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Angel Hernandez’s Lawsuit Against MLB Just Got Really Interesting

Last year, we discussed one of the most important and underreported legal issues facing baseball: the discrimination lawsuit umpire Angel Hernandez filed against Major League Baseball. In the 10 months or so since we last checked in on the case, however, things have taken a couple of really interesting turns.

First, the case is no longer pending in federal court in Ohio, instead having been transferred (over Hernandez’s objection) to the United States District Court for the Southern District of New York. This isn’t in and of itself a major development; the benefits of what lawyers call “forum shopping” (filing a case in what is perceived to be a friendlier jurisdiction) are both absolutely real and also generally overstated. That said, the major benefits to a given friendly forum for a litigant aren’t likely so much in the expected outcome of a case, but rather in the procedural details involved in getting there. Perhaps no single issue drives forum shopping more than the rules and procedures governing fact discovery (the part of the lawsuit where the parties can ask written and oral questions and obtain each other’s relevant documents). Fact discovery procedural rules can sometimes vary widely between jurisdictions, and practitioners will sometimes choose a forum with the friendliest discovery rules to their side.

Why does this matter? Because Angel Hernandez’s lawsuit is now embroiled in a particularly interesting discovery dispute, and the court deciding it won’t be the Ohio forum Hernandez and his lawyers originally anticipated. You see, earlier this year, Major League Baseball sent this subpoena to the MLB umpires union. A subpoena is a special kind of demand for production of evidence, usually documents or testimony, which is issued by a litigant in a lawsuit and backed by court authority. Ignoring a subpoena is generally a bad idea because you can be held in contempt of court. Instead, if you don’t want to answer it, you have to ask the court to quash the subpoena and give a legal reason why. (Note: the word is “quash,” not “squash.” I’ve heard too many people – lawyers and laypeople alike – move to “squash” a subpoena. All that means is that you are wrapping your subpoena around a vegetable.) Read the rest of this entry »


What the Seahawks’ Suit Against Malik McDowell Means for Baseball

If you’re a fan of that vastly inferior sport involving shoulder pads, helmets, and a vaguely oblong ovoid incorrectly dubbed a “ball,” you’re probably familiar with a northwestern franchise known as the Seattle Seahawks (interestingly, there is no such thing as a “seahawk”). You may also be aware of a 2017 second-round draft pick for the team named Malik McDowell, a rare talent who never suited up in a game for the Seattle fake-birds. That has led to the Seahawks suing McDowell in federal court for the return of a significant portion of his signing bonus.

It’s a rare step for an NFL team to sue a former top draft choice to recoup signing bonus money. The development with McDowell underscores a monumentally disappointing spiral with the club following his selection with the 35th overall pick in 2017 draft. Once considered a potential top-10 pick in that draft class, McDowell suffered a slide on draft night after an inconsistent junior season at Michigan State, then never played a snap for Seattle after suffering serious injuries in an ATV accident prior to training camp nearly two years ago. He was released by the team in March.

But in timing that is germane to this week’s lawsuit, McDowell signed a four-year, $6.95 million contract with $3.19 million in bonus money several weeks before his accident. As part of that contract, the Seahawks were to pay McDowell that bonus in four increments. The team ultimately paid out three installments and withheld a fourth for nearly $800,000 following the revelation of his injury. After negotiations with the NFL Players Association and going through arbitration, Seattle agreed to forfeit half of the agreed-upon signing bonus, which still required McDowell to repay $799,238. The suit alleges McDowell never did despite attempts by the team to recoup the funds, leading to this week’s lawsuit.

Why is McDowell’s case relevant for our purposes? There are three reasons. First, in the wake of last week’s MLB draft, McDowell’s case represents a fascinating look at what can go wrong between a team and a player, particularly because there’s very little here that is unique to football. Off-field injuries happen to professional baseball players; it wasn’t long ago that Giants ace Madison Bumgarner suffered serious injuries in a dirt bike accident. The Seahawks declared McDowell to be in breach of his contract for riding his ATV. The team couldn’t sue McDowell for breach of contract directly, because, just as with MLB’s Collective Bargaining Agreement, the NFL’s CBA is the sole remedy for disputes between teams and players (that’s a doctrine called “labor law preemption”). So instead, the team took him to arbitration, where they won a ruling requiring McDowell to forfeit almost $1.6 million of his signing bonus, and return almost $800,000 that he’d already been paid to the Seahawks. When McDowell didn’t pay it, the team filed this lawsuit in federal court. The lawsuit doesn’t relitigate the arbitrators’ decision – it simply enters the decision as an enforceable judgment, allowing the team to garnish his future wages.

