Down to Their Last Strike: How the MLB Antitrust Exemption has Hurt Minor League Players' Salaries and Why It is up to Them to Fight Back.

AuthorOsborn, Andrew P.
  1. INTRODUCTION 260 II. BACKGROUND 261 A. History of Minor League Labor Efforts 261 1. Minor League Baseball is Born 261 2. The History of the Reserve Clause 262 B. History of the MLB Antitrust Exemption 263 1. Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, et al 263 2. Toolson v. New York Yankees, Inc 264 3. Flood v. Kuhn 265 4. The Curt Flood Act of 1998 267 III. ANALYSIS 267 A. The New Reserve System: The Rise of Free Agency Has Not Eliminated Conflicts Created by the Reserve Clause 267 B. History of Minor League Labor Efforts 269 C. Legislative Attempts to Resolve Low Minor League Salaries Have Been Ineffective 269 D. Efforts to Create a Minor League Baseball Union under the Current System Have Failed 273 IV. RECOMMENDATION 272 A. Legislative Fixes Would Face the Same Lobbying Challenges as in Previous Efforts, Like the Curt Flood Act and the Save America's Pastime Act 273 B. Barriers to Unionization That Existed During Past Efforts Still Exist Today 273 C. The Minor League Baseball Reserve Clause Should Be Challenged in Suits Alleging Both Federal Labor Law Violations and Sherman Act Antitrust Violations 274 V. CONCLUSION 276 I. INTRODUCTION

    Major League Baseball's (MLB) antitrust exemption has created harmful effects on player salary potential during the pre free-agency period of their careers. While there are varying views on the legitimacy of MLB's antitrust exemption, its effect on labor relations--specifically on minor league player salaries--has largely been ignored. This is a mystifying phenomenon, as nearly 90% of drafted minor league players will never play a single game in the MLB. (1) Although major league players are the most visible in the public eye, minor league players, due to being much larger in number, are overwhelmingly the most affected parties in player labor relations. The Major League Baseball Players Association (MLBPA) represents major league players in labor-related matters. This players' union has engaged in collective bargaining on the players' behalf for more than fifty years (2) and has made some progress in recent years in raising the salaries of arbitration period major league players. (3) However, minor league players are not represented by the association and the antitrust exemption has allowed teams to exploit minor league players at sub-minimum wage salaries, (4) with little intervention by Congress. In fact, Congressional intervention has often paved the way for even lower minor league player salaries. (5)

    This Note analyzes how the developments in MLB antitrust law have affected Minor League Baseball players and observes player and union responses to those developments. Part II looks back at the history of the seminal U.S. Supreme Court cases that have created and reinforced the MLB antitrust exemption. It also describes the history of Minor League Baseball labor efforts since the league's inception and gives an overview of the Reserve Clause's impact on player freedom of contract over the years. Part III analyzes the failures of baseball's free agency system in addressing the labor constraints that existed under the old Reserve System. Lastly, Part IV recommends that Minor League Baseball players initiate suits against the MLB alleging both antitrust and labor law violations. Part IV argues that courts may be more willing to readdress the antitrust exemption when it is invoked alongside federal labor law violations.

  2. BACKGROUND

    I do not feel that I am a piece of property to be bought and sold irrespective of my wishes... I believe that any system which produces that result violates my basic rights as a citizen and is inconsistent with the laws of the United States and of the several states. --Curt Flood (6) Minor League Baseball has a long labor history that has been directly shaped by the MLB Antitrust Exemption. Likewise, the MLB Antitrust Exemption has a long history, and it is important to highlight its development over the years for its impact on the players to be fully understood. Appreciation for the history of both the MLB Antitrust Exemption and Minor League Baseball labor will promote an awareness of the former's stark effects on the latter and allows for the recognition of the benefits that could be achieved by the Exemption's abolition.

