MINOR LEAGUES, MAJOR EFFECTS: WHAT IF SENNE WINS?

23

MINOR LEAGUES, MAJOR EFFECTS:

WHAT IF SENNE WINS?

Sam C. Ehrlich*

INTRODUCTION

A common thread in any discussion involving salaries or wages

is comparing the salaries received in one industry to the salaries

received by professional athletes. Those favoring the argument that

athletes are overpaid point to the multi-million dollar contracts

received by megastars in baseball, football, basketball, and

international soccer, while those who disagree cite the huge

revenues received by leagues and argue that athletes simply receive

their fair share of the pie.

However, one group of athletes who are certainly not overpaid

are minor league baseball players. Under the protection of

baseball’s exemption from antitrust scrutiny,

1

over the years

professional baseball has built a wide array of minor league affiliate

networks where those at the bottom are paid considerably less than

those at the top. While a meritocracy where those who have the

talent and the work ethic to succeed will be rewarded with riches is

not inherently bad, the low salaries for players in the minor leagues

make for a hard life for the roughly 90 percent of minor leaguers

who will never reach a major league roster.

2

In the past few years, some of these athletes have pushed to

stop this purported abuse. While attempts to fight for higher wages

on antitrust grounds have thus far failed,

3

a group of former minor

* Sam C. Ehrlich, J.D., Doctoral Student, Sport Management, Florida State University.

1

See Fed. Baseball Club of Baltimore, Inc. v. Nat’l League, 259 U.S. 200 (1922); Toolson

v. New York Yankees, Inc., 346 U.S. 356 (1953); Flood v. Kuhn, 407 U.S. 258 (1972); Curt

Flood Act of 1998, 112 Stat. 2824 (1998).

2

Ian Gordon, Minor League Baseball Players Make Poverty-Level Wages, MOTHER

JONES (July/August 2014), http://www.motherjones.com/politics/2014/06/baseball-

broshuis-minor-league-wage-income (last visited Jan. 24, 2017).

3

Miranda v. Selig, No. 14-cv-05349-HSG, 2015 U.S. Dist. LEXIS 122311 (N.D. Cal.

2015). The case has been appealed to the Ninth Circuit Court of Appeals; oral arguments

were heard on April 18 and the case is pending decision. Oral Argument, Miranda v.

24 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

league players led by former Miami Marlins tenth round draft pick

Aaron Senne have sought relief through a more novel approach:

arguing that their low salaries violate the minimum wage and

overtime rules in the Fair Labor Standards Act (FLSA).

4

This class action lawsuit against Major League Baseball

(MLB) and three MLB clubs has raised interesting questions about

minor league player compensation. Based on a fifty-hour week and

a twenty-nine week schedule,

5

a player should earn $11,962.50 per

the federal minimum wage

6

–just above the National Poverty Line

of $11,880 for a single person household.

7

But according to the original complaint, most minor leaguers

earn just $3,000 to $7,500 working between fifty and seventy hours

per week during the five month season

8

Additionally, the plaintiffs

in Senne allege that MLB and MLB clubs have “conspired to pay no

wages at all for significant periods of minor leaguers’ work,”

Selig, No. 15-16938 (9th Cir. Apr. 18, 2017),

https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000011376. For a

thorough discussion on the antitrust exemption’s applicability to minor league baseball,

see Gary R. Roberts, A Brief Appraisal of the Curt Flood Act of 1998 from the Minor

League Perspective, 9 MARQ. SPORTS L.J. 413 (1999).

4

Complaint, Senne v. Office of the Comm’r of Baseball, et al., 105 F. Supp. 3d 981

(No. 14-cv-00608-JCS) (N.D. Cal. 2015) (No. 1).

5

Id. at 2. The twenty-nine week figure was obtained by adding the five month

(twenty week) regular season with nine weeks of spring training. Id.

6

Based on the current federal minimum wage of $7.25 with time and a half given

past forty hours. Minimum Wage, UNITED STATES DEPARTMENT OF LABOR,

http://www.dol.gov/whd/minimumwage.htm (last visited Jan. 24, 2017). Since many

states have higher minimum wages, this is clearly an issue MLB would prefer to avoid

and a major reason why the plaintiffs have thus far been denied class action certification.

Senne v. Kansas City Royals, et al., 315 F.R.D. 523 (No. 14-cv-00608) (N.D. Cal. 2016)

(denying class action certification); see generally Minimum Wage Laws in the States –

August 1, 2016, UNITED STATES DEPARTMENT OF LABOR,

http://www.dol.gov/whd/minwage/america.htm (last visited Jan. 24, 2017).

7

Poverty Guidelines, U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES, (Jan. 25,

2016), http://aspe.hhs.gov/poverty/14poverty.cfm (last visited Jan. 24, 2017).

8

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 21.

During the 2016 Baseball Winter Meetings, Phillies minor leaguer Dylan Cozens made

headlines when he joked during a luncheon that a $8,000 prize that he received for

leading all of minor-league baseball in home runs was more than he had received all

season. Matt Breen, Phillies prospect cashes in at winter meetings, PHILADELPHIA

INQUIRER (December 6, 2016),

http://www.philly.com/philly/blogs/sports/phillies/Phillies-prospect-Dylan-Cozens-

cashes-in-at-the-Winter-Meetings.html (last visited Jan. 24, 2017). His “joke” was not

far off from the truth; as a player at the AA level not on the 40-man roster, Cozens earned

about $1,700 per month, or about $8,500 for the five-month season. Id.

Fall 2016] Minor Leagues, Major Effects 25

including during instructional periods such as spring training,

instructional leagues, and winter training.

9

Even when daily meal

allowances of $25 per day are included, players at the A, Short

Season A, and Rookie ball levels remain in poverty.

10

These

numbers also do not take into account insurance premiums or

clubhouse dues, both of which are deducted from each paycheck.

11

The plaintiffs in Senne also allege that MLB and MLB clubs have

“conspired to pay no wages at all for significant periods of minor

leaguers’ work,” including during instructional periods such as

spring training, instructional leagues, and winter training.

12

These salary figures stand in sharp contrast to the salaries

received by major league players, especially given that both MLB

and minor league players are paid by the MLB club.

13

Once a player

is placed on a club’s 40-man roster, that player is protected by the

MLB Players Association (MLBPA) and the minimum salaries

prescribed in the MLB Collective Bargaining Agreement (or Basic

Agreement),

14

which for 2016 was $507,500 for MLB service,

$41,400 for minor league players signing their first major league

contract, and $82,700 for minor league players signing a second

9

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 2.

10

Garrett Broshuis, Playing for Peanuts, BASEBALL AMERICA (Mar. 31, 2010),

http://www.baseballamerica.com/today/minors/season-preview/2010/269689.html (last

visited Jan. 24, 2017).

11

Id.

12

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 2.

13

See infra note 71 and accompanying text.

14

MAJOR LEAGUE BASEBALL AND THE MAJOR LEAGUE BASEBALL PLAYERS

ASSOCIATION, 2012-2016 BASIC AGREEMENT, 1 (Dec. 12, 2011), available at

http://mlb.mlb.com/pa/pdf/cba_english.pdf (“The Clubs recognize the Association as the

sole and exclusive collective bargaining agent for all Major League Players, and

individuals who may become Major League Players during the term of this Agreement .

. .”); FAQs, MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION,

https://www.mlbpa.org/faq.aspx (“Who is eligible for membership in the Association? . . .

In collective bargaining, the Association represents around 1,200 players, or the number

of players on each club’s 40-man roster, in addition to any players on the disabled list.”).

According to former MLBPA lawyer Gene Orza, the union does not represent minor

league players and thus has “no obligation” to them. Lily Rothman, Emancipation of the

Minors, SLATE (Apr. 3, 2012),

http://www.slate.com/articles/sports/sports_nut/2012/04/minor_league_union_thousand

s_of_pro_baseball_players_make_just_1_100_per_month_where_is_their_c_sar_ch_vez_

.html (last visited Jan. 24, 2017).

26 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

minor league contract.

15

Thanks in part to union protection the

average MLB salary has risen by approximately 2,000 percent since

1976, while the average minor league salary has risen by just

seventy-five percent during that same time period.

16

However, no

minor league union exists, and even with a union there is no

guarantee of significant changes by that approach due to MLB’s

longstanding antitrust exemption.

Regardless of whether the Senne plaintiffs succeed or fail, this

lawsuit has shone a harsh light on MLB’s practices for paying minor

league players and provoked a national conversation about minor

league salaries. But if the Senne plaintiffs do succeed, the

implications will have major ramifications throughout baseball–

and perhaps the entire professional sports industry.

Some commentators have argued that if the MLB loses the

Senne case, clubs will be forced to “take measures to reduce the

increase in player development costs, including possibly reducing

the number of [minor league] affiliates and passing their increased

costs on to their remaining affiliates.”

17

These minor league

affiliates, many of whom are located in small markets that

otherwise would not have access to professional sports and struggle

to draw 5,000 fans per game,

18

would likely not survive if they were

forced to bear any of these costs. Indeed, a bill to specifically exempt

minor league players from FLSA ominously titled the “Save

15

MLB minimum salary remains at $507,500 for 2016, ESPN.COM (Nov. 16, 2015),

http://www.espn.com/mlb/story/_/id/14161690/mlb-minimum-salary-remains-507500-

2016 (last visited Jan. 24, 2017).

16

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 2.

During the same time period, the value of the dollar has risen by 400 percent. Id. For a

look at how the MLBPA has often in collective bargaining traded gains for major league

players for concessions mainly affecting minor league players written by a future

attorney for the Senne plaintiffs, see Garrett Broshuis, Touching Baseball’s

Untouchables: The Effects of Collective Bargaining on Minor League Baseball Players, 4

HARV. J. SPORTS & ENT. L. 51 (2013).

17

Jordan Kubritz, Lobbying Congress in Save America’s Pastime Act, THE DAILY

COURIER (July 12, 2016), http://www.dcourier.com/news/2016/jul/12/column-lobbying-

congress-save-americas-pastime-act/ (last visited Jan. 24, 2017).

18

See Graham Knight, Minor League Baseball Attendance in 2015,

BASEBALLPILGRIMAGES.COM (2015),

http://www.baseballpilgrimages.com/attendance/minor-leagues-2015.html (last visited

Jan. 24, 2017).

Fall 2016] Minor Leagues, Major Effects 27

America’s Pastime Act” has been introduced in Congress and has

been pushed hard by MLB and Minor League Baseball.

19

However, the actual scale of such effects is still a matter of

debate. While it is impossible to know exactly what will happen

until it happens, this Article seeks to predict the effects of a plaintiff

victory in Senne by analyzing the current labor market in minor

league baseball, and how these expenses would change if FLSA was

applied.

Part I of this Article explores the Senne case thus far, and

analyzes the plaintiffs’ chances of prevailing based on FLSA case

law and additional perspectives. Part II of this Article looks to

qualify the potential results of FLSA application on the minor

league baseball labor market, while also raising the possibility that

Congress will simply make the problem go away through

legislation. Part III of this Article then analyzes what a potential

settlement might look like, and how MLB and the minor league

players can work together to bridge the gap between minor

leaguers’ salary concerns and the complications caused by applying

the FLSA. Finally, Part IV of this Article considers whether the

problem can be solved through Collective Bargaining, either

through representation by the MLB Players Association or through

the creation of a new minor league players’ union.

