By Cari A. Cohorn
The class action wage and hour lawsuit initiated in February 2014 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 has now expanded to include claims made by 32 current and former minor league players against every team in the league.
The upshot of the players’ complaint is that MLB and its member teams have allegedly violated the minimum wage and overtime provisions of the federal Fair Labor Standards Act and of California, Florida, Arizona, North Carolina, and New York state laws. Central to these claims are the allegations that most minor leaguers earn roughly $3000-$7500 per year, despite routinely working over 50 hours each week during the regular season and that they are not paid at all for their required attendance at spring and winter training.
The players also assert related claims, such as for alleged violations of record-keeping requirements and statutes governing the timeliness of wage payments. The most noteworthy of the ancillary claims is a request for civil penalties pursuant to California’s Labor Code Private Attorneys General Act (“PAGA”). PAGA allows employees to collect, in addition to any unpaid wages or other damages, civil penalties for violations of California’s wage and hour laws. Note that PAGA penalties can be assessed against non-California employers who send their employees to California to perform work, but only in connection with the work performed in California. PAGA penalties can add up fast. By way of example, a California employer who fails to pay overtime to each of its 100 employees over the course of one year can be liable for penalties well into the six figures — in addition to the unpaid wages and interest.
By the end of May 2014, MLB, Commissioner Selig, and the organizations that own and operate 29 of the League’s 30 teams have filed their initial responses to the plaintiffs’ complaint. (Baltimore Orioles, Inc. and Baltimore Orioles, L.P. — the only defendants not represented by Proskauer Rose, the law firm representing MLB — have stipulated that they will respond by June 13.)
The thrust of all defendants’ responses thus far is that the lawsuit was filed in the wrong court. One group of defendants — the Red Sox, White Sox, Indians, Nationals, Tigers, Braves, Phillies, Pirates, Yankees, and Rays — moved to dismiss the action for lack of personal jurisdiction. They argue that, although the Major League teams play a few games each season in California, the Minor League teams affiliated with these defendants do not. Defendants assert that their Minor League teams conduct no business in California and that “any contacts between the Moving Defendants and Minor League Players in California are simply a function of where Plaintiffs choose to live during the offseason.” As such, according to defendants, courts in California lack the power to adjudicate this dispute.
To oppose this motion, plaintiffs will have to prove that the defendants have had enough contact with California — and that those contacts are sufficiently related to plaintiffs’ claims — that it is fair and reasonable to require defendants to defendant themselves in a California court. It is not unusual in this situation for the court to allow plaintiffs who request the opportunity to do so to conduct discovery into defendants’ contacts in California before responding to defendants’ motion to dismiss.
The other defendants — MLB, Selig, and the rest of the teams — answered the complaint, while simultaneously moving to transfer the case to the Middle District of Florida, where Minor League Baseball’s headquarters are located. Interestingly, even the teams based in California joined in this motion.
In support of the motion to dismiss, defendants argue that many more witnesses and evidence are located in or near the Middle District of Florida than in the Northern District of California. Among other things, defendants assert that 30 Minor League teams are based in Florida — with 23 in the Middle District alone — compared to 12 teams in California and only 1 in the Northern District. Further, most Minor League players sign their contracts and spend up to four months a year at spring training facilities, all of which are located in either Florida or Arizona. Notably, the defendants who moved to dismiss the lawsuit for lack of personal jurisdiction in California joined in the motion to transfer, admitting the Middle District of Florida has personal jurisdiction over them.
Finally, each of the defendants who have answered the complaint asserted 29 or more affirmative defenses, foreshadowing some of the battles to come. As is typical in wage and hour cases, defendants contend that, among other things, there is no basis for class-wide or collective action, that the players are exempt from wage and hour laws as “professionals” and/or seasonal amusement workers, and that some of the time for which the players seek compensation does not count as “hours worked” for purposes of the wage and hour laws.
Long before reaching the merits of those defenses, however, we can expect the parties and court(s) to contend with defendant’s assertion that the Uniform Player Contract requires the players to arbitrate their claims rather than litigate in court. The Contract does, in fact, provide that the “sole and exclusive forum” for resolution of disputes between a player and a team arising under the contract is “arbitration by the Commissioner.” Thus, defendants will almost certainly file a motion to compel arbitration, and the players will argue that the arbitration provision should not be enforced.
This litigation is now in the bottom of the first, in what may well be a lengthy and hard-fought matchup. Procedural wrangling over the proper forum for the dispute will likely last for months before discovery and litigation of the substance of the claims and defenses begin in earnest — and it remains to be seen whether he substance will be addressed in court or in arbitration.
Cari A. Cohorn is a partner in the San Francisco office of Phillips, Erlewine & Given LLP. Her practice focuses on employment law, as well as sports and entertainment law.
