Over the last couple weeks, I have taken a look at the unenviable position in which the Major League Baseball Players Association currently finds itself. Although the glacial pace of free-agent signings this offseason has helped to highlight the extent to which the sport’s existing economic model increasingly favors ownership, the union is relatively powerless to change its trajectory.
Indeed, because there is currently not much of value that the players can offer the owners in collective bargaining, the union has comparatively little leverage over the owners, and thus presently would appear to have relatively little hope of substantially improving its position in the next round of CBA negotiations in 2021 (although much can, of course, change between now and then).
That does not necessarily mean the union’s position is hopeless; however, securing the sort of modifications to the game’s economic structure that will be necessary to substantially improve the players’ financial position may require the MLBPA to engage in some outside-the-box thinking, at least as compared to its recent operating procedure. And as Buster Olney recently observed, it’s never too early for the union to develop a long-term strategy ahead of the 2021 CBA negotiations.
So what can the union do? Realistically, because the owners are unlikely to voluntarily agree to substantially better the players’ financial position, the MLBPA will probably have to adopt a more adversarial negotiating posture in 2021 than it has in recent years if it wishes to substantially change the current economic structure of the sport. That would mean that players should be ready to head into the 2021 CBA talks anticipating a work stoppage, potentially a rather lengthy one.
And it also means that the union should at least consider preparing to do what for many would have long been unthinkable: disband the MLBPA. While certainly a drastic step, dissolving the union could help provide the players with additional leverage of the sort needed to secure some real concessions from ownership, concessions of the sort that could meaningfully improve the players’ financial position.
Specifically, by dissolving their union, players could pursue an antitrust lawsuit against the owners. As I’ve previously explained, under an arcane legal doctrine known as the “non-statutory labor exemption,” courts forbid unionized employees from suing management under antitrust law so long as the employees are represented by a union. Once the union is disbanded, however, then the players could pursue potential antitrust remedies against the owners.
This has proven to be a popular strategy for players in the other major U.S. team sports in recent years. Back in 2011, for instance, both the NFL and NBA players opted to disband their unions in order to pursue federal antitrust litigation against their leagues. Meanwhile, professional hockey players threatened to do the same during the NHL’s last round of CBA talks in 2012.
Pursuing antitrust litigation against the owners would potentially allow the players to increase their leverage over ownership in several ways. Perhaps most importantly, by dissolving the MLBPA, the players would remove the antitrust immunity currently shielding many of MLB’s labor policies from challenge under the Sherman Antitrust Act.
Because MLB is considered a collection of 30 competing businesses under antitrust law, any collective decision the league makes regarding its labor policy is presumptively susceptible to challenge under the Sherman Act. However, if the league can convince the union to accede to these same policies in a CBA, then they cannot be challenged under antitrust law due to the non-statutory labor exemption.
So this means that, if the MLBPA were to dissolve, things like the luxury tax, the international amateur signing bonus limits, and the domestic amateur draft itself would all be subject to antitrust challenge and could, ultimately, potentially be declared illegal. As a result, the amount of the financial damage that these practices inflict on the players moving forward would be tripled under the Sherman Act — a potential liability for ownership that could, in turn, give the players additional leverage in their negotiations.
Moreover, in the likely scenario that the owners should opt to institute a lockout against the players in 2021 after failing to reach an agreement on a new CBA, then antitrust law would give the players the ability to challenge the lockout, as well, also potentially undercutting some of the owners’ leverage in the talks. (As I’ve previously discussed, a lockout by ownership is a more likely scenario than a strike by the players in 2021.)
“But wait a minute,” you may be thinking. “Doesn’t MLB have an antitrust exemption? If so, how could the players sue under the Sherman Act after disbanding their union?”
The answer to that question lies in a rather obscure law passed by Congress back in 1998, known as the Curt Flood Act. Following the devastating 1994 players’ strike, Congress agreed to partially repeal baseball’s exemption so that MLB players could file antitrust lawsuits against the owners during future work stoppages.
While MLB players have never relied on the Curt Flood Act to date, by the time the 2021 CBA talks come around, the time may come for the players to use the Act to acquire additional leverage over the owners. Indeed, given the lack of meaningful concessions the union can currently offer to ownership in exchange for significant changes to the sport’s economic model, the players may find the disband-and-sue strategy to be an attractive option during the next round of CBA talks.
That having been said, disbanding the MLBPA would carry some potential disadvantages for the players. Indeed, by dissolving the union, the players would temporarily have to forgo the benefits they typically receive from the MLBPA, such as the union’s regulation of player agents and its management of the players’ health-care and pension systems.
Ultimately, however, these disadvantages would likely be short-lived, as the players would presumably move to reform the union immediately upon reaching a suitable agreement with the owners on a new CBA. As a result, dissolving the MLBPA would likely have relatively little short-term downside for the players, especially during the course of a work stoppage.
At the same time, however, it’s important not to overstate the potential leverage that the players could gain by disbanding their union. Given the increasing use of this strategy by the players unions in other U.S. professional leagues, the owners would likely anticipate that the MLBPA could dissolve during the next round of CBA talks and plan their negotiation strategy accordingly. Thus, at least some leverage the players might gain from disbanding their union may already, in effect, be baked into the existing negotiations.
Nevertheless, should the players decide to get serious about trying to better their financial circumstances in the coming years, then doing what for many has long been unthinkable — disbanding the MLBPA — may prove to be one of their best options for securing the additional leverage they’ll need to compel the owners to give them a larger share of the game’s ever growing economic pie.
Nathaniel Grow is an Associate Professor of Business Law and Ethics at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.