I. A BRIEF HISTORY OF SENNE V. MLB

A. What Has Happened So Far?

Thirty-seven months after the filing of their initial complaint

on February 7, 2014, the Senne plaintiffs gained significant

momentum towards a legal victory. On March 7, 2017, Chief

Magistrate Judge Joseph C. Spero of the United States District

Court of the Northern District of California certified two classes of

minor league baseball players, allowing their class action FLSA

claims against MLB and its clubs to proceed.

20

Leading up to this certification, the plaintiffs’ claims had

suffered due to natural difficulties with the typicality element

19

Save America’s Pastime Act, H.R. 5580, 114th Cong. (2016). See infra Part II(B).

20

Order Re: Motion for Reconsideration Regarding Class and Collective

Certification, Senne v. Kansas City Royals Baseball Corp., et al., 2017 U.S. Dist. LEXIS

32949, No. 14-cv-00608 (N.D. Cal. Mar. 7, 2017) (No. 782).

28 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

necessary for class-action certification, due to the complexity

inherent with a class with multiple states and multiple state

minimum wage laws.

21

Therefore, after several amended

complaints the plaintiffs attempted to break their class into

subclasses, with class representatives for California, Florida,

Arizona, North Carolina, New York, Pennsylvania, Maryland, and

Oregon.

22

On July 21, 2016, the United States District Court of the

Northern District of California granted MLB’s motion to decertify

the plaintiffs’ class based on the lack of typicality between class

member claims.

23

The Court concluded that “at a minimum, the

class representatives as a group must fairly and adequately

represent the interests of the class for each State Class,” and the

court could not “determine whether the proposed class

representatives for each state class collectively present claims that

are typical of the class.”

24

In response, the plaintiffs in a Motion for Reconsideration

Regarding Class and Collective Certification drew back their class

and claims considerably, scaling back their potential class to just

four subclasses: a Florida Class, for players who had participated

in spring training, instructional leagues, or extended spring

training in Florida; an Arizona Class, for players who had

participated in spring training, instructional leagues, or extended

spring training in Arizona; a California Class, for players who had

played in the California League; and a California Waiting Time

Subclass, for players who played in the California League but are

no longer employed as a minor league player.

25

Based on these changes, the court allowed certification of two

classes of current and former minor league baseball players: a

California class, for players who have played in the California

21

Sungho Cho and Joshua Smith, Chen v. Major League Baseball: Hybrid Collective

Action under Rule 23 and the Fair Labor Standards Act 216(b), 25 J. LEGAL ASPECTS

SPORT 154, 165-166 (2015).

22

Id. at 4-5.

23

Senne v. Kansas City Royals, et al., 315 F.R.D. 523 (No. 14-cv-00608) (N.D. Cal.

2016) (initial denial of class action certification).

24

Id. at 66-67.

25

Motion for Reconsideration Regarding Class and Collective Certification at i,

Senne v. Office of the Comm’r of Baseball, et al., No. 14-cv-00608 (N.D. Cal. Sep. 14,

2016) (No. 720).

Fall 2016] Minor Leagues, Major Effects 29

League for at least seven days;

26

and a general FLSA class, for all

players who have participated in spring training, instructional

leagues, or extended spring training.

27

The players were able to

convince the court to certify these classes by eliminating winter

conditioning claims in favor of claims based on the continuous

workday doctrine, where all activities in the course of a normal

workday are compensable.

28

This change will allow the plaintiffs to

establish the “normal workday” of players during spring training

and the regular season to establish what players should be paid per

day.

29

While the pared-down complaint will not have the league-wide

effect that the plaintiffs sought in their original complaint, a victory

by these class members would still force MLB to pay wages for

spring training or instructional league activity, while also changing

the minor league system by forcing MLB to pay players in at least

one league–the High-A California League–wages as required by the

FLSA.

30

Such changes could lead to comparable adjustments across the

entire minor league system, as MLB may want to avoid the

competitive balance implications for teams with affiliates in one

league forced to pay their players more than other teams without

California League affiliates. Alternatively, MLB may opt to simply

cut the California League out of the minor league farm system

26

Order Re: Motion for Reconsideration Regarding Class and Collective

Certification, Senne v. Kansas City Royals Baseball Corp., et al., supra note 20 at 68-69.

27

Id. However, the court declined to certify the Arizona and Florida classes because

the “choice of law questions that are likely arise in connection with the Florida and

Arizona classes defeat the predominance requirement as to those classes.” Id. at 64-65.

28

Id. at 12.

29

Id. Both the plaintiffs and defendants have appealed this decision to the Ninth

Circuit Court of Appeals. The plaintiffs claim that the certification classes are not broad

enough. Plaintiffs-Petitioners’ Rule 23(f) Petition for Permission to Appeal Denial of

Class Certification, Senne v. Office of the Comm’r of Baseball, et al., No. 17-80043 (9th

Cir. Mar. 21, 2017). MLB claims that the certification was in error. Petition for Leave to

Appeal Pursuant to Federal Rule of Civil Procedure 23(f), No. 17-80044 (9th Cir. Mar.

21, 2017). MLB has petitioned the district court for a stay until the appeal can be

decision. Motion for a Stay, Senne v. Office of the Comm’r of Baseball, et al., No. 14-cv-

00608 (N.D. Cal. Mar. 24, 2017) (No. 720). Both the appeal and motion to stay are

currently pending.

30

Brian MacPherson, Friday hearing has major stakes for minor leaguers,

PROVIDENCE JOURNAL (Nov. 30, 2016),

http://www.providencejournal.com/sports/20161130/friday-hearing-has-major-stakes-

for-minor-leaguers (last visited Jan. 24, 2017).

30 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

entirely. Regardless, the changes forced by a plaintiff victory would

be substantial, and would lead to difficult decisions for MLB and its

member organizations.

B. Can Senne Win?

In the wake of Senne’s initial filing, several legal scholars have

analyzed the plaintiffs’ chances of winning based on the FLSA and

relevant case law. According to one commentator, since MLB

“unilaterally produces unlawful minor league player salary

guideline figures,” its franchises “violate the FLSA by faithfully

adhering to these unlawful standards and compensating their

minor league employees with unlawful wages.”

31

On the other hand, another commentator reasoned that

victory is unlikely for the minor league players, stating that while

it is “unclear how the court will rule regarding whether or not minor

league baseball employers are exempt from the FLSA,” MLB will

still likely prevail by “argu[ing] that minor league players are

exempt as ‘creative professional employees.’”

32

And even if the

minor league players were to find some momentum in the case, this

commentator predicts that Congress will likely step in and pass

legislation exempting minor league players from the FLSA at

MLB’s request in the same way that Congress wrote the Curt Flood

Act of 1998 to exempt minor league players from the Act’s

weakening of baseball’s antitrust exemption.

33

Another comment on FLSA applicability to professional sports

organizations argues that the exception under section 213(a)(3) of

the FLSA which exempts “seasonal ‘amusement or recreational’

establishments from minimum wage and overtime obligations” has

been muddled, with different courts adopting “differing approaches

when applying Section 213(a)(3) to professional sports

franchises.”

34

This exemption, which according to legislative history

31

Wilson Raines, Note, For the Love of the Game, 4 MISS. SPORTS L.R. 274, 290

(2014).

32

Mark Stanton, “Juuuussst A Bit Outside”: A Look at Whether MLB Owners Can

Justify Paying Minor Leaguers Below Minimum Wage Without Violating the Fair Labor

Standards Act, 22 JEFFREY S. MOORAD SPORTS L.J. 727, 749-750 (2015). See infra notes

149-155.

33

Id. at 750-751. See infra Part II(B).

34

Charlotte S. Alexander & Nathaniel Grow, Gaming the System: The Exemption of

Professional Sports Teams from the Fair Labor Standards Act, 49 U.C. DAVIS L. REV.

Fall 2016] Minor Leagues, Major Effects 31

was supposed to apply to “weather-dependent” establishments like

amusement parks,

35

has been applied instead to all “amusement or

recreational” establishments through a bright-line “seven-month

duration test to that establishment’s operations or the receipts test

to its revenue.”

36

But even if professional sports franchises were

found to be exempt from FLSA under the exemption, this “raises

questions about the exemption’s policy rationale” as “the fact that

employees of professional sports teams may in some cases legally

be paid subminimum wages casts doubt on the true economic

benefits these franchises impart to their host communities,

undercutting the job creation and economic development

justifications that teams frequently offer when seeking subsidies

from taxpayers.”

37

Much of the commentary on this exemption as applied to the

Senne case centers on two competing appellate court decisions

where the rules and exceptions to FLSA have been applied to

professional baseball: Jeffery v. Sarasota White Sox, Inc.

38

and

Bridewell v. Cincinnati Reds.

39

In Jeffery, the Eleventh Circuit found that a groundskeeper’s

FLSA claim against a minor league baseball team was covered by

the §213(a)(3) “seasonal amusement or recreational establishment”

exemption, and was thus rejected.

40

While the plaintiff “was

employed in the off-season months relative to the preparation and

maintenance of the baseball fields,” the focus of the exemption “is

on length of the [team’s] seasonal operation.”

41

Because this

operation “[did] not last longer than seven months in any calendar

year,” the exemption applies.

42

The court reasoned that a different

123, 127 (2015). See also Kristin Spallanzani, Note, Major Theft in the Major Leagues:

Application of the FLSA Seasonal Employer Exemption to Professional Sports, 46 SETON

HALL L. REV. 281 (2015).

35

Id. at 136.

36

Id. at 139.

37

Id. at 128.

38

64 F. 3d 590 (11th Cir. 1995).

39

68 F. 3d 136 (6th Cir. 1995).

40

64 F. 3d at 597.

41

Id. Curiously, the Eleventh Circuit cited a Report and Recommendation from

Bridewell to determine that the “focus on the exemption is not on the length of time

Plaintiff performed his work” but instead “on length of the Defendant’s seasonal

operation,” yet still came to a differing result. Id.

42

Id.

32 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

conclusion would in essence “require [teams] to completely shut

down or to terminate every employee at the end of each baseball

season” in order to remain in compliance with the §213(a)(3)

exemption of the FLSA.

43

But in Bridewell, the Sixth Circuit ruled that the FLSA

§213(a)(3) “seasonal amusement or recreational establishment”

exemption did not apply to employees who perform “maintenance

and cleaning duties at Cincinnati’s Riverfront Stadium”

44

as the

team “[did] indeed operate for more than seven months per year.”

45

The Sixth Circuit stated that “[a]n entity seeking to invoke the

§213(a)(3) exemption must both be an amusement or recreational

establishment and operate for fewer than eight months per year,”

and the parties “incorrectly focus[ed] on the duration of the Reds’

activities at Riverfront rather than on the duration of the Reds’

overall operation.”

