The Minor League Wage Battle Isn’t Over After All
Last year, Nathaniel Grow and I each wrote that it looked like the longstanding battle over minor league wages might be on the verge of ending with the passage by Congress of the Save America’s Pastime Act, a statute that had the dual effect of capping minor league players’ pay and threatening the existence of Independent Leagues. Despite Major League Baseball’s success in lobbying for and obtaining passage of the Act, it seems that the league isn’t done yet, moving its fight from the federal level to the states.
Last week, Ben Giles of the Arizona Capital Times reported that MLB is backing a bill introduced in the state legislature by Representative T.J. Shope that would exempt minor leaguers from Arizona’s state minimum wage laws.
HB 2180 would carve out minor league baseball players in Arizona law by enshrining the exemption in federal law in state statute. If signed into law, the bill also applies retroactively, meaning teams would be free from liability against any prior claims that the law was violated.
Now, you might be wondering why MLB is going to such lengths to exempt minor leaguers from state minimum wage laws when the federal statute is already on the books. The answer is pretty straightforward. Even though there is a federal minimum wage – it is set at $7.25 per hour – states also have their own minimum wage laws, many of which require higher hourly rates than the federal statutory minimum. The way the law is written, the federal minimum wage acts as a floor, meaning that a state is legally allowed to require a wage that is greater than the federal wage, but can’t have a minimum wage that falls below it.
In Arizona, the current minimum wage is $11 per hour, and will rise to $12 an hour in 2020. As a result, even to the extent minor leaguers’ access to federal minimum wage laws are limited by the new federal statute, they may well be entitled to the higher state minimum wage.
Now Arizona has no full-season minor league teams. But it does play host to the Cactus League and the Arizona Fall League. From a legal perspective, the primary target of HB 2180 is likely spring training, where minor leaguers aren’t paid at all, let alone below the minimum wage. Shope justified legal protections for non-payment of minor league players in the Cactus League by calling Spring Training “essentially a tryout. You’re not on the team yet.”
Last year, we discussed MiLB player-turned-attorney Garrett Broshius and his proposed class action lawsuits alleging that minor league pay violated federal wage and hour laws. Broshius’ primary causes of action were mooted by the Save America’s Pastime Act, and so many observers thought his cases were over. But recall that an employer has to honor state minimum wage law where it’s higher than the federal law, and so Broshius’ causes of action at the state level remained in play.
Broshuis is seeking class action status in a lawsuit against Major League Baseball in Florida and Arizona, the league’s two homes for spring training. Arizona is home to the Cactus League, the spring training league for the Angels, Diamondbacks, Cubs, Reds, Indians, Rockies, White Sox, Royals, Dodgers, Brewers, Athletics, Padres, Giants, Mariners, and Rangers. A federal judge denied Broshuis’s request but he appealed and is waiting on a ruling.
HB 2180 would seem to constitute an attempt to thwart Broshius’ class action suit in Arizona, just as the Save America’s Pastime Act did at the federal level. And the bill’s ties to Major League Baseball are clear, as Shope forthrightly told the Arizona Republic’s Mitchell Atencio.
Shope said the MLB approached him about introducing a bill and he was happy to bring it to the Legislature, although he wasn’t sure it furthered the intent of the voters. That is required for laws that make changes to voter-approved measures such as the minimum wage.
“Major League Baseball is a major component of Arizona’s commerce and tourism,” Shope said. He said any business that relies on tourism is grateful for the minor league system in Arizona and the tourism it generates.
Shope said he told the league that it would take a lot of effort to change the state’s minimum wage laws. In addition to furthering the intent of voters, changing the minimum wage rules would take approval of three-fourths of the Legislature to be sent to the governor’s desk.
“I think it’s ripe for conversation, but maybe it’s not ready for prime time and Major League Baseball will figure that out. Forty-five votes is a very high number.”