By and large, major league teams aren’t this aggressive when it comes to their players but there’s no reason in the CBA that they couldn’t be. The Giants were without MadBum for months following his dirt bike injury; although there was talk at the time that his contract prohibited the hurler from dirt biking, San Francisco opted not to attempt to recoup a portion of his sizable salary or void his contract. Trevor Bauer famously was forced to leave a playoff start because of a finger laceration he suffered while working on his drone. The Indians, too, didn’t pursue Bauer for breach of his contract. The Giants didn’t void Jeff Kent’s contract after a motorcycle accident, despite Kent lying about the cause.

We’ve talked about other areas where teams and the league are strident in their insistence that players stick to the rules; here, at least, teams have, for the most part, been remarkably lax. The last time a team voided a player’s contract for a non-baseball injury was when the Yankees famously nullified Aaron Boone’s contract after he injured his knee playing basketball in the 2003-04 offseason, clearing the way for the acquisition of one Alex Rodriguez; Boone received a settlement and signed with Cleveland. What makes Boone’s situation really interesting is that he was honest with the Yankees, and had his contract voided – whereas Kent wasn’t truthful, and he kept his contract. But none of those situations ended up in court.

Now, major teams are self-interested, for-profit entities. The Giants’ unwillingness to take legal action against Madison Bumgarner likely had much more to do with the value Bumgarner has to the franchise — and the need to maintain a good relationship with the team’s marquee player and with the MLBPA — than with magnanimity. That said, one wonders what the result would have been had Bumgarner been a less important player. If the same thing happened to the 2019, still-good-but-not-an-ace version of the southpaw in a year where the Giants are actively rebuilding and looking to shed salary, would the team be so quick to look the other way?

This is the first instance in years I’m aware of in which a court is being presented with the contract language present in all major league sports agreements that bars a player from engaging in dangerous, off-field activities. We talked earlier this year about Kyler Murray’s choice between baseball and football; the Seahawks’ case against McDowell rests on the same contract language we discussed then, which prohibits football players from playing other sports (the same goes for baseball). If Murray had elected to try both sports and been injured playing baseball, his football team may have proceeded against him in much the same way the Seahawks have done against McDowell. That possibility may have factored into Murray’s decision to choose to focus on one sport. And Murray is in a similar position to McDowell in one respect. After the outfielder-cum-quarterback signed with Arizona’s Cardinals, he was in breach of his Athletics contract and required to repay Oakland the majority of his signing bonus. If he doesn’t, the A’s will have the right to pursue the same kind of legal action against Murray that the Seahawks are taking against McDowell.

But McDowell’s case is fascinating for one additional reason. Throughout the dispute, McDowell has argued that he is physically fit to play, citing clearances he received from his own neurologists. Seattle’s doctors, meanwhile, wouldn’t clear him, arguing that he wasn’t past the head trauma he suffered in the ATV accident. The result was Seattle cutting McDowell, perhaps to avoid a grievance hearing regarding the player’s medical status.

Disputes between teams and players over injuries are becoming more commonplace in MLB. Just since June began, we had the Mets arguing with Robinson Cano in the media about whether or not the second baseman was healthy. We talked earlier this year about the Yankees allegedly withholding the existence of a bone spur in his throwing arm from relief ace Dellin Betances, which has led to his prolonged absence this season.

One fascinating McDowell analogue might be New York Mets outfielder Yoenis Cespedes. The Mets’ slugger, already out for an extended period after surgery for bone spurs in both feet, broke his right ankle in several places during what General Manager (and Cespedes’ former agent) Brodie Van Wagenen insisted was not a fall off of a horse, but was nonetheless a “non-baseball-related activity” at the outfielder’s ranch. (The official explanation was that Cespedes stepped in a hole on his ranch and suffered a “violent fall.”) Ranching is probably not a contractually acceptable in-season activity for a baseball player who is supposed to be rehabbing from surgery, and that led to Sports Illustrated’s Michael McCann considering if the Mets had legal grounds to void the outfielder’s contract. And McCann is probably correct: if Cespedes’ injury really was an accident, there’s probably not much they can do. But if Cespedes was digging the hole (as opposed to accidentally stepping into it) or riding a horse (despite his and the team’s denials), there’s not much that is legally different between his situation and those of Malik McDowell, Jeff Kent, or Aaron Boone.

Now, McDowell’s case isn’t legally precedential. As we’ve noted, recourse already exists for baseball teams should their players injury themselves in pursuit of activities that violate their contracts. In one sense, it’s “just” the entry of an arbitration award. But in another, the idea of a major league professional sports team suing a former player is largely unprecedented, at least in this century. What the MLBPA and the Mets will likely be watching closely is whether, and to what extent, the NFL Players Association intervenes to defend McDowell. Notably, the Seahawks originally attempted to recoup everything they’d paid McDowell. However, the NFLPA intervened on McDowell’s behalf in the arbitration, arguing that the NFL CBA didn’t permit the team to claw back his entire salary. Eventually, the player, the union, and the team agreed to a compromise that cut that number in half. What we don’t know is whether the NFLPA will intervene again now that the case is in active litigation. The NFLPA is in a bit of a tactical bind here. On the one hand, if the union defends McDowell, they are defending the breach of an arbitration award they helped to negotiate. On the other hand, if the NFLPA opts to stay out of the dispute, they send a message to other professional teams that union defense of players in litigation isn’t necessarily a given.

