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Major (and Minor) League Baseball Wage Violations (Part 4)

Wage violations have been the focus of several investigations and one whistleblower complaint in both the Minor and Major Baseball Leagues in the United States. The United Stated Department of Labor is meeting with owners, managers and members of the Commissioner’s Officer, trying to address outstanding issues of wage theft for many of their lower paid employees, including interns, clubhouse and video staff and minor league players.

While wage theft and wage violations are the main focus of the DOL investigations, there are really two separate issues at hand. One is the fact that many Major League employees are being severely underpaid, and the other is the issue with the Minor League players.

The Major League staff has been determined to be non-exempt employees by the Department of Labor, according to their published guidelines. This is a no brainer. The League is clearly in violation, and the individual teams have, so far, been working with the DOL in order to reclassify employees and three of the four teams have reached settlements with the Department in order to remedy the situation.

The fourth team (the Baltimore Orioles) are in negotiations and no word has been reached, to date. The League itself, has little or no control over the individual teams and their internal wage policies, but the Commissioner can put pressure on team owners and managers to comply with the endemic nature of the system of wage theft the Department is addressing.

The Minor League players are another matter.

Because of baseball’s antitrust exemption, the case for the minor leaguers will be difficult. They are attempting to get around the exemption by appealing to the Fair Labor Standards Act of 1938, enacted, in the words of President Franklin D. Roosevelt to “protect workers unable to protect themselves from excessively low wages and excessively long hours.”

All of America’s large corporations have to comply with the FLSA, there is no reason the MLB should be any different. Given the fact that it is an $8 billion/year industry, there is certainly money that can be going to these players.

According to Michael McCann, director of the University of New Hampshire’s Sports and Entertainment Law Institute, “There’s two issues there,” McCann said. “One is the economic aspect of the case. I think it’s striking to many fans that minor league players are paid so low. Many are paid less than fast-food workers.”

That economic argument, McCann said, is very persuasive. The legal argument, however, is less clear.

“We’re talking about language that has to be interpreted,” McCann said. “Athletes could fall within categories that would exempt them from minimum pay.”

Are ballplayers seasonal employees? Are they entertainers? If a minor leaguer goes to a gym and works out, is that part of his employment?

“Those are issues that can be debated,” McCann said. “Some of the work they do could be considered personal advancement. Wages law is very complex. There’s no slam-dunk answer on this.”

Selig and the major league teams denied all charges and presented a 78-page defense in late May. Eleven teams asked for a dismissal of the case.

MLB asked that it be moved to Florida (ostensibly because 15 teams have spring training sites there, but more likely because Florida courts are considered more employer-friendly than those in California).

The San Francisco court will decide by early December whether to keep the case, send it to Florida or dismiss the 11 teams based on their not having any affiliations in California.

The other difference between the minor leaguers and the majors is that the MLB Players Association, a union, gives the major league players bargaining power that the minor league players are not able to take advantage of, due to the fact that they are not allowed admission into the union. They are however, bound by any agreements reached between owners and the Association. Seems unfair? That’s because it is.

The fact that MLB has grown from $1.4 billion business in 1995 to an $8 billion one today, makes it difficult to understand how an organization with that kind of growth and profitability, can’t seem to pay a decent wage to its workers.