NFL players have reportedly been recently entering into Income Purchase Agreements, which are contracts that involve an up-front payment by a third party to a player in exchange for the player promising the third party a percentage of his current and future NFL contracts. The NFL Players Association caught wind of these Income Purchase Agreements and, while the Association has not barred players from entering into such agreements, it has provided a stern warning to certified Contract Advisors.
In 2013, Cleodis Floyd was victorious in an arbitration against the National Football League Players Association after the union denied his NFL agent application. The union did not want to certify him because Floyd was previously convicted of fraud.
The mandatory seminar and exam for those attempting to fulfill their childhood dreams of becoming a National Football League Players’ Association (NFLPA) Contract Advisor – more commonly known as an NFL player agent – was held on July 24-25. Now, roughly eight weeks later, many hopefuls are beginning to learn whether or not they achieved what they aspire to be — representatives of NFL players. For most, the dream of becoming the next super-agent has become closer to a reality. Yet, for the unfortunate few, they will have to wait for the next opportunity to sit for the exam in order to successfully accomplish their goal the second time around.
However, that next opportunity may not be for some time – pursuant to the NFLPA Regulations Governing Contract Advisors (“NFLPA Regulations”), an applicant who has failed the written examination on two successive occasions is barred from re-applying for certification and re-taking the exam for a period of at least five years. This poses a great concern, especially for those applicants with clients waiting in the wings and eagerly awaiting representation. As a result, many turn to the appeals process in hopes of getting their denial overturned.
Section 2(D) of the NFLPA Regulations states the following: “In the event an Application for Certification is denied pursuant to this Section, the applicant shall be notified in writing (by confirmed facsimile or overnight delivery) of the reasons for the denial.” Section 2(C) lists the following as a non-exhaustive list of reasons for denying certification:
- The applicant made a false or misleading statement of a material nature in his or her application;
- The applicant misappropriated funds, or engaged in other specific acts – fraud, embezzlement, etc. – that would render him or her unfit to serve in a fiduciary capacity;
- The applicant engaged in other certain conduct that significantly impacts adversely on his or her credibility, integrity or competence to serve in a fiduciary capacity;
- The applicant is unwilling to swear or affirm that he or she will comply with the NFLPA Regulations or the fee structure contained within the Standard Representation Agreement incorporated into the NFLPA Regulations;
- The applicant has been denied certification by another professional sports players association, such as the National Basketball Players’ Association or the Major League Baseball Players’ Association;
- The applicant directly or indirectly solicited or recruited a player for representation during the probation period between filing his or her application for certification and actually receiving certification by the NFLPA;
- The applicant did not receive a degree from an accredited four year college/university and a post-graduate degree – i.e. a Law or Masters degree – from an accredited college/university; or
- The applicant failed to fully and properly complete his or her application for certification.
Shall a rejected applicant decide that appealing the NFLPA’s decision is his or her only means of recourse, the applicant must file a written notice of appeal within thirty days of receiving the notice denying certification. The appeal is resolved in accordance with the NFLPA’s arbitration procedures, and the standard of review for the arbitrator is whether there was a reasonable basis for the NFLPA to deny the application.
It is important to note that failing to pass the written examination is not listed as a ground for denying an application under Section 2 of the NFLPA Regulations. It could be argued that failure to fully complete an application encompasses the failure of the exam, and thus should be subject for review; however, successful completion of the written exam is an express requirement to becoming a NFLPA Contract Adviser. As a result, it is undeniable that failure to pass the exam constitutes a reasonable basis to deny an application for certification.
The appellate process is designed more for instances in which an applicant feels he or she has been rejected for a reason that the NFLPA has not adequately explained, or improperly applies. Heitner Legal has successfully represented an individual on such a basis. However, passing the written exam is essential to certification; unfortunately, failure to do so is not typically subject to appeal.
 See NFLPA Regulations Governing Contract Advisers § 2(A)
 In some circumstances, the NFLPA will grant an exception to this requirement for applicants who have at least seven years of sufficient negotiating experience. See id.
 The NFLPA Regulations arbitration procedures are set forth in Sections 5(E) – 5(H).
The following article was written by Spencer Wingate.