46

Preemptively answering the Eleventh Circuit’s

statement in Jeffrey that a team would need to fire every full-time

employee in order to stay compliant with the §213(a)(3)

exemption,

47

the Sixth Circuit reasoned that, “a truly seasonal

business that employs an insignificant number of workers year-

round could conceivably qualify for the exemption.”

48

Yet in this

case, the fact that the team employing 120 year-round workers

“compels the conclusion that they ‘operate’ year-round.”

49

These two decisions–rendered less than a month apart

50

–

create a split in precedent that the District Court of Northern

California–and likely the Ninth Circuit–will have to navigate

regardless of whether Senne’s claims as a whole will be decided on

the merits. An interesting component to the discussion is that in

both Jeffrey and Bridewell, those types of employees would perform

work at their respective stadiums throughout the entire season.

51

But minor league baseball players are employees who generally

43

Id.

44

68 F.3d at 137.

45

Id. at 138.

46

Id. at 139.

47

Jeffrey, 64 F.3d at 597.

48

Bridewell, 68 F.3d at 139.

49

Id.

50

Jeffrey, which ruled in favor of the employer, was decided “first,” on September

15, 1995. Bridewell, which ruled in favor of the employee, was decided on October 12,

1995.

51

Jeffrey, 64 F.3d at 597; Bridewell, 68 F.3d at 139.

Fall 2016] Minor Leagues, Major Effects 33

only work directly for their respective teams during spring training

and the season, which typically lasts from mid-February through

the beginning of September–a span of less than seven months.

52

As the Ninth Circuit has been observed to be generally pro-

employee,

53

the district court or the Ninth Circuit on appeal will

likely rule in favor of the Senne plaintiffs based on public policy

rationale and the original limited scope of the §213(a)(3)

exemption.

54

At the same time, the analyses provided by the courts

in Jeffrey and even Bridewell seem to disfavor such a narrow

application of the exemption. While the plaintiff prevailed in

Bridewell, the Sixth Circuit as noted stated that the team had “120

year-round workers [which] compels the conclusion that they

‘operate’ year-round.”

55

But the court also said that “a truly

seasonal business that employs an insignificant number of workers

year-round could conceivably qualify for the exemption.”

56

Since

almost all of the on-field staff including the players are employed

and paid by the major league affiliates,

57

minor league baseball

teams carry significantly fewer year-round employees than major

league teams.

58

52

Brian MacPherson, Minor league baseball: Squeezed by low pay, PROVIDENCE

JOURNAL (Feb. 21, 2015),

http://www.providencejournal.com/article/20150221/Sports/150229787 (last visited Jan.

24, 2017).

53

See generally Kimberlee W. Dewitt, Note, Ninth Circuit Joins Sister Circuits in

Holding that Employees May be Required to Arbitrate USERRA Claims, HUNTON

EMPLOYMENT & LABOR LAW PERSPECTIVES (Nov. 4, 2016)

http://www.huntonlaborblog.com/2016/11/articles/employment-policies/ninth-circuit-

joins-sister-circuits-holding-employees-may-required-arbitrate-userra-claims/ (last

visited Jan. 24, 2017) (“[T]he Ninth Circuit [is] a traditionally pro-employee circuit.”);

Andrew H. Friedman, The best and worst employment cases of 2015, ADVOCATE -

JOURNAL OF CONSUMER ATTORNEYS ASSOCIATION FOR SOUTHERN CALIFORNIA (June

2016), available at http://www.helmerfriedman.com/docs/Best-Worst-Employment-Law-

Cases-June-2016-CAALA.pdf (“With the exception of several decisions involving the

removal of cases from state to federal court, the Ninth Circuit generally issued pro-

employee decisions.”).

54

See supra notes 44-46 and accompanying text.

55

Bridewell, 68 F.3d at 139.

56

Id.

57

MAJOR LEAGUE BASEBALL, THE OFFICIAL PROFESSIONAL BASEBALL RULES BOOK,

Rule 56, 172-183.

58

For example, the Class-AAA New Orleans Baby Cakes have 27 listed employees.

Contact Us, NEW ORLEANS BABY CAKES,

http://www.milb.com/content/page.jsp?ymd=20070201&content_id=41061432&sid=t588

&vkey=team1 (last visited Jan. 24, 2017). These employees almost exclusively handle

34 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

If the court does lean towards viewing minor league affiliates

as “separate establishments under the FLSA,”

59

this interpretation

would seem to strongly point to coverage under the seasonal

recreational employee exemption. But under the FLSA, “alleged

employees’ injuries are only traceable to, and redressable by, those

who employed them.”

60

Here, it is important to note that affiliate minor league teams

technically do not pay their players; the affiliate major league

teams pay those player salaries and thus “employ” those

employees.

61

According to Rule 56(g)(5)(A) of the Major League

Rules:

Salaries and Other Compensation. The Major League Club is

responsible for the payment of all obligations to or for the

benefit of all players assigned, transferred, leased or loaned to,

or otherwise directed to play for, or otherwise assigned to any

list of, the Minor League Club, including all salary and other

compensation, responsibility for all benefits, payroll taxes,

worker’s compensation coverage, unemployment insurance

coverage, and any other benefits or taxes associated with

players’ employment.

62

As the court has acknowledged that the MLB clubs are the

employer of the minor league players,

63

the plaintiffs have a better

case, as the facts concerning the number of full-time employees that

off-field activities, such as marketing, ticket and sponsorship sales, and maintenance of

the field and stadium. Id. Per the Major League Rules, the only on-field workers

employed by the minor league team are groundskeepers; the “Major League Club [has]

the sole right to select and employ, and the sole obligation to compensate and provide

benefits for, the manager, coaches, instructors and trainers for the Minor League Club”

and “[a]ll of these individuals [are] under contract exclusively with the Major League

Club.” Id; MAJOR LEAGUE BASEBALL, THE OFFICIAL PROFESSIONAL BASEBALL RULES

BOOK, Rule 56(g)(4), 179.

59

Alexander & Grow, Gaming the System, 49 U.C. DAVIS L. REV. at 169-170.

60

Berger v. NCAA, No. 16-1558, 2016 U.S. App. LEXIS 21642, at *6 (7th Cir. Dec.

5, 2016) (citing Roman v. Guapos III, Inc., 970 F. Supp. 2d 407, 412 (D. Md. 2013)).

61

MAJOR LEAGUE BASEBALL, THE OFFICIAL PROFESSIONAL BASEBALL RULES BOOK,

Rule 56, 172-183.

62

Id. at 179. The Major League affiliate is also responsible for all spring training

and travel expenses for the Minor League Club. Id. at 179-180.

63

Senne v. Kansas City Royals, 105 F.Supp.3d 981, 991 (N.D. Cal. 2015) (“MLB

teams employ a small number of players who play at the highest level, the Major

Leaguers . . . They also employ a larger number of Minor Leaguers, who the teams

acquire through either an amateur draft or free agency.”).

Fall 2016] Minor Leagues, Major Effects 35

the team retains lean closer to Bridewell than Jeffrey.

64

The fact

that the players only work directly for their teams for less than

seven months out of the year does lean against the players,

especially now that the plaintiffs have dropped their claims for

offseason training work.

65

But since case law suggests that

“[e]xemptions under the FLSA are to be construed narrowly against

the employer asserting them”

66

and that “[t]he employer has the

burden of showing that it is entitled to the exemption,”

67

the

plaintiffs would seem to have a strong case, assuming that the

issues surrounding the size and character of their class can be

resolved.

II. THE POTENTIAL EFFECTS OF A SENNE VICTORY

A. Applying the FLSA to Minor League Baseball

If the Senne plaintiffs win, the effects of the victory would

change minor league baseball significantly. Even with the

complaint pared down to include claims involving spring training

and the California League,

68

successful litigation would force teams

to institute a number of changes in order to maintain compliance

with the FLSA. Such changes would affect all teams for spring

training. Moreover, the new structure would likely affect even

teams without a California League affiliate. Teams will either

adapt to avoid further litigation, or be forced to change after more

comparable suits are filed.

If the Senne plaintiffs win and minor league players are

considered full-time, non-seasonal-recreational employees,

69

teams

will have to increase the salaries of minor league personnel in order

to adhere to the minimum wage requirements under § 206(a) of the

64

See Bridewell, 68 F.3d at 139 (“[T]he fact that the [MLB] Reds employ 120 year-

round workers compels the conclusion that they ‘operate’ year-round.”).

65

MacPherson, Friday hearing has major stakes for minor leaguers, PROVIDENCE

JOURNAL, supra note 39.

66

Brock v. Louvers and Dampers, Inc., 817 F.2d 1255, 1256 (6th Cir. 1987) (citing

Arnold v. Ben Kanowsky, 361 U.S. 388, 396 (1960)).

67

Id. at 1256 (citing Arnold, 361 U.S. at 397).

68

Motion for Reconsideration Regarding Class and Collective Certification, Senne v.

Office of the Comm’r of Baseball, et al., supra note 31, at i; see supra note 36 and

accompanying text.

69

See supra Part I(B).

36 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

FLSA. This would require teams to pay minor league players $7.25

per hour at minimum, or possibly more for those teams located in a

state or city with a higher minimum wage than the federal level.

70

Most minor league players would suddenly be eligible for overtime

benefits as well.

71

These changes would have extensive ramifications. Especially

when compared to the response of those that feel a higher national

wage would lead to job losses in other industries, some

commentators see a downside should the Senne plaintiffs prevail.

72

Additionally, teams would be forced to pay minor league players

above minimum wage for spring training activities.

73

Consequently,

the resulting raise in salary for minor league players would

significantly reduce the number of viable minor league teams, and

thus, a corresponding loss of jobs for players, front office and event

staff, and baseball industry suppliers.

74

In recent years, many industries outside of professional sports

have had this same discussion. For example, the city of Seattle

recently increased their minimum wage to $15.00 per hour.

75

Subsequently, the Bureau of Labor Statistics reported the city

suffered from a lower supply of jobs and a higher rate of

unemployment.

76

Indeed, a frequent topic of study among political

economists is the effect a higher federally mandated minimum

wage would have on the economy. One recent study found that such

an increase would lead to “consistent[] . . . negative effects” on job

70

Fair Labor Standards Act, 29 U.S.C. §201, §206(a)(1)(C).

71

Under their current pay, only AAA would be ineligible for overtime pay under the

“creative professional exemption” to the FLSA. U.S. DEPARTMENT OF LABOR, WAGE AND

HOUR DIVISION, FACT SHEET #17D: EXEMPTION FOR PROFESSIONAL EMPLOYEES UNDER

THE FAIR LABOR STANDARDS ACT (FLSA), 2 (July 2008), available at

https://www.dol.gov/whd/overtime/fs17d_professional.pdf (hereafter “Fact Sheet #17D”);

see also Raines, supra note 29.

72

See Kubritz, supra note 17; Stanton, supra note 30, at 752-753 (“while a win for

minor league players may enhance their current situation, many will lose their jobs

because the overall minor league system would face extreme economic pressure”).

73

Kubritz, supra note 17.

74

Id.