That “intent of the voters” language is required by a statute called the Arizona Voter Protection Act, which is designed to restrict the ability of the state government to overturn or modify laws passed by ballot initiative or referendum. Arizona’s minimum wage increase was mandated by a voter referendum, so Arizona law requires that any modifications to it reflect the intent of the people who voted to enact it. That Shope introduced and sponsored a bill that he himself found possibly contrary to that intent is eyebrow raising.
In response, we’re seeing rumblings that the MLB Players Association may get involved in this fight for the first time. Ian Penny, general counsel to the MLBPA, told Giles that “[i]t is fundamentally unjust to deny professional baseball players the basic protection of the minimum wage laws, especially at a time when clubs are reporting record revenues.” That’s strong language coming from the MLBPA, especially considering the union doesn’t represent minor leaguers. It’s also a significant departure from previous approaches the union has taken to issues of minor league compensation. This is how St. Louis Cardinals southpaw and MLBPA Executive Board member Andrew Miller discussed the issue with Bill Shaikin last year:
“In negotiations, everything is essentially traded dollar for dollar . . . . There might be a possibility for us to pressure the MLB side to raise wages on the minor league side. However, we would probably be sacrificing, say, arbitration, or some sort of dollars that are being spent on us elsewhere. That is just the reality of the deal.”
So while the MLBPA taking a public stand in defense of minor leaguers might not be a seismic shift in how the union does business, it could signal a meaningful one. Perhaps this is because, with Ken Rosenthal recently reporting that the MLBPA sees a “palpable threat” of a work stoppage, the union is reassessing its public communications strategy. It seems unlikely that the union will welcome minor leaguers into its ranks, although there are is discussion that the MLBPA is quietly looking into helping minor leaguers organize their own union, which is itself a relatively new approach. But the MLBPA adopting the cause of minor leaguers in a meaningful way, even if it doesn’t bargain on their behalf, would represent a sea change in baseball economics.
The new posture makes sense for the MLBPA. Paying minor leaguers more could reduce the number of talented youngsters turning away from baseball in favor of basketball and football. A few weeks of minimum wage pay is hardly enough to stem that tide on its own, but it is a step in the right direction. Backing this cause is also an easy public relations win for the MLBPA, which is badly in need of one after this offseason. Some fans have proven to be less than sympathetic to the fight over major league free agency; advocating for players whose salaries are a lot closer to those of the fans in the stands may help players begin to bridge the sympathy gap. As baseball’s labor unrest continues to grow, minor league wages will continue to be a source of contention and a site of contestation. Contrary to what we may have thought last year, this fight isn’t over.
Sheryl Ring is a litigation attorney and General Counsel at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author's. This post is intended for informational purposes only and is not intended as legal advice.
“Broshius’ primary causes of action were mooted by the Save America’s Pastime Act, and so many observers thought his cases were over.”
If I recall correctly, the Save America’s Pastime Act was not retroactive. And given the general presumption against retroactivity, see Landgraf v. USI Film Prod., 511 U.S. 244, 265 (1994), Congress would have had to be pretty clear that it wanted SAPA to retroactively extinguish the minor leaguers’ claims. Has there been any decision on whether the FLSA claims that accrued before passage of SAPA can go forward? Obviously the state laws you mentioned in the article provide better hope for minor leaguers going forward (at least for now), but it would be nice if those who were already harmed before passage of SAPA received *some* kind of compensation.
Minor league players should be okay with playing as “experience” as their compensation. It will look great on their resumes.
as a professional actor who routinely had to put up with producers’ claims of “but the exposure!” as compensation for unlivable wages early in my career, this entire damn thing makes my blood boil. Good on the MLBPA for possibly finally acting like a labor union and maybe seeing their way into the fight, and treating minor leaguers as not-yet-major-leaguers.
Or all it would take is one major league franchise to recognize the value of paying minor leaguers (their investments) an actual wage **which every single owner could afford**.
