The NFL Draft's Legal Loophole: Why It Works
By Elena Gonatos '27
Every year, over 13 million football fans tune in to watch the National Football League (NFL) Draft, where eligible athletes learn which franchise will launch their professional careers. It is one of the league's largest annual events, filled with excitement, anticipation, and career-defining moments. But behind this spectacle lies a crucial legal question: How can the NFL legally tell players where they must work?
In almost any other industry, this arrangement violates U.S. antitrust law because it limits competition among employers and restricts employees' freedom to choose where they work. However, the NFL Draft has existed for nearly ninety years and continues to withstand legal scrutiny.
Although the draft restricts player mobility and likely raises antitrust concerns in most industries, it remains lawful because it is collectively bargained between the NFL and the National Football League Players Association (NFLPA). The draft survives not because it avoids antitrust issues, but because labor law provides an important exception.
Each spring, NFL teams select eligible football players in seven rounds. The order of selection is based primarily on the previous season's standings, with the team that had the worst season drafting first and the Super Bowl champion drafting last. Once a player is selected, that player's negotiating rights belong to the drafting team. Unlike traditional job applicants, drafted players cannot compare offers or negotiate with whichever organization offers the best contract.
The draft was initially created to balance competition throughout the league. By awarding weaker teams the first pick of the incoming talent, the NFL attempted to prevent more successful franchises from dominating year after year. However, this system comes at a cost as incoming players sacrifice a significant degree of freedom in deciding where they begin their professional careers.
The NFL Draft presents a striking anomaly under U.S. antitrust law. The Sherman Antitrust Act of 1890 prohibits agreements that unreasonably restrain trade or reduce competition. Moreover, the Clayton Antitrust Act of 1914 addresses specific anticompetitive practices, including mergers that may substantially lessen competition, and interlocking directorates, which generally bar the same ‘person’ from making business decisions for competing companies. Since the NFL is not a monopoly, but rather a trade association of 32 independently owned franchises that collaborate on business operations, it should be treated legally as such. The NFL Draft, a league-wide operation including all franchises, toes the line of violating antitrust laws. While people often think of antitrust law as preventing monopolies, it also protects competition within labor markets.
So, if the NFL Draft is seemingly difficult to justify under antitrust law, why has it remained legal?
The NFLPA, the union for NFL players, negotiates with the NFL to establish a Collective Bargaining Agreement (CBA), a comprehensive document detailing player benefits, salary, safety practices, working conditions, and rights as professional athletes. NFLPA agents also work with each player to negotiate salary and player contracts in conjunction with their team. In the CBA, Article 6 specifically explains the process of the NFL Draft. Under the nonstatutory labor exemption, the NFL Draft is considered legal as courts “exempt the actual agreements between and among employers and unions from antitrust liability,” demonstrating how labor law can override antitrust law in certain cases.
In the U.S. Court of Appeals for the Eighth Circuit case Mackey v. National Football League, the court ruled that the “Rozelle Rule” violated antitrust law as an unreasonable restraint on trade, as it required a team signing a veteran free agent to compensate the player's former team. The court determined that the rule was overly broad and did not qualify for the non-statutory labor exemption because it was not the product of collective bargaining.
Similarly, in the U.S. Supreme Court case Brown v. Pro Football, the court ruled 8-1 that the NFL did not violate antitrust law when clubs set a $1,000 weekly salary for developmental squad members after negotiations with the NFLPA reached an impasse. The court found in the labor laws the nonstatutory antitrust exemption that applies when needed to make the collective bargaining process succeed.
In the Clarett v. National Football League case of the U.S. Court of Appeals for the Second Circuit, former Ohio State University running back Maurice Clarett argued that the NFL's rule requiring players to be at least three years removed from high school before entering the NFL Draft violated the Sherman Antitrust Act by unlawfully restricting the ability to pursue employment with NFL teams. The NFL responded that the nonstatutory labor exemption protected the eligibility rule because it was part of the larger collective bargaining relationship with the NFL Players Association.
These cases reinforce the principle that employment rules established through collective bargaining can be exempt from antitrust challenges. They also reinforce that labor law legally regulates what happens when negotiations reach an impasse, as employers can implement their last, best offer as a way to keep the labor system going after good faith bargaining practices have been exhausted.
The NFL Draft maintains support due to the belief that it is essential for balancing competition and sustaining fan interest. However, the draft alone may not achieve this goal; winning is not guaranteed with new players, and there is more to an NFL team’s success than solely talent. Receiving higher draft picks does not significantly increase a team's chances of reaching the playoffs, and long-term success depends more on how effectively teams trade and manage their draft capital.
Whether the NFL Draft could exist without collective bargaining remains one of the most debated questions in sports law. Legal scholars generally agree the draft would face significant antitrust challenges if it were imposed unilaterally by the NFL rather than negotiated through a collective bargaining agreement with the NFLPA. The draft restricts incoming players by preventing them from freely negotiating with all 32 teams, a restraint that could be challenged under the Sherman Antitrust Act.
