National Football League Management Council v. National Football League Players Association

Issue Discussed: Power of Arbitrators

Submitted by Lawrence S. Greengrass, Ann E. Halden*

Date Promulgated: September 3, 2015

National Football League Management Council v. National Football League Players Association, 2015 WL 5148739 (S.D.N.Y. Sept. 3, 2015)

Court: United States District Court, Southern District of New York

Issues Decided: Whether an arbitrator may exclude evidence the arbitrator deems cumulative and irrelevant, and whether an arbitrator can create a remedy not contemplated by the agreement.

Key Holding

The Southern District of New York vacated an arbitration award where the court found that the award was not based on the contract and the arbitrator had denied a party the opportunity to obtain relevant evidence.  In reaching its conclusion, the court noted that an arbitration award may be vacated pursuant to 9 U.S.C. §10(a)(3) where an arbitrator refuses to hear evidence pertinent and material to the controversy and further noted that a principle question was whether the arbitration award drew its essence from the agreement, noting that the arbitrator is not free to dispense his own “brand of industrial justice.”

Finding that there was no notice or basis in the governing agreement of the possibility of a four game suspension for the alleged conduct at issue, the court held that the arbitrator’s award was not based in the agreement and was instead the arbitrator’s own “brand of industrial justice,” which is not permitted.  Moreover, the court held that the arbitrator’s denial of the party’s motion to compel discovery on the basis that the evidence was “irrelevant” or “cumulative” without any basis for these statements was prejudicial and a violation of  9 U.S.C. §10(a)(3).  The court further held that where the arbitrator denied discovery of information the court found relevant and pertinent to the dispute, and that information was known and available to one party and not the requesting party, the requesting party was prejudiced by the denial of the motion to compel.   The court therefore vacated the award.

Key Takeaways

Under 9 U.S.C. §10(a)(3), an arbitrator cannot refuse to allow evidence on the grounds that the evidence is irrelevant or cumulative without a basis for these assertions.  Moreover, an arbitrator’s decision must be based in the agreement at issue and an arbitrator cannot create a remedy not contemplated in the agreement.

* Lawrence S. Greengrass is Senior Counsel and Ann E. Halden is Special Counsel at Mound Cotton Wollan and Greengrass LLP, where they specialize in reinsurance litigation and arbitration.