75

Tim Worstall, Seattle’s $15 Minimum Wage: Jobs Down, Unemployment Up. This

Isn’t Working, Is It?, FORBES (Feb. 19, 2016),

http://www.forbes.com/sites/timworstall/2016/02/19/seattles-15-minimum-wage-jobs-

down-unemployment-up-this-isnt-working-is-it/#208d6baf3712 (last visited Jan. 24,

2017).

76

Id.

Fall 2016] Minor Leagues, Major Effects 37

growth.

77

Other studies have found, however, that an increase of

the minimum wage causes little to no effect on employment levels.

78

Given the unique nature of the business, such changes would

affect professional sports much in a much different way. Unlike the

economics of traditional businesses, MLB clubs cannot simply

outsource jobs to a country with a lower minimum wage.

Furthermore, the public relations backlash of “America’s Pastime”

moving to Mexico to avoid paying the minimum wage would cripple

the sport. Moreover, MLB clubs will not be willing to hire cheaper

international talent like other industries often do, because skill

level required to play professional baseball is irreplaceable, and a

forced ban on talented prospects would be unacceptable to most

teams. Therefore, the best talent will be on the field, regardless of

price.

At the same time, if the Ninth Circuit reverses the district

court’s decision to grant class action certification and dismisses the

claim against MLB without a decision on the merits of the FLSA

claim, or if the court limits the class action to a trivial number of

players, teams could simply opt to release any player willing to

bring up the claim again. There explains why only two active

players are part of the Senne litigation:

79

the great majority of

players are not willing to risk jeopardizing their pursuit of one day

making the major leagues.

80

While federal law technically prohibits

MLB or its clubs from retaliating against players who join the suit,

it would be easy for any club to provide a baseball-related

justification for a firing unless the player is a consensus top

77

Jonathan Meer & Jeremy West, Effects of the Minimum Wage on Employment

Dynamics, 15 J. HUMAN RES. 500, 518 (2016).

78

See Laura Giuliano, Minimum Wage Effects on Employment, Substitution, and the

Teenage Labor Supply: Evidence from Personnel Data, 31 J. LABOR ECON. 155 (2013);

Arindrajit Dube, T. William Lester, & Michael Reich, Minimum Wage Effects Across

State Borders: Estimates Using Contiguous Counties, 92 REV. ECON. STAT. 945 (2010);

Madeline Zavodny, The Effect of the Minimum Wage on Employment and Hours, 7

LABOUR ECON. 729 (2000).

79

Motion for Reconsideration Regarding Class and Collective Certification, Senne v.

Office of the Comm’r of Baseball, et al., supra note 31, at 22.

80

As one minor leaguer, Dan Peltier, testified before Congress, “[W]hat minor league

player is going to jeopardize his career by challenging the system?” Complaint, Senne v.

Office of the Comm’r of Baseball, et al., supra note 4, at 2.

38 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

prospect.

81

According to baseball agent and labor-relations attorney

Bryan Symes, a claim for unlawful termination on this issue “would

be almost impossible to prove in the absence of smoking gun

evidence like an email from the front office.”

82

However, it is once again important to note that minor league

salaries are paid by MLB clubs, not minor league clubs directly.

83

This is a vital distinction, as major league teams are significantly

more sustainable than minor league teams. While minor league

baseball salaries have risen by just 75 percent since 1976,

84

revenues in the baseball industry have tripled since 2000, in large

part due to ever-increasing media rights deals.

85

In 2015, MLB

received about $9.5 billion in revenue

86

–about $317 million per

club–with the league and its member clubs reaching record media

rights deals seemingly every year.

87

According to Forbes, the

average MLB team in 2016 was worth $1.3 billion, with teams

ranging from the New York Yankees ($3.4 billion valuation with

$516 million in 2015 revenue) to the Tampa Bay Rays ($650 million

valuation with $193 million in 2015 revenue).

88

By contrast, Minor

League Baseball teams are only worth an average of $37.5 million,

with the top valued team valued at $49 million.

89

81

Jesse Burkhart, Minor Leaguers Weigh Risks in Minimum-Wage Lawsuit,

FANGRAPHS (Jan. 18, 2016), http://www.fangraphs.com/blogs/minor-leaguers-weigh-

risks-in-minimum-wage-lawsuit-3 (last visited Jan. 24, 2017).

82

Id.

83

MAJOR LEAGUE BASEBALL, THE OFFICIAL PROFESSIONAL BASEBALL RULES BOOK,

Rule 56, 172-183, supra notes 70-71.

84

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 2; see

supra note 16 and accompanying text.

85

Alexander Wolff, The Revolution [Will Not Be Televised], SPORTS ILLUSTRATED,

Dec. 12, 2016, at 117.

86

Maury Brown, MLB Sees Record Revenues For 2015, Up $500 Million And

Approaching $9.5 Billion, FORBES (Dec. 4, 2015),

http://www.forbes.com/sites/maurybrown/2015/12/04/mlb-sees-record-revenues-for-

2015-up-500-million-and-approaching-9-5-billion/#29f5b4e92307 (last visited Jan. 24,

2017).

87

Id.; see also Craig Edwards, Estimated TV Revenues for All 30 MLB Teams,

FANGRAPHS (Apr. 25, 2016), http://www.fangraphs.com/blogs/estimated-tv-revenues-for-

all-30-mlb-teams/ (last visited Jan. 24, 2017).

88

Mike Ozanian, Baseball’s Most Valuable Teams, FORBES (Mar. 23, 2016),

http://www.forbes.com/sites/mikeozanian/2016/03/23/baseballs-most-valuable-

teams/#6b3182331ddd (last visited Jan. 24, 2017).

89

Sergei Klebnikov, Minor League Baseball’s Most Valuable Teams, FORBES (July 8,

2016), http://www.forbes.com/sites/sergeiklebnikov/2016/07/08/minor-league-baseballs-

most-valuable-teams/#6e7d961150a1 (last visited Jan. 24, 2017).

Fall 2016] Minor Leagues, Major Effects 39

Further, MLB teams often put a premium on player

development and have shown a willingness to spend money to build

a strong minor league system.

90

Current figures on player

development spending is not made public, but economist Andrew

Zimbalist calculated in 2007 that the average MLB team spent

more than $20 million on its player development system.

91

Moreover, MLB estimates that teams spend $125 million per year

on international player facilities, along with the $200 million each

year that teams spend on signing bonuses for these players.

92

In

addition to these expenses, each MLB team has a player

development academy in the Dominican Republic.

93

According to a white paper written for Fight for Florida, a

“diverse coalition of labor, faith and community organizations

fighting to better the lives of all working families across the state

of Florida”

94

stated that MLB’s lobbying for an exemption from the

FLSA minimum wage requirements in the Senne case and in

Congress

95

is a symptom of “endemic” wage-and-hour violations in

90

Larry Stone, Shifting nature of free agency will put premium on player

development and scouting, SEATTLE TIMES (Apr. 2, 2013),

http://blogs.seattletimes.com/hotstoneleague/2013/04/02/shifting-nature-of-free-agency-

will-put-premium-on-player-development-and-scouting/ (last visited Jan. 24, 2017).

91

ANDREW ZIMBALIST, CIRCLING THE BASES: ESSAYS ON THE CHALLENGES AND

PROSPECTS OF THE SPORTS INDUSTRY 95 (2011).

92

David Lagesse, Baseball Is A Field Of Dreams — And Dashed Hopes — For

Dominicans, NATIONAL PUBLIC RADIO (Apr. 3, 2016),

http://www.npr.org/sections/goatsandsoda/2016/04/03/472699693/baseball-is-a-field-of-

dreams-and-dashed-hopes-for-dominicans (last visited Jan. 24, 2017). A new rule in the

2017-21 MLB Collective Bargaining Agreement caps team spending on international free

agents to $4.75 million per club for most teams (six teams are allotted a $5.25 million

cap while six additional teams are allotted a $5.75 million cap–both based on the teams’

market size and revenue). Ben Badler, How MLB’s New International Rules Change the

Game, BASEBALL AMERICA (Dec. 7, 2016),

http://www.baseballamerica.com/international/mlbs-new-international-rules-change-

game/#BVb7qoMf3l8t1YGV.97 (last visited Jan. 24, 2017). However, this still allows

teams to spend as a whole $151.5 million on international signing bonuses–still a huge

figure for largely unproven players, most of whom are 16- or 17-years old. See Ben

Badler, Scouting Children: Why MLB Has Teams Competing for 14-Year-Olds, BASEBALL

AMERICA (Apr. 10, 2014), http://www.baseballamerica.com/international/scouting-

children-why-mlb-has-teams-competing-for-14-year-olds/#0BhY565yZZMb3pWz.97

(last visited Jan. 24, 2017).

93

Lagesse, supra note 101.

94

About Us, FIGHT FOR FLORIDA, http://fightforflorida.com/about/ (last visited Jan.

24, 2017).

95

See infra Part II(B).

40 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

the baseball industry.

96

The organization points to two Department

of Labor investigations of the San Francisco Giants for the

mistreatment of clubhouse attendees and other workers.

97

The

Department of Labor has also investigated other teams–including

the Oakland Athletics, Miami Marlins, and Baltimore Orioles–for

FLSA violations against clubhouse workers and interns.

98

According to this organization, MLB has “abused the antitrust

exemption by depressing wages below the poverty line” and “there

is no need for an exemption to wage-and-hour laws for baseball or

for minor league players” as “the cost of compliance would be

minimal—especially in an industry with skyrocketing revenue.”

99

Since “MLB teams need the minor league teams to assist in the

development of their players,” they “will not push costs onto the

minor league teams in a manner that will jeopardize the survival of

any minor league teams.”

100

Despite these factors, there is still the possibility of a loss of

minor league jobs. Not every MLB team makes a profit,

101

and even

96

FIGHT FOR FLORIDA, PROFESSIONAL BASEBALL’S MODERN DAY SERF SYSTEM: AN

ARROGANT ATTEMPT TO GAIN AN EXEMPTION FROM MINIMUM WAGE AND OVERTIME

LAWS, 6 (Feb. 27, 2015), available at http://fightforflorida.com/wp-

content/uploads/2015/03/White-Paper-on-Minor-League-Salaries.pdf.

97

Id. at 6; see also Michael Arria, Major League Baseball Has a Wage Theft Problem,

WORKING IN THESE TIMES (Oct. 15, 2014),

http://inthesetimes.com/working/entry/17261/major_league_baseball_s_wage_theft_pro

blem; Memorandum from Robert D. Manfred, Jr. to MLB Presidents and Club Counsel

(Sept. 12, 2013), available at http://www.fairwarning.org/wp-

content/uploads/2013/10/Sept.-12memo.pdf.

