DRYER v. LOS ANGELES RAMS FOOTBALL COMPANY INC

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Court of Appeal, Second District, Division 1, California.

Fred DRYER, aka John F. Dryer, Plaintiff and Respondent, v. LOS ANGELES RAMS FOOTBALL COMPANY, INC., a Maryland corporation, and Georgia Frontiere and Dominic Frontiere, Defendants and Appellants.

Civ. 68179.

Decided: January 26, 1984

Wyman, Bautzer, Rothman, Kuchel & Silbert and Terry Christensen and J. Jay Rakow, Los Angeles, for defendants and appellants. Sanford M. Gage, Beverly Hills, and John M. Thomas, Los Angeles, for plaintiff and respondent.

INTRODUCTION

Defendants Los Angeles Rams Football Company, Inc. (Rams), Dominic Frontiere and Georgia Frontiere appeal from an order denying their petition to compel arbitration and motion for a stay of the proceedings pending arbitration.

STATEMENT OF FACTS

Plaintiff Fred Dryer entered into a renewal contract to play professional football for the Rams on April 1, 1980.   This contract was extended to cover the 1981 football season when the Rams exercised their option to do so.   Plaintiff commenced the underlying action in November 1981, setting forth 14 separate causes of action, all of which stem from the allegation that the Rams removed plaintiff from the active team roster in violation of the express terms of his contract of employment.   The Rams management has taken the position that plaintiff's contract precluded only the termination of plaintiff's employment and his right to compensation therefor, not his removal from the active roster.

The contract of employment at issue herein is a modified version of the standard National Football League (NFL) player contract drafted pursuant to a collective bargaining agreement between the NFL Players' Association (union) and the NFL Management Council.   Plaintiff's contract contains the following unmodified standard provision:  “Any dispute between Player and Club involving interpretation or application of any provision of this contract will be submitted to final and binding arbitration in accordance with the procedure called for in any collective bargaining agreement in existence at the time the event giving rise to any such dispute occurs․”

Section 1 of Article VII of a collective bargaining agreement effective March 1, 1977, sets forth a grievance and arbitration procedure governing “[a]ny dispute ․ involving the interpretation or application of, or compliance with, provisions of this Agreement ․, the Standard Player Contract ․, [or] the NFL Player Contract․”  The procedure requires the filing of a written notice detailing the specifics of the grievance and permits the allegedly aggrieving party to answer within ten days after written notice is filed;  any answer by way of denial must also contain specifics.   Failing the interim satisfactory resolution of the dispute, the matter is referred to a player-club relations committee composed of two representatives of the players union, one of whom must be an active player, and two representatives appointed by the management council.   The parties may stipulate to bypass this stage and submit their dispute directly to an outside arbitrator.

Once a grievance has been referred to a player-club relations committee, the parties are entitled to have the committee meet to consider the grievance;  the parties, represented by counsel, may attend the meeting and additionally have the right to have a player's union or management council representative in attendance.   Any resolution of a grievance by majority vote or mutual agreement must be reduced to a writing which sets forth the specific reasons for the resolution, after which it constitutes a full, binding and complete disposition of the matter.

Should the player-club relations committee fail to resolve the grievance, either party may appeal to an outside arbitrator.   Two outside arbitrators are selected upon the mutual agreement of the union and management, each of whom has the right to discharge either arbitrator at one year intervals, thereby reopening the mutual agreement selection process.   Following notice of appeal, the parties are entitled to a full arbitration hearing, at which each may present all evidence relevant to the grievance.   The arbitrator must submit a written decision, which may include a variety of remedies.

There is one notable exception to the grievance and arbitration procedure outlined above.   Section 8 of Article VII of the collective bargaining agreement provides:  “In the event a matter filed as grievance in accordance with the provisions of Section 3 above gives rise to issues involving the integrity of, or public confidence in, the game of professional football, the [NFL] Commissioner may, at any stage of its processing, after consultation with the PCRC [player-club relations committee], order that the matter be withdrawn from such processing and thereafter processed in accordance with the procedure provided in Article VIII of this Agreement, Commissioner Discipline.”

