Last week, the Supreme Court of Nevada and the influential United States Court of Appeals for the Second Circuit delivered a powerful one-two punch to NFL Commissioner Roger Goodell’s authority to arbitrate disputes involving NFL club personnel. Specifically, the courts ruled that the NFL’s arbitration process, which permitted Goodell to preside over legal challenges brought by coaches Jon Gruden and Brian Flores respectively, was unenforceable. In so doing, the courts largely cast aside a century of jurisprudence in which courts were deferential to the Commissioners’ role as guardians of their leagues. The leagues – particularly the NFL – must now make changes to try and preserve their historical level of control.
Commissioner Authority
The genesis of the modern-day Commissioner and the role’s authority was MLB’s appointment of Judge Kennesaw Mountain Landis as the sport’s first Commissioner in 1921 after the “Black Sox” scandal in which several members of the Chicago White Sox were accused of intentionally losing the 1919 World Series in exchange for bribes from mobsters. Landis banned eight players for life.
For many years thereafter, the broad scope of a league’s Commissioner authority was most frequently challenged – and upheld – in the context of MLB. In 1931, the Northern District of Illinois dismissed a suit from the then-minor league Milwaukee Brewers challenging Landis’ rejection of an optional player contract between the St. Louis Browns and the Brewers, holding that “the commissioner acted clearly within his authority.” In 1977, the Northern District of Georgia held that Commissioner Bowie Kuhn had the authority to discipline the Atlanta Braves for violations of a recently-imposed no-tampering policy under the Commissioner’s broad authority to act “in the best interests of baseball.” The next year, the Seventh Circuit Court of Appeals affirmed a decision upholding Kuhn’s authority on the same ground to disallow the Oakland Athletics’ sale of left fielder Joe Rudi and pitcher Rollie Fingers to the Boston Red Sox for $2 million and pitcher Vida Blue to the New York Yankees for $1.5 million. Finally, in 1989, the Southern District of Ohio recognized the broad authority of the Commissioner as the real party-in-interest in denying Pete Rose’s motion to remand his lawsuit back to Ohio state court.
The more recent challenges to Commissioner authority have come from players and against the NFL. In 2016, the Second Circuit reversed a district court decision and affirmed Goodell’s authority to impose a four-game suspension on Patriots’ quarterback Tom Brady for his alleged involvement in a scheme to deflate footballs to his liking. The Second Circuit recognized the Commissioner’s “broad authority to deal with conduct he believes might undermine the integrity of the game.” A few months later, the Eighth Circuit Court of Appeals ruled similarly in upholding Goodell’s authority to punish running back Adrian Peterson for alleged domestic violence. The next year, the Southern District of New York rejected the NFLPA’s efforts to vacate an arbitration decision in which Goodell imposed a six-game suspension on running back Ezekiel Elliott for domestic abuse.
Finally, in June 2024, the Southern District of New York rejected the New York Knicks efforts to avoid having NBA Commissioner Adam Silver oversee a dispute between the Knicks and Toronto Raptors concerning a former employee alleged to have stolen confidential Knicks information and data.
The Flores Case
In February 2022, current Minnesota Vikings defensive coordinator Brian Flores filed a racial discrimination lawsuit after he was terminated as the head coach of the Miami Dolphins and was not hired for the same position with the New York Giants, Denver Broncos, or Houston Texans. Flores seeks to represent a class of Black coaches and executives he contends were similarly discriminated against and has been joined in his action by two other Black coaches, Steve Wilks and Ray Horton. Their inclusion brought in claims against their former employers, the Arizona Cardinals and Tennessee Titans.
In March 2023, the Southern District of New York issued a decision largely granting the NFL’s motion to compel the action to arbitration. The court determined that the coaches’ claims related to their respective employment with the Dolphins, Cardinals, and Titans must be arbitrated pursuant to the arbitration provisions in the coaches’ contracts with those clubs. The court also ruled that the arbitration agreements cover the coaches’ related claims against the NFL.