98

Arria, supra note 93. The Department of Labor has reached two settlements with

the Giants: for $544,715 in 2013 and for $220,793 in 2014. Id. The Miami Marlins settled

for $288,290 in 2014 for claims involving 39 team employees, including clubhouse and

office staff. Myron Levin & Stuart Silverstein, Investigation of Pay Practices Targets Two

More Major League Teams, the Orioles and A’s, FAIRWARNING (May 22, 2014),

http://www.fairwarning.org/2014/05/investigation-pay-practices-major-league-baseball-

expands-two-teams (last visited Jan. 24, 2017). The Oakland Athletics settled in 2014

for $266,358 for claims by clubhouse workers who were apparently often paid $70 on

gamedays regardless of how many hours they worked. Myron Levin, Federal Wage

Investigation Snags Another Major League Baseball Team, the Oakland A’s,

FAIRWARNING (Sep. 4, 2014), http://www.fairwarning.org/2014/09/oakland-athletics-

latest-major-league-team-pay-settlement-alleged-wage-violations (last visited Jan. 24,

2017).

99

FIGHT FOR FLORIDA, supra note 105, at 7-8.

100

Id. at 8.

101

According to Forbes, three teams had a negative operating income in 2015: the

Texas Rangers ($-4.7 million), the Philadelphia Phillies ($-8.9 million), and the Los

Angeles Dodgers ($-73.2 million). The Business of Baseball, FORBES,

Fall 2016] Minor Leagues, Major Effects 41

those that do will be loath to add significant salary in an area of

limited previous expense. For example, most teams have eight

minor league affiliates, including one affiliate in the AAA, AA, A-

Advanced and A levels, either one Short-Season-A and one Rookie

level affiliates or two Rookie level affiliates, and two affiliates in the

Dominican Summer League.

102

However, the Arizona

Diamondbacks, Houston Astros, New York Mets, and Tampa Bay

Rays have two Rookie level teams, for a total of nine minor league

affiliates.

103

Similarly, the New York Yankees have three Rookie

level teams and a total of ten minor league affiliates.

104

To lessen

the additional salary burden, some of these teams may opt to cut

one or more of these extra Rookie level teams; thus lessening their

available roster spots for players all throughout the whole minor

league system

105

and also reducing the job pool for coaches and

trainers as well.

106

But in terms of the expenses themselves, the additions would

be fairly minimal. Most MLB clubs have around two hundred active

http://www.forbes.com/mlb-valuations/list/#tab:overall (last visited Jan. 24, 2017). The

last team on that list is notable, as the Dodgers are currently working with MLB to

remain in compliance with an MLB rule that requires clubs to “limit[] debt to no more

than 12 times annual revenue, minus expenses.” Bill Shaikin, After $1 billion in player

spending, Dodgers under MLB mandate to cut debt, LOS ANGELES TIMES (Nov. 26, 2016),

http://www.latimes.com/sports/dodgers/la-sp-dodgers-debt-payroll-20161126-story.html

(last visited Jan. 24, 2017). According to the Los Angeles Times, the Dodgers currently

have about $400 million in debt and have not made a profit in the three years since new

ownership took control of the club. Id.

102

Teams by Affiliation, MINOR LEAGUE BASEBALL,

http://www.milb.com/milb/info/affiliations.jsp (last visited Jan. 24, 2017).

103

Id. The St. Louis Cardinals have two Rookie level affiliates and one Short Season

A level affiliate but just one Dominican Summer League team for a total of eight minor

league teams. Id. The Cleveland Indians, Colorado Rockies, Miami Marlins, San

Francisco Giants, and Washington Nationals each have just one Dominican Summer

League affiliate for a total of seven minor league teams each. Id. The Pittsburgh Pirates

have two Rookie level affiliates and one Short Season A level affiliate but no Dominican

Summer League teams for a total of seven minor league teams. Id. The Atlanta Braves,

Chicago White Sox, Los Angeles Angels, Milwaukee Brewers, and Minnesota Twins,

have two Rookie level affiliates, but do not have Short Season A affiliates and only have

one Dominican Summer League affiliate, for a total of seven minor league teams each.

Id.

104

Id.

105

Rookie level teams can carry up to 35 active players, thus each Rookie level team

cut would decrease the number of available minor league jobs by 35. MiLB.com

Frequently Asked Questions, MINOR LEAGUE BASEBALL,

http://www.milb.com/milb/info/faq.jsp?mc=business#19 (last visited Jan. 24, 2017).

106

See supra note 67 and accompanying text.

42 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

players in their farm systems at any given time, spread across

seven to ten minor league affiliates.

107

Thus based on estimates of

current minor league expenses, clubs currently pay just under $1.1

million in minor league salaries, not including meal allowances and

stipends for players who are inactive or assigned to extended spring

training.

108

Table 1 – Current Estimated Minor League Salaries Per

Club

109

Yearly Pay

Player

s

Per

Month

s

Per

Player

Per Club

AAA

25

110

$2,150

5

$10,750

$268,750

AA

25

$1,500

5

$7,500

$187,500

H-A

25

$1,250

5

$6,250

$156,250

L-A

25

$1,250

5

$6,250

$156,250

S-A

30

$1,100

3

$3,300

$99,000

107

Id. Using the Boston Red Sox system as an example (not including inactive players

and players classified in extended spring training), they will have 25 players in each of

AAA, AA, High-A and Low-A, 30 players in Short-A and 35 players in each of their rookie

level affiliates for a total of 200 players. Mike Andrews, Projected 2017 Red Sox Major

League & Minor League Rosters, SOXPROSPECTS.COM,

http://www.soxprospects.com/org.htm (last visited Jan. 24, 2017).

108

Salary figures obtained from Complaint, Senne v. Office of the Comm’r of Baseball,

et al., supra note 4, at 21. MLB clubs have at least seven affiliates, including one AAA-

level affiliate, one AA-level affiliate, three A-level affiliates (one A-Advanced, one A, and

one Short Season-A), and two Rookie-level affiliate. Teams by Affiliation, MINOR LEAGUE

BASEBALL, http://www.milb.com/milb/info/affiliations.jsp (last visited Jan. 24, 2017).

Many MLB clubs have more affiliates, with the additional affiliates placed at the Rookie-

level. For example, the New York Yankees have 10 affiliated clubs, including five Rookie-

level affiliates. Id.

109

Salary figures obtained from Complaint, Senne v. Office of the Comm’r of Baseball,

et al., supra note 4, at 21.

110

Some AAA (and possibly even AA) players are on MLB 40-man rosters, and thus

would receive significantly more than $2,150. See supra note 15 and accompanying

text. For the purposes of this (rough) tabulation, only minor league players who are not

and have never been on a 40-man roster are considered. See id.

Fall 2016] Minor Leagues, Major Effects 43

R1

35

$1,100

3

$3,300

$115,500

R2

35

$1,100

3

$3,300

$115,500

Total

200

$1,098,75

0

If, hypothetically, the Senne plaintiffs were to force MLB clubs

to pay their minor league players the federal minimum wage of

$7.25 per hour for the fifty hours per week of work alleged in the

complaint (forty hours of $7.25 per hour plus ten hours of “time and

a half” overtime), plus an additional two months of “wages” for

spring training, the total expenditure rises to just under $2 million

per club.

Table 2 – Estimated Minor League Salaries Per Club at $7.25

per Hour for 50 Hours per Week (including Spring Training)

Yearly Pay

Players

Per

Week

Per

Month

Months

Per

Player

Per Club

AAA

25

111

$398.75

$1,595

7

$11,165

$268,750

AA

25

$398.75

$1,595

7

$11,165

$187,500

H-A

25

$398.75

$1,595

7

$11,165

$156,250

L-A

25

$398.75

$1,595

7

$11,165

$156,250

S-A

30

$398.75

$1,595

5

$7,975

$99,000

R1

35

$398.75

$1,595

5

$7,975

$115,500

R2

35

$398.75

$1,595

5

$7,975

$115,500

Total

200

$1,914,000

111

See supra note 110.

44 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

While these figures remain fairly low, it is important to note

two factors that would undoubtedly increase these numbers

significantly. First, at $7.25 per hour for a fifty hour week AAA-

level players would actually be taking a pay cut, so that figure will

likely remain at $2,150 per month, or increase from there.

112

Second, the $7.25 per hour federal minimum wage is superseded by

a higher state or city minimum wage,

113

and many states and cities

do have a higher minimum wage than the federal level.

114

Thus, the

salary costs per club when accounting for minimum wage laws will

be both higher than the totals in Table 2, and vary from club to club

based on the market-draw locations of their minor league affiliates.

Using the Houston Astros as an example, raising salaries to

account for minimum wage and salary rules adds a little over $1

million in expenses to the team’s annual budget, plus an additional

cost for players in their two teams in the Dominican Summer

League.

115

Table 3 – Estimated Minor League Salaries for the Houston

Astros, Based on 2017 State Minimum Wage Laws

116

Yearly Pay

Players

Location

Min.

Wage

Per Month

x

Per Player

Per Club

112

MLB will likely also wish to keep the current structure where monthly salaries

rise as a player rises through the different minor league levels, but that is difficult to

estimate.

113

Minimum Wage, UNITED STATES DEPARTMENT OF LABOR,

https://www.dol.gov/general/topic/wages/minimumwage (last visited Jan. 24, 2017).

114

See 2017 Minimum Wage by State, NATIONAL CONFERENCE OF STATE

LEGISLATURES (Jan. 5, 2016), http://www.ncsl.org/research/labor-and-employment/state-

minimum-wage-chart.aspx (last visited Apr. 18, 2017).

115

Teams by Affiliation, MINOR LEAGUE BASEBALL,

http://www.milb.com/milb/info/affiliations.jsp (last visited Jan. 24, 2017). For the

purposes of simplicity, Dominican Summer League teams were not included in this

analysis. The applicability of Dominican minimum wage laws to minor league baseball

players could be the subject of a separate article, but at this point is a moot issue, as the

minimum wage in the Dominican Republic is just $130.24 USD per month. No raise on

Dominican Republic’s ‘too many’ wages of misery, DOMINICAN TODAY (Sept. 24, 2016),

http://www.dominicantoday.com/dr/poverty/2016/9/24/60713/No-raise-on-Dominican-

Republics-too-many-wages-of-misery (last visited Jan. 24, 2017).

116

Id.; see also Teams by Affiliation, MINOR LEAGUE BASEBALL,

http://www.milb.com/milb/info/affiliations.jsp (last visited Jan. 24, 2017).

Fall 2016] Minor Leagues, Major Effects 45

AAA

25

Fresno, CA

117

$10.50

$2,310

5

$11,550

$288,750

AA

25

Corpus Christi,

TX

$7.25

$1,595

5

$7,975

$199,375

H-A

25

Buies Creek,

NC

$7.25

$1,595

5

$7,975

$199,375

L-A

25

Davenport, IA

$7.25

$1,595

5

$7,975

$199,375

S-A

30

Troy, NY

118

$11.00

$2,420

3

$7,260

$217,800

R1

35

Kissimmee,

FL

119

$8.10

$1,782

3

$5,346

$187,110

R2

35

Greeneville, TN

$7.25

$1,595

3

$4,785

$167,475

Spr.

