It’s Outta Here! SCOTUS Decision Sets Stage for Slugfest Over Minor League Baseball Players’ Wages
With the conclusion of the 2020 Major League Baseball (“MLB”) World Series, baseball fans are instinctively looking ahead towards pitchers and catchers reporting for spring training and the start of the 2021 season. The focus of this baseball offseason, however, may be on a first pitch already thrown, from a team wearing a somewhat different kind of uniform.
On “Opening Day” of its 2020-21 term,[1] the U.S. Supreme Court denied certiorari to a petition from MLB to dismiss the class certification of minor league baseball (“MiLB”) players alleging violations of both federal and state labor laws.[2] In doing so, the Court eliminated MLB’s last remaining attempt to challenge the lineup card of plaintiffs before the two sides get set to play ball at trial.[3] Understanding the potential impact on the future of this litigation and on the future of MiLB, however, requires an grasp of both the history of this litigation and the evolving framework under which MiLB is structured.
This case has been anything but a can of corn. Originally filed in 2014, former and active MiLB players sued MLB, the MLB commissioner, and MLB franchises under the Fair Labor Standards Act (“FLSA”) and various state laws,[4] citing MLB’s “long, infamous history of labor exploitation.”[5] “What we’re basically alleging is that [MiLB] players are employees, like any other group of employees, and they’re covered by both state and federal wage and hour laws,” said Garrett Broshuis, a former-MiLB-player-turned attorney and lead counsel for the plaintiffs.[6] Though initially thrown a curveball when denied by the U.S. District Court for the Northern District of California, the players’ motion for class certification was eventually granted by the U.S. Court of Appeals for the Ninth Circuit in August 2019.[7]
According to the players, MLB’s prodigious anti-trust exemption[8] has permitted a “collective exercise of power” for teams to suppress minor leaguers’ wages and conspire to not provide overtime pay[9] nor pay salaries during spring training, fall instructional leagues, or winter training.[10] Though not publicly available, at the time of the suit it was believed that minor leaguers were being paid salaries between $1,100 and $2,150 per month during the season, depending on the players’ level in the system.[11] The result is the contention that most minor leaguers were only earning between approximately $3,000 and $7,500 per year.[12] Such astoundingly low salaries, especially in light of MLB’s massive yearly revenue increase,[13] are enabled by MLB rules and the implementation of required MiLB uniform player contracts (“UPCs”).[14] The UPCs effectively permit the assignment of salaries below federal and state minimum wage standards[15] and declare that salaries are only to be paid during the championship season,[16] all while explicitly requiring athletic performance and training over the full calendar year.[17]
MiLB players have no choice but to accept the terms of their UPC, due to the systemic absence of any contractual mobility whatsoever.[18] Once selected in the amateur draft, a player cannot bargain with any other franchise[19] and can only sign with the team that drafted him.[20] Players cannot play without signing the UPC because a “player’s refusal to sign a formal contract shall disqualify the player from playing with the contracting Club or entering the service of any Major or Minor League Club.”[21] Once signed, the UPC grants the MLB team the exclusive rights to the minor leaguer for seven seasons.[22] During that time, the franchise may trade or release him at any time.[23] This extraordinary magnitude of one-sided leverage was seemingly given a performance-enhancing drug in 2018 with the enactment of the Save America’s Pastime Act.[24] It specifically removed MiLB players from protection under the FLSA to be paid at minimum wage, for overtime worked above forty hours per week, and for offseason training,[25] and effectively required the players’ class certification in individual states in order to continue the lawsuit.[26]
The Supreme Court decision to not hear MLB’s appeal follows a pandemic-cancelled MiLB season and coincides with the expiration of the latest Professional Baseball Agreement between MLB and MiLB.[27] The expectation is that MLB will take control of the minor leagues in a major overhaul,[28] with reports indicating up to a quarter of MiLB teams may be contracted.[29] It is against this backdrop that the two sides finally toe the rubber in federal court. Baseball fans will eagerly anticipate the start of the 2021 season, this time with a unique legal battle to keep their eyes on, looming in the on-deck circle.
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