An MLB Lockout Preview

With Major League Baseball’s current collective bargaining agreement (CBA) set to expire at 11:59 p.m. Eastern tonight, the owners and the Major League Baseball Players Association (MLBPA) are currently meeting in Dallas to exchange various proposals in an attempt to reach a deal. Unfortunately, media reports suggest that no new agreement is imminent, meaning that the sport is facing the very real possibility that it will experience its first work stoppage since the infamous players’ strike of 1994-95.

While it is certainly possible that tonight’s deadline could pass without triggering a labor stoppage — indeed, the two sides can elect to continue to negotiate with the existing CBA governing the sport in the interim — MLB commissioner Rob Manfred seemed to suggest prior to Thanksgiving that the owners will lock out the players if no agreement is reached this evening.

Consequently, this post explores the various options available to the MLBPA should the owners implement a lockout at midnight tonight as anticipated. Along the way, I will borrow from a similar post I wrote back in 2016 during the last CBA negotiations. While that labor-stoppage primer ultimately proved to be unnecessary, barring a miraculous turn of events in the coming hours, it would appear that fans are unlikely to be so lucky this time around. (Meanwhile, for anyone looking to understand the basis for the current dispute between the owners and players, this preview from a couple weeks ago may prove helpful.)

First, some basic legal background. A lockout is a legally sanctioned tool in which management (in this case, team owners) announces that it will refuse to allow its unionized employees (presently, the players) to work until an ongoing labor dispute is resolved. This means that the players will not be paid, or allowed to report to work, until a new CBA has been agreed to. In the interim, there will be no major-league free-agent signings, trades, or games played. A lockout is thus the ownership equivalent of a strike by the players.

Lockouts have become one of the preferred bargaining tactics of owners in the U.S. professional team sports industry over the last two decades. Rather than allow the players to dictate the timing of a work stoppage via a strike, owners have instead come to realize that they are better off initiating a labor stoppage themselves during the offseason, shortly after the prior CBA has expired.

A lockout provides ownership with several benefits. First, it moves the timeline for a work stoppage up into the offseason — rather than allowing the players to strike mid-season — thereby minimizing the number of games that are likely to be cancelled as a result of the labor dispute (and thus reducing the potential ticket sales and television revenue that will be lost).

A lockout also potentially provides the owners with added bargaining leverage over the players. By preventing free agents from signing, players from reporting to spring training, and ultimately paychecks from being deposited, the longer that a lockout goes on, the greater the likelihood becomes that a portion of the MLBPA membership begins to pressure union leadership to relent to the owners’ demands.

Should MLB lock the players out as anticipated following tonight’s expiration of the CBA, the MLBPA will be forced to decide how to respond. Ultimately, the players will have two primary choices: (i) maintain the status quo and continue to negotiate with the owners in the hopes of reaching an agreement on a new CBA, or (ii) dissolve the MLBPA in order to file a lawsuit challenging the legality of the lockout under federal antitrust law. Both strategies would have their advantages and disadvantages, as discussed in turn below.

Option No. 1: Maintain the Status Quo

Of the two possibilities, the MLBPA’s most likely immediate course of action is probably to elect to maintain the current status quo. There are several reasons why the players are likely to prefer to continue to negotiate as a union rather than dissolve the MLBPA in order to pursue an antitrust lawsuit against the league, at least for the time being.

First, by remaining unionized, the players can best ensure that they will continue to present a single, unified front in their negotiations with the owners. This would be especially important if the union believes that an eventual agreement with the owners on acceptable terms for a new CBA is within reach, in which case the players would want to avoid doing anything that would disrupt their progress towards a deal.

Another benefit of maintaining the status quo for the players is that it would allow the union to continue to rely on the protections afforded to it under federal labor law. Currently, the owners are required to negotiate with the union (and visa versa) in good faith. This means that the owners must continue to meet with the union’s representatives on a regular basis, share certain financial records, make a meaningful effort to reach an agreement with the union on core bargaining topics, and refrain from unilaterally imposing any changes to the sport’s current working conditions without the players’ consent. If the MLBPA were to be dissolved, these protections would be lost.

Relatedly, federal labor law also provides the MLBPA with the ability to file an unfair-labor-practice charge against the owners, should the players believe that the league has failed to negotiate in good faith as required under the law. Such a claim would go before the National Labor Relations Board (NLRB), which could then go to court to seek to have the lockout dissolved should it agree with the players that the owners have failed to negotiate in good faith. (The NLRB’s decision to challenge the owners’ bargaining practices eventually resulted in the end of the 1994-95 players strike, for instance, when then-Judge Sonia Sotomayor ruled that the league had violated federal labor law during its negotiations.)

Moreover, and perhaps even more importantly, if the players remain unionized, they would also preserve any pending grievances they have previously filed against the owners. Most notably, this would include the $500 million grievance the players reportedly filed against the league for failing to negotiate in good faith last year during their talks regarding a resumption of the COVID-shortened season. Preserving this grievance could give the union a potentially important bargaining chip in its current negotiations with the owners.

Thus, should the owners lock the players out following the expiration of the current CBA, the players will most likely elect to maintain the status quo and continue negotiating as a union for the near-term future. Indeed, while a lockout would certainly impose some degree of hardship on any current free agents or arbitration-eligible players — leaving them in limbo pending an eventual agreement on a new CBA — an offseason lockout would have relatively little impact on the overwhelming majority of the union’s membership during the months of December and January.

