brian Dawkins with the Eagles, Robert Porcher,
retired, and Larry Izzo, who's with the Patriots.
That committee met about every discipline case that we have
had. They are the ones who decide whether to issue a complaint,
which is the first step, they are the ones to decide after the
agent answers that complaint whether discipline is appropriate,
and if they do, they propose discipline.
Unlike what Mr. Karcher said, they don't dictate the
discipline, they don't determine it. They propose the
discipline. And the next step in that process is that if the
agent wishes to challenge the discipline as proposed by this
committee of players, then it goes to arbitration. Our current
arbitrator is Roger Kaplan.
This system has worked extremely well. It's worked for over
23 years. We have not had any complaints from any of the agents
who we meet with on a periodic annual basis. We have a
committee known as the Agent Advisory Committee. We meet with
them every year. And contrary to what Mr. Karcher represents,
we do not act unilaterally. This committee of agents has input
on everything we do in the regulations. An example of that is
this past year where we met with the committee as our board of
reps had proposed the reduction in agents' fees and this group
convinced our CARD committee not to do that and they carried
the agents' message to the meeting and that got defeated.
But in this particular case, and it's unfortunate the
subject of pending cases has been brought up, I do have to
address the situation with Mr. Arrington. His agent left 6.5
million dollars out of a contract that he negotiated for Mr.
Arrington. He allowed Mr. Arrington to sign that contract
without it being in it.
When our committee looked at this situation one of the
first things they did was to talk to Mr. Arrington. He spoke to
them for over 45 minutes by telephone conference call in their
meeting. But they also looked at some realities in the NFL
because every contract in this league depends on every other
contract. When a player who's an all pro linebacker negotiates
a deal, the next linebacker who's up for a deal says to the
club I want the deal that he got or I want a better deal than
him because I'm better than him. And if the last relevant
contract is missing $6.5 million, that has an effect on that
player and several other players and on the whole system.
That's point number one.
Point number two, we have in our agreement something called
the franchise player. That's a player who's an exception to
being a free agent. The club can say you are our franchise
player and our agreement says that the consequence of that is
that that player gets the average of the top 5 salaries at his
position in the league guaranteed for 1 year.
Mr. Arrington's contract, had it contained the terms it
should have contained, would have caused that top 5 average to
go up the year that this occurred, but because it was missing
that money it had impact on franchise players in that category.
Thirdly, and just as importantly, it is true as Mr. Karcher
says that we have been active in disciplining agents. Our
committee has disciplined agents on frequent past occasions for
gross negligence, and those agents in question have served
their suspensions. If we say that in this case there's not
going to be any action, what we're saying to the people who
have been disciplined in the past and who went through the
procedure is that we're going to treat you differently than
someone else, and to have disparate treatment within a system
is something that you cannot do under any stretch of principle
or law.
So our committee as a group listened to Mr. Arrington but
disagreed with him as to the appropriate action to be taken in
this case.
One final point, if I could. Mr. Karcher said that we act
unilaterally; that Mr. Poston was suspended immediately without
a hearing. The reality is quite the contrary. Mr. Poston had
three hearings scheduled, one in May, one in June and one in
July. On all three occasions at the very last minute he
happened to find circumstances, create circumstances or
incurred circumstances which caused him to request a
postponement.
Our committee looked very skeptically on what had happened
because it appeared to them that he did not want to come to
present his case or his defense. So it took this action, which
it's allowed to under the regulations, to say your suspension
goes into effect immediately. But what wasn't mentioned here
was that in the same letter and in the same regulation that
allows that it says the person affected is entitled to an
expedited immediate hearing.
That was offered to Mr. Poston if he wanted to challenge
our action. He chose not to. Although he technically appealed
the immediate action of suspending him, his counsel chose not
to pursue that appeal, not to challenge the committee's actions
and its doubts about Mr. Poston's constant postponements, and
instead chose to go forward on the original appeal of the
underlying case.
So Mr. Poston, although he's been offered since day one the
right to come to Washington at his convenience to challenge
what has been done, has deliberately chosen not to, and this is
what our committee is having to deal with in this situation.
[The prepared statement of Mr. Berthelsen follows:]
Prepared Statement of Richard A. Berthelsen
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Mr. Cannon. Thank you, Mr. Berthelsen.
Mr. Friedman, you're recognized for 5 minutes.
TESTIMONY OF LARRY FRIEDMAN, ESQUIRE, MANAGING DIRECTOR,
FRIEDMAN & FEIGER, LLP, DALLAS, TX
Mr. Friedman. Mr. Chairman, thank you very much for
inviting me here today, and Members of the Subcommittee. My
name is Larry Friedman. I'm an attorney. I practice law in
Dallas County, Texas, and I have practiced there for over 28
years. I'm here today on behalf of Steven Weinberg, who is here
with me today, along with my partner Bart Higgins, and I am
here representing Mr. Weinberg as well.
I paid very close attention when Mr. Coble spoke and quoted
his friend Jerris Leonard and said that ``a flawed process is
worse than no process at all.'' Well, I am here to relate to
you Mr. Weinberg's story. He was a certified contract adviser
and I am here to say that the NFLPA's arbitration process is a
flawed process and it is worse than no process at all.
Let me relate that to modern terms. Mr. Cannon, Mr.
Chairman, if you were Donald Trump and this was The Apprentice,
and this was the show, The Apprentice, and you had assembled a
team of tremendous talent, including Gene Upshaw, NFLPA
Executive Director; Richard Berthelsen, General Counsel; Tom
DePaso, Staff Counsel; Regional Director, Mark Levin, Director
of Salary Caps and Agent Administration; Trace Armstrong,
former President of CARD; and Roger Kaplan, the specially
appointed arbitrator of NFLPA disciplinary actions--and you
said to these people, with all your talent we want you to put
together an arbitration process with all the proper procedural
safeguards that you can put together. We want you to put
together an arbitration process that would deter arbitrary and
capricious decision making, we want you to put together an
arbitration process that gives every participant proper notice
and an opportunity to be heard, and we want you to allow
disciplinary procedures to be heard by an impartial decision
maker. And, if these people brought you the current arbitration
process that's in effect at the NFLPA, Mr. Chairman, you would
look at these people spread out across your board room and you
would have two words for them, you would say, ``You're fired.''
Because the process that is in effect doesn't allow the
participants the procedural safeguards that we in this country
allow people who are accused of a crime or accused of
wrongdoing, and what you have here is a valuable property
right, the right of a man or a woman to earn a living.
With regard to my client, Steve Weinberg was a very
successful player agent. He had 42 clients when he was
decertified, including Stephen Davis on whose behalf Mr.
Weinberg negotiated a $135 million contract. Mr. Weinberg lost
his right to earn a living because of the capricious and
arbitrary nature of the arbitration process.
Had there been standards, had there been safeguards, had he
had the ability to participate in a process, had he had the
ability to bring witnesses, to present evidence, to cross-
examine his accusers, he would still be an agent today. He
would still be earning a living today.
Today, Mr. Weinberg doesn't have a job. His wife is sick
and her health is failing. He doesn't have a job and he doesn't
have an opportunity to earn a living. The NFLPA agent
certification says that the NFLPA agrees that it shall not
delete any agent from its list until that agent has exhausted
the opportunity to appeal the deletion to a neutral arbitrator
pursuant to its agent regulation system. Well, that would be
great if that's what happened. It didn't happen in this case.
In Mr. Weinberg's case his punishment took effect before
his appeal was final. In fact, why was he decertified? He was
decertified because he and his former partner were in a dispute
over the distribution of partnership funds. Mr. Weinberg was
told by someone employed by the NFLPA, hey, file a grievance
against your former partner, will help you out. So he did. Mr.
Weinberg's former partner then filed a retaliatory grievance
against him.
Fifteen of Mr. Weinberg's clients, player clients filed a
grievance against Mr. Weinberg's former partner. The NFLPA, Mr.
Berthelsen, arbitrarily decided to pursue Mr. Weinberg's former
partner's grievance against Mr. Weinberg and did not pursue the
15 grievances against Mr. Weinberg's former partner, did not
pursue those grievances and did pursue the one grievance.
That's not fair. That matter should have been fully heard.
Mr. Chairman, the process needs a thorough investigation.
We would encourage this Committee to look into it, to hold more
elaborate hearings, to get more information, to hear from the
players themselves, to hear more from the agents who have been
subject to the process and who are also part of the process
now.
I have read Mr. Carl Poston's testimony that was submitted
to the Committee, and Mr. Poston has some very good suggestions
at the end of his testimony. He lists seven points.
Mr. Cannon. We have that in the record.
Mr. Friedman. I'm not going to repeat it. I'm just saying
we endorse it.
