In Ballalatak v. All Iowa Agriculture Association, where ...

[V@ndy87]

In Ballalatak v. All Iowa Agriculture Association, where Ballalatak contended that he was fired for inquiring into whether the company was fulfilling its workers' compensation obligation and the general manager claimed he was fired for insubordination, the Iowa state supreme court held that Ballalatak:
 a. could not sue for wrongful discharge because he was not fired on the same day that he made the inquiry about the injured workers' compensation
  b. should have been awarded damages of up to 10,000 for wrongful discharge
  c. could sue for wrongful discharge because Iowa law protects an employee who advocates internally for another employee's workers' compensation claims
  d. could sue for breach of his rights as a manager to ensure proper compliance with state law inside the company
  e. none of the other choices are correct

Question 2

Restraint of Trade. The National Collegiate Athletic Association (NCAA) coordinates the intercollegiate athletic programs of its members by issuing rules and setting standards governing, among other things, the coaching staffs. The NCAA set up a Cost Reduction Committee to consider ways to cut the costs of intercollegiate athletics while maintaining competition. The committee included financial aid personnel, intercollegiate athletic administrators, college presidents, university faculty members, and a university chancellor. It was felt that only a collaborative effort could reduce costs while maintaining a level playing field. The committee proposed a rule to restrict the annual compensation of certain coaches to 16,000. The NCAA adopted the rule. Basketball coaches affected by the rule filed a suit in a federal district court against the NCAA, alleging a violation of Section 1 of the Sherman Antitrust Act. Is the rule a per se violation of the Sherman Act, or should it be evaluated under the rule of reason? If it is subject to the rule of reason, is it an illegal restraint of trade? Discuss fully.

[popopong]

Answer to Question 1

e

Answer to Question 2

Restraint of trade
The court granted a summary judgment in favor of the coaches and issued a permanent injunc-tion against the enforcement of the rule. On the NCAA's appeal, the U.S. Court of Appeals for the Tenth Circuit affirmed the lower court's judgment. The appellate court applied the rule of reason to determine that the NCAA rule was an unreasonable restraint of trade. The court ex-plained that the United States Supreme Court applied a rule of reason approach in reviewing an NCAA plan for televising college football that involved both limits on output and price fixing because the plan was in an industry in which horizontal restraints on competition are essential if the product is to be available at all. The court noted that other courts also have applied a rule of reason analysis to sports league rules. In this case, the product is college basketball; the horizontal restraints necessary for the product to exist include rules such as those forbidding payments to athletes and those requiring that athletes attend class.
The court applied a quick look rule of reason. The court acknowledged that the NCAA Rule was successful in artificially lowering the price of coaching services. The court consid-ered the procompetitive effects of the rule, however, (the NCAA argued that the rule allowed for new coaches to enter the profession and that the rule cut costs and maintained competition) and concluded that those effects, even if in fact they existed, were not in this case procompeti-tive factors that qualified as defenses under antitrust law. There was no proof that new coach-es were entering the profession because of the rule, or that the rule cut costs and maintained competition in ways that were protected by antitrust law.