The Threat of a Grievance Likely Spurred MLB’s Latest Offer to the Players

On Wednesday, not long after talks appeared to have stalled, Major League Baseball (MLB) presented a new proposal to the Major League Baseball Players Association (MLBPA) to resume the 2020 season. It was a sharp about face by the league, which on Monday had threatened to cancel the season entirely. The parties intended their March Agreement to resolve multiple issues related to the resumption of play following the postponement of the season due to COVID-19. I received a copy of what is likely the final agreement, although it is not the signed version agreed to and executed by the parties. The version I have received is dated March 26, 2020 and identified as a Final Proposal on one party’s letterhead. Two national baseball writers have independently verified to me that it is the final agreement. After reviewing the Agreement, I believe the threat of a grievance over MLB’s violation of the scheduling provision of the Agreement is what spurred these most recent talks.

Rather than summarize the March Agreement and each of its sections, I thought it would be useful to review it from the perspective of how an arbitrator might review the grievance the MLBPA has implied it will file if the commissioner unilaterally sets the schedule. Although it has been represented as a short agreement addressing a only handful of subjects, the March Agreement is actually a comprehensive document with 15 sections and an appendix covering 17 pages. The parties spent a significant effort reaching agreements over a host of things, both modifying and supplementing the Collective Bargaining Agreement (CBA). It’s important to remember that both parties were represented by experienced, competent counsel throughout the negotiations that led to the March Agreement.

Earlier this week, the commissioner said his concern over a grievance might prevent MLB from scheduling a season at all. Manfred told ESPN, “Unfortunately, over the weekend, while Tony Clark was declaring his desire to get back to work, the union’s top lawyer was out telling reporters, players and eventually getting back to owners that as soon as we issued a schedule – as they requested – they intended to file a grievance claiming they were entitled to an additional billion dollars. Obviously, that sort of bad-faith tactic makes it extremely difficult to move forward in these circumstances.”

In relevant part, the CBA provides that a “‘Grievance’ shall mean a complaint which involves the existence or interpretation of, or compliance with, any agreement, or any provision of any agreement, between the Association and the Clubs or any of them, or between a Player and a Club.” Presumably, the Union’s grievance would be over the failure of the commissioner to meet the “best efforts” provision in the section on scheduling the regular season.

But before we even get to the scheduling section, there is another section that first must be reviewed. The Resumption of Play section gives the commissioner authority over whether or not a season will commence at all. The Agreement further provides the commissioner the right to suspend or cancel games after the commencement of the season if the same conditions are no longer met. This section does not permit the 2020 season to commence without the consent of the Office of the Commissioner and until there are no federal, state, city, or local restrictions on mass gatherings that would materially limit play in front of spectators, although the commissioner has the option to consider neutral sites or playing games in the absence of spectators if economically feasible; no relevant travel restrictions throughout the United States and Canada; and after consultation with medical professionals, the commissioner determines that play does not pose an unreasonable health risk to players, staff, or spectators.

Twice in this section as well as its preamble, “economic feasibility” or “economically feasible” are mentioned. There can be no doubt that the subject was discussed and included in the Agreement. But, what does it mean and how are the Agreement’s procedures applied?

The commissioner makes the first determination that the season can commence because the necessary conditions have been satisfied. On May 16, the Associated Press reported on an internal MLB document titled “Economics of Playing Without Fans in Attendance,” which served as the basis for MLB’s claim that it could not feasibly play games without fans. Throughout the intervening month, this remained a constant refrain from the commissioner and individual owners. But when speaking to ESPN a month later, the commissioner did not cite that as the reason games might not be played. Instead, Manfred said games might not be played because of the risk of a grievance. It’s almost a master class in what not to do.

Imagine if a hiring manager, instead of saying “we’ve selected another candidate,” told a candidate for an opening at the hiring manager’s coffee shop that they would not be hired because of their race. Once said, it’s impossible to backtrack and say that isn’t the reason. Any new reason, even if otherwise legitimate, will be viewed as pretext.

Barring a government authority closing ballparks to games entirely, even in the absence of fans, or all domestic air travel being grounded, the Resumption of Play provisions can no longer be invoked to defend successfully against a grievance. If there had been a reasonable argument for the commissioner to cancel the season using his discretion before, he’s greatly undermined it now. It’s a surprising misstep given that rising COVID-19 case rates in several of the states that are home to major league franchises suggest that an argument for a shortened schedule or cancelled season centered around player safety might have been persuasive.

That brings us back to the scheduling section for the regular season. MLB still has the pretext issue hanging over it here as well, but in this section the commissioner has affirmative duties to move forward. There are a few key things to take out of this section, which is written as one long paragraph: setting the schedule is, as has been reported, within the commissioner’s discretion; it contemplates playing games beyond the scheduled end of the regular season; and it references economic feasibility three times.