[The prepared statement of Mr. Friedman follows:]
Prepared Statement of Lawrence J. Friedman
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Mr. Cannon. Thank you. Your time having run, I'm going to
ask a couple of questions then we'll turn the time to others
who might have questions.
You talked about the 15 complaints against Mr. Weinberg's
opponent; I would like to have something in the record on that.
And Mr. Berthelsen, we would like to have something in the
record, written in the record in response to that, and we will
provide time for that to happen.
But I actually want to ask a more theoretical question. We
have Mr. Arrington here, who is a star, he is obviously a
bright guy, he did well in college and can handle himself, and
so I would like to go back to this $6.5 million that you are
concerned about, that the Players Union is concerned about, and
to balance that, would you tell us about that $6.5 million,
whether you wanted it, whether it was a mistake, whether you
thought you had a contractual right to work with your agent to
get it, or whether you didn't care, and if so, why not, because
6.5 million is enough to care about, I think. But secondly, why
you wanted your agent, instead of another agent, given that
$6.5 million?
Mr. Arrington. Restate the last part.
Mr. Cannon. Mr. Berthelsen said that you were cheated
essentially out of $6.5 million. I would like to know what that
was and how you viewed that.
Mr. Arrington. Well, in the situation, during the course of
those contract negotiations, what Mr. Berthelsen felt that--
discloses that during the course of those negotiations, NFLPA
has a deadline on the time that you can get a contract done due
to salary cap purposes--at least that is the way it is told to
us. So during the course of this time, there were large
discussions on getting the contract done before this deadline.
And at the time that this contract was being negotiated, it
came down to like the waning hour--I think it was about 2 hours
or so before the deadline, the stated deadline time of getting
the contract done to effect a salary cap of the team had
passed.
So in the last, I guess--not too long before the deadline,
they--my agent and the Redskins people, whoever were involved
with the negotiations--came to an agreement. I then, at this
point in time, went to a Redskins facility. He says that my
agent was negligent for not being there with me at the time. I
don't think that anybody--any agent or anybody that represents
an individual that has given and sacrificed as much as I did
for the Washington Redskins organization would feel
uncomfortable going behind closed doors and getting a deal done
to make me a life-long Redskins.
And I think a lot of times, with all of the technical talk
that is used, that sounds good, but at the end of the day we
are all people. And the bottom line is, when I went there, I
was under the firm impression that I am signing an 8-year deal.
I was definitely up on all the details of the contract. The 6.5
million of a roster bonus given in July when you go report in
for camp, and it was I guess a multi-year deal, or whatever.
But when those documents were being sent to my agent, while
I was doing this contract, I had a game the next day against
Philadelphia. I am more concerned about being a good employee,
making sure that over a contract I am not, you know--things had
been done, in my opinion, things had been done on a
professional level on a professional scale thus up to that
point. So once we got to that point, I felt like whatever--if
there is anything wrong, which in anybody who goes into a
business deal, if there is anything wrong with the language or
anything that is, you know, I guess inaccurate, you mark those
things, you go back and you fix them.
Now, when that came about, the 6.5, yeah, when we found out
that it was gone, or it was never put in there, then we went
over our files. Once we went through the files and saw that the
6.5 million was not there, then that was when--well, they tried
to contact me, but I was getting ready to go to a Pro Bowl, and
I was a little younger, I think 2, 3 years ago, so I was having
fun at the Super Bowl, so I wasn't really paying too much
attention to my cell phone. But once the situation was, you
know, recognized, then we then went to NFLPA to have them act
on it.
Now, doing that in good faith--we did that in good faith;
if something is wrong, just show in the evidence where, you
know, that 6.5 should have been on a certain page, and----
Mr. Cannon. Did you get that 6.5 ultimately?
Mr. Arrington. No, I did not. Not only did I not get the
6.5, I didn't finish out the life of the contract either.
Mr. Cannon. You are not unhappy with the Redskins or your
agent.
Mr. Arrington. No. The situation was resolved. Like I said
earlier, I alluded to earlier, there was a no fault resolution;
so it was recognized that there was no fault by the Redskins
and it was recognized that there was no fault by me or my
agent.
Mr. Cannon. I am going to try to stick closely to the rule.
Unfortunately I couldn't see the red light. I am over a minute,
so I am going to ask my colleague's permission--I am going to
be strict with the gavel at 5 minutes so we can get through
everybody who has questions.
Since we have been back and forth, I think that Mr.
Delahunt, you are the first on----
Mr. Delahunt. Whatever, Mr. Chairman.
Mr. Cannon. We should recognize Mr. Watt has joined us.
Do you have questions, Mr. Delahunt?
Mr. Delahunt. Yes.
Mr. Cannon. Good. The gentleman is recognized for 5
minutes.
Mr. Delahunt. I will direct this to Mr. Berthelsen.
Did I hear you correctly, in terms of the arbitrator has
served for a 13-year period?
Mr. Berthelsen. Since 1994. We have had three arbitrators
under the system. The first one was Kenneth Moffett, who is a
former director at the FMCS. The second one was Senator John
Culver, after he served as a senator, he served for several
years. And Mr. Kaplan has served since 1994. Mr. Kaplan----
Mr. Delahunt. Okay. I will tell you, I have a bit of a
problem; you know, there is an assertion by some that the
individual who is currently serving--and I know nothing about
him--might not fit the definition of ``neutral arbitrator.''
Has the NFLPA considered, as these cases come individually,
rotating arbitrators? In other words, I think common sense
dictates that over a period of time, there becomes a comfort
level with one individual serving as an arbitrator. I am just
posing the question to you: Has there ever been consideration
by the Players Association to examine the possibility of having
a pool of arbitrators to be selected by the opposing parties to
ensure neutrality?
Mr. Berthelsen. I think you have to understand the system a
little bit better, as it operates, for me to fully answer that
question.
The arbitrator under the system decides three different
types of disputes. He decides disputes between players and
agents, usually over fees. And this is a thing that the agents
think is extremely good and they think it is working extremely
well because in over 80 percent of the cases, the arbitrator
rules for the agent over the player. There are other cases
where it is agent versus agent, and then there are disciplinary
cases. Mr. Kaplan has done all of those things for all of these
years----
Mr. Delahunt. I understand that, and I am sure he brings an
expertise to it. But what I am suggesting is, in terms of--
let's call it due process.
Mr. Berthelsen. Yes, we have considered more than one
arbitrator. And we may be near a time when we have to have an
additional arbitrator because the case load is considerable.
Mr. Delahunt. And I appreciate that. And my point is, I am
looking at it in a systemic way, to ensure that there is a
random quality, if you will, to the process itself, to the
process of arbitration, as opposed to reliance on a single
individual over an extended period of time. Because clearly,
after 13 years, you know, you can be Mother Teresa, but you are
going to start to develop an attitude on different issues, I
mean, that is just human nature. And I wonder if there is a
better system in terms of ensuring that the individual selected
is a neutral--underscore ``neutral"--arbitrator and doesn't
have a certain preordained view of individuals, whether they be
players or arbitrators, because that does happen.
Mr. Berthelsen. We have had arbitrators in the NFL serve
much longer than 13 years; it is not at all unusual for that to
happen.
Mr. Delahunt. I know, but what I am saying is I don't know
if that is a healthy component of the arbitration system if you
want to ensure that you have a neutral--underscore, again--
"neutral'' arbitrator.
Mr. Berthelsen. Well, Mr. Kaplan is a neutral arbitrator,
he is a member of the National Academy----
Mr. Delahunt. I am sure he is a great guy, Mr. Berthelsen,
and I have no doubt about his expertise, but what I am saying
is let's step back and not think about the current system, but
just in terms of this discrete issue, a rotation, you know, on
an ad hoc basis, for example--whether it is Mr. Arrington or
whatever the issue is--to ensure that there is confidence in
the arbitration system. Someone whom could be selected by
agreement among the parties I think is something that should be
considered.
Mr. Berthelsen. Since I do slightly at least have the
floor, I forgot something earlier. I do have letters from our
counterparts in the National Hockey League Players Association,
and the NBPA, the National Basketball Players Association; one
letter from Billy Hunter, who is the Executive Director of the
NBPA, another from Ted Saskin, who is the executive director of
the NHLPA. And I would like, if I could, to make this part of
the record.
Mr. Cannon. Without objection, that will be made part of
the record.
[The information referred to can be found in the Appendix.]
Mr. Berthelsen. These organizations have the same system
that ours does.
Mr. Arrington. Does that make it correct? That is the
question there. You are very accurate in what you are saying
now. That is loyalty is what you are saying; 13-year-period of
time the man is serving as your arbitrator, there is a loyalty
there; whether he wants to acknowledge that or not, there is a
loyalty. It doesn't matter what his background is or not, it is
loyalty.