Article VIII removes “all disputes involving a fine or suspension imposed upon a player by the Commissioner for conduct on the playing field, or involving action taken against a player by the Commissioner for conduct detrimental to the integrity of or public confidence in, the game of professional football ․” from the Article VII grievance procedure.   Instead, such matters are to be handled exclusively by the NFL Commissioner.   A player's rights are limited to an appeal—to the Commissioner—from the Commissioner's disciplinary action against the player, after which the Commissioner is required to hold a hearing and issue a written decision.   The NFL Commissioner is appointed and his salary is paid by the management of the League member clubs.

CONTENTIONS

I

Defendants contend the trial court erred in finding the arbitration clause in plaintiff's contract to be a contract of adhesion.

II

Defendants further contend the trial court erred in ruling that the grievance and arbitration procedure in Article VII of the collective bargaining agreement falls below those minimum levels of integrity required of a contractual substitute for judicial proceedings.

III

Defendants also assert the trial court abused its discretion in permitting plaintiff to file a belated response to the petition to compel arbitration.

IV

Finally, defendants aver the trial court erred in holding that individual defendants Dominic Frontiere and Georgia Frontiere are not entitled to the benefits of the arbitration clauses.

DISCUSSION

I

 We find merit in defendants' contention the trial court erred in finding the arbitration clause in plaintiff's contract to be a contract of adhesion.   Typically, the term “contract of adhesion” “signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.”  (Neal v. State Farm Ins. Co. (1961) 188 Cal.App.2d 690, 694, 10 Cal.Rptr. 781 [approved in Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 171 Cal.Rptr. 604, 623 P.2d 165].)

Superficially, the NFL players contract in general and the arbitration clause in particular appear to fall within the Neal/Graham definition.   The general contract is standardized and the arbitration clause is non-negotiable.   The difficulty lies in the issue of whether the arbitration clause was imposed and drafted by the party of superior bargaining strength.   In concluding the clause was so imposed and drafted, the trial court apparently accepted plaintiff's evidence that he objected to the arbitration clause, but was informed unequivocally that no players contract would be approved without the arbitration clause—in other words, he could “take it or leave it.”   Were it clear that the Rams' management or the NFL management council had the power to negotiate the issue of arbitration and nevertheless imposed the clause on all individual players, we would perforce agree with the trial court.

We note, however, that the standard players contract has its genesis in the 1977 collective bargaining agreement executed by the players union and the management council.   Article XII, section 1 of that agreement requires the use, by all team managements and all players, of this contract form in conformity with the terms of the collective bargaining agreement.   That the standard contract must conform with the provisions of the collective bargaining agreement is further made clear by section 2.   Section 2 limits changes in the standard contract to those agreed upon by the player and the club which are consistent with the collective bargaining agreement and the union constitution and bylaws or those made with union approval.

Since Article VII requires the use of its grievance and arbitration procedure in any dispute “involving the interpretation or application of, or compliance with, provisions of ․ the NFL Players Contract,” neither management nor a player could negotiate an alternate form of dispute resolution consistent with the collective bargaining agreement.   Any contract not providing for arbitration would violate Article XII of the collective bargaining agreement.   Hence, the arbitration clause is not imposed and drafted by management dealing from a position of superior bargaining strength.   Rather, it is imposed by and drafted pursuant to the collective bargaining agreement—from the record before us, presumably a freely negotiated contract.   This is readily distinguishable from Graham v. Scissor-Tail, Inc., supra, 28 Cal.3d 807, 171 Cal.Rptr. 604, 623 P.2d 165, where the contract was required by the union constitution and bylaws and no bargaining took place.

We are aware, of course, that a collective bargaining agreement may itself be utilized in circumstances suggestive of a contract of adhesion, such as those in Painters Dist. Council No. 33 v. Moen (1982) 128 Cal.App.3d 1032, 181 Cal.Rptr. 17, where an agreement in finished form was presented to one small contractor on a “take it or leave it” basis.   However, the instant matter does not present a similar situation.

Generally, a collective bargaining agreement is the product of the duty statutorily imposed on each party to bargain in good faith.  (29 U.S.C. §§ 158(a)(5), 158(b)(3), 158(d);  Labor Code, §§ 1153, 1154.)   The very purpose of labor law is to uphold the employees' right to bargain collectively and to place employees on a more or less equal footing with the employer.  (Gold v. Gibbons (1960) 178 Cal.App.2d 517, 520, 3 Cal.Rptr. 117;  see also Chavez v. Sargent (1959) 52 Cal.2d 162, 190, 339 P.2d 801.)   There is no evidence in the record that the management council drafted the collective bargaining agreement and imposed it on a weak and powerless union.   Neither is there evidence that any dispute ever arose claiming the agreement was not the product of bona fide good faith bargaining.   Plaintiff, as well as defendants, was represented in the negotiations which led to the 1977 collective bargaining agreement.   On the record before us, we must conclude that the non-negotiable provisions of the NFL player contract were bargained for and settled upon at that time.   Accordingly, the NFL player contract arbitration clause cannot fairly be deemed a contract of adhesion;  the clause is the natural and contemplated outgrowth of what appears to be a bona fide, bargained-for agreement.   The foregoing conclusion is not, however, dispositive of the instant matter.

