Rightly or wrongly, minor-league baseball teams believe the ongoing, class-action lawsuit over minor-league players’ wages presents something of an existential threat. As has been previously discussed here on a variety of occasions, the litigation contends, in short, that many minor league players’ salaries — which can run as low as $3,300 per year — violate the federal minimum wage and overtime laws.
Even though minor-league teams are not actually responsible for their players’ salaries — minor leaguers are instead paid by their respective major-league franchise — they still fear that a ruling in the players’ favor could be vitally injurious to their interests. As the argument goes, if major-league teams are forced to incur higher payroll costs, then they will likely cut back on other subsidies that they may currently provide to their minor-league partners.
Moreover, the minor leagues worry that, in some cases, MLB teams may potentially even decide to terminate their relationship with one or more of their minor-league affiliates in order to reduce costs. While most of the higher-level minor-league teams would likely survive such an scenario, the minor leagues fear that a victory for the players could spell doom for some of their lower-level franchises, especially those residing in particularly small metropolitan areas.
As a result, the minor leagues announced 18 months ago that they would petition Congress for relief, asking the legislature to pass a law protecting the industry from the federal minimum wage and maximum hour laws. A year and a half later, these efforts finally came to fruition, when a bill was introduced in the U.S. House of Representatives last week proposing to formally exclude minor-league baseball players from the federal minimum wage and overtime protections.
Specifically, the proposed bill — currently entitled the Save America’s Pastime Act — would amend the federal Fair Labor Standards Act (FLSA) by adding a new exception to the basic minimum wage and overtime protections afforded to most of our nation’s workers, excluding “any employee who has entered into a contract to play baseball at the minor league level.” In addition, the bill goes on to also cast some doubt regarding the status of major-league players under the FLSA, stating that the fact that minor-league players are excluded should not be read to imply that MLB players are themselves in fact covered by the minimum wage and overtime laws.
At first glance, this second portion of the bill would appear to be quite unnecessary, since it is hard to imagine a scenario in which major-league players’ salaries plummet to the point at which they would fall below the federal minimum-wage (currently set at $7.25 per hour). Instead, the provision is likely intended to help foreclose the possibility that major-league players would ever elect to sue for unpaid overtime compensation. Along these lines, it is doubtful whether players would be covered by the so-called “white collar” exception to the overtime rules, meaning that it is theoretically possible that they could someday file a lawsuit — perhaps during the midst of an extended labor stoppage — seeking one-and-a-half times their normal hourly wage for every hour worked over 40 per week.
Should Congress pass the law, the Save America’s Pastime Act states that its new proposed exceptions would apply retroactively to any lawsuit or work occurring “before, on, or after [the bill’s] date of enactment.” While this would not necessarily doom the ongoing minor-league minimum-wage lawsuit in its entirety — since the case also asserts that MLB is in violation of several state-level minimum-wage and overtime laws, rules that would not be affected by the proposed legislation — it means that the plaintiffs could no longer seek relief under the FLSA, severely hampering their hopes of securing nationwide reform in this area. (Meanwhile, the Constitution’s prohibition of so-called ex post facto laws — i.e., those applying with retroactive effect — would not apply to the new bill, as that restriction only prevents Congress from passing retroactive criminal laws.)
Notably, if enacted into law, the Save America’s Pastime Act may actually be somewhat redundant. Major-league teams have asserted in the minor-league wage case that they are already exempt from the FLSA, under the law’s existing exception for seasonal “amusement or recreational establishments.” As I’ve previously discussed, courts are split as to whether this exception — which generally applies to recreational businesses operating seven or fewer months per year — applies to professional sports teams. In the only case decided to date involving a minor-league baseball team, however, a federal appellate court concluded that the Single-A Sarasota White Sox were in fact covered by this exception, and thus did not have to pay its employees the minimum wage or overtime.
Should this same interpretation be adopted in the minor-league wage lawsuit, then the Save America’s Pastime Act would be unnecessary, as minor-league players would already be excluded from the protections of the FLSA under this preexisting exception.
It remains to be seen, of course, whether the new proposed legislation is ultimately enacted into law. On the one hand, because Congress is currently unable to accomplish much of anything at all in the current political climate, it would seem unlikely that such a bill would make it through both the House and the Senate. And even if it did, it’s not clear that President Obama (or a potential future President Clinton) would sign it into law. (A Donald Trump administration may be another story, however.)
Moreover, even though the bill originally had bipartisan support, having been proposed by Representatives Cheri Bustos (D-IL) and Brett Guthrie (R-KY), Rep. Bustos has already announced — little more than an hour ago — that she is withdrawing her support for the legislation due to the backlash it has already received.
On the other hand, Minor League Baseball (MiLB) has historically proven to have a significant lobbying force on Capitol Hill. With more than 160 teams spread throughout 42 states, minor-league owners have routinely been able to successfully exert their influence over the years on a large and geographically diverse group of Congressional representatives.
And at the same time, MLB is likely to flex its own political muscle to help the cause, since major-league teams will be the ones forced to directly foot the bill should the minor-league players win their lawsuit. (Notably, MLB’s political action committee (PAC) made campaign donations to both of the original sponsors of the Save America’s Pastime Act.)
Should the judge in the minor-league wage lawsuit rule against MLB on the applicability of the seasonal-amusement-or-recreational-establishment exception — thus suggesting that minor-league players are in fact currently entitled to the minimum wage and overtime compensation — then one can expect that the league’s lobbying efforts in Congress will only intensify.
Considering that minor-league players have never formed their own union, it’s not clear how they will rebut these lobbying efforts without their own organized presence on Capitol Hill. That having been said, the fact that the Save America’s Pastime Act could also prevent major-league players from filing their own FLSA lawsuits may motivate the Major League Baseball Players Association to weigh in on the matter, which would help to balance the scales somewhat.
Even if its ultimate prospects for passage are uncertain, however, the fact that MLB and MiLB would appear to be throwing their weight behind the Save America’s Pastime Act shows how significant a threat they perceive the minor-league wage litigation to be. Neither organization is likely to rest, then, until they have been definitively defeated on this issue both in court and in Congress.
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.