Mr. Delahunt. I think Mr. Friedman wants to respond, too,
Mr. Chairman.
Mr. Friedman. Let's look at the people who have been most
successful in the arbitration business, in being neutral, the
American Arbitration Association. Now I am not an expert on
that, but I have arbitrated there many times. They offer a
panel of arbitrators to select from. They offer you 10 choices.
Those people give you a resume and those people disclose
conflicts of interest. You get a chance to strike people who
have biases, or relations, or know people, or know subject
matters, so that you can comb them out to wind up with a panel
of either one or three, as neutral an arbitrator as you can
get. And then they have those panels in every city. It is a
try-hard organization, and the most successful one I know.
Mr. Cannon. Thank you. The gentleman yields back.
Mr. Coble, the gentleman from North Carolina, is recognized
from 5 minutes.
Mr. Coble. Thank you, Mr. Chairman. Gentlemen, it is a
privilege to have you all with us.
Mr. Friedman, you have had considerable experience with
arbitrations involving automobile dealers and manufacturers, et
cetera. If you will--well, strike that. Let me say it a
different way.
Compare the procedures employed by NFLPA with other
arbitration with which you are familiar.
Mr. Friedman. Yes, sir. As I mentioned just a moment ago,
with the American Arbitration Association and with the dealer
franchise organizations and with, not only in the automobile
industry, but also in the food industry, McDonalds, Burger
King, Church's, Kentucky Fried Chicken, it appears to be me
that a greater effort is made in these other places to provide
a process that has more procedural safeguards so that the truth
gets to the top and impartiality governs, neutrality governs,
so that both--there is a system of polite advocacy; one side
provides documents, the other side provides documents, one side
can ask questions, the other side can request questions. There
is an opportunity for cross-examination, which is the greatest
tool in American jurisprudence to discover the truth. And then
you present that to as neutral an arbitrator as you can get. It
is not a perfect system, but it is better than this one.
Mr. Coble. Mr. Berthelsen, speaking of neutrality, let me
put this question to you; it would seem a symptom to some of
the complaints that we have heard today is that the NFLPA
procedures do not ensure that the arbitrator chosen to resolve
the disciplinary action against the certified contract advisors
are sufficiently neutral to render an impartial determination.
Now, what say you to that?
Mr. Berthelsen. I didn't understand about--sufficiently
what?
Mr. Coble. Are sufficiently neutral to render an impartial
determination.
Mr. Berthelsen. Well, I would disagree with that. And the
previous witness said to you that procedures he knows involve
things like cross-examination of witnesses and the ability to
confront accusers and what have you; and our system has that
and more. In every hearing that we have, there is cross-
examination of witnesses, the opportunity to present any and
all witnesses who have relevant testimony. There is even
opportunity for briefing; there is opportunity for prehearing
discoveries through the issuance of subpoenas, which are often
done. But the tenor of your question is that the person that we
have now is not neutral, and that is what I would disagree
with. He has been an arbitrator in the public and private
sector for over 25 years----
Mr. Coble. Mr. Berthelsen, I did not mean that that was my
opinion, I was saying consistent with some of the testimony
that we have heard today is what I was basing my question on.
Mr. Berthelsen. Well, with all due respect, some of the
testimony that you have heard--I am not sure what you are
referring to--but a lot of it, with the exception of Mr.
Arrington, who was describing his feelings to you, has not been
factual. And the problem that I have is that with the limited
time that I have, I cannot point out, for example, what he said
about how we took up the grievance of Mr. Weinberg's former
partner, that is just not true, we didn't take up anybody's
grievance. Our committee decided that there should be
discipline for Mr. Weinberg. So I am sorry if I didn't seem to
answer your question, but that is the best I can do.
Mr. Coble. Before the Chairman gavels me down, Mr.
Arrington, do you or the professor want to weigh in on either
one of my questions?
Mr. Karcher. Yes, thank you. I guess I have to respond
because I didn't know that I actually made some false
statements regarding the regulations. And I just--they are
really not that long, I mean, I attached--I included them in
the record. And it is not my purpose to, you know, pick a side
here on anything, I am just looking at this thing for what it
is. It is a system that they have chosen.
And the system simply says that--basically it is a
discretionary system. So when I said that CARD--I didn't say
that CARD unilaterally makes a suspension, what I said was that
CARD basically has the discretion, if it wants to, to
unilaterally impose a disciplinary action and stay that appeal
to the neutral arbitrator, to the neutral one.
What it says is, and I will read it to you, it is not that
very long, in the extraordinary circumstance--that is what I
referred to in my original testimony--where the Committee on
Agent Regulation and Discipline's investigation discloses that
the contract advisor's conduct is of such a serious nature as
to justify immediately revoking or suspending his or her
certification, the committee, or CARD, may immediately revoke
or suspend that certification with the filing of a disciplinary
complaint, or thereafter. That is clear to me that CARD has the
discretion to do that. Now whether they do that, I don't know.
I am not part of the system. I don't know whether they actually
do that.
I see what they did in Mr. Poston's case, which is that
they proposed--they didn't initially exercise this clause,
exercising discretion, they proposed a discipline, and Mr.
Poston immediately filed his appeal within the time frame that
he was supposed to to the arbitrator, simultaneously filed a
complaint in Federal court. And then a few months later, CARD--
which is a committee of the NFLPA, so they are really not--I
mean, I look at it as the NFLPA, it is a committee of the
NFLPA. The NFLPA basically then officially suspended him for 2
years, not a proposal, an official suspension. And my guess is,
I am speculating, that they would rely on this clause and say
that this was an extraordinary circumstance. Well, what was the
extraordinary circumstance that did it? I don't know----
Mr. Coble. I am going to have to yield back because my time
is expired. Thank you.
Mr. Cannon. Thank you, Mr. Coble.
Mr. Berthelsen, I take it--first of all, Mr. Karcher, did
you finish your statement? Because we are getting now I think
pretty much to the core of this issue, and obviously there is a
lot of concern by this Committee----
Mr. Karcher. There is one other thing I would just add is
that I want to make sure that I finish what the regulation
says. In such event, under these extraordinary circumstances,
which would be determined by NFLPA, the contract advisor would
be entitled to an expedited appeal, as Mr. Berthelsen correctly
noted, of that action pursuant to section 6(e), except that
such appeal shall not stay a discipline.
So you have a situation where they are disciplined
immediately without any opportunity to be heard. And that is
all I meant to say. If I misspoke earlier in my statement, you
know, I apologize, but that is what I was referring to.
Mr. Cannon. Mr. Berthelsen, you said a couple of times you
don't feel like you have enough time. Let me be clear that you
can submit things for the record after this time. Obviously we
are going to go with the flow of questions, but you seem to be
pretty intent to respond to this. We are happy to have you do
that, without objection.
Mr. Berthelsen. Just to finish the thought, and I think I
said it before, we realize that there is a responsibility that
goes with immediately taking action, it is only done under
extraordinary circumstances, and I believe we only did it 3 or
4 times in our history; the responsibility is to grant that
person an immediate hearing. And in Mr. Poston's case, that is
what we wanted to have, but that is what we weren't getting
because he had postponed three hearings in a row. But he chose
not to avail himself of the opportunity to come to a hearing
immediately. And we can't force that, we can't go forward
without him. And that is what I wanted to point out in this.
With Mr. Karcher, he says he doesn't favor anyone's
position here and pretends to be neutral. I really would like
the opportunity to point out about how his statement has a
multitude of inaccuracies from the beginning to the end.
Mr. Cannon. You should do that. And I am sure Mr. Karcher
would respond to that. That is an appropriate thing to do.
Mr. Berthelsen. I appreciate that.
Mr. Cannon. You want to say something here, but I suspect
that you can do it by a written statement.
Mr. Friedman. I will be brief, Mr. Chairman.
I am not neutral, Mr. Chairman. By reading of the
regulations, it appears to me that CARD does not allow cross-
examination, and that the record will reflect that the
arbitration is simply a rubber stamp for the discipline that
CARD dishes out. In Steve Weinberg's case, he had 15 players
that were willing to testify--that were there to testify on his
behalf. Two of them drove through a blizzard to get to a
hearing and they were denied access to that hearing. The other
13 were available by speakerphone, they were denied access to
that hearing. Steve Weinberg's is a case that ought to be
examined.
Mr. Cannon. I am not going to go back to Mr. Berthelsen
because we are not--but we do expect some information to go
into the record to continue to consider this. This is not
Republicans against Democrats here, this is going to be an
ongoing issue, I think, and so we are anxious to have your
input. It is not my time at this point, Mr. Arrington, so I
what I am going to do is yield to Mr. Watt, the gentleman from
North Carolina, for 5 minutes.
