Minor Leaguers Weigh Risks in Minimum-Wage Lawsuit

The minimum-wage lawsuit that a group of former and current minor leaguers is bringing against Major League Baseball could mark a paradigm shift in the industry. In a nutshell, a ruling in favor of the plaintiffs would fundamentally change the business model of the game, both at the minor league and major league levels.

As legal analyst Nathaniel Grow details as part of his running coverage of the suit, the plaintiffs contend that MLB violates federal and state minimum-wage and overtime laws by paying many minor leaguers as little as $3,300 a year. If plaintiffs were to obtain a favorable ruling, the cost of doing business for major league teams would increase dramatically. In all likelihood, major league clubs would try passing down that cost to minor league affiliates. In one extreme yet plausible scenario, we could see retraction in the minor leagues, which would have ripple effects on player development, the amateur draft and the international signing period. And that’s just the baseball side of it, saying nothing of the impact on regional economies that rely on their minor league franchises.

When a verdict is handed down, there will be plenty of time to assess its impact, the good and the bad. For now, I want to look at an issue that is getting less attention than the lawsuit’s hypothetical fallout: the risks that current minor leaguers must accept if they decide to join the lawsuit.

But first, there’s one important legal distinction to make about this case. In October, a San Francisco federal judge determined that the lawsuit should be certified as a collective-action lawsuit, which is commonly equated with a typical class-action lawsuit. The difference between the two is material. A typical class action requires that the plaintiff class members opt out of the lawsuit in order to remove themselves from the class; in other words, the class members don’t have to lift a finger in order to benefit from a decision in their favor.

Meanwhile, collective action (a designation reserved for cases brought under the Federal Labor Standards Act, as this one was) requires that the plaintiff class members opt in to the case in order to be part of the lawsuit, so the class members must first take an administrative action in order to benefit from a decision in their favor. Because this is a collective action, current minor leaguers wouldn’t automatically benefit from a decision in the plaintiffs’ favor; the onus is on the players to decide whether or not to join the lawsuit and thus make themselves eligible for that potential reward. But before they make that decision, they’ll have to weigh certain risks that are attached to their legal participation.

These risks came to light after I spoke with two agents who have current minor leaguers as clients. According to a legal notice sent to minor leaguers in November, the players have until February 11 to decide whether or not to join the lawsuit. If they consent, they will be represented in part by Garrett Broshuis, a former minor league pitcher for the Giants who’s now an attorney for the Korein Tillery law firm in St. Louis. (The notice also says that a player can retain his own counsel at his own expense.) The lawsuit is Senne vs. Office of the Commissioner, so named for Aaron Senne, a former Marlins farmhand whom Broshuis approached to join the suit before it was filed in 2014.

Baseball agent Bryan Symes, who’s also a labor-relations attorney at business law firm Ruder Ware in Wisconsin, is in the midst of advising his minor leaguer clients regarding the lawsuit. He tells me that in his discussions with his clients, the players mainly want to know the answer to one question: what are the advantages and disadvantages of joining the lawsuit?

He summed up their general concern like this:

What I’m hearing is that the players feel like, “Yes, I am getting paid peanuts, and I definitely think I should be making more money as a minor league player in terms of my salary. In the spirit of that sentiment, I want to be part of that lawsuit. But, as my agent, help me understand how I stand to benefit and what are the potential risks.”

The risk of not joining the lawsuit is not benefiting financially in the recovery of damages, should the plaintiffs prevail. But Symes says that by consenting to join the lawsuit, “the players who are unnamed class members cannot, through contributing to key strategic decisions, influence the possible outcome of the case. Players that opt in [to the lawsuit] forfeit the right to file suit individually – meaning these players relinquish decisional control.”

There’s also a career risk to consider. For players who join the lawsuit, it’s possible that players could diminish their standing within the organization if that organization views participation in the lawsuit unfavorably. Now granted, the legal notice that was sent to minor leaguers reminds that “federal law prohibits MLB or the MLB Club Defendants from retaliating” against the players, but let’s be honest – it would be pretty easy for an organization to mask its retaliation by citing a baseball-related justification. Forms of retaliation may include releasing a player, demoting him or refusing to promote him in spite of his talent and performance.