On the other hand, the court ruled that the arbitration provisions do not cover the claims against the Broncos, Giants, and Texans and related claims against the NFL because the coaches had no contracts with those clubs.
The court rejected Flores’ claims that the arbitration provisions in his contract were unenforceable because they provided Goodell the authority to hear the dispute pursuant to the NFL Constitution. Instead, the court reasoned, if Goodell administered the arbitration in a biased manner, then Flores could come into court and request the arbitration decision be vacated. But the court would not prejudge the fairness of the proceedings agreed to by Flores in his contract. Indeed, a different judge from the same court reached the same conclusion in the Knicks case concerning Silver’s alleged bias.
In an August 14, 2025 decision, the Second Circuit affirmed the lower court’s rulings. Nevertheless, the Court went farther and generally rejected the NFL’s arbitration process in its entirety as applied to Flores. Specifically, while recognizing that courts generally defer to arbitration, because Flores had to submit his claims against the NFL to Goodell while Goodell was the NFL’s principal executive, the NFL’s arbitration process “fails to bear even a passing resemblance to traditional arbitral practice,” “is unworthy even of the name of arbitration,” and therefore is deserving of no protection.
The court was unmoved that Goodell had appointed former New Jersey attorney general Peter Harvey as the arbitrator in the matter, given that Harvey is a member of the NFL’s Diversity Advisory Committee.
Finally, the Second Circuit stated that there was no conflict with its prior decision in the Brady case because that arbitration mechanism was pursuant to a collective bargaining agreement between the NFL and NFL Players Association.
The Flores case will now proceed on the merits, split between federal court and an unclear arbitral forum. Barring settlement, any resolution is still years away.
The Gruden Case
In October 2021, Las Vegas Raiders head coach Jon Gruden was forced to resign after the revelation of emails in which he engaged in what the NFL described in a legal brief as “racist tropes and misogynistic and homophobic slurs.” At the time, Gruden was in the fourth year of a 10-year, $100 million contract, the largest contract ever for an NFL coach.
Notwithstanding the fact Gruden and the Raiders quickly reached a confidential settlement concerning Gruden’s departure, in November 2021, Gruden sued the NFL and Goodell (but not the Raiders) in the Eighth Judicial District Court in Clark County, Nevada, alleging principally that the defendants had intentionally and tortiously interfered with Gruden’s contract with the Raiders by allegedly leaking the problematic emails.
In May 2022, without much explanation, the District Court denied the NFL’s motion to compel the case to arbitration.
In a May 14, 2024 Order, by a 2-1 decision, a three-judge panel of the Supreme Court of the State of Nevada reversed, finding that Gruden was bound by his agreement to arbitrate any disputes concerning his employment before the Commissioner in accordance with the NFL Constitution. In so doing, the Court expressed some concern that Goodell, a defendant in the case, could theoretically also serve as the arbitrator. But the Court noted that it was not clear that Goodell would do so and, in the event he did, issues of bias could be raised as a ground for seeking to vacate any arbitration decision he might make.
After that decision, the full seven-judge panel of the Nevada Supreme Court agreed to hear the case. The Court then undid the May 2024 ruling by a 5-2 majority, holding that requiring Gruden to arbitrate his claims before Goodell would be unconscionable because the process “would allow Goodell, as Commissioner, to arbitrate disputes about his own conduct.”
The dissent rejected this concern, declaring it “unlikely that Goodell would serve as the arbitrator over a dispute that names him as a defendant, but if he did, Gruden would be entitled to post-arbitration relief for arbitrator bias.”
Gruden can now pursue his claims against the NFL and Goodell in a Nevada state court. Once again, barring settlement, resolution of his claims is years away.
NFL Arbitration In Practice
Up to this point, the NFL had deftly managed concerns about Goodell’s potential bias. First, during the 2012 “Bountygate” proceedings – which included scrutiny from a federal judge – Goodell appointed his predecessor, Paul Tagliabue, to preside over the appeal. Tagliabue ultimately vacated all discipline against the players (Disclosure: I was part of the players’ legal team). Then, in 2014, Goodell appointed retired judge Barbara Jones to hear the appeal of Ray Rice when his neutrality was questioned. More recently, in 2022, Goodell appointed Harvey as the arbitrator for Deshaun Watson’s appeal under similar circumstances, before the case was settled.