Mr. Watt. Just long enough to say my apologies to the Chair
and to the witnesses for not being here, apologies in this
sense; I mean, we come to various choices we have to make quite
often in this institution, and sometimes we have committed to
do things prior to the scheduling of a hearing. I was at that
crossroads when this hearing was scheduled because I had
already committed to do a speech over at the Naval Yard to a
group of interns. So that doesn't necessarily mean that I put a
higher value on that than what you are here to talk about. I am
sure this is valuable and important, although from the
beginning I would have to say I have questioned how we get into
it at this juncture.
So having said that, I haven't read all the testimony,
haven't heard the witnesses, so no sense in me starting to
cross-examine or examine anybody. Perhaps I could yield 2
minutes of my time to Ms. Jackson Lee and 2 minutes of my time
to Mr. Meehan, both of whom have been here and may have greater
knowledge and have a greater interest.
Mr. Cannon. Without objection. We actually have authorized
them to take the balance of this----
Mr. Watt. So I shouldn't give them 2 more minutes.
Mr. Cannon. They already have five of their own.
Mr. Watt. Okay. In that case, I will yield back my time and
let them use their 5 minutes. I don't want to advantage them
over the Members of the Subcommittee.
Mr. Cannon. I can assure you that with the discretion of
the Chair, they will have as much opportunity to ask questions
as they would like.
And let me just add, Mr. Watt has been very gracious, he
has said very gracious things here. He had his speech lined up
I am absolutely certain before this hearing was called because
it was called and cancelled and then called again as an attempt
to let some of the Members of the Committee who are interested
in this do the hearing, and we appreciate your being available
and flexible on the part of the panel; but Mr. Watt is
thoroughly appropriate, it was not a matter of priorities in
his case, it was a matter of prior commitments.
Mr. Watt. I guess I should, as a clarifying factor, say
that I hope that whatever I said to those interns over there
has more impact on them than what this hearing has on this, but
I don't know that either.
Mr. Cannon. I will say, this has been a very interesting
hearing----
Mr. Watt. They always are.
Mr. Cannon. So with that, we would, by prior unanimous
consent, we have allowed Members of the full Committee who are
not Members of the Subcommittee the opportunity to participate.
And so Ms. Jackson Lee, if you are interested, you are
recognized for 5 minutes.
Ms. Jackson Lee. Mr. Chairman, let me thank you and Mr.
Watt for your graciousness and your willingness to provide an
opportunity and a forum for what I think is particularly
instructive this morning.
Allow me also to thank all of the witnesses, and to express
my appreciation for the detail and the respect in which you are
offering your testimony this morning.
I believe that, short of this being a legislative hearing
in the waning hours of the 109th Congress, frankly, we are
looking at a situation that begs for legislative relief.
Mr. Weinberg, let me acknowledge you and thank you for your
presence here, and offer my concern and expression of concern
for you and your wife. And to say that we are not in a mode of
acrimonious one-upsmanship. Frankly, I believe that there are
many of us who are on this panel who could battle anyone in our
commitment to the existence of unions and your right to exist
and the prerogatives that you have and the value that you have.
We realize that the athletic unions have modelled after
some of the more senior unions, and we are gratified for your
existence, and I know that players in years past have been
gratified as well.
But if anyone thinks--and I am delighted that Ranking
Member Watt raised the question of the nexus, and the nexus has
to do with the overall jurisdiction of the Judiciary Committee
in ensuring, if you will, the separation, like the fingers on
the hand, the whole issue of antitrust and monopolistic
approaches. And unfortunately, athletic leagues have fallen
into or could be compared to monopolies. You can't go play
football on the golf course, you might, but you would get
thrown out I would imagine by some good golfers--and Mr.
Arrington, you may be a good golfer, many football players are.
But it is a situation of not being able to go anywhere else to,
in essence, exercise your profession.
And as I listen to you, Mr. Arrington, I see a budding
lawyer coming up, so your attention to details is one that I
appreciate.
Mr. Watt. Would the gentlelady yield just for a
clarification, and then I will ask unanimous consent to give
her the time back that I take from her.
Ms. Jackson Lee. I would be happy to yield.
Mr. Cannon. Without objection, so ordered.
Mr. Watt. I just want to be clear that I never questioned
the nexus, I question the timing. If the Judiciary Committee
intervened in every case in which there was a nexus between
what is going on in the courts or in the arbitration process,
or otherwise, it wouldn't be about nexus, it would be about
timing. There are hundreds of people who are being denied
Social Security benefits, this benefit, that benefit in a
process that is out there. If we took time, as a Judiciary
Committee, to intervene ourselves in each one of those cases,
there wouldn't be a nexus to any one of them.
The timing of it is the question that I have questioned,
and that I have raised. So I just wanted to clarify that. And I
will ask that this time not be counted against her time,
please.
Mr. Cannon. Without objection, we will extend the
gentlelady's time by 2 minutes.
Ms. Jackson Lee. I thank the distinguished Chairman and I
thank the Ranking Member. And the Ranking Member makes a very,
very good point, and I intend in my questioning to answer that.
Because I don't view this as a scattering of cases of which we
might intervene, and he is absolutely right, we cannot use the
resources for that.
But let me briefly say a pointed point that Mr. Arrington
made, and I would like to pose some questions very quickly. And
that is that it was a flurry of the last minute negotiations as
relates to your 6.5 million, and as I understand, Mr. Schaffer,
who represented the Redskins, had made a commitment to Mr.
Poston that that 6.5 million would ultimately be put in. And I
think if there is an element of failure to you, it would
certainly be that your agent was asleep and didn't even raise
the point. And I understand that you are comfortable that that
did not happen.
And I am going to pose a question, but I would like to
pursue both Mr. Friedman and Mr. Berthelsen. What I believe the
line of questioning of Mr. Delahunt was--and it doesn't seem to
be received--is that we are not commenting on the prowess, the
excellence and the integrity of the existing arbitrator; but
what we are saying is, is that as antitrust can get
monopolistic, there is a hand in glove, and my fear is that
there is a hand-in-glove relationship between the NFL and the
NFLPA. My question is, would you not be comfortable with
adhering to the American Arbitration Association rules and
regulations in terms of establishing who would be an arbitrator
in these situations?
Mr. Berthelsen. Our regulations specify that those rules do
apply to our arbitration hearings.
Ms. Jackson Lee. Mr. Friedman.
Mr. Berthelsen. Those rules also state that whoever the
parties have agreed to select as the arbitrator by contract
must be the arbitrator in the case, and that is what happens in
our situation.
Ms. Jackson Lee. My time is short.
Mr. Friedman, how to you contravene that? How do you relate
to the fact that maybe a more adherence to the American
Arbitration Association which creates an atmosphere that is
neutral and impartial and unbiased?
Mr. Friedman. Well, that would solve the problem.
Ms. Jackson Lee. He suggests that he is following the rule.
Mr. Friedman. They are not. The rule says that they have to
follow the procedures for arbitration. It suggests that they
have to follow the procedures at a particular hearing or at the
particular process. It doesn't say that they have to use the
procedure to pick the arbitrator. In fact, the regulations say
that the NFL will pick the neutral outside arbitrator, and the
NFL continues to pick Roger Kaplan for every arbitration over
the last 13 years.
Ms. Jackson Lee. And there lies the hand-in-glove scenario.
Mr. Friedman. That is the problem.
Ms. Jackson Lee. What you are saying is you adhere
completely to the American Arbitration Association, which might
be a legislative fix, which might then make it more
transparent, neutral and fair.
Let me ask Mr. Arrington. I am literally shocked at some of
what you have said because you would expect you to be a
completely--an adversary in this instance; you lost $6.5
million. But I think you pointed out that you saw that
everybody was trying to act in good faith, even you, you went
to a table to sign a document when you went to a location or
knew you were going to play a game.
Mr. Arrington. That is correct.
Ms. Jackson Lee. So you left Mr. Poston operating--and
again, I don't want to focus on one particular fact situation--
Mr. Weinberg has a fact situation, but it points to the need
for correcting this hand-in-glove relationship that this system
has. You thought they were working on your behalf?
Mr. Arrington. Yes.
Ms. Jackson Lee. Then when we came to the point of trying
to assess whether Mr. Poston or Mr. X or Mr. Y had been
effective----
Mr. Arrington. That is correct.
Ms. Jackson Lee. You would have liked an opportunity where
all can be heard in this arbitration process; is that right?
Mr. Arrington. That is correct. And also, Mr. Berthelsen
referred to the fact that I am speaking purely off of feeling
and not off of facts, it is inaccurate. That is not an accurate
statement from Mr. Berthelsen. Because I firsthand experienced
not being able to be able to be a part of a hearing that was
held in Indianapolis. So there was no cross-examination. Carl
Poston was not allowed to attend this hearing. So it is not
strictly feeling that I am speaking on; there are some facts
involved with the things that I am saying.
