LOKEN, Circuit Judge.
In March 2011, members of the National Football League ("the NFL") — thirty-two professional football teams — commenced a lockout of players after bargaining to an impasse with the National Football League Players Association ("the NFLPA") over the terms of a new Collective Bargaining Agreement ("CBA"). In response, active NFL players filed a class action lawsuit in the District of Minnesota alleging violations of the federal antitrust laws and other claims (the "Brady" suit). Retired NFL players also sued the NFL and its teams, alleging antitrust violations (the "Eller I" suit). The district court consolidated the cases and ordered mediation. In August, active player representatives approved a tentative settlement of the Brady suit, the players re-designated the NFLPA as their collective bargaining agent, the NFL and the NFLPA signed a new CBA incorporating the settlement terms, the Brady plaintiffs dismissed their lawsuit, the lockout ended, and the 2011 NFL season commenced. The settlement as reflected in the new CBA included some $900 million in increased benefits for retired NFL players.
On September 13, 2011, Carl Eller and other retired NFL players filed this class action lawsuit (Eller II) against the NFLPA, its executive director, and certain Brady plaintiffs, asserting that defendants wrongfully barred retirees from the Brady plaintiffs' settlement negotiations, negotiated on retirees behalf without authority to do so, and ultimately agreed to a CBA with fewer benefits for retired players than they could have obtained for themselves. The district court
For the last forty years, labor relations in the NFL have been affected by the players' use of federal antitrust lawsuits in the District of Minnesota to enhance their position in collective bargaining with the NFL's member teams under the federal labor laws. The Supreme Court has long recognized that "the congressional policy favoring collective bargaining ... requires that some union-employer agreements be accorded a limited nonstatutory exemption from antitrust sanctions." Connell Constr. Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 622, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975).
The rules of this collective bargaining game changed significantly when a nearly unanimous Supreme Court held, overruling Mackey and subsequent lower federal court decisions, that the nonstatutory labor/antitrust exemption applies "to an agreement among several employers bargaining together to implement after [bargaining to an] impasse the terms of their last best good-faith wage offer." Brown v. Pro Football, Inc., 518 U.S. 231, 238, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). But despite this clarification, the scope of the nonstatutory exemption remained unsettled, so antitrust lawsuits such as the Brady and Eller I suits continued to be part of the labor relations landscape when a CBA between the NFL's member teams and the NFLPA expired and bargaining over a new CBA reached an impasse.
These historical realities are relevant to the issues raised by this appeal in two significant respects. First, the NFL in 2011 had a strong economic interest in avoiding future antitrust liability by resolving its labor relations impasse with the players through collective bargaining that resulted in an agreement protected by the nonstatutory exemption under the federal labor laws. Thus, as in prior years, the Brady lawsuit was settled and dismissed with a settlement that became the central part of a new CBA entered into after the NFLPA resumed its status as the players' certified collective bargaining representative. Cf. White v. NFL, 836 F.Supp. 1458, 1500-01 (D.Minn.1993), aff'd, 41 F.3d 402 (8th Cir.1994); White v. NFL, 822 F.Supp. at 1430-31. Second, the NFL's imperative need to resolve such disputes through collective bargaining put the retired players in a decidedly weaker position. Retirees are not "employees" within the meaning of the National Labor Relations Act. Therefore, they may not be joined with active players as members of the collective bargaining unit, and retiree benefits, while commonly bargained by labor unions representing current employees, are not mandatory subjects of collective bargaining. See Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 163-76, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971); Atwater v. NFLPA, 626 F.3d 1170, 1184-85 (11th Cir.2010).
Plaintiffs' detailed Eller II complaint alleged the following: In May 2008, the NFL opted out of the final two years of its 2006 CBA with the NFLPA, scheduled to expire in March 2011. The parties bargained to an impasse on March 11, 2011. That day, the NFLPA renounced its status as the players' collective bargaining agent and amended its bylaws to prohibit collective bargaining with the NFL. Tom Brady
On April 4, two NFL owners sent a letter to retired players advising that the NFLPA had "walked away from" the NFL's March 11 proposal. Plaintiffs allege that the terms of that proposal, as described in the letter, included improved benefits for former players which "would have amounted to at least $1.5 billion being allocated to retirees over the ten-year duration of any new CBA." All parties then attended mediation sessions in April and May, with the Eller I plaintiffs being the sole representatives of retired players. In separate sessions with the NFL, counsel for the Eller I plaintiffs made several offers and demands, including one offer that 2.5% of all League revenues be set aside for retired players. The NFL did not accept the proposals, but stated that "key aspects ... appeared both worthwhile and achievable." After May 16, the NFL also held several sessions with the Brady plaintiffs that neither the Eller I plaintiffs nor their counsel were allowed to attend.
