By Leslie King O’Neal
Are You Ready for Some Football—and Arbitration?
Football season is almost here—the annual frenzy of gridiron clashes between dozens of teams at all competition levels. NFL teams are already holding preseason games before the official season begins on September 4, 2025. The college season gets underway on August 23, 2025. Fans are hopeful this is the year their favorite team will win the conference or the national championship. But football clashes aren’t limited to the gridiron. Suprisingly, two recent court decisions involve football and arbitration.
Game On: Coaches File Suits—NFL Moves to Compel Arbitration
In these cases, an NFL coach and a former coach filed lawsuits against the NFL and others seeking damages. Jon Gruden sued the NFL and Commissioner Roger Goodell in Nevada state court on theories of tortious interference with contract, negligence and civil conspiracy for allegedly leaking his emails, which led to his being forced to step down as coach of the Las Vegas Raiders. Brian Flores sued the NFL, the New York Football Giants and others in a putative class action in New York federal court alleging racial discrimination under 42 U.S.C.§1981. In both cases, the NFL defendants moved to compel arbitration under the coach’s employment agreements which incorporated the NFL Constitution and its arbitration provisions.
Illegal Formation: NFL Arbitration Clause Held Unenforceable
Last week the Nevada Supreme Court and the Second Circuit Court of Appeal issued opinions finding the NFL Constitution’s arbitration clause unenforceable because it was unconscionable under applicable law.[i] The Second Circuit stated, “The NFL Constitution’s arbitration provision is ‘unworthy even of the name of arbitration’ and thus falls outside the FAA’s protection.[ii]
The Commissioner Can’t Also Be the Ref (or Arbitrator)
The NFL’s clause gives the NFL Commissioner unilateral discretion regarding arbitration. Section 8.3 of the NFL Constitution grants the NFL Commissioner “full, complete, and final jurisdiction an authority to arbitrate several types of disputes, including any dispute between any coach and any member club or clubs.” Thus, the Commissioner can arbitrate disputes about his own conduct. In addition, the NFL and its member clubs have the unilateral ability to modify the Constitution’s terms, including the arbitration provisions, without notice.
NFL Defendants Ejected from Arbitration for Unconscionable Clause
Unconscionability is a doctrine under which courts may deny enforcement of all or part of an unfair or oppressive contract based on abuses during the process of forming a contract or within the actual terms of the contract itself.[iii] The Fourth Circuit’s opinion in Hooters of America, Inc. v. Phillips https://law.resource.org/pub/us/case/reporter/F3/173/173.F3d.933.98-1459.html describes the elements of an unconscionable arbitration agreement. The Hooters case involved an employee’s sexual harassment claims against the company. The employee sued Hooters, which moved to compel arbitration under the employment agreement. Affirming the trial court, the Fourth Circuit held the arbitration agreement unenforceable as unconscionable, noting “The Hooters rules . . . are so one-sided that their only possible purpose is to undermine the neutrality of the proceeding.”
For example, Hooters created the list from which arbitrators were chosen, which could include Hooters managers or others with close relationships to Hooters. Hooters could cancel the arbitration agreement and could change the rules in whole or in part without notice to the employees. Hooters could expand the scope of the arbitration to any matter, but the employee could not. Hooters could move for summary dismissal of claims; the employee could not. The Fourth Circuit held that “Hooters materially breached the arbitration agreement by promulgating rules so egregiously unfair as to constitute a complete default of its contractual obligation to draft arbitration rules and to do so in good faith.”
“Unconscionability” = Not a Level Playing Field
Both the Nevada Supreme Court and the Second Circuit found the NFL arbitration clause unenforceable and unconscionable, for some of the same reasons listed in Hooters. The Gruden court found his employment contract was procedurally unconscionable as a contract of adhesion and was substantively unconscionable because NFL unilaterally selected a biased arbitrator. Also, the NFL could unilaterally change the arbitration agreement.[iv]
The Flores court noted the NFL’s clause, “provides for no independent arbitral forum, no bilateral dispute resolution and no procedure,” which are basic features of arbitration. It observed, “The Supreme Court has recently reiterated that the FAA’s mandate is limited to the enforcement of actual ‘arbitration agreements’—meaning ‘a specialized kind of forum-selection clause that posits not only the situs of the suit but also the procedure to be used in resolving the dispute.”[v] The Second Circuit stated, “[s]imply labeling something as ‘arbitration’ does not automatically bring it within the ambit of the FAA’s protection.”
Drafting Tips for Keeping Arbitration Agreements “In Bounds”
The Gruden and Flores cases provide good examples of things to avoid in drafting enforceable arbitration clauses. Arbitration agreements should provide a fundamentally fair forum for both parties.
- Allow parties to select a neutral arbitrator (or panel of arbitrators). The courts here found having the NFL Commissioner as the sole arbitrator of all disputes—even regarding his own conduct—offended “arbitration jurisprudence.” Allowing one party to select the pool of arbitrators has also been held unconscionable.[vi]
- Allowing one party to change the arbitration rules unilaterally is substantively unconscionable.
- Having an independent arbitral forum, bilateral dispute resolution and some dispute resolution procedures, are basic elements of arbitration. Courts may be reluctant to enforce agreements lacking some or all of these.
[i] Flores, et al., v. New York Football Giants, et al., (2d Cir. August 14, 2025)(Case No: 23-1185-cv) Flores v. N.Y. Football Giants, No. 23-1185 (2d Cir. 2025) :: Justia; The National Football League, et al. v. Gruden,(Nevada S. Ct. August 11, 2025) (Case No: 85527) THE NATIONAL FOOTBALL LEAGUE AND ROGER GOODELL v. JON GRUDEN (2025) | FindLaw.
The Flores court applied Massachusetts law; the Gruden court applied California law.
[ii] Citing Hooters of Am., Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999).
[iii] Al-Safin v. Cir. City Stores, Inc., 394 F.3d 1254 (9th Cir. 2005).
[iv] Citing Beltran v. AuPairCare, Inc., 907 F.3d 1240 (10th Cir. 2018) (party’s discretion to choose arbitration agency rendered arbitration clause unconscionable) and Al-Safin v. Cir. City Stores, Inc., supra, note iii (party’s unilateral ability to amend arbitration provision is substantively unconscionable).
[v] Citing Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 653 (2022).
[vi] See Hooters, supra, note ii.