Employment & Labor Insider

On August 29, the Major League Baseball Players Association, the union representing players in Major League Baseball, announced that it was assisting players in Minor League Baseball in seeking to form a union. Approximately two weeks later, it was announced that a majority of the minor league players voted in favor of unionization, with the Players Association as its representative. 

Even before the votes were counted, MLB announced that it would voluntarily recognize the union, avoiding a potentially contentious process before the National Labor Relations Board. Although MiLB and MLB are different organizations, they, and the clubs within them, are deeply intertwined. MLB clubs affiliate with (and often outright own) MiLB clubs and generally employ or otherwise control the players playing in the minor leagues.

It is now expected that MLB and the Players Association (on behalf of the minor leaguers) will enter into a collective bargaining agreement governing the terms and conditions of MiLB players’ employment, including pay and benefits. This is familiar territory, as MLB and the Players Association have negotiated more than a dozen contracts over the past 50 years, including before this current season. Of relevance, minor league players and MLB recently agreed to a $185 million settlement in a wage and hour class action.

It will be interesting to see how those contract negotiations unfold and what happens when the contract expires or nears expiration.

First, the make-up of the new group of unionized players is noteworthy. There are 120 teams in MiLB, each of which has approximately 30 players on its roster. That is 3,600 employees. By my estimates, this is only slightly less than the entire combined populations of unionized players in the four major North American sports leagues (the National Football League Players Association, the National Basketball Players Association, the National Hockey League Players Association, and the major league baseball players represented by the MLBPA). Additionally, careers in the baseball minor league are notoriously fickle and short. The entire point of being in the minors is to advance to the majors within a few years.  The large, varying, and transient nature of this player population may present challenges to the stability of labor negotiations.

Second, it is unclear whether a collective bargaining agreement would cover all levels of minor league baseball. MiLB is divided into five levels (AAA, AA, High-A, Single-A, and Rookie).  The players in these levels tend to vary in terms of their age, skill, professional prospects, and other factors potentially relevant to their employment, pay, and benefits. Multiple contracts may be required to account for these differences.

Finally, the eventual expiration of any contract will present interesting legal questions. It is well-established in professional sports that when the clubs in a league come together to create rules that restrict the player labor market (for example, through pay scales, salary caps, free agency rules, and player drafts), the rules are exempt from antitrust scrutiny – provided that they have been agreed to by the players’ union. This is known as the “non-statutory labor exemption.” On multiple occasions when the contracts in those leagues have expired and negotiations have reached impasse, the unions have decertified themselves and the players have filed antitrust lawsuits against the leagues. This is a well-worn litigation path that ultimately results in the parties’ agreeing to a new contract.

However, the minor leaguers cannot necessarily avail themselves of this strategy. MLB has a long-standing and anomalous exemption from antitrust laws as a result of a Supreme Court decision in 1922 saying that MLB was not engaged in interstate commerce. In 1998, Congress enacted a statute that removed matters “affecting employment of major league baseball players” from the exemption.  Congress, however, did not change (but also did not codify) the exemption as it relates to other aspects of MLB’s business, including the operation of minor league baseball. Consequently, for now, MLB’s antitrust exemption continues to protect its activities with regard to minor league baseball, though this is the subject of ongoing litigation with regard to MiLB franchises and recent Congressional inquiry.  In the event that the minor leaguers and MLB cannot agree upon a new contract after expiration, the scope of MLB’s antitrust exemption with regard to players may get a fresh look.