Employment & Labor Insider

Ryan Costello was a promising young baseball player. After being drafted in the 31^st round of the 2017 Major League Baseball Draft by the Seattle Mariners, and later traded to the Minnesota Twins, he worked his way through the clubs’ A and AA affiliates. Sadly, his career was cut short when he was found dead in his hotel room in November 2019 while in New Zealand preparing to participate in the Australian Baseball League. In seeking legal recourse, his parents had to contend with the MLB arbitration clause.

A missed diagnosis?

In February 2022, Mr. Costello’s parents sued Dr. David Olson, a Twins’ team doctor, in Florida state court, alleging alleging that his medical malpractice led to Mr. Costello’s death. Specifically, Mr. Costello’s parents allege that as part of a 2019 spring training physical, an electrocardiogram revealed that Mr. Costello had cardiac abnormalities. Mr. Costello’s parents contend that their son should have undergone more testing before being allowed to participate in any strenuous activities. Nevertheless, Dr. Olson allegedly marked Mr. Costello’s health report as “Normal” with “No Further Action Necessary,” clearing Mr. Costello to return to spring training.

Mr. Costello’s parents claim that the abnormalities were later determined to be Wolff-Parkinson-White syndrome, “a cardiac condition that is treatable but that can make vigorous physical activity dangerous and potentially fatal.” Mr. Costello’s death was apparently caused by a cardiac arrythmia, a condition connected with Wolff-Parkinson-White syndrome.

The MLB arbitration clause

Dr. Olson moved to compel arbitration according to the arbitration provision in the Major League Agreement, also known as the Major League Constitution. The MLA was incorporated by reference into Mr. Costello’s minor league player contract. 

Before going further, it is important to understand the context of this arbitration provision. Major league players have long been unionized and, as a result, negotiate collective bargaining agreements governing the terms and conditions of their employment, including relevant arbitration clauses. Minor league players did not unionize until 2022 and did not have a collective bargaining agreement until 2023 (and which is not yet publicly available). Before the collective bargaining agreement was in place, minor league players were subject to the terms unilaterally imposed by MLB, and by its major league clubs and their minor league affiliates. Some of those terms, like the arbitration provision, are included in the MLA, which is simply an agreement among the 30 MLB clubs.

The arbitration provision at issue stated as follows:

All disputes and controversies related in any way to professional baseball between Clubs or between a Club(s) and any Major League Baseball entity(ies) (including in each case, without limitation, their owners, officers, directors, employees and players), other than those whose resolution is expressly provided for by another means in this Constitution, the Major League Rules, the Basic Agreement with the Major League Baseball Players Association, or the collective bargaining agreement with any representative of the Major League umpires, shall be submitted to the Commissioner, as arbitrator, who, after hearing, shall have the sole and exclusive right to decide such disputes and controversies and whose decision shall be final and unappealable.

Major League Constitution, Art. VI, Sec. 1.

As explained by the District Court of Appeal of Florida, “the arbitration provision applies to disputes that are related in any way to professional baseball and that are between either: (1) two or more Clubs; or (2) one or more Club(s) and one or more Major League Baseball entity(ies).” (Emphasis in original.) The court reiterated that “[b]oth ‘Clubs’ and ‘Major League Baseball entity(ies)’ include their respective owners, officers, directors, employees and players.” 

The courts’ decisions

The trial court granted Dr. Olson’s motion to compel arbitration, relying on Wolf v. Rawlings Sporting Goods, a 2010 case in which a federal judge in the Southern District of New York, applying the same arbitration provision, also granted a motion to compel arbitration. In Wolf, a former minor leaguer sued MLB, Minor League Baseball, and a variety of other parties after his skull was fractured by a pitch that he said was the result of a defective helmet.

In a decision issued last month, the District Court of Appeal of Florida, Sixth District, reversed the trial court’s decision to compel arbitration in the Costello case. According to the appeals court, the suit “is a dispute between a player of a Club and an employee of the same Club.” It is an “intra-Club dispute,” and such disputes are not within the scope of the arbitration provision. The court also distinguished Wolf, asserting that the claims in that case “plainly fell within the scope of the arbitration provision.”

The case was remanded to the trial court for further proceedings.

Workers’ comp preemption

Notably, Mr. Costello’s family did not sue the Twins, presumably because claims against the club would have been barred by workers’ compensation statutes, which generally provide the exclusive avenue for resolving disputes over workplace injuries, including deaths. It is unknown whether Mr. Costello’s family is pursuing a workers’ compensation claim under either the Florida or Minnesota law.

Future claims preempted by minor league CBA?

The claims by Mr. Costello’s family are notable for preceding the collective bargaining agreement between minor league baseball players and MLB. Had a collective bargaining agreement been in place, Dr. Olson may have tried to argue that Mr. Costello’s family’s claims were preempted by the agreement, a common defense by sports leagues and teams against tort claims by players. The success of that argument would depend in part on the scope and depth of the agreement’s provisions concerning medical care. The more extensive they are, the more likely that tort claims against medical staff could be subject to the dispute resolution provisions in the agreement.

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The still-to-be disclosed collective bargaining agreement covering minor league players is likely to contain a dispute resolution provision that will supplant reference to the Major League Constitution. Nevertheless, the Costello case is another reminder of the importance of drafting broad arbitration agreements in the employment context, particularly in light of increased judicial scrutiny.