So McDowell’s case here isn’t about just McDowell. Instead, it will be interesting to see whether it represents a sea change in how professional sports leagues approach off-field player injuries.


J.D. Martinez’s Former Agent Is Suing Over His Contract

J.D. Martinez is one of the best hitters on the planet. Last year he posted a 170 wRC+ and 43 home runs, which is probably good. This year, he “only” has a 128 wRC+ and an obscenely-low-for-a-power-hitter 17.1% strikeout rate. When a .291/.373/.513 triple-slash means you’re having a “down” year, you’re either ridiculously good or your name is Mike Trout.

Martinez is not without problems, however. As Scott Holland explains for the Cook County Record:

A baseball agent has sued Merrill Lynch for allegedly conspiring to steer a superstar client to a rival agent Scott Boras just before the player landed a huge contract. . . . In a complaint filed May 10 in Cook County Circuit Court, agent Bob Garber, president of RMG Sports Group, sued Merrill Lynch; Pierce Fenner & Smith; and Bruce Lee, a financial adviser in Merrill Lynch’s Chicago office, alleging tortious interference with contractual relations.

Let’s break this down. Bob Garber is Martinez’s former agent. Days before he hit free agency, Martinez fired Garber and hired Scott Boras. Martinez and Boras then went on an offseason-long courtship with baseball before the slugger finally signed a five-year, $110-million contract with three opt-outs.

Now, whether Martinez would’ve been better off with Garber instead of Boras is anyone’s guess. It’s worth noting that Garber isn’t an inexperienced agent; his most notable negotiations include those for erstwhile Astros ace Roy Oswalt a 5-year, $73 million extension in 2006 and a five-year, $77 million deal between free agent southpaw C.J. Wilson and the Angels in 2011. More recently, Garber obtained a three-year, $38 million commitment for Tyler Chatwood from the Cubs. So Garber isn’t a neophyte, is the point, and that gives his lawsuit significantly more credence.

What is his lawsuit about? According to the complaint, which you can read here, Martinez was using a financial adviser at Merrill Lynch named Bruce Lee to manage his money. Garber alleges that he and Lee were friends, and that he referred his clients to Lee because he had personally invested with Lee himself. But, according to Garber, Lee told Martinez to drop Garber and hire Scott Boras, because Lee wanted to obtain a financial benefit from having Boras’ book of superstar clients invest with him. Garber is seeking the 5% commission that he would have received had he negotiated Martinez’s Red Sox contract himself. Read the rest of this entry »


The Ballpark Netting Debate Is Back

Last Wednesday, Cubs outfielder Albert Almora Jr. hit a foul ball. That is not an unusual occurrence at a baseball game, except that this particular foul ball hit a four-year-old girl in the stands. Almora, quite understandably, was visibly shaken.

Unsurprisingly, the incident ignited another round of debate over a topic we first discussed last year: protective netting at ballparks. Brian Johnson, a former major league catcher and current scout for the San Francisco Giants, told CNN’s Jeff Pearlman that the existence of seats without netting is like building cars without seat belts. But, as we discussed last year, the law doesn’t see it that way:

As explained in the Restatement [of Torts], there exists in the law a doctrine called “assumption of the risk.” In the context of baseball, that basically means that if you sit in an area without protective netting and you know it’s a possibility that a foul ball might come your way, you can’t sue the team for getting injured by that foul ball. As one court put it in a case called Edward C. v. City of Albuquerque, a fan ‘must exercise ordinary care to protect himself or herself from the inherent risk of being hit by a projectile’ — even if that projectile is traveling upwards of 100 mph.

There’s a really excellent write-up on this that you can read here. In short, however, this “baseball rule” represents the majority rule in the United States. If a foul ball comes your way at a ballpark, the law basically says you should have seen it coming. You’ll probably find language on your ticket saying you assume the risk of injury by foul ball, like the Yankees have on theirs.

Read the rest of this entry »


T-Shirt Cannons and a New Legal Frontier

Last year, we talked about the so-called “baseball rule,” which protects baseball teams from liability for injuries caused by foul balls. To wit:

As explained in the Restatement, there exists in the law a doctrine called “assumption of the risk.” In the context of baseball, that basically means that if you sit in an area without protective netting and you know it’s a possibility that a foul ball might come your way, you can’t sue the team for getting injured by that foul ball. As one court put it in a case called Edward C. v. City of Albuquerque, a fan “must exercise ordinary care to protect himself or herself from the inherent risk of being hit by a projectile” — even if that projectile is traveling upwards of 100 mph.