But if the lockout drags on too long, or should the players prefer to adopt a more aggressive stance, at some point down the road they may decide to shake things up a bit.

Option No. 2: Dissolve the MLBPA and File an Antitrust Lawsuit

In that case, the players may eventually elect to challenge the lockout under federal antitrust law. To do so, however, they would first have to formally dissolve the MLBPA and proceed against the owners on a non-unionized basis. The reason for this is an arcane legal doctrine known as the “non-statutory labor exemption,” under which courts refuse to allow unionized employees to sue management under federal antitrust law during the midst of the collective bargaining process. (For anyone interested in the reasoning underlying this doctrine, a more thorough explanation is available here.)

So to sue the owners under the Sherman Antitrust Act, the players would first have to disband their union, thereby ending their collective-bargaining relationship. Should the MLBPA elect to pursue such a strategy, it would effectively be following the lead of NFL and NBA players back in 2011, both of whom decided to dissolve their unions in order to file antitrust lawsuits contesting their respective lockouts in court. Specifically, MLB players would presumably allege that the 30 independently owned and operated MLB teams have violated federal antitrust law by collectively refusing to employ their players, thus creating what is, in effect, an illicit group boycott.

While MLB generally enjoys protection from federal antitrust law under its longstanding antitrust exemption, this doctrine would not protect the owners from a lawsuit brought by the players. Back in 1998, Congress enacted what is known as the Curt Flood Act, a statute that partially repealed baseball’s antitrust exemption in order to specifically allow MLB players to file such a lawsuit against the league during future labor disputes.

Should the players elect to pursue this strategy, they could ultimately choose to dissolve the MLBPA in one of two ways: (i) decertification or (ii) a disclaimer of interest. The first method — decertification — would require a majority vote of the union membership, and would prevent MLB players from re-forming their union for at least 12 months. Meanwhile, a disclaimer of interest would simply entail the union leadership sending a letter stating that the union no longer wished to represent its members on a collective basis, a decision that could be quickly reversed at any time with the consent of a majority of union membership.

Given the increased ease and flexibility of the second approach, a disclaimer of interest is the most likely route MLB players would take should they decide to dissolve the MLBPA in order to file a lawsuit against the owners. However, it is possible that a court could ultimately rule that a disclaimer of interest is insufficient for the players to successfully sue the owners under antitrust law, and instead that the union must be formally decertified (no court only one court has ruled on this issue).

Dissolving the MLBPA would have several negative consequences for the players, requiring them to forgo — at least temporarily — any benefits provided by the union (such as the regulation of player agents and the management of the players’ health-care and pension systems). Similarly, as noted above, disbanding the union would also risk depriving the players of any leverage they can extract from the $500 million grievance currently pending against the owners relating to the resumption of the COVID-shortened 2020 season.

At the same time, however, by suing the owners under antitrust law, the players could potentially gain considerable new leverage over ownership. Most significantly, such a suit could potentially result in the players securing a court order blocking the owners from continuing their lockout. (NFL players temporarily received such a ruling from the trial court during their 2011 lockout, before having that decision overturned on appeal.) Such a ruling would allow the players to continue to play and be paid while a new CBA is negotiated.

But even if a court was unwilling to block the lockout, the players would also benefit from filing an antitrust lawsuit by beginning to accrue potential triple damages from the owners, meaning that they could ultimately be entitled to three times the wages that they lose during the duration of the work stoppage should the lockout eventually be declared illegal. The leverage that the players would gain from such a possibility could ultimately outweigh the value of their pending, 2020-related grievance, thus altering the owners’ current financial calculus regarding a continued lockout and the ongoing CBA negotiations.

One last possibility: if the owners suspect that the players intend to dissolve their union, it would not be surprising to see the league decide to proactively sue the players in court. In such a case, the owners would likely contend both that the dissolution of the MLBPA is invalid (making the argument that the players must formally decertify their union, rather than rely on a disclaimer of interest), and that any lockout of the players is presumptively legal. This is the strategy that the NBA and NHL each pursued back in 2011 and 2012, respectively, in an attempt to choose a more favorable jurisdiction for any eventual litigation against the players (as the courts in some regions of the country tend to interpret the underlying law in this area more favorably for management than for the union).

Realistically, any such litigation — whether filed by the players or the owners — would likely be short-lived. As in the case of the NFL and NBA lockouts in 2011, MLB owners and players would presumably be able to resolve their differences before the work stoppage consumed too much of the 2022 season, at which point the sides would agree to drop the lawsuit and the players would reform their union.

Indeed, at the end of the day, all of the legal machinations that baseball fans may witness over the coming days and weeks should be understood as simply reflecting the fact that the players and owners are each trying to gain as much bargaining leverage over one another as possible. Assuming that the owners have determined — as appears likely — that a lockout best serves their current interests, it’ll be up to the players to decide how to respond.

But until we find ourselves sitting in late February or early March with no deal in sight, the events of the next couple months will likely prove to be a lot of sound and fury that ultimately signifies relatively little about the chances that we will eventually see a full 2022 season played on the field.