MLB’s pay practices have come under considerable scrutiny in recent years. In 2013 and 2014, the U.S. Department of Labor launched a series of investigations examining whether several MLB teams violated the federal Fair Labor Standards Act (FLSA) by failing to pay their clubhouse attendants, administrative workers, and interns in accordance with the FLSA’s minimum wage and overtime requirements.

At the same time, MLB has also been hit with four different lawsuits over the last two years alleging that the league’s pay practices violate the FLSA and/or federal antitrust law. The most notable of these cases were two suits filed last year contending that MLB teams routinely fail to pay their minor-league players either the minimum wage or overtime. Those cases – which assert that minor leaguers often earn as little as $3,300 per year – currently remain pending against 22 MLB teams.

Now, yet another group of MLB employees is coming forward to challenge MLB’s pay practices. In a new class action lawsuit filed last week in New York federal court, former Kansas City Royals scout Jordan Wyckoff contends that MLB teams have unlawfully agreed not to compete with one another for the services of their amateur and professional scouts. As a result, the suit – Wyckoff v. Office of the Commissioner of Baseball – asserts that a number of MLB scouts currently make less than the minimum wage and are not paid overtime, even when working more than 40 hours in a given week.

Wyckoff alleges that these practices not only violate the FLSA, but that they fail to comply with both federal and state antitrust law as well.

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Overshadowed by last week’s series of momentous decisions by the U.S. Supreme Court, Major League Baseball recently filed a brief with the Court urging it to reject an appeal by the city of San Jose, California in the on-going dispute over the future home of the Oakland Athletics. As I noted at the time San Jose filed its appeal back in April, the city is hoping to challenge MLB’s refusal to approve the proposed relocation of the A’s to the city in court under the Sherman Antitrust Act.

Over the last two years, however, both the trial court and court of appeals have dismissed San Jose’s suit in light of professional baseball’s nearly century-old antitrust exemption. The city is now asking the Supreme Court to take its appeal and overturn the controversial doctrine in order to hold MLB accountable under the Sherman Act, like all of the other major U.S. professional sports leagues.

As one might expect, MLB’s brief instead argues that San Jose’s appeal should be rejected for several reasons. In particular, MLB devotes much of the first half of its brief to the contention that San Jose lacks standing to sue — a requirement in which the plaintiff must show that it has a personal stake in the outcome of an actual legal case or controversy (as opposed to a hypothetical, future dispute) — and therefore can’t sustain its case against the league.

MLB challenges San Jose’s standing on several grounds. The primary basis of MLB’s attack, however, focuses on a recent California state court decision holding that an option agreement between the city and the A’s for the land on which a new stadium is to be built is invalid under various state and municipal laws. Specifically, the California court determined that San Jose had illegally transferred the land to a governmental authority in an attempt to circumvent laws requiring that a public referendum be held to approve the use of any tax dollars to build a sports facility.

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Since Tony La Russa and Dave Stewart took over baseball operations for the Arizona Diamondbacks last year, their moves have come under considerable scrutiny. Questions have been raised about the Diamondbacks plan, but not with as much regard to its execution. The questions surrounding the Diamondbacks’ moves have been confusing enough that some wondered if the Diamondbacks had a plan in mind at all. The club looked to be attempting a quick rebuilding process. How they plan to achieve that goal is finally becoming a little more clear.

When the Cubs and Astros took bad teams and completely deconstructed their rosters, choosing to lose for a while and re-stock the organizations, their plans were easy to see. After a full offseason, multiple in-season trades, and the recent major-league draft, the Diamondbacks’ plan, or at least their goal, has come into focus. The Diamondbacks are not interested in a long, drawn out rebuilding process. Their main interests look to be cutting salary and adding players who are ready to contribute now or will be ready to contribute in the near future. They might not be ready to win now, but they appear to be attempting a swift rebuild to make the team competitive.

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In the aftermath of yesterday’s shocking news that the FBI is investigating the St. Louis Cardinals for allegedly illegally accessing the Houston Astros’ computer network without authorization, many fans have begun to speculate as to what sort of penalty the Cardinals might face from Major League Baseball. MLB has already suggested that some form of punishment is forthcoming, issuing the following statement yesterday in response to the New York Times’ initial report:

Major League Baseball has been aware of and has fully cooperated with the federal investigation into the illegal breach of the Astros’ baseball operations database. Once the investigative process has been completed by federal law enforcement officials, we will evaluate the next steps and will make decisions promptly.