There’s a really excellent write-up on this that you can read here. In short, however, this “baseball rule” represents the majority rule in the United States. If a foul ball comes your way at a ballpark, the law basically says you should have seen it coming. You’ll probably find language on your ticket saying you assume the risk of injury by foul ball, like the Yankees have on theirs.

But baseballs aren’t the only projectiles spectators will encounter during baseball games. Earlier this month, the Associated Press reported on a lawsuit filed against the Houston Astros for a fan injury caused by a T-Shirt Cannon:

A woman has sued the Houston Astros for more than $1 million, saying that a T-shirt cannon by the team’s mascot at a game last season broke her finger.

The Houston Chronicle reports that Jennifer Harughty alleges that the mascot, who is named Orbit, “shattered” her left index finger during a game last July when a T-shirt fired from a “bazooka style” cannon into the stands struck her finger.

The Astros said in a statement Tuesday the team is “aware of the lawsuit with allegations regarding Orbit’s T-shirt launcher. We do not agree with the allegations. The Astros will continue to use fan popular T-shirt launchers during games. As this is an ongoing legal matter, we will have no further comment on this matter.”

The Chronicle reported court records said Harughty was seated in the middle of the first deck behind the third base line when the incident occurred. The lawsuit said the fracture required two surgeries to repair.

Read the rest of this entry »


The Yankees, Dellin Betances, and Informed Consent Laws

Unless you’re a time-traveling visitor from 900 years in the future, you’ve probably heard that the Bronx Bombers have been struck by a rash of injuries early on this season. Among the more eyebrow-raising of those maladies was the revelation that key setup reliever and very tall human Dellin Betances had been sidelined with a bone spur. As Randy Miller reported for NJ.com:

What’s really interesting about Betances’ ordeal this week – his setback in Tampa, return to New York and second MRI – is Friday night’s revealing that he’s been pitching with a bone spur in his throwing shoulder since high school that never has affected his pitching.

More interesting, GM Brian Cashman said on Friday night that the Yankees have known about the bone spur since Betances had an MRI before signing his first pro contract as a teen in 2006 … and Betances saying Saturday morning that he first heard of it on Friday night.

That’s right – it appears the Yankees knew for over a decade that their right-handed relief ace had a bone spur, and they didn’t tell said right-hander about it.

“I guess from the previous MRIs I’ve always had it,” Betances said Saturday. “I didn’t know about it until now. But, yeah, I’ve always had it. I always come into spring and I feel, I guess .. a little stiff, But for me it usually gets better and this time it wasn’t. That’s pretty much what happened.”

Why did the Yankees never tell Betances about his bone spur?

“He hasn’t had the inflammation before,” Cashman said. “On the various testing we’ve done since we signed him … (After) drafting (Betances) I gave him a $1 million to sign rather than go on to college, and you do a physical and there’s an MRI, and right away that was (a bone spur that was) an incidental incident, meaning it’s not affecting him.

“There is something there. It’s inconsequential, non-symptomatic. He hasn’t had to deal with this. It’s had no affect on his game or pitching in anyway shape or form. The various times we imaged him, if it was for insurance or whatever reason, it’s always been there, but it’s never been something that’s caused a problem.”

There’s a lot to unpack here, but let’s start with this: the Yankees not only knew that Betances had a bone spur, they imaged it for insurance purposes. At the same time, they didn’t tell Betances because, as Cashman put it, it was “incidental” and largely asymptomatic. The uniform Major League Baseball contract required Betances to warrant that he has “no physical or mental defects” that would “prevent or impair” his ability to play baseball. The Yankees knew Betances had such a defect, and didn’t tell him. Worse, they had a number of contentious arbitration hearings with the right-hander. In hindsight, Randy Levine’s comments that Betances was “a victim” of his agent’s “overreach,” and comparison of Betances to an astronaut, seem even worse when one considers that the Yankees knew Betances had a medical condition and had seemingly disclosed that to insurance companies but not the player himself. Read the rest of this entry »


What Can the MLBPA Do About Ozzie Albies’ Deal?

Earlier this month, Braves franchise building block Ozzie Albies agreed to an eyebrow-raising extension that was widely considered to be among the most team-friendly in recent baseball history.

There was already speculation that the deteriorating state of free agency appeared to be incentivizing extensions, but Albies’ deal was shocking even given those concerns. Veteran baseball scribe Jeff Passan went so far as to say that the deal was being considered in major league circles as “among the worst ever for a player.” That leads to a number of uncomfortable questions about how these deals are to be handled in the future – by players, by the league, and by the Major League Baseball Players’ Association.

