NFL Is Dispute Winner : Free Agents: A court upholds the ‘first-refusal’ system that awards draft choices to teams that don’t match competing clubs’ offers to veteran players.

A federal appeals court today ruled in favor of the NFL in its free agency dispute with the players association.

In a split decision, a three-judge panel of the U.S. 8th Circuit Court of Appeals overturned a lower court ruling and said the free agency provisions of the old contract between the two sides cannot be challenged as violations of antitrust laws just because negotiations are at an impasse.

The appeal was filed as a class-action lawsuit by New York Jets offensive lineman Marvin Powell, president of the players association, other players and the association itself.

At issue is the “first refusal-compensation system” that provides that a team could retain a veteran free agent by exercising a right of first refusal and by matching a competing club’s offer.

If the old team decided not to match the offer, the old team would receive compensation from the new team in the form of additional draft choices.

A form of the system was included in an agreement reached in 1982 at the end of a 57-day strike by players. That agreement expired in 1987, and the players again went on strike.

No new agreement was reached, but the players returned to work a month later and took the case to court.