With that being said, I am not saying that, you know, Carl
Poston, you know, don't go through the process with him. I
didn't have a problem and different things like that. I said
merely as what is being stated today, that just make sure that
the process is fair, because in that situation--you know, it is
okay to say well, we do have that in our system, we do go
through arbitration the way Mr. Berthelsen is saying. And if
those things are in there, that is fine, but if they are not
being exercised, then what good are they?
Mr. Cannon. The gentlelady's time is expired.
I ask unanimous consent to just ask one question to clarify
the record. Hearing no objection.
Mr. Berthelsen, do both parties have a right to object or
to choose an arbitrator, or does the NFLPA choose the
arbitrator and impose that on the negotiations?
Mr. Berthelsen. The regulations state that the NFLPA
chooses the arbitrator. I think there is some confusion here
because Mr. Arrington referred to a hearing, where he said he
wasn't allowed to attend. The hearing hasn't taken place in
this case yet. He is referring to a committee of people,
players, fellow players who propose discipline in a meeting
among themselves, discipline which, on the average, is reduced
or vacated much more often by the arbitrator than it is upheld.
The arbitrator is not a rubber stamp.
Mr. Cannon. Thank you for that distinction. But as to the
question of the arbitrator, I thought you said earlier that the
national rules of arbitration apply and therefore there is some
choice, but I take it there is no choice as to the arbitrator--
for the players, it is only the choice of the NFLPA; is that
correct?
Mr. Berthelsen. I am referring to the rules of the American
Arbitration Association, which is the subject of the question.
The AAA has different sets of rules for different kinds of
situations. We use the labor arbitration rules. Those rules
state that if the parties in the case have agreed to a
selection process for an arbitrator, that agreement is to be
enforced. When an agent applies to become an agent of the
NFLPA, which legally they are, this is a regulatory system,
they agree that their application becomes an agreement with the
NFLPA to the regulations as they state. And that is the
agreement of the----
Mr. Cannon. I think there is some heavy handedness in the
concerns raised by Mr. Delahunt, who is not here, but I
appreciate that clarification and how that works.
Ms. Jackson Lee. Just one quick one on your clarification.
Mr. Cannon. Certainly.
Ms. Jackson Lee. In that process that they sign onto, do
they then commit themselves not to be able to subpoena or
discover witnesses?
Mr. Berthelsen. Absolutely not. There are subpoenas issued
in virtually every case. For some unknown reason, Mr. Poston
has chosen not to use that. But I get subpoenas signed by the
arbitrator. Mr. Weinberg's counsel, his prior counsel, who
hasn't pursued his appeal on his disciplinary case, sent me at
least four subpoenas, one of which I filed a motion to limit,
to quash.
We provide documents all the time. And there is, again, it
gets back to my frustration with the limited time we have that
I am not able to correct what I think is a lot of inaccurate
information.
Mr. Cannon. We do hope that you note what is inaccurate and
just inform us. This is not a heavy handed thing, we are just
trying to figure out what is going on.
Mr. Meehan, did you have some questions?
Mr. Meehan. Yes.
Mr. Cannon. The gentleman from Massachusetts is recognized
for 5 minutes.
Mr. Meehan. Thank you, Mr. Chairman.
And I don't know any of the parties involved, my interest
is basically I follow the NFL, so I am interested in this. And
I have to say, your testimony was excellent.
When you were talking about the hustle and bustle of
negotiating this contract, and you mentioned preparing for a
game in Philadelphia----
Mr. Arrington. It was at home, it was here.
Mr. Meehan. Against Philadelphia.
Mr. Arrington. Yes.
Mr. Meehan. And then you mentioned other parts where you
were at the Super Bowl orpreparing for the Pro Bowl----
Mr. Arrington. That is correct.
Mr. Meehan. And I couldn't help but think that one of the
reasons why agents have strict rules is because most players
are in exactly your position. Preparing for an NFL game is a
complicated thing, it requires full attention. Players are
young, in some cases you--although I wouldn't say you are
inexperienced now, you do very well, and you should think about
running for Congress 1 day--but players really need to be
protected, and that is one of the reasons that there are the
regulations that there are.
And I always worry about players being taken advantage of
by agents, and I think that is one of the things that I always,
as a fan, want to see is protected. There are times when
players negotiate their own contracts, and usually they could
have made more money if they had somebody else negotiating for
them. But in any event, I admire your loyalty to your agent as
well.
And Mr. Berthelsen, it is interesting because in this other
case, Mr. Steve Weinberg, there were 15 players that testified
or wanted to testify on behalf of him. Should the fact that a
player doesn't blame his agent for negligence or malfeasance in
representing a player affect whether or not there is a decision
to discipline that player? And why or why not?
Mr. Berthelsen. Any individual player who is a client of
the agent, if he had a veto power, the only agents we could
ever discipline would be those agents who have no clients.
Players are very loyal people. I do arbitrations for players,
that is what I spend most of my time at, and I do a good job
for them, I think, but if I made a big mistake in a case, in an
arbitration and I lost it, that player may well think that I am
still the greatest guy in the world, but Gene Upshaw looks at
the mistake I make, and if it is serious enough, he is going to
say you are not going to do any more cases for the next year or
somebody else is going to do them because he has a
responsibility to the other players.
And that is why we say we need a system where we have a
committee of players who have no involvement in the particular
situation to assess it.
But one of the biggest misconceptions, inaccuracies of this
case, what has been said today, what has been said otherwise,
has been that there was a deadline that day for LaVar's
contract, that therefore there had to be a leap of faith taken
and oral representations had to be accepted. If Mr. Poston had
called us, if he would have looked at the collective bargaining
agreement we had, he would have seen there was no deadline that
day. Anybody in the NFL knows that day was not a deadline. The
next day was a deadline of sorts because the rule in question
said the contract had to be done before the last game of the
season. The last game of the season for Mr. Arrington was more
than 24 hours after these things were being said.
Now, we never said that his agent had to be here in
Washington with him; we recognize that this happens all the
time, it is done by fax machine. But what the evidence in the
case will show is that there was a 3\1/2\ hour period,
beginning with the supposed deadline of 4 o'clock that Friday
and ending almost 7 p.m. That night, where there were numerous
exchanges of faxes between the Redskins and Mr. Poston's
office, and on four separate occasions the very page in which
the $6.5 million should have gone and the page where Mr. Poston
said it should by putting something in the margin, he saw it 3
or 4 times----
Mr. Meehan. How does the collective bargaining agreement
between the NFL and the NFL Players Association, how does that
impact the rules that we are discussing?
Mr. Berthelsen. It has more impact on what an agent does
than anything.
Mr. Meehan. How though? You just negotiated a new contract
with the NFL, how does that relate to rules?
Mr. Berthelsen. Well, the basic elements of the deal are
the players get a percentage of the gross revenues, about 60
percent of them. We take a very generous benefit package and we
subtract it from that, and the rest of it is left over for
salaries, and there is a cap. There are certain exceptions, a
lot of complex rules. We have deadlines for contracts to be
done. In this case, we have a rule that says that in order to
renegotiate a contract by the end of the season, it must be
done by the last regular season game. Literally that would mean
they could be negotiating this contract in the fourth quarter.
But an agent is expected to know that collective bargaining
agreement; more than any other obligation, that is the one that
is most paramount. And we have seminars with the agents every
year where we emphasize the importance of the rules, and
emphasize and reemphasize the importance of making sure that
what you get for player negotiations is in the contract.
Mr. Meehan. This will be the last question. Let me ask you,
has this arbitration system that we are talking about been
challenged in court? I mean, certainly there must be cases? Are
there cases, how many are there?
Mr. Berthelsen. Yes. Mr. Poston challenged it twice and he
lost on both occasions, once in the Southern District of New
York. Mr. Karcher said there is a case still pending, well, Mr.
Poston's lawyer disagrees with him because he said that case
went away when they lost their injunctive effort. The court in
New York ruled against Mr. Poston. He tried to get an
injunction based on the impartiality of the procedure, the
judge rejected his claim saying that he had no likelihood of
success on the merits. And that is a dispositive ruling of the
court.
He tried, when he was disciplined the last time, when the
discipline was reduced by the arbitrator, Mr. Kaplan--in fact,
it was reduced by 75 percent--he went into court before Judge
Cacheris in Virginia, argued everything that he is arguing here
today, and more, and Judge Cacheris ruled that our system was
legal, that Mr. Kaplan as an arbitrator was someone that he had
agreed to to arbitrate disputes, and he said in his decision
that Mr. Kaplan was a regular arbitrator who had been accepted
in other sports. But we have had a case in the District of
Columbia that has blessed the system, one in Virginia, one in
the Southern District of New York. We have had one in Los
Angeles in the last year and a half, where Judge Lau in the
Dave Dunn case said basically the same thing.
