By Leticia Halas and Cari A. Cohorn
High-profile wage and hour claims appear to be on the rise in professional sports. In January 2014, an Oakland Raiders cheerleader filed a putative class action in Alameda Superior Court against the Raiders for numerous alleged state law violations. The plaintiff, Lacy T. asserts that the cheerleaders are paid a flat fee of $125 per game to be received upon completion of the season, regardless of how many hours worked and that they are required to attend two or more weekly rehearsals without pay and appear at numerous unpaid charity events. Moreover, the cheerleaders’ final compensation is subject to multiple deductions — escalating fines imposed for such infractions as tardiness or failing to wear all parts of the official uniform, ranging from $10 to $380. According to the complaint, the team acknowledges that these fines may result in a Raiderette receiving no compensation whatsoever for the season.
Similarly, on February 11, 2014, less than three weeks after the Raiderettes complaint was filed, former Cincinnati Bengals cheerleader Alexa Brennemen filed a class action complaint in the Southern District of Ohio. Brennemen claims that in 2013, she “worked well in excess of 300 hours for [the Bengals]”, and she was paid only $855 at the end of the season — averaging a pay rate of less than $2.85 an hour. Like Lacy T., Brennemen alleges that she and members of the class she seeks to represent were required to attend numerous functions (such as practices and promotional events) for which they were not compensated.
The National Football League is not the only professional sports league accused of wage and hour violations. On February 7, 2014, three minor league baseball players filed a class action complaint against the Office of the Commissioner of Baseball d/b/a Major League Baseball (“MLB”), Bud Selig, the Kansas City Royals, the Miami Marlins and San Francisco Baseball Associates LLC for violations of federal and state wage and hour laws in United States District Court for the Northern District of California. The complaint alleges “most minor leaguers earn between around $3000 and $7500 for the entire year despite routinely working over 50 hours per week (and sometimes 70 hours per week) during the roughly five-month championship season.” In addition, the plaintiffs assert that MLB currently recommends salaries of just $1,100 per month for Rookie and Short-Season A; $1,250 per month for Single A, $1,500 per month for Double A; and $2,150 for Triple A players. Further, minor leaguers are not paid for their required attendance at spring and winter training, nor are they paid overtime.
Despite the fact that professional baseball has long enjoyed an exemption from the antitrust laws, teams have not succeeded in asserting exemptions from federal and state wage and hour laws. As noted in the Minor Leaguers’ complaint, the Sixth Circuit rejected the argument that an MLB team is a “seasonal amusement or recreational establishment” exempt from the Fair Labor Standards Act (“FLSA”). See Bridewell v. The Cincinnati Reds, 68 F.3d 136, 139 (6th Cir. 1995), cert. denied, 516 U.S. 1172 (1996); Bridewell v. The Cincinnati Reds, 155 F.3d 828, 829 (6th Cir. 1998). (The Minor Leaguers’ complaint somewhat overstates the breadth of the holding of these, asserting that MLB has “been on notice that they are not exempt from federal and minimum wage and overtime requirements since at least 1995 and 1998, when the Sixth Circuit issued a pair of decisions making clear that the industry is not exempt.”) More recently, in 2013, the Wage and Hour Division of the US Department of Labor (“DOL”) conducted investigations into the Miami Marlins’ and the San Francisco Giants’ employment policies and practices. In response to the DOL’s findings, the Giants paid employees $545,000 in back wages and damages. The DOL announced that they are now working with MLB “to ensure that all teams are aware of and adhere to the requirements of the Fair Labor Standards Act.”
However, the lessons of the Bridewell cases and the DOL investigations have limited applicability in the Minor Leaguers’ case, since both involved low-level employees such as maintenance and clubhouse workers rather than athletes. As a result, neither the Bridewell courts nor the DOL considered exemptions under the FLSA or state law that may arguably apply to ball players or the contention — which may be MLB’s best defense — that the ballplayers are not employees at all.
As an initial matter, MLB and its codefendants (who have not yet responded to the complaint) are unlikely to persuade the court that the Minor Leaguers are exempt employees under either the FLSA or state laws. For example, although the plaintiffs are “professional” athletes, they do not qualify for the professional employee exemption under either state or federal law for several reasons: many do not earn the minimum weekly salary required to qualify for the exemption, nor do they perform intellectual work requiring advanced studies or a license from the state. Similarly, although California law recognizes an exemption for employees covered by collective bargaining agreements that meet certain minimum standards, the collective bargaining agreement applicable to major league players does not apply to minor league players and therefore cannot render such players exempt from wage and hour laws.
A stronger defense than attempting to rely on exemptions from the wage and hour laws is to assert that the Minor Leaguers are not employees at all, but rather are being given an opportunity to develop their skills, receive coaching and training that would not otherwise be available to them, and increase their chances of making it to the majors — in an arrangement akin to an internship or a position as a graduate student research assistant. (Notably, graduate student research assistants can be paid stipends without creating an employment relationship.) This analysis acknowledges the reality that professional sports differ in important ways from other industries: An opportunity to play in spring training, winter training and instructional leagues seems more similar to an unpaid internship than to a typical pay-by-the-hour job. Under this approach, rather than being cast as exploited employees, the Minor Leaguers are instead receiving — at no charge — training, experience, and “education” which will ultimately increase their chances of making it to the Major League.
The DOL and the Supreme Court, see Walling v. Portland Terminal Co. 330 U.S. 148 (1947) have adopted six factors in determining whether one is an intern or an employee:
The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
The internship experience is for the benefit of the intern;
The intern does not displace regular employees, but works under close supervision of existing staff;
The employer that provides training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
The intern is not necessarily entitled to a job at the conclusion of the internship; and
The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The Wage and Hour Division provides that “if all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern.” Further, “the more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training.” Although some of the criteria are clearly met (e.g., the players are not guaranteed employment beyond the term of their contracts), fully satisfying the above test may be a difficult task for the MLB, especially due to the fact that the MLB profits from the Minor Leaguers’ participation in the Minor League. Perhaps the greatest obstacle MLB would face in asserting that the Minor Leaguers are not employees is that the Uniform Player Contract refers to the players’ “employment.” Although terminology used in contracts does not necessarily control how a court will characterize the parties’ relationship, MLB may have difficulty persuading a judge to disregard the language of an agreement MLB drafted.
This case is anticipated to present issues that have not yet been decided by any court and that will have wide-ranging implications throughout minor league baseball and beyond. If the players are successful, the suit will likely result in significant changes in the wages and working conditions of thousands of athletes.
Leticia Halas, former college athlete and third-year law student, is currently interning with Phillips, Erlewine & Given LLP in San Francisco, California. Cari A. Cohorn is a partner with the firm. Her practice focuses on employment law, as well as sports and entertainment law.
