Second Circuit’s NFL Arbitration Ruling Extends to the Boardroom

The Second Circuit last week threw out the National Football League’s playbook when it rejected the league’s efforts to force former Miami Dolphins head coach Brian Flores’ race discrimination claims into arbitration.

After ruling that Flores’ employment agreements that he signed with various teams over the years contain an “unenforceable” arbitration requirement giving NFL Commissioner Roger Goodell final authority over arbitration disputes, the court could end up being a “magnet for anyone who wants to challenge an employment decision in the NFL,” said Jodi Balsam, professor of clinical law at Brooklyn Law School and an arbitrator for the Forum of Arbitration & Independent Resolution Sport.

It could also have ripple effects for the other major sports leagues in the United States—all of which are headquartered in New York and under the Second Circuit’s jurisdiction—that have similar arbitration requirements in place. It could also extend to other industries, said Lance Tanaka, regional vice president for the American Arbitration Association’s commercial division.

“Arbitration is used across many industries—from commercial and labor matters to employment and construction. These decisions serve as a reminder of the importance of having a process that is fair, neutral, and efficient for all participants. Sometimes we see that outcomes of cases in one industry may impact procedures or processes of related industries,” Tanaka said.

No Deference

Flores, who is Black, sued the NFL, the Miami Dolphins, New York Giants, Denver Broncos, and Houston Texans alleging the league and its teams discriminate against Black coaches in hiring and retention. The Giants, Broncos, and Texans interviewed but didn’t hire Flores for head coaching jobs.

Judge José A. Cabranes acknowledged the court has long recognized “the unique ‘informalities’ of arbitral procedures and the ability of parties to construct arbitration agreements on their own terms,” but said the NFL Constitution’s arbitration provision fails to bear even a passing resemblance to traditional arbitration.

The decision signals to the NFL that it it won’t get the deference that it’s enjoyed in the past and could impact its arbitration process going forward, said N. Jeremi Duru, professor of law and director of the Sports and Society Initiative at American University.

Other leagues that have similar arbitration processes—particularly those empowering the league commissioners—in place should be rethinking their approach at this point, said Balsam.

“Are you going to start restructuring dispute resolution process now or wait until it’s too late and you’re in court?” she asked.

Empowering commissioners doesn’t make sense when it comes to civil rights complaints, said Imre Szalai, law professor at Pace University.

Goodell “would be a perfect decision maker about sports rules,” like he was with the notorious Tom Brady ‘Deflategate’ case, but not for a legal claim, Szalai said. There, the Second Circuit upheld Goodell’s decision to suspend Brady for the first four games of the 2016 NFL season.

Next Steps

Attorneys caution that Flores still has several hurdles to jump over to get a final decision in the case.

The NFL said it would seek a review of the decision. That could mean a rare en banc hearing at the Second Circuit, or asking the US Supreme Court for review.

If those efforts are rejected, it’s likely the parties will move to settle, attorneys said.

“Even if they thought as a legal matter they could win, I don’t think the NFL wants to go to trial. I think their hope is this is resolved before that,” Duru said.

The decision didn’t have much to say about the NFL’s Rooney Rule, which requires teams to interview at least two minority candidates for open head coach and general manager positions. Flores argued his interview with the Broncos in 2019 was a sham to satisfy the rule.

Flores alleged the rule was “totally flouted in this case in a way that was unfair and humiliating,” said Duru. If the case proceeds to trial, that rule will be front and center, he added.

A settlement would be the best pathway for the league, according to Szalai. Letting the case proceed to discovery would make public internal discussions and documents that Szalai said he “can’t imagine the NFL would want to have” released.

The league could take notes from corporate America, which has “managed to achieve what the NFL has failed to do,” which is to include compulsory arbitration clauses in employment contracts for senior executives, but coupled with truly neutral decision makers, Balsam said.

“I don’t know of a single corporation that’s structured its employment arbitration process in a way that empowers the CEO as a decision maker. It’s counterintuitive,” she said.

The case is Flores v. New York Football Giants, Inc., 2d Cir., No. 23-01185, 8/14/25.