Not a rhetorical question – Why did you keep yourself in such a position? When people point out that nobody forces players to accept low salaries, amd they could get better jobs if they were unwilling to work so cheaply, the reaction is so harsh… But that is a perfectly valid view. If players are willing to work for their low wages, why is it anybody else’s concern to interfere? The players all have a choice.
I was an Intern for 3 years during Law School… Paid literally ZERO dollars by law firms that earned a ton of money. Nobody was crying for me.
Sometimes internships are treated as a way to funnel in cheap labor. They don’t always turn into jobs. At least at our minor league team, the management who couldn’t have been beating minimum wage given how much time they spent there were upfront about it.
You joke but this is sadly the same argument made by the NCAA.
It’s always funny to see capitalists fighting against the idea that people should be paid what they’re worth, and arguing instead that compensation should be set by, effectively, central planners who decide what you should be happy to be paid.
I do also think that there may be levels of the minors that may legitimately not be worth it (obviously depending on how much of a pay hike players get). I think MiLB could function just fine with, minimum, combining high and low A, you’d probably start hearing about that if a wage hike was realized and it was substantial.
NCAA is different than professional athletes. NCAA players should not be paid as they are getting free tuition on the football side, hence the name student athlete. i wouldn’t even consider paying the NCAA athletes until all sports get full rides. Baseball for instance only gets 11.7 scholarships for 35 players. Mens track, soccer, baseball etc…all those kids are paying to play. Before we even consider paying football and basketball players, they need to fully fund all student athletes tuition first.
My answer to this is always: if you think it’s such a good deal, open up the market and players will accept it, right? No one would ever take me up on that, and why? Because everyone knows Marquee players are getting shafted, tuition or not.
I just fundamentally dislike the notion the other people get to make up their minds about what fair compensation is for players. Let the market speak, we’ll find out just how fair it is. And why is it fair for football players to risk their brains and futures for pennies on the dollar so other people can compete in a sport that has no viability on its own?
I hear ya….and agree its not fair….but they don’t have to play, they can go home and not get a free college education.
The highest paid state employee in 42 states is an NCAA coach.
NCAA revenues are over $1 billion.
The University of Michigan spends nearly $200mm on its athletic department.
Big schools make tens of millions of dollars off their football programs.
These students, many of whom come from lower class households, put in work in their classes and then _work to make their schools money_.
I think you’ve got it backwards. The market has spoken. Aspiring MLB and NFL players are willing to pay for peanuts. In a free market, why should the owners/colleges voluntarily pay more? I agree that MiLB players are woefully underpaid and NCAA players are getting hosed, but us saying they should be paid more when they’re willing to play for less is exactly “other people making up their minds about what fair compensation is for players.”
This is not a free market for their labor, so what they’re “willing” to play for (when their only other option is to not play) is not the result of supply and demand, it’s the result of artificial systematic constraints. “You have one option, take it or leave it” is not exactly the invisible hand or a competitive marketplace.
“Aspiring MLB and NFL players are willing to pay for peanuts. In a free market, why should the owners/colleges voluntarily pay more? ”
Because what you’re describing doesn’t exist? MiLB players aren’t free agents – their right to work is literally owned by a single team! And the NCAA hardly allows student-athletes to take their labor to another school if they’re unhappy with their current team (and puts hilarious restrictions on their ability to earn extra income, too). How do any of those rules reflect a “free” market?
The case for paying in the NCAA (beyond scholarship, board and per diem) is usually made for male football and basketball players. The case is based on the revenue they generate. Your arguments (college athletics and MiLB) seems somewhat consistent albeit in my opinion flawed. The NCAA is different because its charter is not a business operation- although it contains all the often cited sins of business- greed, payoffs, no show jobs, and screwing the people who generate revenue. I like many, feel more can be done for minor league players but any solution will have unintended consequences. The less market based the more behavior- consumers, owners, MiLB and MLB will shift to alternate viewing and development pathways. I hope people in search of a solution will start with the value MiLB provides- development and entertainment (especially for non-urban, lower income families). I’m leery of well intentioned social engineering efforts (often with religious zeal)- the track record is abysmal.