II

Defendants further contend the trial court erred in ruling that the grievance and arbitration procedures in Article VII of the collective bargaining agreement fall below those minimum levels of integrity required of a contractual substitute for judicial proceedings.   We disagree.

Initially, we note that Graham v. Scissor-Tail, Inc., supra, 28 Cal.3d 807, 171 Cal.Rptr. 604, 623 P.2d 165 did not limit the requirement for such “minimum levels of integrity” to arbitration provisions set forth in contracts of adhesion;  the court simply considered “circumstances smacking of adhesion” an aggravating factor.  (Id., at pp. 825, 828, 171 Cal.Rptr. 604, 623 P.2d 165.)   Concluding the analysis of the arbitration provisions at issue in Graham, the court stated:  “Such a provision, being inimical to the concept of arbitration as we understand it, would be denied enforcement in any circumstances;  clearly it cannot stand in a case which, like that before us, requires the careful and searching scrutiny appropriate to a contract with manifestly adhesive characteristics.”  (Id., at p. 828, 171 Cal.Rptr. 604, 623 P.2d 165.)

Graham specifically held that a contractual provision designating as sole arbitrator a party to the contract or one whose interests are closely allied with those of a party must be denied enforcement on the ground it would be unconscionable to permit the designated arbitrator so to serve.  (Id., at p. 827, 171 Cal.Rptr. 604, 623 P.2d 165.)   Relying on this holding, the trial court focused solely on the effect of section 8 of Article VII on the integrity of the arbitration mechanism.   We limit our focus in a like manner.

Section 8, Article VII of the collective bargaining agreement permits the NFL Commissioner, after consultation with the player-club relations committee, to order any dispute, filed as a grievance, which “gives rise to issues involving the integrity of, or public confidence in, the game of professional football” removed from the grievance and arbitration process.   Thereafter, the matter is processed pursuant to Article VIII, commissioner discipline.   In essence, section 8 of Article VII acts as an “escape clause,” permitting the removal of a matter from the normally-contemplated arbitration setting against the wishes of the aggrieved party.   As such, it is an integral part of the agreement to arbitrate and the arbitration mechanism itself.

Article VIII refers to the Commissioner's power to take certain disciplinary measures against players for conduct “detrimental to the integrity of, or public confidence in, the game of professional football,” thus echoing the language of section 8, Article VII.   The Commissioner must provide written notice of the action taken.   Should a dispute then arise as to the discipline imposed, a player's sole recourse is to appeal the action to the Commissioner.   Thereafter, the Commissioner must hold a hearing, but his written decision following a hearing constitutes a full and final disposition of the dispute.   In essence, then, once the Commissioner exercises his removal power under section 8, he becomes the sole and final arbiter of any dispute so removed.   It is noteworthy, in this regard, that while pre-removal consultation with the player-club relations committee is required, the Commissioner need not obtain the committee's approval of removal.   As noted in Graham v. Scissor-Tail, Inc., supra, 28 Cal.3d 807, 826, 171 Cal.Rptr. 604, 623 P.2d 165:  “when it can be demonstrated ․ that the clear effect of the established procedure ․ will be to deny the resisting party a fair opportunity to present his position, the court should refuse to compel arbitration.”

Unquestionably, the NFL Commissioner's interests are closely allied with those of management.   He is appointed and paid by team owners;  he functions as something of a managerial overseer.   In that role, the assessment and discipline of certain types of player misconduct is confided to him.   In the dichotomy of player versus management, it is difficult to conceive of a closer alliance between the Commissioner's interests and those of management.   Given the Commissioner's management bias, the removal power conferred on him by section 8 clearly would, if exercised, deprive a player of the fair opportunity to present his position.   Therefore, if the instant dispute falls within the ambit of the Commissioner's removal power, the existence of a fair and impartial arbitration mechanism would be purely illusory;  to subject plaintiff to such an illusion of neutral dispute resolution would be unconscionable.

