Tuesday, October 4 2022

In a 181-page ruling that reshapes an eight-year legal battle, a federal judge recently held that minor league baseball players count as “employees” and are entitled to $1.88 million in penalties for baseball’s failure to comply with California’s wage statement requirements—and that MLB, unlike the NCAA and conferences, is a joint employer of athletes they govern.

Judge Joseph Spero of San Francisco’s federal district court granted summary judgment on March 15 for some of the claims raised in a class action brought by retired minor league first baseman Aaron Senne and other minor leaguers. In 2014, the players sued MLB and its 30 clubs for violations of the Fair Labor Standards Act (FLSA) and state laws guaranteeing minimum wage and overtime pay. They argue that when their total work hours are counted, MiLB players have been unlawfully shortchanged.

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The case features five categories of plaintiffs, including different classes representing players who participated in spring training or instructional leagues in Florida, Arizona and California. The $1.88 million penalty reflects the players’ California claims, specifically in regard to a lack of itemized statements on actual hours worked and a failure to offer accompanying disclosures to employee players. A jury trial, currently scheduled for June 1, is expected to address damages and other penalties.

A key question is whether the players are entitled to minimum wage and overtime pay protections. Those benefits are guaranteed unless applicable laws say otherwise. Many categories of workers are exempt, meaning they aren’t entitled to minimum wage or overtime pay. Certain types of farmworkers, salespersons and tipped employees, for example, are subject to different rules.

MLB has argued that MiLB players are exempt as creative professionals, which under the law refers to performance of work requiring “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.” Actors, musicians, writers, cartoonists, novelists and essayists commonly fall under this designation. One expert witness for MLB concluded that MiLB players “demonstrate unique and individualized talent as baseball players” and thus are creative professionals.

An expert for the players disagreed, contending that “talent” and “creativity” are not synonymous, that labor regulations noticeably omit mention of professional athletes in discussion of creative professions, and that creativity ought to refer to “originality and fluency of ideas—that is, the ability to come up with many ideas to address topic.”

Judge Spero agreed with the players. He highlighted that MLB and its teams “have not been able to cite to a single case in which this exemption was found to apply to any professional sport.”

MLB has also argued that MiLB players aren’t owed minimum age or overtime pay under the amusement exemption, which covers workers at “amusement or recreational establishments, organized camps, or religious or nonprofit educational conference centers.” In previous cases, baseball teams, including the Cincinnati Reds in a 1990s case brought by ballpark maintenance staff, have been construed as amusement and recreational establishments.

MiLB players dispute the applicability of past baseball cases. In court filings, they highlight how complexes for minor league spring training activities are physically separate from MLB facilities. The players opine that minor league facilities—tellingly referred to as “the back fields”—lack an “amusement purpose.” Tickets and concessions, the players note, aren’t sold for the back fields, which “may be open to the public [but] few people ever attend, apart from an occasional family member of a minor league player.” Judge Spero declined to rule on this debate, saying there are disputed issues of fact that require further analysis.

MLB has raised other arguments rejected by Judge Spero. One is that MiLB players should be viewed as “trainees” rather than employees, at least during the offseason. MLB relies in part on Eberline v. Douglas J. Holdings, Inc., which, as Judge Spero summarized, “involved cosmetology students who were required as part of the training school’s curriculum to work in ‘clinic salons’ to obtain practical experience hours necessary for a cosmetology license.”

Spero rejected the applicability of the case, noting key differences. MiLB players have employment contracts that expressly pay for them to render services. Also, MiLB players aren’t “students who have enrolled in a vocational school with the understanding that they would perform services, without compensation, as part of the practical training necessary to complete the training and obtain a license.”

Spero also concluded that MLB is a joint employer of the players. A joint employer is a secondary employer that takes on shared responsibilities to pay and compensate. The key test for joint employer recognition is degree of control over the employment relationship.

The players maintain that MLB exerts significant control over MiLB player employment. MLB, the players assert, has its own scouting department that assists teams in preparing for the amateur draft. MLB also requires prospective players to upload various forms and medical documentation and, in some cases, take and pass a drug test. Further, MLB must approve any changes to the uniform player contract and declare a player temporarily or permanently ineligible for drug and misconduct infractions.

MLB rejects those reasons as misleading or exaggerative. MLB insists it has no power to hire or fire players, whose employment is determined by their clubs. MLB also maintains its scouting work only serves to assist clubs, who have their own scouting departments and make their own draft and signing decisions. MLB further categorizes drug testing and other administrative functions as mere regulatory activities, not employment actions, and argues that determining eligibility to play in a pro league “is not equivalent to the authority to hire or fire.”

To bolster its arguments, MLB cites Dawson v. NCAA, where the U.S. Court of Appeals for the Ninth Circuit concluded that NCAA and PAC-12 weren’t employers of USC football player Lamar Dawson. The court noted that although Dawson had received financial resources from USC, there was no expectation of compensation from the NCAA or PAC-12. Also, neither the NCAA nor PAC-12 has the power to hire or fire players, and instead both acted in a regulatory capacity. The Court also emphasized that even if the NCAA and conference profit from players’ athletic contributions, that alone doesn’t establish employment. These same issues are at play in Johnson v. NCAA, which is before the U.S. Court of Appeals for the Third Circuit.

In siding with MiLB players, Spero found MLB’s analogy to Dawson unpersuasive. He noted that college sports lack a draft system, which requires players to submit personnel materials and follow employment-like protocols. Spero also surmised that although the NCAA, like MLB, can punish athletes, the punishments are structurally dissimilar. The NCAA can declare that college athletes are ineligible but that is “not akin to ‘firing’ . . . because the students were not playing under a contract or receiving a salary.”

Absent a settlement, Senne v. MLB will proceed to trial. In granting summary for some of the players’ claims, Spero’s ruling has effectively shrunk the scope of what the jury will hear. The case is also limited by the Save America’s Pastime Act, which then-President Donald Trump signed into law in 2018. The Act denies FLSA protections to minor league players, though doesn’t apply retroactively and doesn’t bar state law claims concerning minimum wage and overtime pay.

MLB can appeal a loss to the U.S. Court of Appeals for the Ninth Circuit, which has already ruled on class certification issues in the litigation, though the timing for an appeal is not yet “ripe.” Pursuant to the Federal Rules of Civil Procedure, a “final judgment” in a case is ordinarily needed before an appellate court will hear an appeal. The Ninth Circuit would be more inclined to review MLB’s arguments after the trial.

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Source: Yahoo Sports

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