By June, plaintiffs alleged, it had become "public knowledge" that the NFL and the NFLPA were negotiating issues related to the retired players. On July 13, the Eller I plaintiffs moved to amend their complaint to add claims that the NFLPA, its executive director, and the named Brady plaintiffs were improperly negotiating on behalf of retired players. At the urging of counsel for the Eller I plaintiffs, Magistrate Judge Boylan requested that the Eller I plaintiffs be allowed to participate in the Brady plaintiffs' negotiations; the request was refused. On July 19, the NFL's counsel met with counsel for the Eller I plaintiffs and advised that the NFL and the Brady plaintiffs had reached an agreement. The Eller I plaintiffs asked if they could negotiate retiree issues with the NFL. The NFL declined but described benefit improvements for retirees that would be part of an agreement between the NFL and the Brady plaintiffs.
On July 25, the Brady plaintiffs and the NFL agreed to settle the Brady lawsuit contingent on the active players reconstituting the NFLPA as their collective bargaining agent and the NFLPA and the NFL entering into a new CBA by a specified date, with minimum terms set forth in the settlement agreement. Those terms included benefit improvements for retired players having an estimated value of $900 million over the ten-year duration of the CBA, most notably a "Legacy Fund" providing additional benefits to players whose last credited season was prior to 1993. The NFL on behalf of its member teams and the NFLPA on behalf of its member players signed the 2011 CBA on August 4, 2011. The CBA explicitly stated, "this release does not cover any claims of any retired player."
The Eller I plaintiffs voluntarily dismissed their suit against the NFL without prejudice before the district court ruled on their motion to amend. On September 13, 2011, twenty-eight retired players, including many members of the Pro Football Hall of Fame, filed this class action suit seeking declaratory relief and damages for intentional interference with prospective economic advantage and breach of fiduciary duty. They appeal only the dismissal of their claims under Minnesota law for intentional
Minnesota courts have long-recognized the tort of intentional interference with prospective economic advantage. See Wild v. Rarig, 302 Minn. 419, 234 N.W.2d 775, 790-93 & n. 16 (1975), appeal dismissed and cert. denied, 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307 (1976); Witte Transp. Co. v. Murphy Motor Freight Lines, Inc. 291 Minn. 461, 193 N.W.2d 148, 151 (1971), citing Tuttle v. Buck, 107 Minn. 145, 119 N.W. 946 (1909); Gieseke v. IDCA, Inc., 826 N.W.2d 816, 825-26 (Minn. App.2013). When the alleged interference is with prospective contractual relations, as in this case, the Supreme Court of Minnesota has adopted § 766B of the Restatement (Second) of Torts (1979):
(quoted in United Wild Rice, Inc. v. Nelson, 313 N.W.2d 628, 632-33 (Minn.1982)). In applying this standard, Minnesota courts require that plaintiff prove a reasonable expectation of a prospective economic advantage or contractual relation. See Wild, 234 N.W.2d at 790 n. 16; Gieseke, 826 N.W.2d at 827-28; Harbor Broadcasting, Inc. v. Boundary Waters Broadcasters, Inc., 636 N.W.2d 560, 569 (Minn.App.2001).
Plaintiffs contend that defendants improperly interfered with their prospective economic advantage by locking them out of mediation negotiations with the NFL and then negotiating retired player benefits without authorization, resulting in fewer benefits for retired players than they could have obtained if allowed to negotiate with the NFL for themselves. The district court concluded that plaintiffs failed to state a plausible claim for relief because retired players "could not reasonably have expected to enter into a contract based on their own negotiating power as opposed to that of the active players," and because "no reasonable jury could find the purported interference here to be `improper.'" Eller v. NFL, No. 11-cv-00639, Order at 13, 15 (D.Minn. May 28, 2012). We agree with both grounds of dismissal.
As explained in Part I of this opinion, the problems with this theory are (i) the NFL's desire to negotiate player benefits in a CBA protected by the nonstatutory labor antitrust exemption, and (ii) the retired players' lack of standing under the federal labor laws to negotiate a protected CBA on their own. The NFL's April 4
Plaintiffs allege that counsel for the Eller I plaintiffs "repeatedly" told the NFL during the mediation sessions that "any settlement ... with former NFL players would occur through an independent organization devoted to the interests of such players that was separate from the NFLPA." But retired players are not members of a collective bargaining unit, and therefore any separate settlement of this kind would not have resulted in a CBA protected by the nonstatutory labor exemption to the antitrust laws. Thus, on July 19, the NFL predictably refused to negotiate further with the Eller I plaintiffs after negotiating a tentative new CBA with the Brady plaintiffs that would include substantially increased benefits for retired players.