    1. History of Minor League Labor Efforts

      Minor League Baseball players, lacking both a players association and support from the legislative branch, have suffered the most from the antitrust exemption. The collective bargaining that has resulted from the creation of the MLBPA has not eliminated all exploitation of major leaguers, but it has significantly increased their pay and bargaining ability. (7) The status of minor league players has changed relatively little since that time. While the MLB has increased its minimum player salary by nearly 3,400% since 1975, U.S. households at large have enjoyed a 450% increase in their incomes while the minimum salary for minor league players has only increased by 69% in that time. (8) Exploitation is a tale as old as time for Minor League Baseball players.

      1. Minor League Baseball is Born

        Minor League Baseball began in 1901 as the National Association of Professional Baseball Leagues (NAPBL). (9) Initially, there were 14 leagues with 96 teams. (10) For a couple of decades, many teams and leagues came and went. (11) While all the leagues and teams operated independently of the Major League Baseball teams--American League and National League--during this time, that changed by 1921. (12)

        Before that year, Major League teams would buy players from NAPBL teams according to an agreement made between the NAPBL and the American and National Leagues. (13) Major League team owners decided that it would be cheaper to purchase NAPBL teams rather than pay them every time their team wanted to purchase a player. (14) By purchasing minor league teams, Major League owners could sign young, inexperienced players for long terms at low pay--allowing them to promote high-performing minor league players at a low financial cost. (15) This practice became widespread amongst most of the Major League teams by the 1940s. (16)

        Soon, NAPBL began to see precipitous drops in attendance and revenue--largely credited to the increase in television consumption. (17) Despite the drops in attendance, the increase in television consumption proved beneficial for both the MLB and the NAPBL. Television blackouts of Major League games were in place in the territories of most NAPBL teams, and Major League teams paid NAPBL to allow television broadcast of Major League games in NAPBL territories. (18) This provided NAPBL teams with a surge of revenue and expanded the broadcast territory of Major League teams. (19)

        This continued until 1962, when the Minor League Baseball system that exists today was created through the Player Development Plan. (20) The plan mandated that every Major League team operate at least five Minor League teams. (21) It further mandated that all players and coaches be paid salaries by the Major League team, even if the Minor League team was independently owned. (22)

      2. The History of the Reserve Clause

        The reserve clause was a provision within player contracts that required a player to commit to playing with a single team for an extended period of time. (23) In its early years, this usually meant for the duration of that player's career. (24) The system can be traced back to 1879 and was established well before the formation of the NAPBL. (25)

        Curt Flood, a center fielder who played for the St. Louis Cardinals and other teams from 1956 to 1971, was the first to challenge the Reserve System. And although he lost his case at the Supreme Court, his lawsuit was just the beginning of a much larger player movement for labor change. (26) Various labor stoppages and strikes from 1972 to 1995 helped bring nominal improvements to the Reserve System. (27) The 1972 strike brought mandatory arbitration clauses for labor disputes. (28) Then, in 1975, two players decided to play the season without contracts so that they could sign with whatever team offered them the most money the following year. (29) In the required arbitration hearing that followed, the arbiter ruled for the players. (30) This is often considered the end of the Reserve System, (31) but in reality, it still exists today--unless one becomes a veteran Major League Baseball player. (32)

        The modern free-agent system began on July 12, 1976. (33) Players who served six years on the active roster of a Major League team would be granted free agency to sign with any team. (34) This led to an explosion of salary levels in baseball, (35) but for the vast majority of professional players, the Reserve System remains effectively unchanged. (36)

    2. History of the MLB Antitrust Exemption

      The MLB Antitrust Exemption's origins can be traced back to a point over a century ago when another league, known as the Federal League of Base Ball Clubs, attempted to become the third major league in professional baseball. (37) The National League and American League have made up the Major Leagues since that time--due much in part to the lawsuit the Federal League initiated against the two other leagues. (38)

      1. Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, et al.

        The Federal League of Base Ball Clubs was formed in 1913 with the intent of becoming a third major league. (39) It directly competed with the National League and American League from 1914 to 1915. (40) With strong financial support from several business magnates, the Federal League quickly began to sign talented players from the other two leagues. (41) Notably, many of the former American and National League players found the working conditions in the Federal League to be superior. (42) Eventually, the other two leagues began offering to raise players' salaries when they were offered more money from the Federal...

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