Thursday, February 10, 2011

Roger Goodell's Recruitment of College Players in 1984 and Tortious Interference with Contractual Relations

Jimmy Golen and I recently discussed a very interesting passage from Peter King's Sports Illustrated cover story on Roger Goodell titled The Man of the Hour:
* * *

Goodell's first project upon being hired full-time by Rozelle in 1984 was to persuade college players not to sign with the rival United States Football League.

Goodell and longtime Cowboys executive Gil Brandt traveled to bowl games and All-America gatherings to argue that the USFL's money was fool's gold. "We had an 800 number set up to ring into Roger's office, and gave it to all the players," Brandt says. "He'd never lie to 'em. He'd never tell a fourth-round guy he was going in the first round. But I think we saved some guys from signing in the USFL."

At a black-college all-star game in 1985, Goodell laid a pro-NFL pitch on a little-known receiver out of Mississippi Valley State-Jerry Rice. He signed with the 49ers.
* * *

Like Jimmy, I wonder whether the USFL might have entertained the notion of challenging the legality of Goodell and Brandt's actions (which I assume other NFL employees were engaged in as well).

The specific claim I'm thinking of is tortious interference with contractual relations. That claim refers generally to when one business economically harms a competing businesses’ contractual or customer relationships, and engages in that harmful behavior on purpose.

Tortious interference obviously doesn’t mean that two companies can’t compete with each other -- the absence of competition would be harmful to consumers and inconsistent with federal and state antitrust laws. But tortious interference does mean that when one company intentionally induces customers of a competing company to breach a contract, or when that company intentionally makes false statements about a competing company, that can cross the line into tortious inference.

But here the NFL could have argued a number of points against a tortious interference claim and I think would have prevailed. For one, the amateur players in question were not yet in the league (and thus had not yet signed contracts with USFL teams or even negotiated a prospective contract with a USFL team). The NFL could have also maintained that it was merely recruiting the available labor population in colleges -- much like investment banks compete with each other, rather than coordinate with each other, in recruiting college business students and MBA students, and physicians' groups compete with each other in recruiting prospective physicians and so on. In fact, had the NFL not competed with the USFL in the recruitment of college players, some commentators might have surmised there was collusion between the two leagues in the recruitment of college players (which they may have accomplished in another way through age/experience eligibility restrictions, but that's a topic for another day). I also suspect the USFL probably tried the very same tactic in attempting to dissuade the very same college players from signing with NFL teams.

Still, there's that gray area of wrongly undercutting a rival's business that can be hard to distinguish from appropriate -- and socially desirably -- competitive conduct.

Oh well, 1984 is a long time ago and, besides, the USFL did end up beating the NFL in court anyway (albeit for a judgment of $1, which was trebled to a grand total of $3).