The NFL Players Association has filed a twofold grievance against the NFL, appealing the suspensions handed down to Jonathan Vilma (New Orleans Saints), Will Smith (New Orleans Saints), Anthony Hargrove (Green Bay Packers), and Scott Fujita (Cleveland Browns) for their involvement in the Saints bounty program. On August 4th 2011, the league and players association entered into a new collective bargaining agreement (CBA). According to Article 43 of the new CBA, the NFLPA has the right to appeal NFL Commissioner Roger Goodell’s ruling, as it involved player suspensions. The NFL has stated that the pay for performance program lasted from 2009- 2011. The NFLPA states that according to Article 3 Section (b) of the new collective bargaining agreement, the players cannot be liable for their actions before August 2011:
The NFL, on behalf of itself, the NFL, and the NFL Clubs and their respective heirs, executors, administrators, representatives, agents, successors and assigns, releases and covenants not to sue, or to support financially or administratively, or voluntarily provide testimony of any kind, including by declaration or affidavit in, any suit (including any Special Master proceeding brought pursuant to the White SSA and/or the Prior Agreement) against the NFLPA or any of its members, or agents acting on its behalf, or any member of its bargaining unit, with respect to conduct occurring prior to the execution of this Agreement.
Therefore, they allege the players should be released from their penalties from conduct prior to the agreement between the two sides. They contend that even if the language in Article 3 Section (b) does not stipulate the players are not accountable for past acts, the suspension cannot be brought on by Goodell. The grievance states the issue at hand is being “paid for performance” so it is a cap violation. The system arbitrator, University of Pennsylvania law professor Stephen Burbank, should have ruled on the matter. They are stating that since Goodell did not have the right to hand down the punishment for the violations, they should not be upheld.
Last, the NFLPA references Article 46, Section 1 (b) of the CBA; punishments for unnecessary roughness or unsportsmanlike conduct on the field should again not be determined by Goodell, but a designee of the commissioner. This stance notes even if the first two assertions are not applicable, the appeals must be handled by Art Shell or Ted Cottrell, the league’s hearing officers.
The NFLPA is taking a strategy to establish two separate objections that will remove the player suspensions out of Goodell’s hands. The grievance asserts the issue at hand is undetermined payments, so it should be decided by the cap arbitrator. If that is deemed false, then the nature of the actions – roughness and unsportsmanlike conduct – mean the league’s hearing officers must rule on the appeals. Being that the NFLPA has a responsibility to not only the players accused but also the players targeted, the grievance never refutes the players were involved in a bounty program. The strategy allows them to not take either side but attempt to bring the players together against the league. They are claiming the conduct is not punishable; although if the league proves it is, then Goodell should not have handed down the punishments nor should he able to rule on the appeals.
The NFL has since responded to the grievance citing that they expect the arbitrators to reject the union’s assertions. They contend the players are accountable for their dangerous conduct and the disciplinary process negotiated in the CBA, not even a year ago, must be upheld. During the lockout last year, the NFL and NFLPA never could see eye to eye on a number of issues like the disciplinary process. They were eventually able to negotiate a new ten-year CBA. However, a lack of coordination and communication resulted in a power struggle that threatened to endanger the 2011-2012 season. The union desired to reduce Goodell’s authority. They were unsuccessful, as other issues took greater importance in their minds and the commissioner retained his power. The issue for the league is much more than unnecessary roughness, unsportsmanlike conduct, or a cap violation. The bounty program left the league legally liable as their players were intentionally being targeted and their safety was in danger. The Saints had been warned to stop, yet continued and tried to cover up their actions. Now, once again, the league and players association are on two different sides of the spectrum. They are struggling to work together and unfortunately back in a power struggle where they appear more as foes than allies.
The following article was written by Spencer Wingate.
The NFLPA is the labor union that represents current and former NFL players. They are in charge of maintaining former and current players’ benefits. Through subsidiaries, their responsibilities expand to players’ marketing and licensing agreements. Therefore, they pay expenses for players’ royalties, arbitration, and general counsel. Last year the NFL lockout leading to union decertification left the NFLPA very busy. The union is in charge of CBA negotiations which consumed a large portion of their outside legal and lobbying expenditures. Being a labor union, they are required to detail their finances to the U.S. Department of Labor. Their most recent LM-2 for the fiscal year of March 1, 2010 to February 28, 2011 was for $313.6 million. The financial statement details payments to outside accounting, law, and lobbying firms. Representational activities and legal work accounted for $63.2 million, with “only” $1.7 million being spent on political activities and lobbying.
The AM Law Daily detailed specific figures that were spent on firms and companies. Their article notes that since DeMaurice Smith became NFLPA Executive Director three years ago, his former firm Latham & Patton Boggs has substantially benefited. They have been able to make inroads into the legal turf typically dominated by Dewey & LeBoeuf and Weil, Gotshal & Manges.
DeMaurice Smith’s contract is up for renewal in March and his leadership has recently been criticized by Attorney David Cornwell in a detailed eleven page memorandum. If you are interested in learning more about the letter, Darren Heitner, owner of this website, analyzed the memo here.