200

Kissimmee,

FL

120

$8.10

$1,782

2

$3,564

$712,800

Total

200

$2,172,060

An additional $1 million per club investment is obviously not

too heavy a fiscal burden for a MLB team. But perhaps the real

issue with adding minimum wage laws into the mix is that if the

courts found that the FLSA applies to minor league players, clubs

will be forced to adjust to a wide variety of constantly-changing

minimum wage laws., This would muddle salary computation for

the clubs, raise competitive balance issues between teams, and add

an additional layer of difficulty in minor league contract

negotiations.

But even beyond this, it is conceivable that minimum wage

rules will vary from day-to-day based on away games, just as tax

responsibilities for players often vary from day-to-day. Under the

series of tax laws known colloquially as the “jock tax,” athletes are

taxed by the states they visit for away games for income that they

117

California’s minimum wage will increase to $11.00 per hour on January 1, 2018, and

$1.00 per year after that until January 1, 2023, at which point it will increase annually

based on the Consumer Price Index. 2017 Minimum Wage by State, NATIONAL

CONFERENCE OF STATE LEGISLATURES (Jan. 5, 2017),

http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

(last visited Apr. 19, 2017).

118

New York’s minimum wage will increase to $11.00 per hour on December 31, 2016,

$13.00 per hour on December 31, 2017, and $15.00 per hour on December 31, 2018. Id.

119

Florida’s minimum wage increases annually based on cost of living measurements.

Id.

120

See supra note 119. For the purposes of this calculation, only active players were

included in the spring training total. However, in practice this total will also include

inactive players and minor league non-roster invitees, thus raising this total again

slightly.

46 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

earned while in that state.

121

While this issue has (obviously) not

been tested for minimum wage laws, if minimum wage laws were

applied to minor league players based on the same legal reasoning,

an extremely complicated legal issue may arise about which

minimum wage should apply day-by-day for teams traveling out of

state for away games.

For example, when the Astros’ A-level affiliate Quad City

River Bandits (based out of Davenport, IA) travel to Illinois to play

the Peoria (IL) Chiefs, are the Astros responsible for paying the

River Bandits players based on Iowa’s minimum wage of $7.25 per

hour, or Illinois’s minimum wage of $8.25 per hour?

122

Contrarily,

when the Astros’ AAA-level affiliate Fresno (CA) Grizzlies play the

nearby El Paso (TX) Chihuahuas, will the Astros still be responsible

to pay players at $10.50 per hour based on California’s minimum

wage, or can they get away with paying their players the mere $7.25

per hour required in Texas?

123

For first-year players, whose salaries are mandated by MLB

to stay consistent from team-to-team, this issue may not be of any

concern. MLB will likely continue their practice of mandating equal

salaries for first-year minor league players

124

and will simply raise

that mandated monthly salary to an equivalent of the salary needed

to stay compliant based on the teams in each minor league level.

125

But for all other minor league players, the jobs of team accountants

will get much more complicated, and major responsibility will fall

on agents to ensure that their players’ paychecks are calculated

correctly so their clients are receiving the salaries they are legally

due based on the various states’ minimum wage laws.

121

See Elizabeth C. Ekmekjian, The Jock Tax: State and Local Income Taxation of

Professional Athletes, 4 SETON HALL J. SPORT L. 229 (1994); see also John DiMascio,

Note, The Jock Tax: Fair Play or Unsportsmanlike Conduct, 68 U. PITT. L. REV. 953

(2007).

122

2017 Minimum Wage by State, NATIONAL CONFERENCE OF STATE LEGISLATURES

(Jan. 5, 2016), http://www.ncsl.org/research/labor-and-employment/state-minimum-

wage-chart.aspx (last visited Apr. 18, 2017).

123

Id.

124

MAJOR LEAGUE BASEBALL, THE OFFICIAL PROFESSIONAL BASEBALL RULES BOOK,

Rule 3(c)(2), 26.

125

That mandated salary may simply be the $455 per week necessary to reach the

FLSA’s creative professional exemption. See FACT SHEET #17D, supra note 69.

Fall 2016] Minor Leagues, Major Effects 47

B. Will Congress Legislate the Problem Away?

As one scholar predicted in 2015,

126

MLB and Minor League

Baseball have looked to solve the issues raised by Senne by lobbying

Congress to simply make the problem go away through legislation.

In June 2016, Representatives Brett Guthrie (R-KY) and Cheri

Bustos (D-IL) introduced the “Save America’s Pastime Act,” which

would add “any employee who has entered into a contract to play

baseball at the minor league level” to § 16(a) of the FLSA.

127

If this

bill passes, future minor league players would be facially exempted

from bringing any FLSA claim, including those for violations of the

federal minimum wage or overtime rules.

128

The bill was introduced with full support from MLB and Minor

League Baseball, with Minor League Baseball President Pat

O’Conner stating that “[f]or over 115 years, Minor League Baseball

has been a staple of American communities, large and small, and

with the help of . . . members of Congress, it will remain so for years

to come.”

129

MLB took a more pragmatic approach in their statement,

arguing that “MLB pays over a half a billion dollars to Minor

League players in signing bonuses and salary each year” and

“heavily subsidizes Minor League Baseball by providing Minor

League clubs with its players, allowing professional baseball to be

played in many communities in the United States that cannot

support a Major League franchise.”

130

The league also took the

opportunity to attack the Senne claim directly, stating that “Minor

League Baseball players always have been salaried employees

similar to artists, musicians and other creative professionals who

are exempt from the Fair Labor Standards Act” and “it is simply

impractical to treat professional athletes as hourly employees.”

131

126

Stanton, supra note 30, at 750-751.

127

Save America’s Pastime Act, H.R. 5580, 114th Cong. (2016).

128

Id.

129

Press Release, Minor League Baseball, Minor League Baseball supports new

legislation to protect America’s pastime (June 29, 2016), available at

http://www.milb.com/news/print.jsp?ymd=20160629&content_id=186903512&vkey=pr_

milb&fext=.jsp&sid=milb.

130

Press Release, Major League Baseball, Major League Baseball statement (June

30, 2016), available at http://m.mlb.com/news/article/187167466/major-league-baseball-

statement/.

131

Id.

48 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

Most media outlets roundly criticized the proposed legislation

when it was introduced, with some commentators noting that both

bill sponsors received donations from MLB’s political action

committee in the 2016 election cycle, and that Congresswoman

Bustos’s father, Gene Callahan, was MLB’s first lobbyist.

132

Since

1998, MLB has routinely flexed their muscles on Capitol Hill, and

in the 2016 election cycle donated $303,625 to federal

Congressional candidates–including $1,000 to Congressman

Guthrie and $2,000 to Congresswoman Bustos.

133

This lobbying is

one step in a larger strategy for MLB and minor league baseball, as

according to minor league baseball vice president Stan Brand, the

two leagues plan to storm Washington “[l]ike the 17-year locusts”

in order to secure an exemption from the FLSA.

134

Facing heavy public backlash, Congresswoman Bustos

withdrew her support of the legislation just a few days after its

introduction, citing “several concerns about the bill” and affirming

her apparent view that “Major League Baseball can and should pay

young, passionate minor league players a fair wage for the work

they do.”

135

132

See Ted Berg, The ‘Save America’s Pastime Act’ in Congress will do nothing of the

sort, USA TODAY (June 30, 2016), http://ftw.usatoday.com/2016/06/save-americas-

pastime-act-minor-league-minimum-wage-lawsuit-mlb-salaries (last visited Jan. 24,

2017).

133

Contributions to Federal Candidates, 2016 cycle – Major League Baseball

Commissioner’s Office PAC, CENTER FOR RESPONSIVE POLITICS (Nov. 28, 2016),

https://www.opensecrets.org/pacs/pacgot.php?cycle=2016&cmte=C00368142 (last

visited Jan. 24, 2017).

134

Josh Leventhal, MiLB Opposes Players, Supports MLB in Lawsuit, BASEBALL

AMERICA (Dec. 11, 2014), http://www.baseballamerica.com/minors/milb-opposes-players-

backs-mlb-lawsuit/#qvl415LRjI3ikKpA.97 (last visited Jan. 24, 2017). Speaking to fans

at the 2014 Winter Meetings about the Senne case, Brand stated: “Just as we did in the

1990s to save the antitrust exemption, we will need your help to explain to our legislators

the importance of this issue to the future of minor league baseball and their communities’

investments in stadia and infrastructure. I do not want to overstate the threat this suit

presents, but I think my honest assessment is that it is equally perilous for our future

as the antitrust repeal was in the 1990’s.” Id. See also Marissa Payne, Baseball officials

to lobby Congress to help MLB avoid paying minor league players minimum wage,

WASHINGTON POST (Dec. 20, 2014), http://www.washingtonpost.com/blogs/early-

lead/wp/2014/12/20/baseball-officialsto-lobby-congress-to-help-mlb-avoid-paying-minor-

league-players-minimum-wage/ (last visited Jan. 24, 2017).

135

Press Release, Congresswoman Cheri Bustos, UPDATE: Bustos Statement on

H.R. 5580 (June 30, 2016), available at https://bustos.house.gov/congresswoman-bustos-

and-congressman-guthrie-introduce-bill-to/.

Fall 2016] Minor Leagues, Major Effects 49

As of April 18, 2017, the bill remains active with Congressman

Guthrie as its sole sponsor.

136

The bill was referred to the House

Education and the Workforce Subcommittee on Workforce

Protections on September 19, 2016, but to date has not passed the

subcommittee.

137

Notably, in December 2016, Minor League Baseball acted and

established their own political action committee “to lobby Congress

for help the league’s ‘legislative issues.’”

138

According to Minor

League Baseball president Pat O’Conner, the Senne litigation is

“the most immediate and pressing” issue behind the decision to

start the political action committee, and O’Conner acknowledged

that the league is “going to face this down the road in some other

format.”

139

The establishment of a political action committee,

according to O’Conner, allows the league to “be proactive, get

engaged, get our troops engaged, [and] get an infrastructure in

place that allows [Minor League Baseball] to immediately

respond.”

140

Such responses would presumably include defending

against further lawsuits in the same vein as Senne, as while Minor

League Baseball is not a party to that litigation, they will certainly

be affected if the plaintiffs prevail.

While the success of this legislation remains to be seen, the

fact that MLB and Minor League Baseball have taken such steps

shows that they are worried about their chances of winning the

Senne case and the potential ramifications of a defeat. As the

litigation moves along, it will be interesting to see whether MLB

and Minor League Baseball act more urgently in regards to their

lobbying efforts and whether the legislation advances through

Congress.

136

H.R.5580 - Save America’s Pastime Act, CONGRESS.GOV,

https://www.congress.gov/bill/114th-congress/house-bill/5580/committees (last visited

Apr. 18, 2017).

137

Id.

138

Josh Norris, Minor League Baseball Establishes Political Action Committee,

BASEBALL AMERICA (Dec. 5, 2016), http://www.baseballamerica.com/business/minor-

league-baseball-establishes-political-action-committee/#h51qXK5wMIhq1qul.97 (last

visited Jan. 24, 2017).

139

Id.

140

Id.

50 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

III. WHAT COULD A SETTLEMENT LOOK LIKE?

To avoid the complications that would result if a court were to

rule in favor of the Senne plaintiffs, MLB and the minor league

players may look to settle the case by working together to create a

system where compensation is raised to avoid FLSA minimum

wage and overtime concerns. The best way to accomplish this would

be to simply look to the next level of FLSA exemptions after the

seasonal recreational exemption–the creative professional

exemption.

