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From Antitrust Law Daily, May 30, 2017

NFL cheerleader’s claims of wage suppression tumble

By Jeffrey May, J.D.

The National Football League (NFL) and 27 of its member teams were entitled to dismissal of claims that they conspired "to fix and suppress the compensation of" and "to eliminate competition among them for" professional cheerleaders, the federal district court in San Francisco has decided. According to the plaintiff—a former cheerleader—the defendants conspired to suppress earnings for cheerleaders below fair market value by (1) paying them "a low, flat wage for each game" and not paying them for rehearsals or community outreach events; (2) refraining from poaching other teams’ cheerleaders; and (3) prohibiting cheerleaders from seeking employment with other professional cheerleading teams and from discussing their earnings with each other. Dismissal was appropriate, however, because the complaint rested "on assertions of parallel conduct anchored in rhetoric and conclusory statements" and the parallel conduct alleged was minimal at best, in the court’s view (K. v. NFL Enterprises, LLC, May 25, 2017, Alsup, W.).

The unidentified former 49ers "Gold Rush Girls" dance team member who brought the suit on behalf of a putative class failed to state a plausible claim under Section 1 of the Sherman Act, the court held. The court suggested that a conspiracy of the scale alleged by the complaint would typically be supported by some evidentiary facts, such as statements by a confidential witness regarding some actual conspiratorial meeting, communication, or agreement. Instead of direct evidence of conspiracy, the plaintiff relied on circumstantial evidence of conspiracy. Thus, the plaintiff had to allege facts tending to exclude the possibility that defendants acted independently, the court noted.

Meetings of NFL executives, while serving as opportunities to conspiracy, did not create an inference of unlawful conduct. The NFL’s "significant control over the individual teams" also did not sway the court.

The court also questioned whether the challenged conduct was even parallel. The complaint alleged specific facts concerning cheerleader wages only as to the Oakland Raiders, Tampa Bay Buccaneers, Cincinnati Bengals, and Buffalo Bills. Pay per game varied from $90 to $125 across the teams. Moreover, the Raiders and the Bengals did not pay their cheerleaders for community events, but the Buccaneers and the Bills sometimes did. The court said that these admissions of nonparallel conduct undercut the very theory asserted by the complaint. The closest the complaint comes to showing parallel conduct is its general allegation that no NFL team pays cheerleaders for rehearsals, according to the court. However, this minimal allegation of parallel conduct did not nudge the overall conspiracy across the line from conceivable to plausible.

No-poach agreements. The court also rejected a conspiracy based on the absence of poaching of cheerleaders among the NFL teams. It was plausible that the NFL teams might have had little or no desire or need to poach each other’s cheerleaders. The complaint itself alleged that cheerleaders "were told . . . they were lucky to be chosen, should be grateful and could be quickly replaced," and there would be no need to poach for positions where individuals can be "quickly replaced."

Allegations of injury. The plaintiff also failed to state a plausible claim for relief specifically as to herself. Allegations of wrongdoing against cheerleaders as a whole did not suffice. The plaintiff did not allege facts showing that she suffered any harm as a result of defendants’ anticompetitive conduct, the court held.

The Case is No. 3:17-cv-00496-WHA.

Attorneys: Thomas Joseph Obrien (Bradshaw & Associates, P.C.) for K. K. Sonya Diane Winner (Covington & Burling LLP) for NFL Enterprises LLC, Forty Niners Football Co. LLC and The Oakland Raiders Ltd. Partnership.

Companies: Forty Niners Football Co. LLC; The Oakland Raiders Ltd. Partnership; NFL Enterprises LLC

MainStory: TopStory Antitrust CaliforniaNews

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