Nevertheless, each of those cases concerned players and collectively bargained arbitration processes. While NFL Commissioners – or their designees – have overseen cases involving club employees before, the Flores and Gruden cases are extraordinary because they include claims against the NFL.
Protecting The Shields
Sports leagues are unique and insular businesses in many ways. Yet, they contribute to our collective culture in important ways and are therefore subject to considerable public scrutiny. For these and other reasons, the leagues believe that the Commissioner holds a unique position which requires the officeholder to have broad authority to manage the league in such a way that is in the best interests of the league and sport. But courts are clearly no longer willing to treat sports and their Commissioners differently.
The leagues – particularly the NFL – will need to revisit how it can maximize Commissioner authority while avoiding adverse legal rulings. They should consider the following revisions to their arbitration procedures:
Vest initial authority in the Commissioner. As is generally the case now, the league Constitutions should provide the Commissioner – or its designee – the authority to serve as the arbitrator in any dispute related to or arising out of a non-player club’s employment with the club.
Broaden the coverage. The arbitration provision should cover claims against the club, a colleague, another club or their employees, and the league or league employees, including the Commissioner. The parties covered by arbitration provisions have historically been more limited.
Clarify the arbitration rules. Courts across the country are increasingly skeptical of enforcing arbitration provisions, specifically in California and its neighboring states. Leagues must update their arbitration processes to meet these courts’ exacting standards, which includes providing clear and fair rules which do not substantially diminish a party’s rights as compared to litigation in court. Arbitration agreements frequently incorporate by reference the rules of the American Arbitration Association (AAA) or JAMS. The leagues can either do the same or construct and make available their own lengthy set of rules.
Create a process for managing possible conflicts. It is pretty clear based on the Flores and Gruden decisions that Commissioners should no longer hear disputes involving themselves or the leagues. Nor will courts likely accept a Commissioner’s decision as to whom to delegate the matter. Instead, the leagues should create a process through which cases which involve either the league or the Commissioner as a party or as a substantial fact witness can be heard by a neutral arbitrator. Both AAA and JAMS maintain a panel of arbitrators with sports industry expertise. The league could delegate the matter to one of them.
Include a right to remand. The above proposal would incentivize claimants to name the league or the Commissioner as a party to avoid arbitrating in front of the Commissioner. However, the arbitration provision could include a right by the league to challenge its inclusion as a party as a sham to avoid the Commissioner-controlled arbitration process. That question could be resolved by a AAA or JAMS arbitrator.
Freeze the Constitution. Both the Second Circuit and Nevada Supreme Court disliked that the Flores and Gruden arbitration provisions incorporated the NFL’s Constitution while also preserving the right of the NFL to amend the Constitution at any time. Instead, the parties should be bound by the Constitution in existence at the time of the parties’ agreement.
Identify criteria for the league’s interests. In the event a matter must be arbitrated before a neutral arbitrator, the arbitration provision could nonetheless spell out certain criteria that the league believes are important to the league’s interests and which the arbitrator must consider in reaching a decision. For example, the arbitration provision could require the arbitrator to consider prior relevant decisions by the Commissioner, to consider the league’s history, to consider the affect of any decision on the public’s perception of the league, and to consider the league’s unique integrity or cultural concerns. For comparison, the baseball salary arbitration process includes permitted criteria (essentially the player’s performance and contribution to the club) and prohibited criteria (the club’s financial position, press reports, prior offers, and salaries in other sports or occupations). By identifying such criteria, the leagues can ideally protect themselves from judicial scrutiny about their arbitration process while still encouraging an arbitration process that considers the league’s unique interests carefully.
The leagues generally seek to run close operations through which any disputes and controversial issues can be resolved internally and with minimal public knowledge, let alone involvement from the courts. If they want to continue to do that, they – and their arbitration processes – will have to evolve.