Second Circuit to NFL: “Arbitration” Can’t Mean “Commissioner Decides Everything”
The Second Circuit just delivered a sharp reminder that the Federal Arbitration Act (FAA) protects real arbitration—not a process where one side’s top executive unilaterally controls who the arbitrator is and how the proceeding runs. In Flores v. New York Football Giants, the court affirmed the denial of the NFL’s motion to compel arbitration, holding that the league’s internal scheme—vesting sweeping authority in the Commissioner to select the arbitrator and dictate procedure—provided “arbitration in name only” and therefore fell outside the FAA’s protection.
Below is what happened, why the court said the FAA didn’t apply, and what this means for any employer relying on in-house or bespoke arbitration frameworks.
The short story
Former Miami Dolphins head coach Brian Flores sued the NFL and several clubs for race discrimination and related claims. The league moved to compel arbitration based on agreements that incorporated the NFL Constitution. That document gives the Commissioner near-total control over “arbitrations”: the ability to pick the decision-maker (including himself or his designee), set procedures, and resolve disputes that involve the league and its clubs.
The Second Circuit agreed with the district court that this setup isn’t the kind of bilateral, neutral adjudication the FAA was written to enforce. Because the Commissioner—the principal executive of a party adverse to Flores—wields unilateral control over arbitrator selection and the conduct of proceedings, the court concluded the process lacks a genuinely independent forum and a defined, even-handed procedure. Put simply, it’s not arbitration as the FAA uses that term.
The core legal holding: FAA protection requires a real arbitral forum and real rules
The decision turns on two bedrock FAA concepts that often get less attention than they deserve:
Independent Arbitral Forum. Arbitration under the FAA presupposes a neutral decision-maker and a forum separate from the parties. The NFL’s framework failed that test because it routed disputes to the unilateral “substantive and procedural discretion” of the Commissioner—the chief executive of one of the litigants. That kind of structural bias made the process inherently one-sided.
Identifiable, Bilateral Procedure. The FAA also assumes the parties will have a procedure for resolving their dispute—either a mutually agreed set of rules or at least a fair method for setting them. Again, the NFL’s system fell short: the Commissioner could set the rules himself, from who hears the case to how it’s heard, without bilateral checks. The Second Circuit emphasized that such one-way control “undermines the fairness required for a valid arbitration agreement under the FAA.”
Because these structural flaws meant Flores could not meaningfully “vindicate [his] statutory cause of action in an arbitral forum,” the court held the league’s provision unenforceable, and it allowed Flores’s case to proceed in federal court.
Why this matters beyond football
Plenty of employers (and industry associations) like the speed and privacy of arbitration, and some design custom pathways to get there. Flores is a wake-up call: if your “arbitration” process centralizes control in your own hands—especially over who the arbitrator is and what rules apply—you’re courting FAA problems. Courts will look past labels and ask whether the procedure actually looks like arbitration in any recognizable sense.
Three broader implications:
Unilateral control is a red flag. The closer your setup gets to “we pick the decision-maker and write the rules,” the likelier it is a court will say the FAA does not apply. The Second Circuit’s reasoning was explicit on this point.
The “effective vindication” lens is alive and well. The court leaned on the principle that arbitration must allow a party to effectively pursue statutory rights. A structure that places a litigant before an adversary’s executive—who also controls procedure—predictably fails that test.
Industry-wide templates aren’t bulletproof. Even widely used, constitution-style instruments (think leagues, trade groups, large franchise systems) are vulnerable if they collapse neutrality and procedure into the hands of one side.
Drafting checklist: How to keep your arbitration program on solid FAA ground
Use this case as a design audit. The goal is to ensure neutrality and bilaterality are baked in:
Name an independent admin and rule set. Incorporate a recognized provider (e.g., AAA, JAMS) and an applicable set of rules (employment/consumer rules) by reference. That instantly supplies neutral appointment mechanisms, disclosure obligations, and baseline procedures.
Preserve neutral selection—no unilateral vetoes. Provide a mutual strike-and-rank process or a provider-administered list method. Avoid any clause that lets one party (you) hand-pick the arbitrator or block a neutral without cause.
No party-officer arbitrators. Expressly bar current officers, directors, or employees of either party from serving as the arbitrator or being able to appoint the arbitrator.
Lock procedures bilaterally. If you want customization, say that any procedural modifications must be mutually agreed or ordered by the arbitrator under the governing rules—not imposed by one side’s representative.
Separate case management from the enterprise. Don’t lodge procedural decision-making in an internal executive (general counsel, president, commissioner). Leave case management to the arbitral institution and the arbitrator.
Avoid unilateral amendment clauses. Provisions letting you change the arbitration program at will (especially mid-dispute) are catnip for unenforceability arguments. If updates are needed, apply them prospectively and even-handedly.
Preserve remedies and discovery sufficient to vindicate statutory rights. Make clear the arbitrator can award any relief a court could, and incorporate discovery that is at least adequate for the claims at issue (most provider rules already do this).
Provide for a neutral seat and venue. Tie the seat/venue to the claimant’s work location or another neutral forum, not just the company’s home turf.
Transparency on costs and fees. Follow applicable due-process protocols (e.g., employer bears unique arbitration fees in employment cases). Hidden cost-shifting can also undermine enforceability.
Train on administration. Even a well-drafted clause can be sunk by sloppy administration. Assign a neutral coordinator (outside counsel or provider liaison) to ensure deadlines, invoices, and logistics run by the book.
What employers should do now
Audit existing clauses—especially industry or association “constitution” provisions, employee handbooks, and multi-entity frameworks. Scrub for any language that gives your officers unilateral control over arbitrator selection or procedure.
Refresh templates to use an independent provider and neutral appointment mechanics. If your system relies on internal officials to “hear” disputes or to appoint their own designees, plan a redesign.
Stress-test against the effective-vindication doctrine. Could a plaintiff plausibly argue they cannot realistically pursue statutory rights in your forum? If so, revise.
Expect closer scrutiny from courts (and plaintiffs) of bespoke internal arbitration regimes. Flores offers a clear roadmap for challenges where one side dominates the process.
Bottom line
Flores doesn’t diminish the FAA’s strong policy favoring arbitration; it enforces it. The FAA protects agreements to submit disputes to a neutral decision-maker under fair, bilateral procedures. It does not protect a process where one side’s chief executive chooses the adjudicator and writes the rules. If your arbitration program looks too much like you adjudicating your disputes, courts will call it what it is—“arbitration in name only”—and let the case proceed in court.
To read the opinion, click here.