Let’s start with Albies’ representation, an agency called SportsMeter. According to MLB Trade Rumors’ Agency Database, Albies is among the agency’s more marquee clients, with the firm also representing Craig Kimbrel, Nicholas Castellanos, and Francisco Lindor, among others. (According to some reports, SportsMeter also represents Cleveland ace Corey Kluber.)

SportsMeter hasn’t had a great offseason. Not only did they negotiate the much-maligned Albies deal, but they have been unable to broker a contract for their biggest pitcher client, Kimbrel, despite entering the offseason with dreams of a nine-figure contract. That’s led to some speculation from former Brave Eric O’Flaherty that the Albies deal was part of an effort to land a deal for Kimbrel with the savings. Other players certainly haven’t been shy in expressing their feelings about it. Castellanos, who is headed for free agency, may have had similar feelings when he switched his representation to Scott Boras last week. Other baseball writers like Passan and Evan Altman have suggested that SportsMeter may have negotiated the deal now so as to obtain a commission before Albies decided to sign with a bigger agency. Read the rest of this entry »


The Orioles and Nationals Are Suing Each Other. Again.

The best rivalry in baseball right now might not be the Yankees versus the Red Sox, or the Dodgers against the Giants. Instead, it might be the one between the Orioles and the Nationals, a feud that has landed in multiple courtrooms and has been literally litigated almost non-stop for over seven years.

The dispute arises from the teams’ joint ownership of the Mid-Atlantic Sports Network (MASN), though it also seems to have been fueled by what appears to be genuine antipathy from Orioles’ owner Peter Angelos for his team’s southern rival. Back in 2004, when the Montreal Expos were about to move to the District of Columbia, Angelos “went on Baltimore radio station WBAL-AM and pronounced that ‘there are no real baseball fans in D.C.'” Angelos was later the sole dissenting vote against the Nationals’ move, and given territorial rights disputes, having the Orioles on board became a matter of some necessity. So the two teams “worked out a deal whereby the Orioles would hold a majority partnership profit interest in MASN and get to telecast Nationals games at a substantial discount from 2005 to 2011. After that, MASN would be obligated to pay the Nationals ‘fair market value.'”

How Orioles-friendly was that deal?

When MASN was created to broadcast Orioles and Nationals games in the regional territory that once solely belonged to the Orioles, the Orioles owned 90 percent of the network and the Nationals’ stake would increase by 1 percent each year until 2032, when it reached 33 percent.

Despite the deal, which the Sports Business Daily called “one of the most lopsided deals in sports TV history,” Angelos still voted against the Expos’ move to Washington, D.C. And since that deal was struck, the Orioles have resisted MASN’s obligation to pay the Nationals anything close to “fair market value” as required by the contract for Washington’s broadcast rights. Remember, the Orioles still own better than 70% of the network, so they control how much the network pays. Read the rest of this entry »


Does MLB’s Involvement in Salary Arbitration Cross a Line?

Over the course of the last two painfully slow offseasons, baseball fans, agents, and writers have speculated about the possibility that collusion might be responsible. We aren’t going to talk about that today. Instead, we’re going to talk about the report from Marc Carig late last month about Major League Baseball awarding a prize for the team most successful in suppressing arbitration salaries.

The​ Belt​ changes hands​ shortly after season’s end,​ in​ a crowded​ conference room at a luxury resort, where delegates​ from every MLB team​ have​​ been summoned for a symposium on arbitration. For three hours, they will work together at the direction of the league to set recommendations, which teams will use in negotiations with their players. It’s a thankless job. So before the meeting adjourns, they’ll celebrate an unsung hero in this battle over dollars. The ceremony ends with the presentation of a replica championship belt, awarded by the league to the team that did most to “achieve the goals set by the industry.” In other words: The team that did the most to keep salaries down in arbitration…

…In a statement, Major League Baseball acknowledged The Belt as “an informal recognition of those club’s salary arbitration departments that did the best.”

Now, this may seem like an insignificant token – after all, a plastic belt awarded as a trophy is in most contexts rather innocuous. But this is more complicated than it appears at first glance.

Collusion is a violation of the Collective Bargaining Agreement, as we discussed in February. The word “collusion” doesn’t appear in the Major League Rules, and it isn’t in the Collective Bargaining Agreement either. However, the Collective Bargaining Agreement does say in Article XX – governing the Reserve System – that rights under the CBA are individual, not collective.

The utilization or non-utilization of rights under Article XIX(A)(2) and Article XX is an individual matter to be determined solely by each Player and each Club for his or its own benefit. Players shall not act in concert with other Players and Clubs shall not act in concert with other Clubs.

Let’s refresh our recollections on what collusion is in the context of major league baseball, beginning with the preeminent legal definition of collusion from Darren Heitner and Jillian Postal, who wrote a particularly excellent note on the subject for Harvard Law School’s Journal of Sports and Entertainment Law.