Per this exemption to the FLSA, employees who work “in a

recognized field of artistic or creative endeavor as opposed to

routine mental, manual, mechanical or physical work” may be

exempted from the FLSA’s minimum wage and overtime rules

based on a two-prong test.

141

First, the employee “must be

compensated on a salary or fee basis (as defined in the regulations)

at a rate not less than $455 per week.”

142

Second, the employee’s

“primary duty must be the performance of work requiring

invention, imagination, originality or talent in a recognized field of

artistic or creative endeavor.”

143

According to one commentator, the creative professional

exemption will allow MLB to prevail in Senne, as MLB could simply

argue that “the overtime pay the minor leaguers demand is not for

work, but rather for their own professional development.”

144

However, the question of whether playing baseball is “original” or

“creative” enough to be held under this exemption is a matter of

debate.

145

No case has applied or attempted to apply the creative

professional exemption to professional athletes. When courts have

looked at this exemption in the context of newspaper reporters,

141

Defining and Delimiting the Exemptions for Executive, Administrative,

Professional, Outside Sales and Computer Employees; Final Rule, 29 C.F.R. § 541.302

(2004), available at https://www.dol.gov/whd/overtime/regulations.pdf.

142

FACT SHEET #17D, supra note 69.

143

Id.

144

Stanton, “Juuuussst A Bit Outside”, 22 JEFFREY S. MOORAD SPORTS L.J. at 750.

145

See Lucas J. Carney, Note, Major League Baseball’s ‘Foul Ball’: Why Minor League

Baseball Players Are Not Exempt Employees Under the Fair Labor Standards Act, 41 J.

CORP. L. 285, 295-301 (2015); Keith M. Weddington and L. Elizabeth Gibbes, Are

Professional Athletes Covered Under New Overtime Rules?, EMPLOYMENT LAW ALLIANCE

(Aug. 8, 2016), http://www.employmentlawalliance.com/firms/parkerpoe/articles/are-

professional-athletes-covered-under-new-overtime-rules (last visited Jan. 24, 2017).

Fall 2016] Minor Leagues, Major Effects 51

judges have generally stated that in order to meet this exemption,

the employee’s work must be “original” or “creative,” which would

be a difficult case to make for an athlete participating in a team

sport.

146

But regardless, the “not less than $455 per week”

compensation required for this exemption would result in a fairly

substantial pay raise for most minor league players.

147

Assuming

146

Carney, Major League Baseball’s ‘Foul Ball’, 41 J. CORP. L. at 295-301. Compare

Sherwood v. Washington Post, 871 F. Supp. 1471, 1473 (D.C. 1994) (holding that a

reporter for the Washington Post who was asked to “originate story ideas, piece together

seemingly unrelated facts, analyze facts and circumstances, and present his news stories

in an engaging style” was a creative employee under the FLSA), and Freeman v.

National Broadcasting Co., Inc., 80 F.3d 78, 83 (holding that writers for NBC’s Nightly

News program were creative professionals under the FLSA despite the “functional

nature of their positions”), with Kadden v. VISUALEX, LLC, 910 F. Supp. 2d (S.D.N.Y.

2012) (holding that an employee whose job primarily required “‘proofing’ and ‘revising’

graphics that other people created” was not covered under the creative professional

exemption), and Reich v. Newspapers of New England, Inc., 44 F.3d 1060 (1st Cir. 1995)

(holding that local “general assignment” newspaper reporters were not covered under

the creative professional exemption).

147

Fact Sheet #17D, supra note 149, at 2. It must be noted that under the direction

of the Obama administration, the Department of Labor has attempted to raise the

compensation threshold for FLSA overtime exemptions (including the creative

professional exemption) to $913 per week. Final Rule: Overtime, UNITED STATES

DEPARTMENT OF LABOR, https://www.dol.gov/whd/overtime/final2016/ (last visited Jan.

24, 2017). This change would undoubtedly include all minor league players not covered

by the MLB-MLBPA collective bargaining agreement and force MLB to give these

players an even higher raise if they wish to take advantage of the creative professional

exemption. But on November 22, 2016, the United States District Court, Eastern District

of Texas issued a permanent injunction blocking this rule change. Important information

regarding recent overtime litigation in the U.S. District Court of Eastern District of Texas,

UNITED STATES DEPARTMENT OF LABOR, https://www.dol.gov/featured/overtime (last

visited Jan. 24, 2017); State of Nevada, et al v. United States Dep’t of Labor, et al, 2016

U.S. Dist. LEXIS 162048 (No. 4:16-CV-00731) (E.D. Tex. Nov. 22, 2016). The injunction

was appealed to the Fifth Circuit Court of Appeals and granted expedited review, and is

currently in the briefing stage. Important information regarding recent overtime

litigation in the U.S. District Court of Eastern District of Texas, DEPARTMENT OF LABOR,

https://www.dol.gov/featured/overtime (last visited Apr. 14, 2017); see State of Nevada,

et al v. LABR, et al, No. 16-41606 (5th Cir. filed Dec. 1, 2016). However, it remains to be

seen whether President Trump’s administration will continue the fight to raise this

threshold. See generally Valerie Bolden-Barrett, 29% of business owners think Trump

will block the FLSA overtime rule, HR DIVE (Jan. 19, 2017),

http://www.hrdive.com/news/29-of-business-owners-think-trump-will-block-the-flsa-

overtime-rule/434283/ (last visited Jan. 24, 2017); Hannesson Murphy, The DOL’s Final

Rule on Life Support?, THE NATIONAL LAW REVIEW (Dec. 30, 2016),

http://www.natlawreview.com/article/dol-s-final-rule-life-support (last visited Jan. 24,

2017). Most recently, the Fifth Circuit granted the Department of Justice’s request (on

behalf of the Department of Labor) for an extension of time to file its reply brief “to allow

52 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

four weeks to a month, the $455 per week required would force MLB

clubs to pay minor league players $1,820 per month to claim this

exemption. This would be a pay raise for all but AAA players, who

currently make $2,150 per month.

148

As such, MLB would be well advised to base a settlement offer

off this $455 per week minimum figure. While it would not make

the league entirely free from potential litigation (as the question of

whether professional athletes are held under the creative

professional exemption is unsettled), it would give them a less

nebulous legal position than the seasonal recreational worker

exemption–especially since they can show that they reached these

new compensation figures with player involvement.

For the players, while it is still very difficult to live off of $455

per week, this change would still represent a significant raise from

what players have been making. Players at the Short-Season-A and

Rookie levels are currently making $1,100 per month, or $3,300 for

a three-month season.

149

Under the creative professional exemption

minimum of $455 per week, these players would be making $1,820

per month, or $5,460 for the three-month season. And presumably,

players at higher levels would be paid at a correspondingly higher

rate.

While this potential settlement is not perfect for either side,

focusing the discussion on the $455 per week figure required by the

FLSA’s creative professional exemption would help solve many of

the issues inherent with applying minimum wage and overtime

rules to minor league employment. Such a settlement would help

the league avoid these difficult discussions, while at the same time

granting the players a modest, but significant, pay raise.

incoming leadership personnel adequate time to consider the issues.” Important

information regarding recent overtime litigation in the U.S. District Court of Eastern

District of Texas, DEPARTMENT OF LABOR, https://www.dol.gov/featured/overtime (last

visited Apr. 14, 2017). Even if the change falls through the Democratic Party has vowed

to implement the new rule state-by-state, which would then further add to the

complexity faced by MLB clubs if minor league players are granted FLSA rights. Josh

Eidelson, Democrats Want to Revive Obama’s Overtime Rule State by State, BLOOMBERG

(Jan. 13, 2017), https://www.bloomberg.com/news/articles/2017-01-13/democrats-want-

to-revive-obama-s-overtime-rule-state-by-state (last visited Jan. 24, 2017).

148

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 21.

149

Id.

Fall 2016] Minor Leagues, Major Effects 53

IV. CAN THE PROBLEM BE SOLVED THROUGH COLLECTIVE

BARGAINING?

Rather than simply settling the Senne lawsuit, MLB and the

minor league players may look to make widespread changes beyond

salary considerations by expanding the discussions to a more

holistic collective bargaining agreement. However, this would

require union representation for minor league players.

Efforts to unionize minor league players are not new, but have

thus far been wholly unsuccessful. Before filing the Senne lawsuit,

lead plaintiff’s attorney and former minor league player Garrett

Broshius considered forming a Minor League Baseball Players

Union, but he was unable to gain any traction in these efforts.

150

According to the Senne complaint, minor league players do not want

to unionize as they “fear retaliation” by MLB and MLB clubs and

are thus “reluctant to upset the status quo” if it may jeopardize

their “lifelong dream of playing in the major leagues.”

151

However, given the massive potential effects and the plaintiffs’

respectable chances of prevailing on the merits, if Senne can move

past the class action certification stage it may behoove MLB to

reach a settlement with the plaintiffs that would include changes

to minor league compensation policies. Also, while no minor league

players’ union exists, this lawsuit could be the first step towards

establishing collective bargaining between minor league players

and teams. Through collective bargaining, minor league players

and management would have the opportunity to respond to the

issues raised in Senne on their own terms. Moreover, the parties

would avoid further dragged out litigation and the sudden changes

that would come from a verdict in favor of the plaintiffs.

While the MLBPA does not count most minor league players

as part of its membership,

152

the changes it makes allows through

collective bargaining with MLB undoubtedly have significant effect

on minor league players.

153

150

Marc Allard, Life as Minor League Baseball player far from easy or fair, NORWICH

BULLETIN (July 30, 2016), http://www.norwichbulletin.com/sports/20160730/life-as-

minor-league-baseball-player-far-from-easy-or-fair (last visited Jan. 24, 2017).

151

Complaint, Senne v. Office of the Comm’r of Baseball, et al., supra note 4, at 1.

152

See supra note 13.

153

See Broshuis, Touching Baseball’s Untouchables: The Effects of Collective

Bargaining on Minor League Baseball Players, 4 HARV. J. SPORTS & ENT. L. 51, supra

note 15; see also Shauna Teresa DiGiovanni, Note, Underpaid, Unrepresented,

54 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

For example, the new Collective Bargaining Agreement

significantly changed the signing rules for international amateur

players under the age of twenty-five.

154

Previously, teams could

exceed their bonus allotment and merely suffer penalties ranging

from a tax on the overage to prohibitions on signing high priced

talent in the next one or two international signing periods.

155

But under the new “hard cap” system, teams are absolutely

prohibited from exceeding their bonus allotment, which will range

between $4.75 million to $5.75 million per club.

156

Teams may trade

for additional cap room, but they are limited to an additional 75

percent of their additional bonus pool for a maximum of just over

$10 million.

157

By contrast, four players–Adrian Morejon ($11 million with

the San Diego Padres), Yusniel Diaz ($15.5 million with the Los

Angeles Dodgers), Yadier Alvarez ($16 million, again with the

Dodgers), and Yoan Moncada ($31.5 million with the Boston Red

Sox)–each signed for over $10 million alone in the past two years.

