Major League Baseball's 'Foul Ball': Why Minor League Baseball Players Are Not Exempt Employees under the Fair Labor Standards Act

By Carney, Lucas J. | Journal of Corporation Law, Fall 2015 | Go to article overview

Major League Baseball's 'Foul Ball': Why Minor League Baseball Players Are Not Exempt Employees under the Fair Labor Standards Act


Carney, Lucas J., Journal of Corporation Law


I. INTRODUCTION

Most fans and casual followers of Major League Baseball (MLB) are acquainted with the meteoric rise in salaries MLB franchises have been paying their major league talent over recent decades. The same cannot be said, however, regarding MLB's compensation of arguably its most valuable commodity-Minor League Baseball (MiLB) players. A lawsuit filed on behalf of current and past minor leaguers alleges that, while major league salaries have increased 2000% since 1976, minor league salaries have increased just 75% over the same period.1 Senne v. Office of the Commissioner of Baseball pits representatives of the MiLB players versus MLB in a Fair Labor Standards Act (FLSA) lawsuit.2 The minor leaguers allege that MLB-functionally operating as a cartel-has failed, and continues to fail, to pay the federal minimum wage and mandatory overtime required by FLSA.3

This Note will explore the core, interrelated legal aspects of the Senne lawsuit and examine a possible pair of MLB's FLSA defenses. Through generally analyzing these related legal issues, this Note seeks to answer whether MiLB players are statutorily exempt, non-covered employees under FLSA section 213.4 Specifically, however, this Note will illustrate why MLB will unlikely achieve dismissal of the Senne complaint purely on the basis of the section 213 exemptions.

Part II begins by providing background on the structure of professional baseball's labor market, MLB's historic antitrust exemption, the corollary Curt Flood Act, the relevant FLSA protections and exemptions, and concludes by presenting the nature and factual basis for the Senne minor leaguers' FLSA lawsuit.5 Part III then analyzes whether MLB can effectively defend the Senne claims on grounds that MiLB players are exempt employees under section 213-ultimately concluding it cannot.6 Part IV therefore concludes by recommending that MLB "play ball" by settling the Senne lawsuit and work with the minor leaguers to form a MiLB player union similar to the Major League Baseball Players Association (MLBPA).7

II. BACKGROUND

This Part develops the foundation of interrelated legal issues essential to answering whether MiLB players are exempt from FLSA protection and, furthermore, understanding why MLB should seek to settle the Senne lawsuit. Section II.A begins with an introduction of professional baseball's cartel-like labor market, which results in the suppression of wages paid to minor leaguers.8 Sections II.B-C discuss MLB's judicially-created antitrust exemption9 and Congress's subsequent attempt to limit MLB's protection under its exemption.10 Section II.D then presents the FLSA minimum wage and overtime compensation provisions, as well as FLSA's statutory exemptions.11 Finally, Section II.E concludes by setting forth the factual basis for the Senne minor leaguers' FLSA claims.12

A. An Overview of Professional Baseball's Labor Market

The minor leaguers allege that "MLB has a long, infamous history of labor exploitation dating to its inception."13 An introduction into the structure of professional baseball's labor market is needed to understand the origin of this exploitation.14 Abstractly, MLB has a "three-tiered labor market."15 First, players with three or fewer years of professional experience are subject to the "reserve clause" system.16 Second, players with three to six years of experience remain subject to the reserve clause system but may settle salary disputes through outside arbitration.17 Finally, players with more than six years of experience, and not currently under contract with a team, may opt for free agency.18

1. The Reserve Clause

In essence, the reserve clause "perpetually ties a player to a specific team unless the owner of that team trades the player or sells the player's contract to another team."19 No player is permitted to participate in professional baseball until the player has signed a Uniform Player Contract (UPC).20 Until 1976, the reserve clause had been mandated in all player contracts. …

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