Employment & Labor Insider

Ryan Costello was a promising young baseball player. After being drafted by the Seattle Mariners in the 2017 Major League Baseball Draft, 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. Mr. Costello’s parents are suing Dr. David Olson, a Twins’ team doctor, for alleged medical malpractice.

The lawsuit has moved forward on some close legal calls.

A missed diagnosis

Mr. Costello’s parents allege that as part of a 2019 spring training physical conducted in Florida, an electrocardiogram revealed that Mr. Costello had abnormalities and that he should have undergone more testing before being allowed to participate in any strenuous activities. They allege that Dr. Olson marked Mr. Costello’s health report “Normal” with “No Further Action Necessary,” clearing Mr. Costello to return to spring training.

Mr. Costello’s parents allege 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.” Indeed, Mr. Costello’s death was apparently caused by a cardiac arrhythmia, a condition connected with Wolff-Parkinson-White syndrome.

Evading arbitration

Dr. Olson first moved to compel arbitration according to the arbitration provision in the Major League Agreement, also known as the Major League Constitution. The Agreement 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. MLB 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. As a result, before 2023 minor league players were subject to terms that were unilaterally imposed by MLB, its major league clubs, and their minor league affiliates. Some of those terms, like the arbitration provision, are included in the Agreement, 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.

A trial court in Florida granted Dr. Olson’s motion to compel arbitration, but in a 2023 decision, the District Court of Appeal of Florida, Sixth District, disagreed. In its reading, the present action “is a dispute between a player of a Club and an employee of the same Club.” In other words, the Appeals Court said that it was an “intra-Club dispute” and outside the scope of the arbitration provision.

As the Appeals Court said, “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 said that “[b]oth ‘Clubs’ and ‘Major League Baseball entity(ies)’ include their respective owners, officers, directors, employees and players.” 

The Appellate Court sent the case back to the lower court for trial.

Workers’ compensation doesn’t apply?

After the case was remanded, Dr. Olson argued that the court should dismiss the lawsuit anyway because the parents’ claims were barred by the Minnesota workers’ compensation statute. Workers’ compensation laws generally provide the exclusive avenue for resolving disputes over workplace injuries and illnesses, including deaths, that are allegedly caused by the negligence of the employee, coworkers, or the employer. In these cases, the worker is intended to be fully compensated by the workers’ compensation insurance system.

Dr. Olson’s defense hinged on an interesting fact – that he was a coworker of Mr. Costello. Team physicians are normally independent contractors, not employees of the ball clubs. This is in contrast to athletic trainers, who have successfully asserted the workers’ compensation defense while doctors have not (see chapters 2 and 3 of this report for discussion of this type of litigation). 

However, in March, the court denied Dr. Olson’s motion for summary judgment based on the workers’ compensation defense. The court determined that Florida law – where Dr. Olson examined Mr. Costello – should apply rather than Minnesota law. Florida’s workers’ compensation statute does not apply to professional athletes. And because professional athletes cannot be compensated by the workers’ compensation system, they (or, in this case, their estates) are not prohibited from bringing claims against their employers or coworkers based on alleged negligence.

Dr. Olson has appealed the court’s decision, which has resulted in a stay (pause) of the proceedings until an appellate decision is rendered. If the appeal is unsuccessful, expect Dr. Olson and his insurer to seek a settlement rather than face the exorbitant amounts often awarded by juries to professional athletes in medical malpractice cases.