The phrase “public confidence” carries no generally recognized meaning.   It is a vague, amorphous phrase incapable of definition.   That being the case, it is conceivable that any acrimonious player-management dispute involving allegations of mistreatment or malicious conduct could, in the Commissioner's opinion, raise issues involving “public confidence” in professional football.   By virtue of the very words employed, there are no limits to the Commissioner's discretion to remove a matter from the grievance and arbitration process;  neither was any evidence presented to indicate that the removal power has been more narrowly construed by custom and usage.

 Inasmuch as the Commissioner's discretion in exercising the removal power is broad enough to encompass any dispute, including that at issue here, the grievance and arbitration procedures incorporated from the collective bargaining agreement into the arbitration clause of plaintiff's contract must be deemed so unfair as to be unenforceable.

 Notwithstanding the strong public policy favoring arbitration as a means of dispute resolution and the corollary maxim that every intendment must be indulged to give effect to an agreement to arbitrate (Wheeler v. St. Joseph Hospital (1976) 63 Cal.App.3d 345, 355–356, 133 Cal.Rptr. 775), that policy cannot displace the necessity that minimal standards of due process attend the curtailment of the sacrosanct right to trial by jury.  (See Ramirez v. Superior Court (1980) 103 Cal.App.3d 746, 756, 163 Cal.Rptr. 223.)   A provision permitting one individual, with interests so allied to one of the parties, to designate himself the sole arbiter of any dispute “does not achieve the ‘minimum levels of integrity’ which we must demand of a contractually structured substitute for judicial proceedings.”  (Graham v. Scissor-Tail, Inc., supra, 28 Cal.3d 807, 828, 171 Cal.Rptr. 604, 623 P.2d 165.) 1

III

 Defendants assert the trial court abused its discretion in permitting plaintiff belatedly to respond to the petition to compel arbitration.   Again, we disagree.

Plaintiff filed written opposition to arbitration in a timely fashion;  his sole failure was to file a formal response to the petition within the statutorily required ten days.  (Code Civ.Proc., § 1290.6.)   Hence, defendants were fully apprised of plaintiff's defenses to arbitration;  that is the purpose of the response.  (Player v. Geo. M. Brewster & Son, Inc. (1971) 18 Cal.App.3d 526, 532, 96 Cal.Rptr. 149.)   Accordingly, it is clear defendants suffered no prejudice by virtue of a belated filing of the formal response.   Where a party has complied with the spirit and purpose of a procedural requirement, the courts will not demand the idle and futile act of technical conformity.  (Ibid.)  As a consequence, a reasonable interpretation of the technical “mistake” at issue here permits the conclusion it was excusable;  we cannot say as a matter of law that the trial court exceeded the bounds of reason, thereby abusing its discretion.  (Alvarado v. City of Port Hueneme (1982) 133 Cal.App.3d 695, 705–706, 184 Cal.Rptr. 154.)

In view of the conclusion we reached, ante, we find it unnecessary to address defendant's final averment.

The order is affirmed.

I respectfully dissent.

I would reverse the order of the trial court and direct the entry of an order compelling the parties to proceed to arbitration as provided by contract.   My reasons are:

FIRST, the contract in question, renewed April 1, 1980, was a modified version of the standard National Football League (NFL) player contract, drafted pursuant to a collective bargaining agreement between the NFL Players' Association (union) and the NFL Management Council, effective March 1, 1977.   Both the player contract and the collective bargaining agreement clearly provided for grievance and arbitration procedures designed to deal with “any dispute” arising from the contractual terms.

Unquestionably the matter before us is just such a dispute;  despite the inclusion in plaintiff Dryer's complaint of numerous causes of action, all arise from defendants' decision, assertedly in contravention of a “no-cut” provision in Dryer's contract, removing Dryer from service as an active Rams' player in 1981.

Stripped of the fanfare and public interest generated due to the prominence of the parties and of professional football, the Dryer-Rams dispute is simply a labor dispute governed by grievance and arbitration provisions bargained for by the parties.   The majority opinion has correctly concluded that the trial judge improperly held that Dryer's modified player contract was one of adhesion, in the absence of persuasive evidentiary support.   In that respect, I agree with the majority opinion.