We are batting a thousand when it comes to challenges in
court. There haven't been many of them. And they have basically
been two by Mr. Poston, one by Tank Black and one by David
Dunn, but all people who had been disciplined and lost on prior
occasions.
Mr. Cannon. The gentleman's time is expired.
The gentlelady from Texas would like to ask a couple more
questions, and so I ask unanimous consent that she be granted 2
minutes for those questions. And before you start that, without
objection, Mr. Meehan, did you have more questions?
Mr. Meehan. Maybe afterwards. I mean, I could talk for an
hour on this. This is fascinating.
Mr. Watt. We hope you won't.
Mr. Cannon. Maybe you can submit those in writing or
something like that.
Ms. Jackson Lee. I am with Marty Meehan, I could talk for 3
hours on this.
Mr. Meehan. The real question is whether Mr. Poston could
have gotten Ty Lauder re-signed with New England.
Ms. Jackson Lee. I hope when we leave this hearing--and I
thank the distinguished gentleman from Massachusetts, my good
friend, for his line of questioning--really will not be on A or
B agent. I think the crux of this has to be how do we make this
system work. And we have already found an Achilles Heel that I
hope the NFLPA will adhere to and listen, even before
legislative response may be pursued, and that is, that you have
a system, yes, that agents buy into which says that you select
the arbitrator, but who wouldn't buy into it because the only
way you can work, you are a designee of the NFLPA, you can't
work without getting that authority. I would agree to anything,
there is a lot of money in this. So it is a patently built-in
unfair system, and there is a hand in glove.
When you say that six or seven individuals dish out
punishment, those six or seven individuals are--I respect them
greatly, but it is my sense that they are hand in glove to a
certain extent. And reason why I say that is we have been
getting calls from the Retired Players Association about
conflicts in their provisions that they have had.
Let me just quickly say this; to answer the question about
Mr. Poston in particular, it was when he contacted Congress
that he was immediately suspended, because those particular
scheduled days of meetings could have continued on so he would
have had his day in court.
Mr. Karcher, could I just simply ask you the question, what
procedural safeguards should be required of, A, to ensure that
the decertification proceeding are fundamentally fair to
agents, players and NFLPA? And do we need to have discovery and
subpoena powers that can be enforced and that can ultimately
stand up in court? Because I don't understand why Mr.
Weinberg's 15 players were not allowed to testify. Why couldn't
Mr. Weinberg have the ability for discovery, calling his 15
players?
Mr. Karcher. It is a complicated question, I think; it
would take me a long time to answer it.
Ms. Jackson Lee. You can just say do they need discovery
and subpoena powers?
Mr. Karcher. As I said in the initial statement, there are
a lot of points here to the overall entire system that just
needs to be looked at. I would say that Mr. Meehan made a great
point that there is a lot of agent misconduct going on in this
business. However--and I have written about agent misconduct,
it takes place. And the union must look after the best
interests of the players. However--and I have written on this
issue--that the union, under the labor laws, has the power, if
they wanted to, to start representing players, make it an
option to have players be represented by the union, make it an
option that they could. But they have chosen a system in which
there are third-party agents involved. Now, if that is the
system that is chosen, the question is, under that situation
when they are not employees of the union, they are not under
their control, they are not looking after him like Mr.
Berthelsen said when he is working for the NFLPA, and they can
see what he is doing on a daily basis, okay, there needs to be
some sort of, I would think, minimum due process and fairness
in a system when you have third-party agents, and that is a
system that you want to have.
And I guess the question would be, why, in my mind, why is
it so difficult to have a system of, like we talked about
earlier, somebody had proposed where you have people strike
arbitrators from a list and ultimately agree on one arbitrator.
I mean, that is a typical situation in society where parties in
equal bargaining agree to a contract that says that. The
problem that you have in this situation, and it is unique, is
that you have a third-party system where in order to represent
players, you must agree to sign on the dotted line, and you
must consent to that with no negotiation powers.
Ms. Jackson Lee. Thank you very much. I need to get to Mr.
Friedman. And I would like to conclude, Mr. Arrington, on this
whole idea of having witnesses.
Mr. Friedman. Ms. Jackson Lee, the answer to your question
is yes. If the goal of the arbitration process is to get to the
truth and have these grievances heard by an impartial
arbitrator----
Ms. Jackson Lee. That is the key.
Mr. Friedman. That is the key, that is the goal. Procedural
safeguards, due process rights have to be implemented. You have
to have discovery, you have to have an honest and fair exchange
of documents. In the court system, the discovery is liberal,
the discovery is broad, there is no harm in exchanging those
documents. You have to get sworn statements.
Ms. Jackson Lee. But you wouldn't mind it being more
restrained on the arbitration system and as well modifying what
the agent sign; we want to protect players, but modifying that
agreement that says we select the arbitrator?
Mr. Friedman. Sure.
Ms. Jackson Lee. Mr. Arrington, with your daily dealings
with agents----
Mr. Cannon. Let me ask unanimous consent that the
gentlelady be granted one more minute. Without objection, so
ordered.
Ms. Jackson Lee. I thank the distinguished Chairman and the
distinguished Ranking Member.
Just in the course of your experience with the NFL and with
the Players Union--which I know has many meritorious assets,
many good things that it does--in your back and forth, your
time with the Redskins and the 6.5 million, I know it came into
arbitration, but just the idea of being able to call witnesses,
both you and your agent and the Players Union or however it is,
the Redskins, would that have been a fairer system?
Mr. Arrington. Well, I think, as has been alluded to, I
think if a neutral arbitrator would have been able to have been
brought on board, I don't have a problem going through the just
process. It is not about trying to beat anything unlawfully or
anything like that, or under the table, it is just be fair. You
know, this has been I think 3 years now since this has
happened, and to me the truth still remains the same. That is
why I don't have to stay here and keep referring to my notes or
different things that--to me, you know, if you are trying to
cover things up, you ought to keep trying to go through pulling
out facts and different things to try and justify what it is
that you are saying. And I don't need to do that because I know
exactly what happened. So all I ask is just to have a fair
process, that is it, nothing more, nothing less, just a fair
process.
Ms. Jackson Lee. Mr. Berthelsen, I think you have heard
everyone at the table say they just want a fair process. Why
wouldn't the NFLPA adhere to the American arbitration system
and reform its rules to allow the consensus of agent and
opponent--or whoever it is--to have a consensus of who the
arbitrator would be?
Mr. Berthelsen. We do conform to that system. We do have
hearings where there are witnesses and cross-examination----
Ms. Jackson Lee. Do you have a process where an agent can
select as well? Thank you, Mr. Chairman.
Mr. Meehan. Can I ask one final question?
Mr. Cannon. I ask unanimous consent that the gentleman from
Massachusetts be recognized for 1 minute. Without objection, so
ordered.
Mr. Meehan. I want to know how the rehab is coming and will
you be ready to go next year?
Mr. Arrington. Hopefully I will.
Mr. Watt. Can I ask unanimous consent for 1 minute, please?
Mr. Cannon. Without objection, so ordered. The gentleman is
recognized for 1 minute.
Mr. Watt. Just to say a word to Mr. Berthelsen. As strongly
as I have expressed my concern about the timing of this
hearing, let me say this in public as I would say it to you in
private if you asked me to. I think the timing of this hearing
is terrible, but I hope that you are listening to what is being
said. There is a high degree of interest--not always uniformly
applied by this Committee--to fairness. And it is quite
possible that the gentlelady who is being so aggressive about
this may be sitting in this chair next year, where the Chairman
is sitting. So I hope you have heard this concern about
fairness, and I hope you will communicate it to whoever it is
you are representing, the Players Association, the union,
whoever it is in this mix.
I personally am not a big fan of arbitration, period, but
that is not what had hearing is about. I am not a big fan of
injecting ourselves into cases on a case-by-case basis, but I
hope you get the broader message here about fairness, and I
hope you will talk to your clients about it, because this may
be one of those situations that it would be better for you all
to resolve and define fairness than have this Committee resolve
it and define fairness. I yield back the rest of my time.
Mr. Cannon. Let me associate myself with Mr. Watt's words.
And I was going to say something very similar to that, and we
will just let it be said by Mr. Watt.
Before we adjourn, let me also just point out that this is
the--we don't often use this hearing room, this is the first
room that I had a hearing in. And as a young green freshman,
Mr. Watt showed me great kindness here. So it is a matter of
great warmth to be here and chair this as the last hearing that
I chair. It may well be that Ms. Jackson Lee takes the gavel of
this Committee, and I look forward to working with her. We have
some wonderfully important issues, especially those that
preceded this hearing, that I look forward to working with her
on.