Collusion at its core is collective action that restricts competition. Under federal law, particularly the Sherman Anti-Trust Act (the “Sherman Act”), collusion is prohibited; however, because of labor exemptions, what constitutes collusive, prohibited behavior in specific sports leagues varies based on the league’s negotiated collective bargaining agreement (“CBA”).

And, as Marc Edelman explained for Forbes:

Although collusion under Baseball’s collective bargaining agreement is not identical to collusion under U.S. antitrust laws, the language and case precedence track similarly. Under antitrust law, mere parallel behavior among competitors is not enough to trigger a violation. But, parallel behavior along with a plus factor is sufficient.

Put another way, the mere fact that everyone is acting in the same way isn’t enough on its own to trigger a violation of the CBA’s collusion language. That’s doubly true in arbitration, because as we’ve discussed before, MLB teams are allowed to coordinate their arbitration filings. Per Jeff Passan:

While MLB works diligently and impressively to coordinate the arbitration targets of its 30 teams — this behavior is sanctioned under the collective bargaining agreement and not considered collusive — agents occasionally make far-under-target settlements. The effect, in a comparison-based system, is devastating: A bad settlement can linger and depress prices at a particular position for years.

But coordination of filings isn’t all that’s going on. As Carig explains:

Those versed in arbitration describe efforts that encourage teams to hold the line in negotiations, even when differences are relatively small, because the results will eventually have a larger impact in setting future comparables. In essence, it is worth fighting for pennies, because even pennies pile up over time. The labor relations department positioned itself as a central resource. It made data available for teams to more easily find comps to be used in negotiations. It staged mock arbitration sessions. It encouraged frequent discussion about the process. As a result, teams as a group have improved their approach to arbitration.

Eventually, the league began using its internal information to promote its own valuations for all players eligible for arbitration. These are still, technically, recommendations. But according to several people familiar with the process, they have increasingly been treated as hard guidelines. It is understood that teams are to settle at or below the league’s recs.

Now, a lot of this is above-board. Coordination of arbitration figures is allowed by Section 2 of the part of the Collective Bargaining Agreement that governs salary arbitration, which states that, “It shall be the responsibility of the Association prior to the Exchange Date to obtain the salary figure from the Player, and the LRD shall have a similar responsibility to obtain the Club’s figure.” That “LRD” is the league’s Labor Relations Department. So this clause, by its plain language, allows for the LRD to talk to the club about what its filing is going to be – after all, how else would the LRD obtain the figure? In fact, as attorney Michael D’Ambrosio explained, it’s the LRD that submits the team’s proposed salary figure. The CBA also allows for LRD to select arbitrators on behalf of teams, and designates LRD as the recipient of arbitration awards along with the team, the player, and the union. That’s because the LRD is also tasked by Major League Baseball with “look[ing] at results across cases to analyze the consistency of outcomes.”

In short, there’s nothing wrong with LRD being involved in the salary arbitration process. Major League Baseball is even right now hiring for an attorney to assist teams in preparing for and presenting arbitration cases. Holding mock arbitrations? Providing data? Facilitating communication? All fine. The CBA bars none of those things. The CBA doesn’t even prohibit awarding a schlocky plastic belt for stupid reasons, but there’s no law against stupid behavior. What the CBA does prohibit is the LRD stepping out of its role as a helper and into the team’s role as a party.

Here, the key fact isn’t the piece of plastic, though that’s certainly the most eye-catching. Instead, the most important fact is Carig’s reporting that MLB’s recommendations are being treated as “hard guidelines.”  Per Carig:

“The LRD is definitely pushing a narrative that recs are concrete. And going above the rec is a substantially bad thing to do because it will mess up this entire salary structure.”

Remember, the CBA says that the LRD can help teams in arbitration. What the CBA doesn’t allow is for LRD to make final decisions. LRD can help a team develop a submission, but it can’t tell a team what its submission figure should be. It can help a team prepare for a hearing, but it can’t tell the team it must have that hearing instead of settling. It’s a subtle but important distinction. Think of LRD as a person sitting next to you in a car. It can read you a map. It can read you the directions from your smartphone. It can tell you what direction you’re driving in. But it can’t take over the steering wheel or force you to slam on the brakes. The question then is whether meetings like those Carig reported mean that LRD is the driver or the passenger:

For the league, it begins in spring training, when they hold State of the Union-style debriefings — two in Arizona and two in Florida — to evaluate the just-completed arbitration cycle. Attendees are presented with a 90-page booklet filled with data such as each club’s adherence to the league’s recommendations, the timing of all settlements, and a preview of the work to come. This spring, it also included a section of media quotes regarding arbitration. One in particular was highlighted in red, [agent Jeff] Berry’s line about “successfully stagnated arb salaries.” To this point, the executive leading the session offered a confirmation, and encouraging words about the progress being made.

