MLB States Its Defense In Minor League Players Lawsuit

In February, three former ballplayers hoping to create a fair pay structure for current minor leaguers filed a lawsuit against Major League Baseball, Commissioner Bud Selig, the Kansas City Royals, Miami Marlins and San Francisco Giants—charging each with illegally suppressing player salaries in violation of federal and state labor laws.

That lawsuit—filed in U.S. District Court in San Francisco on behalf of Aaron Senne (Marlins), Michael Liberto (Royals) and Oliver Odle (Giants) and claiming the defendants have unlawfully denied minor league players minimum wage and overtime pay—has since grown to include 32 former players as plaintiffs and all 30 major league teams. It has gained national attention, bringing to light the financial hardships minor leaguers face off the field while chasing their big league dreams on it.

See also: Minor League Players Sue For Better Salaries

On the surface, it seems difficult to argue against the players' case. After all, can the $8 billion major league baseball industry really require players to attend spring training and instructional league but not pay them for it? Is it legal to pay minor leaguers, on average, between $1,100 and $2,150 per month during the five-month regular season—a sum if broken down to an hourly rate would be below fast-food standards? Is it fair not to pay minor leaguers overtime for their journeys from city to city during a season?

The answer to these questions could very well be yes.

Major League Baseball officials and lawyers had been mum in the months since the original filing of the lawsuit, which the plaintiffs are petitioning to get a class action status, before offering a first glimpse of potential defenses in late May when Selig and 29 teams each filed court-mandated responses. As expected, Selig denied all charges—from suggestions that players are forced to live in poverty off the field to accusations MLB works as a leverage-wielding cartel—while providing 30 potential defenses in a 78-page response.

Los Angeles-based Proskauer Rose LLP is representing Selig and 29 of the 30 major league teams. Only the Baltimore Orioles sought independent counsel and were granted additional time to file a response. Selig did not seek to have the case dismissed in lieu of filing a defense, a tactic that did surprise some observers. However, 11 teams did make such a claim, arguing that they do not conduct business in California where the case has been filed, while the other 18 teams agreed to litigate it there. All 29 teams requested to have the trial transferred to the Middle District of Florida, because the area is more relevant to the case than California (15 clubs maintain spring training sites in the state, including 12 in the Middle District).

While trying the case in Florida might be more convenient for many teams, sports law expert Nathaniel Grow says, their motivation for the change of venue is more likely because Florida courts are considered more employer-friendly than its California brethren. While there are federal claims in the lawsuit, the Florida courts must also interpret laws of the states where the three original plaintiffs played in the minors—Florida, North Carolina and New York (Senne), Arizona (Liberto), and California (Odle).

"This may give them enough of a grounds to have the case moved," says Grow, an assistant professor of legal studies at the University of Georgia's Terry College of Business.

Selig offers a variety of defenses in his response, including that he has no control over minor league player salaries and conditions, that much of the time spent by players is not considered "hours worked," and that MLB acted in "good faith" even if it had failed to pay the plaintiffs any amount due.

However, observers of the case believe only a few defenses filed by Selig will ultimately factor into the case. They are highlighted below:

Arbitration. Selig calls for players to pursue arbitration instead of a lawsuit, as is dictated in the Uniform Player Contract each player and team signs. However, that same clause in the contract states that the arbitrator of such a dispute would be the commissioner, which certainly would create a conflict of interests since Selig is also a defendant in the case.

However, Grow says, a court could still enforce the contract and force the parties to arbitrate before Selig. He points to the "Bounty Gate" scandal in the National Football League as an example. Under the NFL's Collective Bargaining Agreement, commissioner Roger Goodell was technically the arbitrator over the New Orleans Saints players he had suspended—a decision the courts ultimately upheld. Goodell recused himself from the arbitration case and appointed former NFL commissioner Paul Tagliabue to serve in his place.

"I agree that the conflict of interest would probably lead a court to conclude that Selig cannot be expected to preside over the dispute on a neutral basis," Grow wrote in an email. "That having been said, it’s not inconceivable that a court would say that the players have to abide by the contractually agreed-upon process nevertheless."

Exemptions within the Fair Labor Standard Acts (FLSA), including one that does not require amusement and entertainment businesses operated on a seasonal basis (seven months or less) to pay its employees minimum wage or overtime pay. This defense would require the courts to determine whether minor league ballplayers can be classified as seasonal employees and if major league teams can be considered a seasonal employer.

Bill Gould, an emeritus labor and sports law professor at Stanford who served as an arbitrator and mediator between the MLB Players Association and MLB in 1992 and '93, previously said that he does not believe MLB would qualify for a seasonal exemption—in part, because teams earn profits year-round.

"This is the sleeping giant in terms of employees in baseball," Gould previously said of the FLSA exemptions.

There is precedence, Grow notes, regarding seasonal exemptions in baseball. In 1998, members of the Cincinnati Reds maintenance staff sued the team, demanding overtime pay. An Ohio district court initially ruled in favor of the Reds, describing the team as "an amusement or recreational establishment" that played its games during a season that lasted seven months or less. That decision was overruled when the United States Court of Appeals determined that the Reds do not qualify for a seasonal exemption because the team "operated year-round with no fewer than 120 employees in the offseason."

The Detroit Tigers won a similar lawsuit in 1997 when a bat boy sought overtime pay for working more than 40 hours in a week. The Tigers claimed a seasonal exemption and won when the court recognized that the team operated on a yearly basis but that Tiger Stadium operated on a seven-month schedule, making its operation seasonal.

The Sarasota White Sox, a former minor league franchise in the Florida State League, also won a lawsuit by claiming a seasonal exemption in 1995 when a groundskeeper sued for overtime. The court ruled that the team played in a six-month season and made 99 percent of its revenue during that time period.

Grow says the decision will come down to which side of the argument the court favors: that baseball is a year-round business or that it is a seasonal operation that does most of its business during a baseball season.

"I could see the court go either way on that one," Grow said.

No Basis For Class Action. Selig also argues that the plaintiffs have no basis for class action claims because "the types of claims alleged by Plaintiffs are inherently individualized."

Under this defense, MLB plans to argue that the hours worked and salaries of players are not uniform and therefore should be considered by the court on an individual basis, Grow says. This could discourage players from bearing the financial risk and hassle of bringing a lawsuit against MLB on their own.

"If there are a lot of factual cases that differ, the courts tend to disfavor a class action and prefer everyone to move forward on their own," Grow says. "If an individual player has to sue, he has to consider 'Do I really want to take on all this uncertainty and pay lawyers tens of thousands of dollars?'

"The plaintiffs need it to be a class action to be successful."

The next significant date on the trial calendar is Sept. 5, when the California court is scheduled to decide if it will keep the case or send it to Florida, and consider the 11 teams' motion to dismiss. Ultimately, Grow believes, the case will be settled before it goes to trial, particularly if the court certifies it as a class action or if MLB fails to get any FLSA exceptions.

“At some point the writing is going to be on the wall for one side or the other," he said.