Very little about MILB compensation is “market based”. A labor market involves few restrictions on the movement of labor and competition for that labor by multiple owners. Neither of those broad, necessary conditions exists for a minor league player.
Granted MiLB labor doesn’t operate in a free market, that wasn’t my point. My point is the value MiLB delivers is twofold- the developmental value to their Major League teams and the entertainment value to those in attendance. There is meat on the bone (financial wherewithal) ) for MLB to improve pay but MiLB teams operate on a shoestring budget. In any event, any solution will see MLB or local MiLB adjust to financial realties. As cited above baseball, could get by with fewer minor league teams (perhaps independent leagues rise) and offshore operations (DR) circumventsUS rules and can operate at lower cost. My point is about unintended consequences- you (we) may not like them but they are a market reality.
“It’s always funny to see capitalists fighting against the idea that people should be paid what they’re worth”
They aren’t capitalists; they’re businesspeople, and they’re acting explictly in the way free-market economics says they will — seeking to avoid competition and instead attempt to secure a monopoly, via government capture or whatever other way they can. It was one of Adam Smith’s core ideas: “People of the same trade seldom meet together but the conversation ends in a conspiracy against the public,” etc. His argument was just that a truly free market was, ultimately, the best resistance to self-interested businessmen.
Hah this joke was too topical for the thumbsdowners I guess
A joke in poor taste will generally get booed not matter how topical it is.
If Saving America’s Pastime entails preventing the establishment of a minimum wage, it follows naturally that America’s Pastime will be even more Saved by eliminating minor league wages entirely, along with signing bonuses as well. The logic is impeccable.
saving americas past time is undoing the bam deal immediately with disney. it will end up killing MLB…. mark my words. The worst deal in MLB history. It has single handedly put a wet blanket over the long term future for a short near term gain. NBA and NFL growing at much faster pace with NBA revenues increasing 25% this past year alone. Those leagues allow the players to be individuals and have a social media presence which grows fanbase, whereas the mlb fines its players and doesnt promote them for such instances.
And major league wages, and ticket prices, and TV commercials. Those should all be set to zero too.
One thing you didn’t mention as possibly motivating a change in the relationship between the MLBPA and minor leaguers is that, should they truly feel work stoppage is on its way, the logical thing is to start collecting leverage. The threat that the MLBPA might go to bat for MiLB, or the threat of a minor league union, is a nice chip to bring to the table if you’re fighting over a new CBA.
This talk about all negotiations being one dollar for another, that’s ignoring that the facts of the parties’ relative power position can change. Improve your leverage enough to open a costly fight and you win more dollars.
Hmm this boils down to will MLB players actually care enough to include them next CBA – For all the talk about owner greed this one falls on the players and their willingness to share some more of the pie next time around- History has shown us the players usually pick the short-sighted “whats in it for me” when its negotiating time
I think MLB players are finally coming to the realization that MiLB players are not a world unto themselves but integrally intertwined in their success.
By limiting draft and IFA bonuses, MLBPA has ensured that more MiLB players will be poorer and be more desperate when they reach the majors. Poor, desperate people do not make wise, long term financial decisions.
If minor leaguers are living in poverty for years (for some decades even), the few that make it to the majors will be more inclined to sign smaller deals for more security (think Sal Perez’s 5/$7m deal). This directly undercuts the MLB players ability to command higher contracts. It’s unbelievable that MLBPA has not made this connection yet.
That’s an excellent point.
I would assume the agents of these young players probably prevent this sort of thing (taking a deal that rips the player off), but it has to come into play.
Some of these breakout players – expecially international stars – barely got much of a bonus when selected. Coupled with the poverty-level pay while in the minors, a chance to sign a contract for millions of dollars is irrisistable for them. I know it would be for me.