If LRD really is stepping over that line – taking control of the arbitration process instead of merely providing assistance – we would expect to see some empirical data on that point. Notably, Deadspin found that “Nearly two-thirds of settlements have come in at or below the labor relations department’s ‘recommendations,’ up from less than half a few years ago.” At the same time, Carig noted that “there are no tangible repercussions for teams that break ranks.” And though Carig also added that “some teams find themselves feeling compelled to go along with the league’s plan, and fighting with their own players in the process[,]” he doesn’t say how.

Unfortunately, the CBA never actually specifies the evidentiary showing necessary to prove collusion. Per Heitner and Postal, “The Basic Agreement does not provide what burden needs to be met in order to prevail in this type of grievance.” Nevertheless, we can use what we know about antitrust law to make some educated guesses.

Courts evaluate most antitrust claims under a “rule of reason,” which requires the plaintiff to plead and prove that defendants with market power have engaged in anticompetitive conduct. To conclude that a practice is “reasonable” means that it survives antitrust scrutiny.

(Because the standards are similar, we can look at what antitrust law considers collusive or anticompetitive behavior in interpreting MLB’s own collusion clause; this does not mean that MLB isn’t subject to an anti-trust exemption, which is a different issue entirely.)

Why a reasonableness standard? Because, theoretically, everything is a restraint on trade, and to an extent, everything is collusive, too. Every trade between teams is a coordinated attempt by those teams to set the value of players. Trading James Paxton for Justus Sheffield (and other prospects) means that James Paxton is worth Justus Sheffield (and other prospects), and future trades will use that as a referent. Exchanging J.T. Realmuto for Sixto Sanchez and Jorge Alfaro means that the Phillies and Marlins, two enterprises that are supposed to be in competition with one another, have fixed the price of a J.T. Realmuto at a Sixto Sanchez and a Jorge Alfaro. In a sense, those trades are themselves anti-competitive, because it means that the value of similar players has been set, and the players who were traded have been removed from the market. But no one would say those trades were an unreasonable restraint on competition. The Red Sox can’t file a grievance because the Yankees and Marlins “colluded” on Giancarlo Stanton.

It’s for these reasons that subjective intent isn’t necessarily a good indicator. As such, we aren’t going to discuss whether or not the LRD and teams think they’re colluding. For example, the Supreme Court said in a case called Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Oklahoma that when we’re looking at whether something is unlawfully collusive, we can base our conclusion “either (1) on the nature or character of the contracts, or (2) on surrounding circumstances giving rise to the inference or presumption that they were intended to restrain trade and enhance prices.”

Legal test aside, there’s a factual problem with using subjective intent: we don’t always know what other people are thinking. For all we know, the Giants’ arbitration team does its work while thinking about Chicago deep-dish pizza. So instead, we’ll follow a rule from a 1913 case called United States v. Patten that we don’t need to prove specific intent: “by purposely engaging in a conspiracy which necessarily and directly produces the [anticompetitive] result which the statute is designed to prevent, they are, in legal contemplation, chargeable with intending that result.” (It also is possible to do something so anti-competitive that the law presumes the action to be unlawfully collusive, but that’s unlikely to be the case when we’re talking about a piece of plastic.)

To understand why all of this matters, it’s helpful to look at baseball’s collusion cases from the 1980s.

After the 1985 season, at the urging of Commissioner Peter Ueberroth, owners came to an unwritten agreement not to compete with each other over the services of free agents, and to reduce significantly the length of contracts they would offer. As a result, free agents were forced to re-sign with their original teams for little or no pay raise, unless their team indicated that it was not interested in their services.

The union’s grievance eventually resulted in a $280 million arbitration award in favor of the players, and an award of free agency for seven players. In some ways, the similarities between the collusion of the 1980s and today are striking. For example, that “unwritten agreement” mentioned above was couched in terms of fiscal responsibility and avoiding long-term contracts, rhetoric that would be familiar to anyone who follows a front office today. But then, the owners went further than that.

Then at the Winter Meetings in San Diego that winter [1985-86], the idea of “fiscal responsibility” was preached to ownership. A list of the 62 players who filed for free agency was circulated to all teams and a message was sent to avoid the free agent market until a player was “released” by their former club, meaning a team would have to make it public that a player no longer fit in their plans. If all teams participated in the plan, the free agent market would no longer be free, but it would be controlled by the teams.

That’s the part that was found to be collusive by an arbitrator. What does this have to do with a plastic wrestling belt? Take a look at what then-MLB Commissioner Peter Ueberroth said to owners ahead of the 1985-86 offseason.

“If I sat each one of you down in front of a red button and a black button and I said, ‘Push the red button, and you’d win the World Series but lose $10 million; push the black button, and you would have a $4 million profit, and you’d finish in the middle,’ you are so damned dumb, most of you would push the red button. Look in the mirror and go out and spend big if you want; don’t go out there whining that someone made you do it.”

