Keeping It In-House? 2d Cir. Examines Arbitrator Impartiality in Flores v. National Football League

By Fred N. Thomas IV

A high-profile discrimination dispute between the National Football League and one of its coaches—which landed in a Second U.S. Circuit Court of Appeals courtroom last month--is a textbook example of the “tension between employer-controlled arbitration systems and the legal standards of fairness and neutrality.” See Stephanie Argueta, “Keeping ADR In-House? NFL Switches Arbitrators in High-Profile Discrimination Case,” 43 Alternatives 1 (January 2025) (available on Westlaw).

The case focuses on an internal arbitration process—the NFL’s--and the inherent concerns about impartiality.

A decision in Flores v. Nat’l Football League, et al., No. 23-1185 (2d Cir.), could mark a change in the NFL’s and perhaps other sports league’s arbitration practices and promote the presence of neutral and independent arbitrators. It also has the potential to reaffirm the ability of a sitting NFL commissioner to oversee disputes that arise as a neutral arbitrator when he clearly has a stake in the matter by virtue of his position. Id.

This case began as a 2022 lawsuit where Brian Flores, now the Minnesota Vikings defensive coordinator, along with former NFL coaches Steve Wilks and Ray Horton, filed a class action suit against the NFL. They alleged racial discrimination in the league’s hiring practices for head coaches, general managers, and coordinators.

Flores alleged that the New York Giants and Denver Broncos refused to hire him because he is black--including interviewing him as process window-dressing even though a hiring decision already had been made--and the Miami Dolphins fired him because of his race. The suit collected claims against at least six teams. Id. 

NFL Commissioner Roger Goodell is at the center of the case.  He serves as the NFL disputes arbitrator. In the course of the dispute with Flores, the NFL made an effort to substitute arbitrator Peter C. Harvey, a partner in New York’s Patterson Belknap Webb & Tyler, and a former New Jersey Attorney General, for the Flores matter.

But the September 2024 effort was too little too late, more than six months after U.S. District Court Judge Valerie Caproni found that permitting Commissioner Goodell to arbitrate Flores’ claims against the NFL teams was a violation of procedural norms of fundamental fairness. Flores v. The Nat’l Football League, et. al., 22-CV-0871 (VEC) (March 1, 2023) (available at https://bit.ly/4io1hvP).

The league, which won the right to arbitrate some of the issues, appealed on the Flores claims it lost. On March 25, a Second Circuit panel—Senior Circuit Court Judges José A. Cabranes and Gerard E. Lynch, and Judge Raymond J. Lohier Jr.--heard oral arguments on the issue of whether Judge Caproni erred by refusing to grant a motion to compel arbitration for plaintiff Flores’ claims under his employment agreements with the New England Patriots and the Pittsburgh Steelers. 

Kannon Shanmugam, a Washington, D.C., partner at Paul, Weiss, Rifkin, Wharton & Garrison and attorney for the appellant NFL, argued that the case should have been sent to arbitration. He emphasized the retroactivity of a later contract that compelled arbitration.

His argument established, under questioning, that Flores was under contract with the New England Patriots, under which he was bound by arbitration. Later, when Flores got a job with the Pittsburgh Steelers, his claims required arbitration, but not because of the contract’s own terms, but because those terms incorporated provisions of the NFL Constitution.

Shanmugam emphasized that Flores’s Patriots contract arbitration agreement was not illusory, but rather a valid and enforceable contract. Moreover, at the time Flores signed the Steelers contract, he had a pending litigation claim against the Giants—filed when Flores was not under either contract. Judge Lynch inquired whether Shanmugam believed that the agreement Flores signed with the Steelers, by incorporating the NFL Constitution, retroactively required him to abandon the suit that he already filed, even though at the time of filing he was not bound by an arbitration agreement. 

Shanmugam reasoned that a presumption of arbitration applies under the NFL Constitution, and the timing of the contracts point to compelling arbitration, arguing for a retroactive effect of the Steelers’ contract. 

But Lynch pressed on whether the arbitration terms were unconscionable.

Shanmugam said the arbitration agreements weren’t unconscionable since both parties mutually agreed to be bound. Unconscionability must be both substantive and procedural. As to procedural unconscionability, he argued that Flores was a sophisticated, career-long NFL coach who had entered into a series of contracts to which he read and therefore understood the NFL Constitution. Thus, Shanmugam argued it was not a “classic” example of disparate bargaining power. He also argued that these agreements are not substantively unconscionable either because Flores voluntarily agreed to the contract and its arbitration provision, and he understood its terms.

Shanmugam argued that the commissioner’s arbitrator position was common practice in sports leagues. Lynch was skeptical about the point, and asked whether Paul Weiss employees would be facing unfair arbitration procedures if their pre-dispute agreement required the firm’s managing partner to oversee their disputes. Shanmugam said that there would be more potential procedural unconscionability, but pushed back against the idea that the NFL process was unfair. He insisted the Federal Arbitration Act Sec. 10 standard for overturning an arbitration award for evident partiality by the arbitrator could be invoked. 

If you have a claim that there is actual bias, he said, the commissioner can appoint another arbitrator, which Commissioner Roger Goodell indeed had done in the case by appointing Arbitrator Peter Harvey. The “mere possibility of bias” at the outset of a contract isn’t sufficient to render a contract procedurally unconscionable, said Shanmugan.  

In response, David Gottlieb, a partner at Wigdor LLP in New York, and attorney for Flores, immediately took issue with Kannon Shanmugam’s defense of the NFL, zeroing in on a statement, said Gottlieb, that “it’s common practice for sports leagues to use their commissioner to arbitrate disputes.”

Gottlieb countered that “the NFL and its teams . . . are employers . . . like any other and they should not be entitled to any special deference by virtue of being the NFL” or by being a sports league.

Gottlieb argued that “there is nothing in the NFL Constitution [or the] arbitration agreement that permits . . . the commissioner to delegate his authority” under it. It explicitly states that “the commissioner shall have full, complete, and final jurisdiction and authority to arbitrate.” In the cases where delegation was permitted, there was a separate agreement that included delegation provisions which, according to Gottlieb, the NFL Constitution does not.

That status was fatal to the arbitration, argued Gottlieb, who discussed in detail substantive and procedural unconscionability, and then applied the principle of the effective vindication of rights to his client. Gottlieb argued that the federal trial court reasoning was correct. He said that providing a non-neutral biased forum is “unfair and unconscionable.” 

A decision is expected this spring. 

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To hear the oral argument in its entirety see the link on the Second Circuit website at this page: https://bit.ly/4lRs3Qz. For a commentary on the case, see Mike Florio, “Appeals court conducts oral argument in Brian Flores discrimination case,” Pro Football Talk (NBC Sports) (March 25) (available at https://bit.ly/42WE5Ak).

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The author is CPR’s 2024-2025 full-year intern and is a student at the Howard University School of Law in Washington, D.C.

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