In particular, as others have noted, MLB’s reference to the incident as an “illegal breach” – as opposed to an “alleged” illegal breach – is especially noteworthy. MLB isn’t denying that employees of one of its teams may have illegally accessed the Astros’ computer network, nor is the league holding off judgment on the veracity of the reports until the federal investigation is complete. Instead, the league office is explicitly acknowledging that an illegal breach has occurred.

So the Cardinals are almost certainly facing some form of MLB-imposed punishment on top of any potential criminal charges the government may pursue. The question now is just what type of punishment MLB and Commissioner Manfred will seek to impose.

Given the unprecedented nature of the incident, initial speculation has ranged anywhere from a steep fine or the loss of draft picks to a potential postseason ban for the Cardinals. However, while Commissioner Manfred certainly has broad authority to govern the sport under his “best interests of baseball” powers, his authority – as NFL Commissioner Roger Goodell has learned in recent years – is not absolute. Instead, MLB’s league constitution and collective bargaining agreement both impose some real constraints on the commissioner’s ability to punish the Cardinals. Read the rest of this entry »

The New York Times dropped a bombshell of a story Tuesday morning, reporting that the FBI is investigating whether front-office officials from the St. Louis Cardinals may have illegally hacked into the Houston Astros’ proprietary computer network. According to the Times, government officials believe that unnamed Cardinals employees may have accessed the Astros’ computers in order to retrieve the team’s internal trade discussions, proprietary statistics and scouting reports. The FBI has apparently traced the source of the hacking to a house shared by some Cardinals employees.

While some are understandably comparing Tuesday’s news to the NFL’s recent “SpyGate” scandal – in which the New England Patriots were accused of impermissibly videotaping the New York Jets coaches’ hand signals during a 2007 game – if true, the Cardinals’ alleged hacking would, of course, be much more serious. Beyond just league-imposed penalties, the hacking allegations carry the possibility of criminal prosecution, not just for the Cardinals employees involved in the breach, but potentially for the organization as a whole.

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Major League Baseball has seen its fair share of television-related litigation over the last few years. On Thursday, there were significant developments in two of these lawsuits.

First, the legal proceedings surrounding the failed CSN-Houston regional sports network took a new turn when the bankrupt station filed suit against Comcast, accusing the cable provider of a variety of misdeeds. If successful, the case could potentially allow the Houston Astros and the National Basketball Association’s Houston Rockets – the two primary owners of the defunct station – to recover hundreds of millions of dollars in damages.

Meanwhile, the long-running Garber lawsuit challenging MLB’s television blackout and pay-per-view package policies took an interesting turn as well, when the parties in a companion case challenging the National Hockey League’s analogous TV policies reached a tentative settlement. Although this settlement does not directly affect the suit against MLB, the deal nevertheless has potential implications for the Garber case.

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As most baseball fans are by now aware, a fan at Friday night’s game between the Oakland A’s and Boston Red Sox was seriously injured after being struck in the head when a fragment of a broken bat flew into the stands. Although initial reports suggested the woman had suffered “life-threatening” injuries, it fortunately now appears that she is expected to survive the incident.

Nevertheless, the severity of Friday’s accident has brought renewed calls for Major League Baseball to take greater steps to help protect fans from similar injuries in the future. Although broken bats and foul balls at MLB games have only resulted in one documented fan fatality in history, a recent study estimated that approximately 1,750 fans are injured by foul balls alone each year.

As a result, various observers are calling on MLB to require that teams install more extensive netting to protect fans sitting close to the field from flying objects. At the same time, others have urged a more cautious approach, suggesting that additional netting will detract from the fan experience, and that ticket buyers can rationally weigh the pros and cons of sitting in exposed seats.

While there are reasonable arguments to be made on both sides of the issue, all too often these debates overlook an important legal reason that helps explain why MLB hasn’t done more to protect its fans from these sorts of injuries. Under what is known as the “Baseball Rule,” courts have historically held that professional baseball teams are not legally liable for any injuries fans that may sustain after being hit by a foul ball or broken bat.

