This is the second in a series of posts looking back at the most significant events in what has been an unusually eventful year for Major League Baseball on the legal front. Part One reviewed the legal maneuvering surrounding Alex Rodriguez’s suspension and the Oakland A’s proposed move to San Jose. This part now looks at baseball’s minimum wage issues and two potentially embarrassing gender discrimination suits filed against MLB and its teams in 2014.
MLB Pay Practices
MLB’s allegedly unlawful pay practices were the subject of considerable legal scrutiny in 2014. Most significantly, in February the league was hit with the first of two class action lawsuits filed on behalf of former minor league baseball players, cases asserting that MLB’s minor league salary scale violates federal and state minimum wage and overtime laws.
In Senne v. Office of the Commissioner, the plaintiffs contend that MLB has violated the Fair Labor Standards Act (FLSA) by paying minor league players as little as $3,300 per year, without overtime, despite often requiring players to work 50 or more hours per week. Moreover, as the suit notes, minor leaguers typically are not paid at all for their participation in spring training, fall instructional leagues, or mandatory offseason workout programs. All told, then, the suit claims that most minor league players receive well below the federally guaranteed minimum wage of $7.25 per hour.
Another group of former minor leaguers then filed a second class action suit against MLB in July on similar grounds. While the second suit – Marti v. Office of the Commissioner – shares much in common with the Senne case, the Marti lawsuit differentiates itself by specifically focusing on the plight of Latino ballplayers (all of the named plaintiffs in the Marti suit originally hail from Latin America).
Both cases are still in the initial phases of litigation. Notably, however, MLB is currently seeking to have the suits transferred from California to Florida federal court. MLB contends that Florida would be a more convenient venue for the parties considering the number of MLB teams with spring training facilities located in the state. In reality, though, MLB is likely hoping to take advantage of Florida case precedent, which holds that professional baseball teams are seasonal recreational operations, and therefore not subject to the FLSA.
The California court will likely decide whether to transfer the cases sometime in the first half of 2015. Either way, a trial is unlikely to occur until 2017 or 2018 at the earliest (assuming, of course, that Congress doesn’t grant baseball an FLSA exemption before then).
Beyond the minor leagues, MLB’s pay practices faced legal scrutiny on others fronts as well in 2014. For instance, in March, MLB successfully defeated a minimum wage lawsuit brought by volunteers at the 2013 All-Star Week FanFest held in New York City. Like the Senne and Marti suits discussed above, Chen v. Major League Baseball asserted that MLB had violated the FLSA by failing to pay its volunteers the minimum wage. Federal court Judge John Koeltl concluded otherwise, however, holding that because FanFest was a “seasonal amusement or recreational establishment,” its volunteers were not owed the minimum wage or overtime. An appeal in the case is pending, with a decision likely to be issued sometime in 2015.
Finally, four MLB teams also faced U.S. Department of Labor investigations into their pay practices in 2014. The Labor Department believed that the Baltimore Orioles, Miami Marlins, Oakland Athletics and San Francisco Giants were each violating the FLSA by paying their clubhouse attendants, administrative workers, and interns less than the minimum wage and/or failing to pay them overtime.
For example, the Marlins were accused of paying its clubhouse attendants a flat rate of $50 per day despite often requiring them to work 11 hours or more at a time. The team settled the claims earlier this year by agreeing to pay $288,290 in back wages and damages to 39 team employees. The Giants and A’s both reached similar settlements with the Labor Department.
According to a 2013 memo from MLB’s then-COO Rob Manfred, however, the government believes these issues are “endemic to [the baseball] industry,” meaning that other MLB teams may face similar investigations by the Labor Department in 2015.
Along with its minimum wage issues, MLB and its teams were also hit with two potentially embarrassing gender discrimination lawsuits in 2014. First, the New York Mets’ former senior vice president for ticket sales, Leigh Castergine, filed suit against the franchise and its chief operating officer, Jeff Wilpon, in September. The lawsuit accuses the team of unlawfully discriminating against Castergine after she became pregnant out of wedlock in 2013.
In particular, Castergine alleges that Wilpon told colleagues that he was “morally opposed” to Castergine having a child without being married. Wilpon is also accused of harassing Castergine by checking to see if she was wearing an engagement ring in front of her colleagues, and telling her that she would get a raise and bigger bonuses if she were to get married. Later, when Castergine returned to work after giving birth, Wilpon allegedly told her that her performance wasn’t meeting expectations, but that he’d let her finish out the year if she promised not to sue for discrimination. When Castergine complained to the team’s human resources department, she was fired.
For their part, the Mets and Wilpon have denied discriminating against Castergine, instead asserting that she was fired for “legitimate business reasons.” In particular, the team points to personality conflicts between Castergine and other company executives as the reason her job was terminated, conflicts that allegedly pre-dated her becoming pregnant. Castergine’s complaint had anticipated that the defendants would attack her job performance, and counters these allegations by pointing out that she was rewarded with six-figure bonuses, raises and a promotion during her four years with the team.
The suit is currently in the discovery phase, when the parties collect the documents and sworn testimony they will use at trial. Sooner or later, though, one would expect that the Mets will try to settle the case – assuming Castergine is willing – as the discovery process threatens to reveal all sorts of embarrassing information about the team’s ownership and management (neither of which, frankly, need any more bad publicity).
In addition to the Castergine case, MLB faced another potentially embarrassing discrimination suit in 2014. In December, Sylvia Lind – MLB’s director of baseball initiatives and highest-ranking Hispanic female employee – sued the league, Commissioner Bud Selig, and MLB’s executive vice president of baseball development, Hall of Famer Frank Robinson, for gender discrimination.
Lind’s suit alleges that she has been repeatedly passed over for promotions in favor of less qualified and often less experienced male candidates throughout her 19 years working for MLB. For example, when Lind’s former boss was fired by MLB in 2012, Lind says that she was never considered as a replacement for the job, despite her extensive experience in the office. Instead, MLB hired Robinson, who Lind contends lacked the experience and educational background necessary to assume the position.
Lind asserts that this mistreatment continued under Robinson. Her suit states that Robinson repeatedly promoted a less experienced and less qualified male employee over her, while unfairly criticizing Lind’s work performance. For instance, in her most legally damaging allegation, Lind asserts that Robinson told her, “Sometimes you have to hire a man because there are places women can’t go.”
MLB has not yet responded to the lawsuit in court. However, one would expect that the league will vigorously contest Lind’s allegations. MLB will likely argue that Lind’s lack of advancement was due to inadequate job performance, not sexism or racism. For instance, Lind’s complaint acknowledges that she had received several negative performance evaluations from Robinson. Lind assert that Robinson intentionally misrepresented the quality of her actual performance in order to justify his discriminatory treatment of her. MLB will undoubtedly argue to the contrary.
As with the Castergine case, MLB will probably consider settling the suit with Lind. Even if the league truly believes it has not discriminated against her, the prospect of potentially lengthy and embarrassing discovery proceedings in the case may be enough to motivate MLB to resolve the suit out of court. Whether Lind would be open to such a settlement, though, remains to be seen.
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.