Baseball Owners Still ‘Reserving’ Right to Underpay Minor Leaguers

During spring training last year, this column detailed a class-action suit filed by three ex-minor leaguers alleging Major League Baseball paid them less than fast-food workers.

Unrepresented by a labor union, minor leaguers toil 50 to 70 hours per week through a five-month season for subminimum wage with no overtime and no compensation during spring training, instructional leagues or winter leagues.

Minor leaguers must serve a minimum of seven seasons to gain eligibility for free agency. And the few ballplayers who hang around long enough to meet this criterion are unlikely to have a major league future, inherently reducing their value.

The class action, Senne v. Office of the Commissioner of Baseball, 3:14cv00608, which remains pending in federal court in San Francisco, essentially seeks to bring baseball into conformance with state and federal minimum wage laws. Trial is tentatively set for 2016.

While MLB may have been caught looking when that action was filed, it is now aggressively swinging away both at the Senne allegations and at a second class action brought in December by four former minor leaguers targeting its venerable antitrust exemption.

In directly challenging baseball’s monopolistic control over the minor leagues and the notorious reserve clause, this second suit, Miranda v. Office of the Commissioner of Baseball, 314cv05349, also filed in San Francisco, threatens the game’s very fiber.

Baseball’s reserve clause dates to the 19th century — before the Sherman Antitrust Act — and came to be included in players’ standard contracts. It bound a player to a single team, often in perpetuity, rather than allow the player to offer his services to the highest bidder in an open market. Once a player signed his contract, the team enjoyed absolute rights to his services and could play, trade, sell, reassign or release him as it saw fit.

The reserve system, long hated by players, survived many challenges before encountering center fielder Curt Flood. Chicago fans may recall Flood played for St. Louis throughout the 1960s and didn’t appreciate being traded to Philadelphia after the 1969 season — or learning about the trade on the radio. Even though Flood was a Cardinal, he had a point.

After then-commissioner Bowie Kuhn rejected his free-agency request, Flood filed his antitrust suit, which famously reached the U.S. Supreme Court. Flood v. Kuhn, 407 U.S. 258 (1972).

“For the third time in 50 years,” began Justice Harry A. Blackmun’s opinion, dripping in baseball homage, “the court is asked specifically to rule that professional baseball’s reserve system is within the reach of the federal antitrust laws.”

And for the third time, the court refused.

The first ruling came when Justice Oliver Wendell Holmes famously granted baseball its antitrust exemption in Federal Baseball Club v. National League, 259 U.S. 200 (1922). The court effectively insulated MLB from charges of engaging in monopolistic practices such as colluding to keep minor league wages artificially low.

That decision, granting antitrust immunity to baseball alone among professional sports, has long received much criticism, including from the court itself, which has described it as “of dubious validity” and “unrealistic, inconsistent or illogical.” Radovich v. National Football League, 352 U.S. 445, 450 (1957).

Yet, as the court made clear in Flood, baseball is “deemed fully entitled to the benefit of stare decisis,” and any changes will need to come from Congress. Due to “something other than mere congressional silence and passivity,” however, Congress has shown “no intention to subject baseball’s reserve system to the reach of antitrust statutes.”

The second decision in favor of MLB involved claims by a minor leaguer in the New York Yankees system who refused to accept his reassignment. Asserting the reserve clause violated the Sherman Act, much like the present argument in Miranda, the court relied on congressional inactivity since Federal Baseball Club to reject the claim. Toolson v. New York Yankees, 346 U.S. 356 (1953).

While Flood ultimately lost, his case set the stage for the reserve system’s demise in the majors. The owners begrudgingly accepted free agency and salary arbitration in the wake of Flood’s claims, and the big leagues haven’t been the same since.

Decades later, the aptly named Curt Flood Act of 1998 passed Congress unanimously and was signed into law by President Bill Clinton. Supported by both owners and players, the act enabled major leaguers for the first time since 1922 to bring antitrust suits. (Alas, it arrived too late for Flood, who died in 1997.)

Significantly, minor leaguers were shut out. The act expressly “does not create, permit or imply a cause of action by which to challenge under the antitrust laws, or otherwise apply the antitrust laws to, any conduct, acts, practices or agreement … affecting employment to play at the minor league level … or any reserve clause as applied to minor league players.”

Tilting against these judicial and legislative windmills, the quixotic San Francisco lawsuits of Ex-minor leaguers Aaron Senne and Sergio Miranda appear to have little chance of succeeding. Lower courts should be expected to follow Flood, Toolson and Federal Baseball Club and, should the Supreme Court eventually accept either case, it seems determined to continue deferring the antitrust questions to Congress.

The present Senne and Miranda plaintiffs and their counsel must be well aware of the unfavorable legal climate and surely bring their claims eyeing a negotiated resolution.

A settlement serves the best interests of MLB, too, even with the law, if not the equities, on its side. As claims from players earning subminimum wage continue to mount against teams worth an average of $811 million last season, according to Forbes, so too will the negative attention confronting the game’s new commissioner, Rob Manfred.

Baseball plainly owes its talent pipeline more. The opportunity for owners to voluntarily raise the minor league standard of living without losing control of the reserve system is one Manfred should seize.

MLB’s reserve clause history suggests such reasoned compromise is unlikely, however, meaning next year’s spring training column may again cover minor leaguers’ decidedly uphill litigation efforts.