Until this rule changes, there will be little financial motive for MLB to install additional netting to protect fans sitting in the closest proximity to the field.

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Major League Baseball might be incredibly healthy in terms of attendance, television ratings, and finances, but the league has a perception problem that will not go away anytime soon. Baseball’s biggest challenge is, and always likely will be, creating new fans. This is not a challenge unique to baseball or sports in general. All sports continue efforts to draw in new fans just like Coke and Pepsi use marketing campaigns to lure in a new generation of soda drinkers. Rob Manfred has made one of his goals to increase childhood participation in baseball as he believes that children who play baseball turn into baseball fans as adults, continuing the generational chain that has allowed baseball to thrive for more than a century.

While getting more youths to participate in baseball is hardly the only initiative MLB will undertake to grow the sport, getting new fans to attend games is very important for baseball’s future. The Angels’ most recent public-relations mistake, discouraging fans from lower socioeconomic levels from attending because they do not spend as much as other fans once they get to games, is a shortsighted strategy that could hurt baseball in the long run.

In his story for the OC Register, Pedro Moura discussed the Angels’ declining attendance with Robert Alvarado, a Vice President with the team. Alvarado dismissed targeting fans looking to pay for lower-priced seats because they do not make as many purchases once they are inside the stadium. This somewhat callous disregard for “discount buyers,” as Alvarado calls them, might work for short-term revenue, but the team has seen one of the bigger drops in attendance in MLB and the plan is a questionable one long-term.

Since we looked at attendance last month, there have not been too many big changes at the top or bottom of attendance rankings. The Los Angeles Dodgers, St. Louis Cardinals, San Francisco Giants, and New York Yankees are still the highest-drawing teams, and the Cleveland Indians, rebounding on the field and in attendance, passed the Tampa Bay Rays in seasonal attendance over the past month. The Angels do boast decent numbers compared to all teams. (All attendance numbers below from Baseball Reference.)

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To the extent that most fans pay any attention to legal issues relating to Major League Baseball, they are typically aware that MLB is somehow immune from antitrust law. How exactly this came to be, however, is often less well understood. And in many cases, fans may not have a firm grasp on precisely how this antitrust exemption actually affects MLB’s operations.

Having written a bit on the topic, I thought I’d begin an occasional series of posts examining baseball’s antitrust exemption to help clarify some misconceptions regarding what is admittedly a rather peculiar legal doctrine. This first post will recount the history of baseball’s exemption, dating back to its creation in 1922. Future posts will consider the current scope of the exemption – i.e., what it does and does not cover today – as well as the practical effect that the exemption has on the league.

Although some fans mistakenly think Congress granted baseball its antitrust exemption, the immunity really results from a nearly 100-year-old decision by the U.S. Supreme Court in a lawsuit arising out of the last on-field challenge to the American and National leagues’ dominance over the sport. Back in 1914 and 1915, the Federal League of Professional Baseball Clubs tried to establish itself as a third major league by signing roughly 50 major league players away from their then-current teams – the most notable of which was probably Hall-of-Fame shortstop Joe Tinker. Read the rest of this entry »

Eight Major League Baseball teams won an initial victory on Wednesday in two federal lawsuits contesting MLB’s minor league pay practices under the minimum wage and overtime laws. At the same time, however, the judge denied the league a potentially more sweeping victory in the cases.

The two lawsuits were filed in California last year by former minor league players who allege that they received as little as $3,300 per year, without overtime, despite routinely being required to work 50 or more hours per week during the playing season (in addition to mandatory off-season training). MLB and its thirty teams responded to the suit by challenging the plaintiffs’ claims on a variety of grounds. Wednesday’s decision considered two of these defenses in particular.

First, 11 of the MLB franchises argued that they were not subject to the California court’s jurisdiction and therefore must be dismissed from the lawsuit. Second, all 30 MLB teams argued that the case should be transferred from California to a federal court in Florida, which they argued would be a more convenient location for the trial.  In its decision on Wednesday, the court granted MLB a partial victory, agreeing to dismiss eight of the MLB defendant franchises from the suit due to a lack of personal jurisdiction, but refusing to transfer the case to Florida. Read the rest of this entry »