But I just did want to say that it has been a great
pleasure to work with Mr. Watt. We have had some hard
conflicts, but all--first of all, I cherish audible conflicts.
People can yell at each other, that is not fun at all, but Mr.
Watt is a worthy opponent. And on a couple of occasions over
the past couple of years we have crossed swords, but we have
had a very gracious, very thoughtful period together here, and
it has been my honor and my privilege and my pleasure to have
worked with you, Mr. Watt, over this period of time.
Let me also say that staff has been wonderful, both
majority staff--and Stephanie, you have been wonderful in
awkward difficult situations. As my staff begins to see itself
being paired down and working in your awkward position, we want
you to know that you have been a great model, and I appreciate
the many, many hours and the many problems that we have
resolved together.
This has been a great 4 years as a Committee, and we have
done so many wonderful things. And whoever the Chair is, Mrs.
Jackson Lee, if that is you, we look forward to that same kind
of relationship. I can assure you that I will try to emulate,
although poorly, the model of Mr. Watt. And I hope that we can
actually make some progress on some of these issues that are
not partisan. This is not a partisan issue today. This is not a
Democrat or Republican issue, this is not union, non-union,
this is about fairness. And I will say the hearing was much
more interesting than I expected it to be.
And again, I want to associate myself with what Mr. Watts
said about why we are here and what ought to happen out of this
hearing.
And with that, without objection, we will adjourn.
Ms. Jackson Lee. I echo and yield and thank both of you for
your kindness. Thank you very much.
Mr. Cannon. Adjourned.
[Whereupon, at 12:37 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
Prepared Statement of the Honorable Sheila Jackson Lee, a
Representative in Congress from the State of Texas, and Member,
Committee on the Judiciary
I thank the gentleman for yielding. Let me also thank you, Chairman
Cannon for holding this important and informative hearing. I also thank
the Ranking Member, Mr. Watt, for his cooperation. And I thank all the
members of the subcommittee for allowing me to join you today.
The purpose of the hearing is to examine the arbitration practices
of the National Football League Players Association (NFLPA). I am
pleased to extend a warm welcome to each of the witnesses who will help
us obtain a better understanding of those practices and how well or
poorly they are serving the intended purpose of arbitration. The
witnesses are:
<bullet> Mr. LaVar Arrington Arrington, an All-Pro linebacker
for the Washington Redskins of the NFL and now a player with
the New York Giants;
<bullet> Mr. Richard Berthelsen, the General Counsel of the
NFLPA;
<bullet> Professor Richard Karcher of the Florida Coastal
School of Law and an expert in the field of sports law; and
<bullet> Mr. Larry Friedman, Managing Director of the law firm
of Friedman and Fieger, LLP, and an attorney who has
represented NFLPA certified player agents in litigation against
the NFLPA.
The Collective Bargaining Agreement (CBA) between the NFL and the
union for its professional football players (NFLPA) recognizes the
NFLPA as the exclusive bargaining agent. The CBA also gives the NFLPA
the authority to regulate and discipline contract agents who represent
NFL players in contract negotiations with respective franchises in the
NFL. Under the CBA only agents certified by the NFLPA may negotiate
player contracts.
As I stated, the collective bargaining agreement authorizes the
NFLPA to certify and discipline contract agents. But the NFLPA may not
decertify an agent--an act akin to disbarring an attorney--without
permitting the agent an opportunity to contest the proposed
decertification to ``a neutral arbitrator pursuant to its agent
regulation system.''
One would think that a sanction as drastic, extreme, and draconian
as decertification would trigger a legal process with all the
procedural safeguards necessary to prevent an erroneous deprivation of
a property interest and deter arbitrary or capricious decision-making.
I think all of us here would simply assume that before the NFLPA
could decertify an agent and deprive him or her of the right to make a
living in his or her chosen profession it would be required to afford
the agent procedural due process, which, at a minimum, requires notice
and a meaningful opportunity to be heard before an impartial
decisionmaker.
One would think that the party seeking to deprive the agent of his
license would bear the burden of proof, production, and persuasion
which must be established by at least clear and convincing evidence
introduced in accordance with established rules of evidence. And, of
course, we would expect that the accused would be afforded the right of
confrontation and compulsory process for obtaining witnesses in his
favor.
But then I learned of a disturbing case involving Mr. Carl Poston,
which indicates that these assumptions may be unwarranted when it comes
to the arbitration processing involving the decertification of NFLPA
contract agents. Mr. Poston is the contract agent for LaVar Arrington
Arrington, one of the witnesses appearing before us today. He is also
one of my constituents and the subject of an NFLPA decertification
arbitration proceeding. Although the merits of that proceeding are not
before the subcommittee, I think it useful to describe the factual
background which prompted the NFLPA to institute decertification
proceedings against Mr. Poston.
about carl poston
Carl Poston has been a professional sports agent for more than 17
years. The father of three children, he was drawn to the business out
of a desire to help professional athletes, particular football players,
make good decisions concerning their careers, maximize their income
during their playing years, and plan for a safe and secure post-playing
career. Mr. Poston also holds four degrees--a mathematics degree, a law
degree, a LLM (an advance law degree in taxation) and an MBA. He has
developed a reputation as a smart and aggressive agent, who fights hard
for his players, and zealously represents their interests.
Since 2000, Mr. Poston has represented LaVar Arrington, the number
two overall pick in 2000 NFL draft. He has tremendous respect for LaVar
Arrington and at all times has looked out for his interest and
represented LaVar Arrington with undivided loyalty. There are no
allegations that Mr. Poston did anything to the contrary.
about the lavar arrington contract negotiation
In 2000, Mr. Poston was able to achieve an outstanding seven year
contract for LaVar Arrington worth more than $50 million with several
escalator provisions which could yield LaVar Arrington even more money
and higher future salary cap values were created which placed the team
under pressure for future salary cap renegotiation. Although LaVar
Arrington was the second overall pick, his contract was the best
contract in the entire draft class. Because of the size of LaVar
Arrington's contract, and the various escalators, LaVar Arrington's
contract had a major impact on the Redskins salary cap. On several
occasions, LaVar Arrington, represented by Mr. Poston, restructured his
contract so that the Redskins could make salary cap room and increase
their cash flow to sign other players and strengthen the team.
In late fall of 2003, Dan Snyder, the Redskins owner, called Mr.
Poston and asked to restructure LaVar Arrington's contract--again.
Snyder explained that he wanted to sign additional players, and that in
order to do so, the Redskins needed to restructure LaVar Arrington's
contract, and wanted to sign him to a long term contract making LaVar
Arrington a ``lifetime'' Redskin. Snyder told Mr. Poston he would
receive a call from Eric Schaffer, whom had recently been hired to be
the salary cap manager for the Redskins. Mr. Poston called LaVar
Arrington and after the call, and the two discussed strategy on how to
approach the discussions with Schaffer.
On December 3 Schaffer met Mr. Poston in Houston and the two met
for several hours discussing the Redskins salary cap and cash flow
problems over the next few years and the impact LaVar Arrington had on
both the cash flow and the salary cap. Schaffer explained that the
Redskins wanted to stretch out the contract, make LaVar Arrington a
lifetime Redskin and that the new deal had to be done by December 26,
2003 to maximize the salary cap effect for the team. Schaffer's
proposal to Mr. Poston, however, was far short of the parameters that
Mr. Poston and LaVar Arrington established for such a long term
contract.
Over the next twenty three days extensive negotiations took place
that involved complex contractual issues. Despite these negotiations,
the parties remained extremely far apart and it appeared unlikely that
they would be able to reach a deal. As the December 26, 2003 deadline
approached, the negotiations grew more intense, and continued on
Christmas Eve and Christmas Day. The parties' positions grew closer,
but there was still no deal. On the morning of December 26, 2006, Mr.
Poston arrived at his office in Houston to make arrangements to fly to
Washington in case a deal was struck before 9:00 a.m. He received a
call from Schaffer, who refused a key demand in the negotiations--that
LaVar Arrington receive a 2006 roster bonus of $6.5 million payable in
2006. Without this key provision Poston took the deal off the table and
told Schaffer that they were out of time and the deal was dead.
In the early afternoon, however, Schaffer called Poston and advised
him that the Redskins would agree to both $6.5 million 2006 roster
bonuses. At this point it was too late in the day for Mr. Poston to fly
from Houston to Washington D.C. in time to make the deadline.
Mr. Poston called LaVar Arrington and told that the deal appeared
to be back on. Unable to fly to Washington at that point, Poston and
Schaffer worked over the telephone. Poston and Schaffer proceeded to
negotiate the final terns, and at approximately 1:30 p.m., reached a
deal. Schaffer promised to fax Mr. Poston the completed contract. Mr.