Any one of these actions may be detrimental to the organization from a player-development perspective, but the club may be willing to pay that price if they believe strongly enough in sending a certain message to the player. Regarding the likelihood of an organization getting caught for retaliating against a player, Symes says it “would be almost impossible to prove in the absence of smoking gun evidence like an email from the front office.”

Though these risks are real and worthy of consideration as players decide whether or not to opt in, Symes says that there is still “very little downside for players entering this suit.” Regarding the surrender of decisional control, he calls it a double-edged sword, noting that most minor leaguers do not have the financial means to retain their own counsel and pursue a separate suit. And concerning the potential for retaliation by major league clubs, it seems unlikely that an organization would view participation in the lawsuit so unfavorably that it would be compelled to punish the player, especially so for players of a greater prospect ilk who are viewed by their organizations as valuable long-term assets.

Aside from the risks, sheer apathy is another factor that will depress the number of plaintiffs. Because of the opt-in requirement, some current players inevitably will open the envelope and throw away the contents to avoid the hassle.

Naturally, Symes recommends that the players seek legal counsel if they haven’t already. He encourages players to call the information-hotline number provided in the legal notice, collect as much info as possible, and bring it to their agents. Additionally, they might consider calling the Korein Tillery plaintiffs’ firm, who may be able to provide further information that could help the players make an informed decision.

“I can’t speak for the plaintiffs’ attorneys, but my sense is, based on this type of lawsuit, that the players are probably motivated to obtain a decision from the court as opposed to trying to settle it. And I would imagine the league is equally motivated to defeat the lawsuit, because the ripple effects are obvious,” Symes says. “It has the potential to be a very important case, so I think it’s imperative that these players get with someone who’s equipped to sufficiently advise them about the pros and cons, and sooner rather than later.”

We hoped you liked reading Minor Leaguers Weigh Risks in Minimum-Wage Lawsuit by Jesse Burkhart!

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szielinski
Member
Member
szielinski

The minimum wage creates income that fails to put the wage earner far over the poverty line. The poverty line in most of the United States: $11,770 per year for one person household. The poverty line is stingy. Hence, the relevance of the living wage movement to the working poor in the United States.

So, can one find any reason to support a sub minimum wage economy? And, can one even provide a moral defend a sub-minimum wage economy in an industry that generates monopoly rents from its product?

Fans look closely at ML teams, top prospects, etc. What we do not often see are the many people working in the industry who endure an impoverished life just because “baseball.”

They are not slaves, of course. The are, however, highly exploited wage slaves.

walt526
Member
walt526

“can one find any reason to support a sub minimum wage economy?”

The main argument against a minimum wage is that it lowers the quantity of jobs, which is possible if MLB’s response is to contract their minor league systems.

jfree
Member
jfree

That is only partially true in this case. The only reason a retaliatory action by MLB to reduce their MiLB system would affect total employment is because MLB is legally able to kill new competition via anti-trust exemption. IOW – they have monopoly power and they have a long ugly history of using it in ways that no other entity in the US legally can (eg not paying employees minimum wage).

I generally agree that minimum wage laws are worse than useless. But this situation (and one-employer towns – the whole ‘company store/housing/scrip/etc’ – which still exist in places) is exactly the sort of structural power disparity (if unfixable via competition and free markets – like MLB with its exemption from the law) that were the reason for min wage laws in the first place.

Dave from DC
Member
Dave from DC

Exactly what jfree said. Though the question of whether or not minimum wage laws help the economy is an open one, the argument against them is (as best I know) always predicated on the fact that such laws constitute a damaging restriction on the free-market. MLB, with its preposterous anti-trust exemption, is nothing like a free market.

Paul22
Member
Paul22

Minimum wage (Fed minimum wage 7.25) by my calculation based on a 40 hr work week gets you about 15K per year (52 weeks). Its about 30% less than it was in 1968 if adjusted for CPI inflation. There is no way that’s a living wage unless you live in a tent or your moms basement.

3300 wont feed my dog