The nonstatutory labor exemption has become the primary legal basis for preserving the draft despite its restrictions on competition and player mobility. The draft does, however, significantly limit rookie bargaining power and would likely be difficult to justify under antitrust law without the protection of the labor exemption.
Critics call for Congress to abolish the draft, arguing that a free-market system would better protect players' economic rights. The Denver Law Review proposes replacing the draft with a true free-agent system in which all eligible rookies could negotiate with any NFL team. Teams would compete for players through the open market, enabling athletes to choose the employer offering the best combination of salary, opportunity, and career development.
To address concerns that wealthier franchises would dominate the market, suggestions are made that Congress authorize alternative balance measures less restrictive than the draft, such as salary caps, revenue sharing, or luxury taxes, all of which have a smaller impact on player freedom. These changes would allow for competitive balance while eliminating what is viewed as an unnecessary restraint on trade.
The NFL Draft represents an unparalleled intersection of both antitrust and labor law in a mainstream spotlight. Although it restricts player mobility by limiting where incoming athletes can negotiate, it remains lawful because it is collectively bargained between the NFL and the NFLPA and protected by the nonstatutory labor exemption. Cases such as Mackey v. National Football League, Brown v. Pro Football, and Clarett v. National Football League demonstrate that the draft's legality depends on this balance between competition and labor policy.
While supporters argue the draft promotes competitive balance, critics assert that it unnecessarily limits player freedom and bargaining power. As player empowerment continues to grow across professional sports, should the draft remain protected, or is it time to reconsider how much control leagues should have over where athletes begin their careers?
Endnotes
Todd Archer, “Quieter Offseason Has Cowboys Focused on the Right Things,” ESPN, July 24, 2026, https://www.espn.com/nfl/story/_/id/49418639/dallas-cowboys-2026-quiet-offseason-focused-winning. (espn.in)
National Football League, “NFL Draft History, Rules, Traditions, Mr. Irrelevant, Salaries, and More,” ESPN, 2025, https://www.espn.com/nfl/draft2025/story/_/id/44404897/nfl-draft-history-rules-traditions-mr-irrelevant-salaries-questions.
Sherman Antitrust Act, 15 U.S.C. § 1 (1890).
Clayton Antitrust Act, 15 U.S.C. §§ 12–27 (1914); Federal Trade Commission, “The Antitrust Laws,” accessed July 19, 2026, https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws.
National Football League Players Association, “About the NFLPA,” accessed July 19, 2026, https://nflpa.com/about.
National Football League and National Football League Players Association, Collective Bargaining Agreement (2020), art. 6, https://nflpaweb.blob.core.windows.net/website/PDFs/CBA/March-15-2020-NFL-NFLPA-Collective-Bargaining-Agreement-Final-Executed-Copy.pdf.
Bona Law, “What Are the Statutory and Non-Statutory Labor Exemptions to Antitrust Liability?” accessed July 19, 2026, https://www.bonalaw.com/insights/legal-resources/what-are-the-statutory-and-non-statutory-labor-exemptions-to-antitrust-liability.
Bona Law, “What Are the Statutory and Non-Statutory Labor Exemptions to Antitrust Liability?” accessed July 19, 2026, https://www.bonalaw.com/insights/legal-resources/what-are-the-statutory-and-non-statutory-labor-exemptions-to-antitrust-liability.; Mackey v. National Football League, 543 F.2d 606 (8th Cir. 1976).
Mackey, 543 F.2d 606.
Brown v. Pro Football, Inc., 518 U.S. 231 (1996).
Brown, 518 U.S. 231; Bona Law, “What Are the Statutory and Non-Statutory Labor Exemptions to Antitrust Liability?”
Clarett v. National Football League, 369 F.3d 124 (2d Cir. 2004).
National Labor Relations Advocates, “More About Good Faith Bargaining,” accessed July 19, 2026, https://nlradvocates.com/more-about-good-faith-bargaining/.; John R. Gerba, “Instant Replay: A Review of the Case of Maurice Clarett, the Application of the Non-Statutory Labor Exemption, and Its Protection of the NFL Draft Eligibility Rule,” Fordham Law Review 73, no. 5 (2005): 2651–86, https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=4081&context=flr.
Peter B. Coughlan, “Does the NFL Draft Actually Promote Competitive Balance?” Vanderbilt Business School, October 9, 2024, https://business.vanderbilt.edu/news/2024/10/09/does-the-nfl-draft-actually-promote-competitive-balance/.
Thomas Simpson, “Call Upon Congress to Abolish the NFL Draft,” Mississippi Law Journal 93, no. 1 (2023), https://mississippilawjournal.org/journal-content/call-upon-congress-to-abolish-the-nfl-draft/.
Burton F. Brody, “NFL Free Agency: A Modest Proposal,” Denver Law Review 67, no. 2 (1990): 155–64, https://digitalcommons.du.edu/cgi/viewcontent.cgi?article=2513&context=dlr.
Simpson, “Call Upon Congress to Abolish the NFL Draft.”
Brody, “NFL Free Agency.”
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