On November 6, NFL Commissioner Roger Goodell appointed New York attorney Ted Wells to “investigate possible misconduct in the [Miami] Dolphins' workplace and prepare a report that will be made public.” The “possible misconduct” centers around veteran Dolphins player Richie Incognito, whom the team suspended indefinitely on November 3 after ESPN reported allegations that Incognito harassed fellow player Jonathan Martin to the point where Martin left the team. Subsequent reports have painted Incognito as a bully who, possibly acting on orders from Dolphins coaches, attempted to “toughen up” Martin through a combination of hazing, threats, extortion and racist insults. Incognito has denied any misconduct. Whatever the outcome of the Wells investigation, the Dolphins affair has once again focused public attention on the NFL's unusual labor system.

Football pundits have largely confined their discussion to the “culture” of the locker room—debating, for instance, whether Martin should have physically confronted Incognito rather than leave the team. Others, like sportswriter Will Leitch, argue the locker room is no different than any other workplace. “If a private company is abusing its employees,” Leitch wrote, “or providing an unsafe or hostile work environment, that's against the law.” Leitch added that laws and “persnickety” human resources policies are in place precisely to “protect those who need protecting.”

Of course, the NFL is hardly a lawless dystopia. The league maintains hundreds of regulations governing every aspect of player conduct—down to the type of socks that must be work on game-day—crowned by a 318-page collective bargaining agreement (CBA) with the NFL Players Association (NFLPA). The CBA, in fact, is a critically overlooked component of the Dolphins story.

If Martin was, in fact, the victim of abusive conduct from a fellow employee—and possibly his supervisors—why were his only apparent options to walk away from football entirely or challenge Incognito to a fight? As Yahoo Sports Radio host Steve Czaban observed, “Only because of the NFL's 'rights system' did Martin not have the choice any other person would have in the professional world—to simply quit and go work for another more 'evolved' company than the 'Miami Dolphins Football Inc.'” This “rights system” is built into the CBA. Martin can refuse to play for the Dolphins. But he can't seek employment with another NFL team unless and until the Dolphins release him. And even then, he must “clear waivers,” meaning any other NFL team can claim the remainder of Martin's existing Dolphins contract.

And keep in mind, Martin's only NFL option coming out of college was to sign with the Dolphins. The team claimed exclusive “rights” to Martin with its second-round draft pick in 2012. The draft is another part of the CBA-based labor system, one designed to artificially suppress competition for new players.

Free Market “Closed Shop” vs. Government Labor Cartel

Many libertarians see nothing wrong with the NFL's labor system. Even in a pure free market, employers and unions could enter into “closed shop” agreements like the NFL's CBA. But as we all know, professional sports hardly exist in a free market. The NFLPA itself holds a government-sanctioned monopoly over all current and future NFL players. Indeed, Martin was not even a union member when the NFLPA signed the current CBA in 2011.

More importantly, in a free market any closed shop would face competition from new entrants seeking to exploit the incumbent's labor restrictions. There's little risk of that with the NFL given that most of its infrastructure is subsidized by government. This includes not just stadiums built with billions in taxpayer financing, but also player development, as most NFL players are the product of college football programs subsidized by state-run universities.

There's also the perverse incentives created by federal antitrust law. The collective bargaining process creates an exemption from antitrust law. Without that exemption, most NFL labor policies, such as the draft, would be deemed illegal. Now, that's hardly a libertarian outcome. But consider the NFL's position. The more rules and restrictions they can stuff into the CBA, the lower the risk of future antitrust lawsuits. Thus, the exemption encourages the NFL (and the NFLPA) to centralize as much of its labor policy as possible.

That means there's little motive to experiment with more flexible labor policies. Individual teams can't offer employee incentives or enforce discipline in any way that conflicts with the CBA. When there are workplace disputes like the Dolphins situation, the bureaucracy acts not to “protect” employees, but to ensure nothing disturbs the government-granted authority of the league and its monopoly labor union.

Commissioner Goodell's appointment of an outside investigator in this case is little more than an exercise in public relations. Both the NFL and the NFLPA have an acute interest in preventing Martin from taking his grievances outside their closed labor system. The union is an especially precarious position. Many of its members—including most of the Dolphins locker room—have publicly sided with Incognito.

Unions are not inherently anti-libertarian. But their collectivist nature under U.S. labor laws often put individuals at an enormous disadvantage. Whatever collective bargaining benefits Martin may enjoy as a member of the NFLPA do not outweigh the restrictions on his ability to get out of what he considers an intolerable working environment. The same may hold for Incognito, who could still turn out to be the innocent victim of a media-fueled railroading by NFL management.