On April 25, 2015, in National Football League Management Council v. National Football League Players Association, the US Court of Appeals for the Second Circuit reversed and remanded the decision of the district court and ordered that it confirm the arbitration award that imposed a four-game suspension on Tom Brady in the Deflategate case. The Second Circuit found that the arbitrator properly exercised his broad discretion under the collective bargaining agreement, his rulings were grounded in the agreement, and the award did not deprive Brady of fundamental fairness ( (2d Cir. Apr. 25, 2016)).

Deflategate began when the Indianapolis Colts reported to the National Football League that they thought the New England Patriots were using under-inflated footballs during the American Football Conference championship game. The NFL hired outside counsel to investigate the Colts' allegations. Shortly before he was to meet with investigators, Brady allegedly had his assistant destroy the cellphone he had used around the time of the AFC championship, which may have included communications with Patriots employees about the inflation of footballs.

After an investigation, the NFL concluded that Brady participated in a scheme to deflate footballs used during the game and suspended him for four games under Article 46 of the Collective Bargaining Agreement (CBA) between the League and the NFL Players Association. Brady requested arbitration and Goodell, the League Commissioner, served as the arbitrator and entered an award confirming the suspension.

The League commenced an action in the US District Court for the Southern District of New York seeking confirmation of the award under the Labor Management Relations Act (LMRA), 29 U.S.C. § 141 et seq. The district court granted the Association's motion to vacate the award and denied the League's motion to confirm based on fundamental unfairness and lack of notice. The League timely appealed.

The Second Circuit reversed and remanded with instructions to confirm the award. The court held that its review of the arbitration award required substantial deference and this is not an exceptional case that warrants vacating the award.

The court determined that since this dispute involves rights under a collective bargaining agreement, it is governed by section 301 of the LMRA. The Second Circuit found that a federal court's review of an arbitration award under the LMRA is very limited, involving only a determination of whether the arbitration proceedings and award met the minimum legal standards under the LMRA. This means that the court scrutinizes an award only to ensure that the arbitrator was "even arguably construing or applying the contract and acting within the scope of his authority" and did not ignore the contract. Even if an arbitrator makes mistakes of fact or law, the court may not disturb the award as long as he acted within the bounds of his authority.

Additionally, the court found that the Commissioner had broad authority under the collective bargaining agreement to impose sanctions and preside at arbitrations. Given this substantial deference standard, the district court's bases for overturning Brady's suspension were insufficient to warrant vacatur.

Counsel litigating in the Second Circuit should be aware that a federal court's review of labor arbitration awards is limited and highly deferential.

To see and compare summaries of sample collective bargaining agreements of professional athletes and employees of other industries, visit the What's Market Collective Bargaining Agreements Database.