Any labor relations practitioner will tell you that the discussions, feedback, and consulting required by this section are far from bargaining. Instead of negotiations, there are several matters the parties must talk about. Once the Union provides its feedback on those subjects, the commissioner is authorized to make the schedule “using best efforts to play as many games as possible” and taking into account a host of issues including “economic feasibility.” Then, after presenting one or more options to the MLBPA, the commissioner sets the schedule considering further feedback from the Union to the extent that that feedback is practicable and economically feasible.

The commissioner is responsible for making best efforts on two occasions. First, after the discussions and feedback from the MLBPA, he has to construct one or multiple schedule options:

“The Office of the commissioner will construct and provide to the Players Association, as promptly as possible, a proposed 2020 championship season and postseason schedule (or multiple schedule options) using best efforts to play as many games as possible, while taking into account player safety and health, rescheduling needs, competitive considerations, stadium availability, and the economic feasibility of various alternatives.”

Although the commissioner has unilateral authority in constructing the schedule(s), he does not have discretion about whether to do so. He must. That is why the MLBPA requested he do so by this past Monday.

Second, the Agreement states “the Office of the commissioner shall use best efforts to issue a 2020 championship season schedule that addresses, to the extent practicable and economically feasible, the feedback received from the Players Association.” This sentence is not written in the exact same mandatory fashion. The first sentence required the construction of the schedule(s) and best efforts to play as many games as possible. This sentence requires best efforts to issue a schedule that addresses the MLBPA’s feedback, but it provides caveats to reject the feedback if it is not practicable or economically feasible. It merely restates the commissioner’s discretion over the final schedule by giving him the ability to reject the Union’s feedback.

So, it’s really only in the construction of the schedule(s) that the economic feasibility acts as a counterbalance to playing as many games as possible. That said, what’s missing from this is who determines what is economically feasible. The Agreement does not define the term. In the absence of a definition or specific authority as to who determines feasibility, the arbitrator will be unable to use the plain language of the agreement to rule, in which case, he will allow the parties to present bargaining history. Surely, MLB will argue that it’s the commissioner himself who determines economic feasibility. But even still, he may be required to justify that conclusion. To evaluate that justification, the arbitrator would likely require the economic data that the individual clubs and MLB have failed to provide to the MLBPA. It would seem that the last thing team owners would want is an arbitrator ordering them to produce financial information that they would prefer to keep proprietary.

In collective bargaining, management is not required to share financial information unless it makes an inability to pay argument. Even so, only basic financial information is required. In this situation, though, much more detailed financial information would likely come to light. Even if MLB thought it had a better than 50% chance of prevailing in the grievance, keeping that information private may make them want to avoid a grievance. Perhaps it’s not the fear of liability that scares MLB; it’s the fear of disclosure.

Although grievance arbitration does not offer the same discovery opportunities as federal courts, arbitrators generally require parties to produce the evidence that they relied upon in making decisions that are the subject of or relevant to the grievance. The arbitrator may draw an adverse inference against the party failing to produce evidence in their possession or control, meaning the arbitrator will assume the evidence is adverse to MLB and its position.

All told, MLB has a lot of reasons to want to avoid a grievance, especially now that the commissioner has admitted that MLB wants to avoid the grievance. And it is likely this grievance avoidance that will lead to a resolution of the issues that have previously precluded agreement.

If the Players Association were to prevail in a grievance over MLB’s breach of its obligation to make best efforts to play as many games as possible, the arbitrator would have to determine how many games would have been accomplished had the clause not been breached, and then issue damages based on the difference between that figure and the actual games played under the unilaterally imposed schedule.

One last note. Despite all of the references to economic feasibility in the two sections referenced above, it is notably absent from the section on pay. The issue of pay was completely resolved with a pro rata agreement and formula in the March Agreement, with no contingency related to spectators attending games or other economic feasibility. That was a false argument from the moment it was uttered. Thankfully, that argument has been dropped by MLB. And if you are wondering about the further negotiations required by the Agreement, it merely stated, “the parties will meet regularly to bargain over application of, and any appropriate modifications to, all other provisions of the Basic Agreement and the collectively bargained Major League Rules, consistent with their agreements on the topics set forth above.” (There is another section related to further negotiations on transaction deadlines.)

I believe that the parties are now, finally, on track to reach an agreement to resume play. On Thursday, the MLBPA made a counter proposal. Although that led to another round of recriminations, the parties’ proposals are now closer than they ever have been before, not solely because their offers are close on the specific terms, but also because they cover identical subjects. The parties are no longer talking past each other.

They could have been here two months ago and four weeks ago and even last week had there not been impediments on the management side in accepting the March Agreement’s pay provisions, to which they had already agreed. After fruitlessly attempting to reopen those provisions for far too long, it was the threat of a grievance over the commissioner’s exercise of rights from that very same Agreement that likely drove the parties closer to resolution.