A Possible Path Forward for the MLBPA

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 and the Yormark Family Director of the Sports Industry Workshop 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.

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4 years ago

Don’t get me wrong, this is a real strategy one could use, but it is the nuclear option. It’s way more damaging and riskier than a strike.

It just seems to me that if you have the organizing capacity and willingness to disband the union and destroy the entire economic model of the league, you probably have a lot of other tools available (including a strike).

4 years ago
Reply to  sadtrombone

I agree this idea while fine as a method of filling content space here would be a disaster if chosen as the path forward. The players problem is their abandonment of the function of a union and turning over their fate to others. The people who they have delegated their future to have had other motivations that have systematically destroyed the gains won in the past under the leadership of Marvin Miller.

The players should indeed develop a strategy for 2021, but that strategy should be to fund a strike that lasts up to one and half seasons. Only by planning for a strike that goes on for one and half seasons can they gain the necessary leverage to win fundamental changes that will swing the revenue sharing in favor of the players. That should be the goal, to give the players 60% of all revenues.

The players can best accomplish this by funding not only the players in the union but by extending benefits to players who have reached double-A in the minors as well. They need to work to either abolish the draft or quadruple the slot bonuses paid to players in the draft and make those slots the minimum required payment. The players could make everyone who is drafted in the first three rounds automatic members of the players union and give them some minimum benefits that are substantial enough to provide living expenses when combined with minor league pay. This would work against the owners trying to make strikebreakers out of minor leaguers.

The Federal courts are extremely political. Look at some of the ridiculously unqualified individuals currently nominated to the courts for a lifetime appointment. Political hacks are on the courts and they represent both corporate parties that are aligned with the business backgrounds of those who own MLB teams. Those owners are very connected both politically and judicially. MLB owners have access to the best and most powerful attorneys who know judges and know how to corrupt judges. The players should do all they can to stay out of the courts.

4 years ago
Reply to  FanTards

How do you figure the players are owed 60% of revenue? What’s wrong with 50/50?

4 years ago
Reply to  sadtrombone

the problem is the strike option really isn’t an option. MLB- or any other sports league- will NEVER again open a season without a CBA.

4 years ago
Reply to  stever20

Yeah, there will always be a pre-emptive lockout but…that kind of gets you to the same place.

The bigger point is that if you can collectively get your membership to dissolve the union and reform it later, you have the organizing power to also establish a work-to-rule/slowdown/strike. And none of those have anywhere near the same level of risk as blowing up your union on the potential chance you can blow up the entire economic model of your industry in on the potential you can get a better deal without totally destroying the entire industry you’re in.

For some reason, the author seems to think that this is somehow more of an option than a strike (based on his prior posts) but this is about three times the magnitude of difficulty on the organizing side (once to dissolve the union, double to get it back together again). It also has waaaaaay more risks. It is what you do when everything else has failed.

4 years ago
Reply to  sadtrombone

The problem is for a work-to-rule scenario is that a lot of things that would be removed are things that are extremely fan friendly which if you take out would put the fans squarely on the owners side.

4 years ago
Reply to  sadtrombone

It’s not even a real option. MLB players need the overt existence of a cartel even more than the owners do since all they can negotiate for is a piece of the publicly visible part of the iceberg. The owners get the rest – the tax shelters, the extortion of municipalities, and especially dictating the terms under which non-MLB leagues can operate.

Just re the latter, the Curt Flood Act explicitly authorized both the denial of standing and exemption from anti-trust laws of MLB’s control of ‘National Association of Professional Baseball Leagues’ (which actually pre-exists MLB). So much so that that organization could now rename itself a couple years later as ‘Minor League Baseball’ – making itself explicitly subordinate to MLB and no longer even pretending rhetorically to be ‘independent’.

The Curt Flood Act was a typical act of Congress. Naming itself one thing when in fact it enables the opposite in all the important ways.