SECOND, I further agree with the majority opinion that neither the fact that it is a labor dispute arising from an employment contract nor that the contracts are non-adhesive in character disposes of the issue of whether the grievance and arbitration procedures utilized therein fall below those “minimum levels of integrity” described in Hines v. Anchor Motor Freight (1976) 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 and referred to with approval in Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, at 825, 171 Cal.Rptr. 604, 623 P.2d 165.

However, unlike the majority opinion, I conclude that it has not been demonstrated here that the procedures contemplated by the agreements can be fairly characterized as lacking the requisite integrity.   It need only be said of the grievance procedure that it is informal in nature but provides for player participation.   The arbitration procedure contemplates the use of arbitrators agreed upon by management and the players and provides a panoply of procedural safeguards, quite unlike the union contract considered by our Supreme Court in the Graham case.

As I construe the majority opinion, it nullifies the arbitration clause because section 8 of article VII of the collective bargaining agreement provides that when matters filed as grievances give rise to “issues involving the integrity of, or public confidence in, the game of professional football” the NFL Commissioner may step in, take charge of the matter, and apply discipline, if such is required.   As I interpret that provision, it simply has no bearing on the dispute before us, which has not evolved from the grievance provisions and has nothing to do with the typical discipline situations in which the Commissioner has an understandable interest (gambling, use of drugs, etc.).

In my view, the majority opinion has fashioned a straw man.   There is not even a hint in this case that intervention in this dispute has been considered by the Commissioner.   Moreover, defendants have offered to waive any possibility of intervention by him, in the interests of proceeding to arbitration.

Furthermore, it is worth noting that in Graham the issue of fair procedure was not debated in the abstract (as the majority opinion does here) but was squarely before the court because the asserted procedural unfairness had already occurred.   Here, arbitration is being denied defendants not on the basis of what has occurred but what might occur, assuming that one accepts the premise (uncertain, at best) that the Commissioner could intervene in this dispute.

In addition, Graham is careful to point out the seriousness of denying arbitration to those who have bargained for it.   As was said in Graham at 28 Cal.3d 826, footnote 23, 171 Cal.Rptr. 604, 623 P.2d 165:  “Enforcement of an agreement to arbitrate should be denied on this ground [procedural unfairness] we think, only in the clearest of cases, i.e., when the applicable procedures essentially preclude the possibility of a fair hearing.   In all other cases the matter should be permitted to proceed to arbitration.   If, in the course of arbitration proceedings, the resisting party is actually denied a fair opportunity to present his position, ample means for relief are available through a subsequent petition to vacate the award.  [Citations.]”  (Emphasis added.)

The unlikely intervention by the NFL Commissioner in an arbitration proceeding does not in my view constitute a clear case for rendering the entire arbitration procedure fatally defective.   In any event, the majority opinion's concern with this unlikely intervention is premature.

FINALLY, this state has a strong public policy favoring arbitration—a well established public policy.   Our Supreme Court has in fact quite recently reiterated that policy, characterizing arbitration “as a speedy and relatively inexpensive means of dispute resolution.”  (Ericksen, Arbuthnot, McCarthy, Kearny, & Walsh, Inc. v. 100 Oak St. (1983) 35 Cal.3d 312, 197 Cal.Rptr. 581, 673 P.2d 251.)

I see no reason, set forth in Graham or any other authority, for veering from the course favoring arbitration in the context and posture of the case at bench.

FOOTNOTES

1.   In Graham, the court having held the arbitration procedure unenforceable, fashioned a remedy which made available to the parties a truly neutral arbitration if they wanted it;  if not, judicial determination of the controversy was deemed the available alternative.   Notwithstanding Graham, we do not consider such an approach appropriate in the instant matter.  Graham involved the reversal of an order compelling arbitration, while the instant matter involves a determination of the correctness of an order denying a petition to compel arbitration, which petition was vigorously opposed.   It is all too clear that plaintiff does not wish to proceed to arbitration.   Inasmuch as an integral portion of the overall arbitration scheme at issue here is likewise unenforceable, there is nothing to be gained in affording these particular parties yet another opportunity to arbitrate.  (Cf. Pascal & Ludwig, Inc. v. State of California ex rel. Dept. Water Resources (1981) 127 Cal.App.3d 178, 189, 179 Cal.Rptr. 403.)

SPENCER, Presiding Justice.

LILLIE, J., concurs.