I just don’t understand why MiLB doesn’t have better wages yet. I mean obviously these guys shouldn’t be expecting to be rich while playing minor league baseball, but they should atleast be able live a normal life. Baseball is just too big to have an entire entity of employees basically broke.
True but this all stems on a union basically handing over money to outsiders for free, not something we see too much today…or any day for that matter
This next CBA would be easier to solve thru a 3 rd party arbitrator even if that arbitrator was these here message boards and imagine how hard that would be? At least we would be agenda free – Will mlbpa put up a grandiose effort to do whats right and not best for just them…Im skeptical
Minor league players should be paid a living wage–not a big check, but enough to live on. There’s no excuse for it to be otherwise. Baseball is awash in money and taxpayer-funded goodies. It can do the right thing here.
What’s most incredible is that for all this effort: lobbying, consulting, legal battles, etc. from both sides. It would only cost about $5m per year for each club to pay ALL its minor leaguers $30,000 per year.
Never underestimate corporate greed.
How many minor league games do you pay to watch every year? How many minor league jerseys do you buy? Most people parrotting the “pay them more money” party line probably attend zero minor league games and buy zero minor league jerseys.
If fans are so concerned about minor league salaries, why not show it by attending the games?
I would be very interested to see this issue portrayed from the major league team’s point-of-view. Like what the hell is their explanation for the lack of pay to their employees? What is their reasoning behind this? Is it just “this is how it’s always been”? Or is it just simply that MiLB players are not a part of the union so tough shit…?
Probably that minor league teams lose money so that there’s no profit to share. Minor Leaguers receive free professional training, some even attend here rather than university. (People in medical residency make very low wages until they become licensed physicians.) Many receive large upfront sign-on bonuses in addition to their annual salaries.
The obvious reason why players accept low salaries to play MiLB is love of the game, but more importantly, the prospect of a huge payoff if they make it to MLB. Where else can one make $550k entry-level salary after 3 or 4 years of training? And the ones who don’t make it at 26 or so, can start a career in a cubicle like the rest of us.
“And the ones who don’t make it at 26 or so, can start a career in a cubicle like the rest of us.”
And if that “not making it” even includes a single day on the MLB roster, you get lifetime healthcare, which is pretty nice.
“And if that “not making it” even includes a single day on the MLB roster, you get lifetime healthcare, which is pretty nice.”
That’s not true. Micah Bowie, who spent parts of 6 seasons in the majors, will explain otherwise: https://www.washingtonpost.com/sports/2019/01/27/this-is-no-way-live-former-nationals-pitcher-micah-bowie-is-fight-his-life/
The majority of minor leaguers at any given time got a very modest signing bonus (often years prior)…or none at all.
Pushing for higher salaries for low-level minor leagues seems like it will backfire. Why wouldn’t teams move their rookie, low-A and A ball teams to campuses in Dominica? It’s not like MLB earns profit on rookie league ticket sales. They could run year-round baseball academies for a fraction of the cost. And it seems unlikely they would be forced by a central government to pay American-level salaries.
And one thing low level minor leaguers are stuck with… The large majority are not “prospects”. They are only there so the small % of actual prospects can practice.
Minor leagues are a historical relic. MLB could get by without them by restructuring their player development in a more modern way.
“Paying minor leaguers more could reduce the number of talented youngsters turning away from baseball in favor of basketball and football … Backing this cause is also an easy public relations win for the MLBPA,”
Much as I’d like these to be true, IMHO they’re wishful thinking. The lifestyle difference between “minor-league baseball player” and NFL/NBA or, really, even big-time D1 college athlete is night-and-day. A few thousand more bucks doesn’t come close to making up the gap.
And while some hard-core fans know about issue, 90% of ordinary fans — the ones MLBPA needs on its side — don’t know or care about minor-league salaries.