Poston spoke to LaVar Arrington, who was concerned that he could not
get to the Redskins' offices in time to sign. Mr. Poston told LaVar
Arrington to go directly to Schaffer at Redskins Park expecting
Schaffer to call Mr. Poston before LaVar Arrington signed the deal.
Despite this promise, Schaffer never sent the entire contract. He
called Mr. Poston and told him that the contact was taking longer than
expected, and he would fax pages as they were being finished.
Over the next several hours, Mr. Poston received portions of the
contact which contained various errors which Mr. Poston called Schaffer
to correct. Among the items that Mr. Poston observed were missing were
the second $6.5 million 2006 roster bonus payable in 2006 and the $11.3
million ``non exercise fee'' with respect to certain options contained
in the draft. Mr. Poston observed that the contract contained a 2006
roster bonus payable over three years, which was a sum of money that
they had agreed to in the contact in addition to the $6.5 million 2006
roster bonus payable in 2006.
Both roster bonuses were key in order to reach the 4-year total of
$27.5 million. The other roster bonus was money that the parties had
agreed to, but which Mr. Poston had agreed that Schaffer could
structure as he wished. Mr. Poston pointed out to Schaffer that the
non-exercise fee and the roster bonus were missing, and Schaffer
assured him that they were being included in the document.
Mr. Poston continued to wait for a complete and final contact to
arrive, and called several times but could not reach either LaVar
Arrington or Schaffer. Then, Schaffer finally took Mr. Poston's call.
In that call, Schaffer told Mr. Poston that LaVar Arrington had already
signed the contract and had left the office to check into the team
hotel. Mr. Poston complained that he still had not received the entire
contract. Mr. Poston told Schaffer that he should not have presented
the contract to LaVar Arrington without having sent it to Mr. Poston
first and then calling him so that Mr. Poston and LaVar Arrington could
go over the contract.
Although Schaffer's conduct in presenting the contract to LaVar
Arrington without having Mr. Poston's prior authorization was plainly
inappropriate, Schaffer told Mr. Poston that given the looming salary
cap deadline, he needed both LaVar Arrington's execution and Mr.
Poston's certification immediately. Schaffer advised Mr. Poston that
the second $6.5 Roster Bonus as well as the $11.3 had been added, and
asked that Mr. Poston send signed certification pages. Schaffer then
faxed to Mr. Poston the pages he needed Mr. Poston to initial and sign,
and Mr. Poston initialed and signed those pages and faxed them back.
Had Mr. Poston not done so, then, according to the Redskins, the entire
deal would have fallen apart since a major consideration was the
creation of salary cap room. Subsequently Mr. Poston has been advised
that Schaffer's statement that the deadline was December 26, 2003 was
incorrect and that the certification was not required to be submitted
until the next day, December 27, 2003.
Mr. Poston has said that he read all the drafts and partial draft
pages that Schaffer had sent him and commented on them, corrected
various mistakes, and indicated the second 2006 roster bonus and the
$113 million non-exercise fee were not included. But according to Mr.
Poston, he had little choice but to send back the certification as
Schaffer had insisted, because if he had not, the deal that LaVar
Arrington wanted and on which he had already signed off on, would have
fallen apart.
It was only after Mr. Poston had sent back the signature pages,
that Schaffer sent a full copy of the document. In the document that
Mr. Poston received from Schaffer he noticed that the signatures were
attached to a version that had the $11.3 million non exercise fee
interlined in handwriting, but had no interlineation for the second
$6.5 million roster bonus payable in 2006.
resolution of the arrington contract dispute
Mr. Poston attempted to rectify the problem, and called Schaffer
who refused to continue to speak to Mr. Poston without Redskins legal
counsel. Schaffer called back with counsel for the Redskins, who
claimed that the $6.5 million roster bonus payable in 2006 was not part
of the deal. This made absolutely no sense in light of the negotiations
between Mr. Poston and Schaffer, and was directly contrary to
Schaffer's assurances that second 2006 roster bonus was indeed in the
paperwork that LaVar Arrington had signed.
Mr. Poston informed LaVar Arrington of the Redskin's position and
also contacted the NFLPA to enlist its support and advice. Mr. Poston
also helped LaVar Arrington hire legal counsel to protect LaVar
Arrington's rights. On March 12, 2004, LaVar Arrington, through
counsel, filed a non-injury grievance against the Redskins asking for
(i) addition of the $6.5 million bonus and/or to (ii) void the
contract. In the grievance, LaVar Arrington pointed out:
The Redskins' delay in drafting the language, combined with the
deadline, created a situation where trust was paramount. The
deal could not occur--without trust--a trust predicated on
Arrington's desire to help the Redskins. The Redskins
controlled the contract language and the time to draft it. It
was not humanly possible for Poston to review the Redskins'
version of the contract, compare it on a word-by-word basis
with the agreement in principle, and advise Arrington by the
4:00 p.m. deadline. Poston and Arrington were required to trust
the Redskins to accurately memorialize their agreement.
On or about March 23, 2004, the NFLPA agreed to represent LaVar
Arrington in the matter and retained the law firm of Dewey Ballantine.
Mr. Poston had no involvement with the decision but he cooperated fully
with the Dewey Ballantine attorneys, meeting with them on two occasions
and providing them all information they requested, including his notes.
I am advised that Dewey Ballantine did not meet with LaVar
Arrington until shortly before his non-injury grievance arbitration was
scheduled to be heard. LaVar Arrington was not impressed with the
performance of his legal representatives, and after the hearing called
NFLPA President Gene Upshaw to complain. LaVar Arrington asked Mr.
Upshaw who had hired the Dewy Ballantine firm, asked how could they be
his lawyers if they had not even bothered to meet with him, the client,
until shortly before the arbitration. LaVar Arrington told Gene Upshaw
was going to hire his own attorney who could give him an objective view
and did so shortly thereafter.
After LaVar Arrington retained new counsel, the arbitration was
adjourned for the purpose of pursuing settlement negotiations. Through
the efforts of new counsel, a settlement was reached. Mr. Poston played
an important role in achieving this settlement, including arranging a
meeting with Redskins Coach Joe Gibbs to explain LaVar Arrington's
feelings concerning the situation. Coach Gibbs helped prevail on the
Redskins to reach an acceptable settlement with LaVar Arrington. The
settlement provided that no one did anything wrong or improper and
provided for a new contract for LaVar Arrington under which he could
obtain an additional $4.85 million under certain conditions, including
the right to void the contract if he made Pro Bowls in the next four
years unless the Redskins paid LaVar Arrington an additional $3.25
million. The settlement agreement provides:
``This Agreement shall not be construed as an admission of
liability or a finding of wrongdoing by any party.''
As LaVar Arrington has put it, ``[m]y grievance against the
Redskins has been settled on no-fault, win-win resolution.''
conclusion
Based on the foregoing, it is clear that Mr. Poston did nothing
wrong nor improper. So for me, two questions immediately come to the
fore: (1) why would the NFLPA would institute a decertification
proceeding against Mr. Poston; and (2) as the Chairman rightly
indicates, (a) whether the arbitration procedures employed by the NFLPA
are fair; (b) whether they ensure a neutral arbitrator; (c) whether
adequate opportunity for judicial review exists; and (d) whether the
procedures comport with the intent underlying the Federal Arbitration
Act and, if not, what might be a proper legislative response.
Mr. Chairman, let me thank you again for convening this hearing,
which I hope will be the first of several. The playing career of the
typical professional football, baseball, hockey, or basketball player
is less than ten years, at which time the athlete in most instances is
still under 35 years of age with a remaining working life of at least
30 years.
It is therefore important for Congress to understand whether these
professional athletes are being well prepared to lead productive lives
in the global economy at the conclusion of their playing careers. That
is why, in my view, it would be useful also to examine examination of
the effectiveness of the relationship between professional athletes,
the representatives that represent players in collective bargaining,
the sports agents who represent the individual interests of players,
and the professional sports team which employ them.
The Congress' paramount concern should be ensuring that the
financial and professional interests of professional athletes are being
well served by those who owe them a fiduciary duty of loyalty and care.
I believe that professional athletes who are poorly served by their
player representatives, agents, or the teams that employ them are much
more susceptible to temptations such as the false lure of performance
enhancing drugs.
I am looking forward to hearing from the witness and considering
their responses to the subcommittee's questions.
Thank you. I yield the balance of my time.
Prepared Statement of Carl Poston
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Letter submitted by the National Basketball Players Association (NBPA)
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Item entitled, ``NFLPA Regulations Governing Contract Advisors,''Letter
submitted by Richard Berthelsen, General Counsel, National Football
League Players Association (NFLPA), Washington, DC
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Letter submitted by Bernard Parrish
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