In closing, Ueberroth told the owners: “I know and you know what’s wrong. You are smart businessmen. You all agree we have a problem. Go solve it.”

That’s a directive from the commissioner of baseball to not spend on free agents. As soon as Ueberroth made this statement, what could have been passed off as benign instantly became legally something more sinister. That we now have sources implying that LRD is dictating salary arbitration submissions and strategies, all for a uniform purpose, does potentially suggest a situation with at least some parallels to the 1980s.

That said, there are a number of significant differences between Ueberroth’s speech and this plastic wrestling belt. For one thing, Ueberroth gave a de facto instruction. As far as we know, no one has given a similar speech regarding arbitration. Even the comments regarding “progress” made in “stagnating arbitration salaries” aren’t in and of themselves damning; the comments weren’t tied to team revenues the way Ueberroth’s were, and didn’t, in and of themselves, suggest an instruction or implied agreement. Moreover, even assuming that all teams agreed that arbitration salaries should be lowered to improve profits, complimenting those teams on having already done so doesn’t mean that those efforts were collusive from the beginning.

So while the MLBPA might have new grist for a collusion grievance based on Carig’s reporting, we’re a long way from the union being able to prove such a case. Proving collusion from a legal perspective is very difficult hard. For example, Barry Bonds couldn’t find a job after posting a 157 wRC+ and .276/.480/.565 triple-slash with a BB% of 27.7% in 2007. He lost a collusion grievance in 2015, with one well-known labor union attorney noting that “I don’t believe that there is sufficient evidence, at least not public evidence, that there was a concerted effort to blackball him. I would be very surprised to see him prevail in this case.” That’s despite the fact that several well-known labor attorneys continue to think Bonds’ grievance had merit.

That said, the ramifications of this development are potentially significant beyond a legal case. First, this puts the league’s recent concession regarding a 26th roster spot in an entirely new light, particularly if the league knew ahead of time that this was about to break. Second, this changes the dynamic between the league and union from that of a potential thaw in relations to being on the precipice of a possible work stoppage. One veteran told Carig he was “ready to strike tomorrow.” Players across the league reacted similarly.

Astros ace right-hander Gerrit Cole:

We understand business, but if you were looking for a way to antagonize players, this would be a great way to do it,” Cole told The Chronicle on Saturday. “If it’s not intentional, it certainly is a pretty fascinating move by them because I don’t think there’s one player in this room that’s worked hard for his salary through arbitration or gone through the process and taken it seriously like I have or Collin [McHugh] has that really wants to kind of be treated with a lack of respect.”

An MLBPA spokesperson referred me to Executive Director Tony Clark’s official statement:

Major League Baseball did not respond to my request for comment.

We can’t say with any certainty whether MLB’s actions are legally collusive, nor whether the MLBPA would have a viable claim based on these facts. But as reported, LRD’s actions suggest that they may have gone beyond the role the Collective Bargaining Agreement defines for them in the arbitration process. How the union chooses to react to these facts remains to be seen, but they could constitute a significant development in the game’s ongoing labor conflict, and could deepen the rift between the union and MLB.


MLB’s Cuba Deal Just Got Scuttled

Late last year, news broke that Major League Baseball had reached an agreement for players to leave Cuba using a posting system similar to that which exists between MLB and the Japanese NPB or the Korean KBO.

Major League Baseball, its players’ association and the Cuban Baseball Federation reached an agreement that will allow players from the island to sign big league contracts without defecting, an effort to eliminate the dangerous trafficking that had gone on for decades.

The agreement, which runs through Oct. 31, 2021, allows Cubans to sign under rules similar to those for players under contract to clubs in Japan, South Korea and Taiwan.

While the proposed agreement generated a great deal of excitement at the prospect of a boon of talented Cubans coming to the majors, I wrote at the time that a good deal of caution was warranted given that the United States government considered the Cuban Baseball Federation (“FCB”) to be covered by the decades-old trade embargo.

There’s just one problem: the FCB is an arm of the Cuban government, and has even been run by Fidel Castro’s son, who served as its vice president. This agreement means that MLB, an American business entity, would be paying money to an unofficial arm of the Cuban government. Because of the United States’ trade embargo, which remains in effect, it’s questionable at best whether this arrangement will survive legal scrutiny.

Last week, the Trump administration blocked the agreement from taking effect for exactly that reason.

The White House and members of Congress took the position that the proposal “amounts to paying the Cuban government ransom for baseball players.”

“The U.S. does not support actions that would institutionalize a system by which a Cuban government entity garnishes the wages of hard-working athletes who simply seek to live and compete in a free society,” said Garrett Marquis, a National Security Council spokesman. Marquis said the administration will work with MLB “to identify ways for Cuban players to have the individual freedom to benefit from their talents, and not as property of the Cuban State.”

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