Minor league baseball has long been cherished for inexpensive, family-friendly games. Part of the low price stems from remarkably low wages for minor league players, who are paid by major league clubs. Three former minor leaguers now contend that these wages are unlawfully low. Aaron Senne, Michael Liberto and Oliver Odle have sued Major League Baseball, commissioner Bud Selig, the Royals, Marlins and Giants in the U.S. District Court for the Northern District of California for violations of wage and overtime laws. They hope to expand the lawsuit into a class action on behalf of thousands of former minor league players. One of their attorneys, Garrett Broshuis, is a former minor leaguer who for years has fought for higher minor league pay. Here are the key legal issues in the case.
Minor Leaguers as the Working Poor
The lawsuit portrays minor league players as members of the working poor, and that's backed up by data. Most earn between $3,000 and $7,500 for a five-month season. As a point of comparison, fast food workers typically earn between $15,000 and $18,000 a year, or about two or three times what minor league players make. Some minor leaguers, particularly those with families, hold other jobs during the offseason and occasionally during the season. While the minimum salary in Major League Baseball is $500,000, many minor league players earn less than the federal poverty level, which is $11,490 for a single person and $23,550 for a family of four.
Not all minor leaguers are poorly paid. High draft picks tend to receive six- or even seven-figure signing bonuses, and occasionally lower round picks also command sizable signing bonuses. Yet the vast majority of drafted players receive four- or five-figure signing bonuses. The complaint contends that most drafted players receive signing bonuses of around $2,500.
The three players suing baseball also stress that minor league salaries have effectively declined in recent decades. According to the complaint, while big league salaries have risen by more than 2,000 percent since 1976, minor league salaries have increased by just 75 percent during that time. When taking into account inflation, minor leaguers actually earn less than they did in 1976.
In addition to low salaries, minor leaguers have no formal say on drug testing policies, disciplinary rules and other restrictions on their employment. Their choice is to accept these terms or pursue another career.
Legal Protections for Baseball
Baseball has been able to pay minor leaguers low wages partly because of a historical exemption from antitrust law. The exemption allows baseball to unilaterally set salaries and working conditions for minor league players. Without this exemption, minor league players could theoretically sue under the Sherman Act, and argue that big league and minor league owners have conspired to unreasonably limit salaries. While this exemption was narrowed by the Curt Flood Act of 1998, it remains in effect for Minor League Baseball.
Baseball has also benefited by the inability of minor league players to form a union, which could advocate for higher player compensation and hold leverage through the power to strike. There have been multiple unionization efforts over the years, but none have convinced minor leaguers to join hands. The failure of unionization likely reflects different career priorities for prospects and veteran minor leaguers and fear of retaliation by big league teams. Unless they have appeared on a big league team's 40-man roster, minor leaguers are not members of Major League Baseball Players' Association.
New Legal Argument: Violation of Fair Wages
The players' legal argument is novel and may circumvent baseball's historical protections under the law. Their core claim is that baseball has violated the Fair Labor Standards Act (FLSA) and state laws guaranteeing minimum wage and overtime pay. The FLSA generally requires that employees' pay cannot fall below the minimum wage and that employees are owed overtime pay of one-and-a-half times the regular pay rate when working in excess of 40 hours per week. Lawyers who practice wage and hour law caution that the FLSA is far more complicated than it sounds, mainly due to a bevy of exceptions and qualifications. The FLSA is a worrisome law for employers because those in violation can be ordered to pay substantial amounts of back pay and other damages.
To advance their legal argument, the three players describe the life of a typical minor leaguer as one of constant "exploitation." They contend the exploitation begins at the start of a player's career, where teams have allegedly agreed to not negotiate salaries or inform players of salary data. Players then earn meager wages while purportedly working between 60 and 70 hours per week. This range of work includes playing in six or seven games a week and doing conditioning and other work to keep their skills and bodies sharp. Players are also unpaid for participating in the instructional league and extended spring training. The players believe that they, and other current and former minor leaguers, are owed back wages for uncompensated and under-compensated labor.
Defenses for MLB
Baseball also has several likely defenses it can offer when it files an answer to the lawsuit, likely by early next month. Among them is that minor league players voluntarily agreed to the terms of their employment as reflected in a signed contract. In essence, minor leaguers knew what they were getting into and a contact expressly reflects this understanding.
Along those lines, baseball will argue that professional athletes are not entitled to overtime pay. The life of a professional athlete commands atypical hours and an arduous work schedule. Some of this work may also be more in line with a player's own professional development than his employment. Baseball will surely cite case precedent and Department of Labor Wage and Hour Division materials that support an argument that minor leaguers are exempt from wage and overtime benefits. Baseball might stress that under the FLSA, "professional employees" are usually exempt from FLSA benefits and that classification includes those who perform original or unique work.
Baseball could also contend that minor league players are not disadvantaged in negotiations because they can retain agents. These agents negotiate signing bonuses and other benefits. Similarly, baseball can emphasize that under labor law, the MLBPA negotiates on behalf of current and prospective players -- minor leaguers included. The league may also raise economic arguments. A central one is increasing the pay and benefits of minor league players could translate into higher ticket prices for fans and possibly some minor league teams folding. Lastly, should the lawsuit be approved as a class action, baseball may be able to reduce their exposure by the fact that the statute of limitations for FLSA lawsuits is normally two or three years. The statute of limitations could limit the ability of minor leaguers who have been retired for several years from joining a class.
Senne v. MLB will be a case worth watching. Baseball does not enjoy an exemption from federal wage and overtime requirements. It may therefore be difficult for baseball to convince a judge to swiftly dismiss the case. The longer the case goes, the more willing baseball may be to settle and perhaps change the way minor leaguers are paid.
Michael McCann is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He is also the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.