CITE: Wood v. National Basketball Association, 809 F.2d. 954 (2d. Cir. 1987)
FACTS: Leon Wood was drafted by the Philadelphia 76ers in the NBA annual college draft on 1984 NBA draft. After being unsuccessful during contract negotiations, Wood was offered a one year contract at $75,000. Patrick Williams, Vice President and General Manager of Philadelphia the contract was offered to Wood not because of the limitations of the 1983 memorandum agreement, but to preserve Philadelphia's exclusive right to negotiate with Wood following the regulations set forth by the NBA. Williams asserts that Philadelphia was prepared to seek a way around the salary cap in order to negotiate a multi-year contract with Wood but could not get Slaughter, Wood's representative, to work out the terms. Wood argues that he is suffering irreparable injury due to being required either to sign a one year contract with Philadelphia at a low value level in an open market or forego playing basketball. He implores the court to grant him preliminary relief which will require the 76ers to negotiate with Wood not limited by the restrictions of the college draft, salary cap and bar on player corporations impose.
ISSUE: Does the NBA's college draft, maximum team salary rules and ban on player corporations constitute violation of section 1 of the Sherman Act, 15 U.S.C. § 1?
HOLDING: No. Wood v. National Basketball Association case was dismissed on the grounds of the non-statutory labor exemption.
RATIONALE: Judge Carter found that both the salary cap and college draft provisions affect only the parties to the collective bargaining agreement, the NBA and player, and involve mandatory subjects of bargaining as defined by federal labor laws, and are the result of bona fide arms-length negotiations. The salary cap and college draft provisions are the concern of the Player's Association, not a player. Due to these reasons, the protective shield of our national labor policy are exempt from the...
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