Bloomberg Law
March 26, 2018, 12:58 PM

Minor League Baseball Players Are Big Losers in Spending Deal

Chris Opfer

By Chris Opfer

Major League Baseball clubs would no longer have to pay minor league players minimum wages and overtime under the government spending bill unveiled by Congress last night.

The 2,200-page omnibus spending package includes a provision that exempts baseball teams from the federal law requiring workers be paid at least $7.25 an hour and time-and-a-half wages for overtime. The policy rider is the product of years of lobbying by the MLB and its “farm” team affiliates.

The policy rider is an example of “how our government is operating right now,” Garrett Broshius, an attorney representing minor league players, told Bloomberg Law. “You have billionaires lobbying on something proposed in secret and rushed into a spending bill even though it has nothing to do with spending.”

The move comes in the wake of a class action alleging that minor league players are paid as little as $3,000 over a five-month season. Courts have split over whether teams are already exempted from wage and hour requirements as “amusement” businesses.

Supporters say playing by federal pay rules could make it too expensive for minor league teams to operate. They also argue that the opportunity for a player to chase a shot at the big leagues is different than working in a factory or other traditional jobs.

Major League Baseball reportedly brought in more than $10 billion in revenue last year. Arrangements with independently owned minor league teams require MLB franchise clubs to pay all player salaries and expenses and the minor league teams to foot the bills for operation and marketing costs.

MLB and lobbyist Daniel Meyer didn’t immediately respond to Bloomberg Law’s requests for comment. George Yund, who lobbied Congress on the issue on behalf of the National Association of Professional Baseball Leagues, declined to comment.

The government spending package provision is based on the Save America’s Pastime Act, a bill introduced by Rep. Brett Guthrie (R-Ky.) in 2016. That measure didn’t attract any cosponsors, but Guthrie spokeswoman Lauren Gaydos told Bloomberg Law “the bill has continued to gain bipartisan support, including from leadership.”

Legal Battle Pending

The players in a California class action against MLB and several Major league clubs allege that most minor league players earn about $3,000 to $7,000 over a five-month season in which they regularly work 50 to 70 hours per week. A federal appeals court in San Francisco is currently considering a dispute over which players should be included in the class.

The players say their schedules included six or seven games per week, as well as regular practice, strength and conditioning training, mandatory pregame activities, and long stretches of bus travel. Players aren’t paid for required spring training sessions leading up to the regular season, according to the lawsuit, nor during other off-season training and instructional sessions in winter and fall.

Professional baseball organizations at all levels have long argued that they fall under the FLSA’s “amusement or recreational establishment” exemption. That shields a business that operates for seven months or less per year or generates the bulk of it’s income over a six-month period from minimum wage and overtime requirements.

The players say MLB operates as a “cartel,” thanks to its exemption from federal antitrust laws.

“This is the exact opposite of a free market,” Broshius said. “It allows them to collude and suppress the salaries below the free market value.”

Broshius said it was too early to tell how the spending bill will impact the case. The policy rider exempts baseball teams only from federal wage and hour laws; it doesn’t extend to minimum wage and overtime requirements under state and local laws.