158

As of December 21, 2016, only Moncada has been placed on a team’s

40-man roster and is thus part of the MLBPA.

159

Clearly, these new

rules will have significant effect on the money received by non-

union players despite the fact that neither these players nor

similarly situated had any say in their collective bargaining.

Unprotected: A Call for a Change in the Status Quo of Minor League Baseball, 22 SPORTS

LAW. J. 243, 247-251 (2015).

154

Jonathan Mayo, How CBA affects Draft, free agency, international market,

MLB.COM (Dec. 2, 2016), http://m.mlb.com/news/article/210035584/mlb-cba-affects-

draft-international-prospects/ (last visited Jan. 24, 2017).

155

Jeff Todd, MLB Releases 2016-17 International Bonus Pools, MLB TRADE RUMORS

(April 5, 2016), http://www.mlbtraderumors.com/2016/04/mlb-releases-2016-17-

international-bonus-pools.html (last visited Jan. 24, 2017).

156

Mayo, supra note 162.

157

Id.

158

Id.

159

Padres Roster & Staff, SAN DIEGO PADRES, http://m.padres.mlb.com/sd/roster/40-

man/ (last visited Jan. 24, 2017); Dodgers Roster & Staff, LOS ANGELES DODGERS,

http://m.whitesox.mlb.com/la/roster/40-man/ (last visited Jan. 24, 2017); White Sox

Roster & Staff, CHICAGO WHITE SOX, http://m.whitesox.mlb.com/cws/roster/40-man/ (last

visited Jan. 24, 2017) (Moncada was traded from the Red Sox to the White Sox on

December 6, 2016 (Steve Adams, Red Sox Acquire Chris Sale In Exchange For Yoan

Moncada, Michael Kopech, Two Others, MLB TRADE RUMORS (Dec. 6, 2016),

http://www.mlbtraderumors.com/2016/12/red-sox-to-acquire-chris-sale.html (last visited

Jan. 24, 2017)).

Fall 2016] Minor Leagues, Major Effects 55

Under the precedent set by Clarett v. National Football

League, it is indisputable that the MLBPA is well within its rights

to collectively bargain signing bonus rules, as these terms are “the

conditions under which a prospective player . . . will be considered

for employment” just like the draft rules in Clarett.

160

However, the

terms of employment for minor league players as minor league

players leave a legal grey area in who actually represents these

players, as the minor league salary rules are not collectively

bargained by the MLBPA as part of the Basic Agreement.

A court may find that the MLBPA has “acquiesced in the

continuing operation” of the minor league salary rules by not

challenging them like in Clarett.

161

However, Clarett is likely

distinguishable in this context since unlike in the NFL, players

drafted or signed as amateur free agents by MLB clubs are not

immediately part of the union, since it is extremely rare that such

players are immediately placed on 40-man rosters.

162

In fact, since

only ten percent of drafted players make it to the major leagues,

163

it stands to reason that something close to ninety percent of drafted

players are never placed on a 40-man roster, and thus never receive

this union representation at all. Thus, it makes sense for minor

league players to acquire their own union representation if possible,

especially for negotiating a potential settlement to the Senne case.

160

369 F. 3d 124, 141 (2nd Cir. 2004).

161

Id. The rule in question in Clarett–a minimum age rule for eligibility in the NFL

Draft–was not part of the NFL’s CBA at the time; it was part of the league’s Constitution

and Bylaws, and thus not collectively bargained with the union. Id. Nevertheless, the

2nd Circuit still held the rule as exempt from antitrust challenge under the non-

statutory labor exemption, as “the union agreed [in the CBA] to waive any challenge to

the Constitution and Bylaws and thereby acquiesced in the continuing operation of the

eligibility rules contained therein–at least for the duration of the agreement.” Id at 142.

162

Clubs have no incentive to do so, as minor league players who are never placed on

a 40-man roster are not eligible for selection by other clubs under the Rule 5 Draft until

four or five years after they are signed or drafted (MAJOR LEAGUE BASEBALL, THE

OFFICIAL PROFESSIONAL BASEBALL RULES BOOK, Rule 5(c), 56), and not eligible for free

agency until seven years after they are signed (MAJOR LEAGUE BASEBALL, THE OFFICIAL

PROFESSIONAL BASEBALL RULES BOOK, Attachment 3, §VI(A), 193).

163

Nathan Sorensen, Minor league ballplayers’ path to the bigs has major obstacles,

so family is no small thing, DESERET NEWS (May 15, 2014),

http://www.deseretnews.com/article/865628804/Minor-league-ballplayers-path-to-the-

bigs-has-major-obstacles-so-family-is-no-small-thing.html (last visited Jan. 24, 2017).

This is an estimate, as players are often placed on a 40-man roster without a concurrent

or subsequent call-up to the major leagues.

56 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

While the MLBPA could bring in minor league players as part

of their representative body, the prospects for such a move are

bleak. MLBPA founder Marvin Miller once considered bringing

minor league players into the MLBPA fold but the “appeal of

unionizing every pro baseball player . . . was always outweighed by

a lack of resources, the geographic decentralization of the minors,

and the dreamy idealism of the players.”

164

MLB players can unionize because there is so much money at

stake, but minor league players have “less to gain and more to

lose.”

165

Similarly, labor lawyer and minor league unionization

champion Don Wollett wrote in his book, Getting on Base: Unionism

in Baseball, that such a merger would never work as while these

players “have a common employer,” there is a “conflict of interest

between major league players and minor league players” because

MLB players are “advantaged by the fact that [minor league

players] are non union and lesser salaries” since “more money is

available for their common employer to pay the major leaguers.”

166

Similarly, MLB could not force the MLBPA to represent minor

league players against their wishes. While employers generally can

combine the bargaining groups for two separate groups of

employees where one group is represented by a union and one is

not, the accretion doctrine would apply.

167

Under the accretion

doctrine, “an employer may incorporate a small group of employees

into an already existing collective bargaining unit, without holding

elections, so long as the added employees (1) do not constitute a

separate bargaining unit, and (2) do not outnumber the employees

who belong to the existing bargaining unit.”

168

Here, the MLBPA can be said to represent a little over 1,200

players, given that they represent members of the 40-man rosters

for the thirty MLB teams plus additional players who have

previously been on MLB rosters but are currently not on a 40-man

roster (free agents, players on the 60-day disabled list, and players

164

Rothman, supra note 14.

165

Id.

166

DONALD WOLLETT, GETTING ON BASE: UNIONISM IN BASEBALL 102-105 (2008).

167

John F. Fullerton III and Paul Salvatore, Bargaining Unit Consolidations: One

Union or Two?, 20 LABOR LAWYER 291, 291-292 (2005) (citing KHEEL, LABOR LAW

§14.03[5], at 14-68 (1995)).

168

Local 144 v. NLRB, 9 F.3d 218, 223 (2nd Cir. 1993).

Fall 2016] Minor Leagues, Major Effects 57

who have been outrighted).

169

In a given year, MLB farm systems

generally include about 5,550 minor league roster spots.

170

In 2016,

MLB added 1,216 players to minor league systems through the Rule

IV Amateur Draft alone,

171

plus many international and undrafted

free agents. Thus, the second prong of the accretion doctrine would

almost certainly fail as there is no way that MLBPA members

outnumber the number of unrepresented minor league players.

Therefore, the only option for minor league players is to create

their own union and negotiation their own collective bargaining

agreement. However, unionizing minor league players would be

difficult since so little money is at stake. Unions generally require

dues to function, and since minor league players make so little

money anyway, asking players to contribute a portion of their

paycheck towards a union is likely asking too much.

Further, the uniqueness of minor league baseball players as

employees would also make it difficult for them to unionize. The

ultimate goal for any minor league baseball player is to receive a

call-up to a major league roster, thus transferring their

representation from a potential minor league players’ union to the

MLBPA. It stands to reason the players with the most negotiation

leverage in any league are the top players, as they are the players

that the employer-teams are most likely to suffer without if they

were to strike.

172

On the other hand, in the minor leagues the players with the

most negotiation leverage are the players most likely to spend the

169

See supra note 14 and accompanying text.

170

MLB teams generally have about 200 minor league roster spots. See supra note

117 and accompanying text. An MLB active roster includes 25 players, leaving about 15

of these roster spots for minor league players. Thus each team would have 185 roster

spots for players not on 40-man rosters, or 5,550 total for the 30 MLB teams. This

calculation is a rough estimate, as it does not include inactive and extended spring

training players, Dominican Summer League players, and players on various MLB and

minor league disabled lists.

171

2016 Draft Tracker, MLB.COM, http://m.mlb.com/draft/tracker/#!ft=all (last

visited Jan. 24, 2017).

172

For example, the 10 lead plaintiffs in the NFL players’ antitrust lawsuit against

the NFL during the 2011 NFL lockout included the three highest paid quarterbacks, the

soon-to-be second overall pick in the 2011 NFL draft, and other top players at various

positions. Complaint, Brady v. National Football League, et al., 779 F. Supp. 2d 992 (No.

0:11-cv-00639-PJS-JJG) (D. Minn. 2011); see also NFL must satisfy antitrust plaintiffs,

ESPN.COM (Jul. 20, 2011), http://www.espn.com/nfl/story/_/id/6783030/nfl-satisfy-tom-

brady-antitrust-plaintiffs-seal-deal (last visited Jan. 24, 2017).

58 MISSISSIPPI SPORTS LAW REVIEW [VOL. 6:1

least amount of time in the minor leagues and the players who

generally have already made the most amount of money through

their initial signing bonuses. By contrast, the players most affected

by a potential unionization are the longtime minor leaguers, who

are often just lucky to have received a roster spot in the first place.

Consequently, minor league unionization is unlikely. Even if

the players were to successfully unionize, the negotiation power of

that union would be limited, and the move would thus not be likely

to result in any substantial change. Accordingly, the Senne

litigation is the players’ best hope at forcing a change in minor

league salaries.

CONCLUSION

As with most class action suits involving various state laws,

the Senne case has a ways to go before it has any sort of effect on

the labor market for minor league baseball players. But as this

Article has established, the effects could be substantial, if only in

the complications it would add towards providing legal

compensation for minor league player work. While the financial

effects of the litigation, if successful, would not be oppressing

enough to require legislation to “Save America’s Pastime,” the

sudden applicability of dozens of different minimum wage laws on

the operations of MLB teams and their minor league affiliates

would certainly throw a curveball to operating budgets and

accounting protocols.

Even with the chances of the concurrent antitrust litigation

looking bleak,

173

the plaintiffs in Senne may have found a way to

force change outside of the traditional legal theories used by the

players in the history of professional sports. As this Article has

shown, the plaintiffs in Senne may very well prevail, and such a

victory would have the potential of facially changing minor league

baseball despite limited financial impact. Thus, regardless of

whether the result of litigation is a verdict in either direction or a

settlement to avoid the issues entirely, the Senne litigation is

certainly one to watch as it develops.

173

See supra note 3 and accompanying text.