Given the undisputed history of labor relations and collective bargaining involving the NFL and its players, the factual allegations in plaintiffs lengthy complaint — which we accept as true — provide no plausible reason to believe that the NFL, having agreed with the active players to provide more than $900 million in increased contractual benefits for retired players in a new CBA, would be willing to separately negotiate even greater benefits directly with the retired player class, unless the Eller I class action claims posed a significant threat of even greater antitrust liability.
The first fatal flaw in this theory is plaintiffs' assumption that it is improper for current employees to bargain for increased benefits for retired former employees unless expressly authorized to do so by the retirees. To the contrary, though retired employees are not members of a collective bargaining unit under the federal labor laws, "bargaining over pensioners' rights has become an established industrial practice." Allied Chem. Workers, 404 U.S. at 175, 92 S.Ct. 383; see, e.g., Maytag Corp. v. Int'l Union, UAW, 687 F.3d 1076, 1084-85 (8th Cir. 2012); John Morrell & Co. v. United Food & Commercial Workers, 37 F.3d 1302, 1304-07 (8th Cir.1994), cert. denied, 515 U.S. 1105, 115 S.Ct. 2251, 132 L.Ed.2d 259 (1995). Thus, the Brady plaintiffs did not interfere with retired players' prospective contractual relations by settling the Brady antitrust suit with a new CBA between the NFL and the NFLPA that included increased retiree benefits. Under the federal labor laws, the retired players could not negotiate their own CBA, so the 2011 CBA did not interfere with any prospective labor agreement. And the Brady settlement expressly provided that it did not affect the retirees' pending antitrust claims in Eller I, leaving retired players free to exploit whatever additional bargaining leverage that lawsuit provided.
The second fatal flaw in this theory is that Minnesota law has long recognized a "special privilege for competitors" set forth in § 768 of the Restatement (Second) or Torts. Under this "privilege," a competitor who intentionally causes a third person not to enter into a prospective contractual relation with the defendant's competitor does not tortiously interfere (i) if the relation concerns a matter involved in the competition, (ii) the defendant "does not employ wrongful means" or unlawfully restrain trade, and (iii) "his purpose is at least in part to advance his interest in competing with the other." United Wild Rice, 313 N.W.2d at 633, quoting § 768. "Wrongful means" as used in § 768 "refer to means which are intrinsically wrongful — that is, conduct which is itself capable of forming the basis for liability of the actor." Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1507 (8th Cir.1992) (quotation omitted), cert. denied, 506 U.S. 1080, 113 S.Ct. 1048, 122 L.Ed.2d 356 (1993).
The competitor's privilege is plainly relevant to the complex relationships at issue in this case. On the one hand, active players represented by the Brady plaintiffs had a personal interest in negotiating increased benefits for retired players because all active players will one day retire (a particularly strong interest given the relatively short careers of most professional football players). On the other hand, the active and retired players were competitors for the share of professional football revenues that the NFL was willing to pay to its players.
Plaintiffs alleged that the active players excluded retired player representatives from settlement negotiations that included retiree benefits in order to get a larger share of the total player revenues for themselves. Plaintiffs further alleged they were told during the July 19 meeting with
Finally, plaintiffs argued for the first time in their reply brief that defendants engaged in "illegal labor negotiations" because the NFLPA controlled and financed the Brady suit and collectively bargained on behalf of active and retired players when, as a decertified union, it had no authority to act as bargaining agent for members of the bargaining unit. This contention is squarely contrary to decisions by the District of Minnesota in prior litigation between the NFL and its players, decisions supported by the General Counsel of the National Labor Relations Board. See White, 822 F.Supp. at 1430-31 (D.Minn. 1993) ("Where it was appropriate for the NFLPA to finance the prosecution of antitrust litigation challenging terms and conditions of employment, the court finds that the NFLPA's role as consultant to class counsel in settling the same litigation is also lawful and appropriate."). In support, plaintiffs cite statements of general labor law principles regarding a union's authority to bargain collectively in NLRB v. Local Union No. 103, Int'l Ass'n of Bridge Workers, 434 U.S. 335, 344, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978). But as that decision makes clear, those are issues within the exclusive purview of the NLRB. Thus, we reject plaintiffs' suggestion that courts may decide that a "decertified union engaging in collective bargaining under the guise of settlement negotiations ... constitute[s] improper conduct" under Restatement (Second) of Torts § 766B, cmt. d.
For these reasons, plaintiffs failed to plausibly allege facts establishing that they had a reasonable expectation that either prospective contractual relations or other economic advantage would result if they had been allowed to bargain independently with the NFL, or that defendants improperly interfered with any such expectation. Accordingly, the district court properly dismissed plaintiffs' claims of tortious interference under Minnesota law, and its judgment is affirmed.
BEAM, Circuit Judge, concurring.
I concur in the court's opinion, except for Part III.A., and in the judgment.