Analyzing MLB’s Decision to Dismiss Arbitrator in the Wake of Controversial Decision

Jun 1, 2012

Shyam Das should have seen it coming. His position as Major League Baseball’s independent arbitrator was in jeopardy from the moment he announced his decision to overturn Milwaukee Brewers outfielder Ryan Braun’s 50-game suspension for violating MLB’s drug policy. True to form, less than three months after Das ruled against the league, MLB exercised its right to unilaterally terminate him after 13 years of service.
If it’s any consolation, Das’ tenure as MLB’s independent arbitrator was longer than any of his 12 full-time predecessors (MLB has also had a number of special independent arbitrators). Several arbitrators quit under pressure and others, like Das, have been fired by MLB for rulings that have raised the ire of management.
 
Peter Seitz was the first recipient of MLB’s wrath after his landmark decision in the Andy Messersmith and Dave McNally cases. For almost a century prior to the Seitz decision, teams included a clause in the standard players’ contract – paragraph 10A, commonly referred to as the reserve clause – that allowed them to renew expiring contracts for a period of one year. Because teams normally refused to allow players to play without signing a new contract, the reserve clause had the effect of binding a player to one team during their entire career. The clause effectively eliminated competition for players’ services and not-so-coincidentally kept salaries in check.
 
Messersmith, pitching for the Los Angeles Dodgers, and McNally, who retired as a member of the Montreal Expos during the 1975 season, refused to sign contracts for the 1975 season. With the support of the Players’ Association, they claimed to be free agents at season’s end. MLB disagreed and the dispute was submitted to Seitz for a decision. Seitz delayed announcing his decision while imploring the parties to settle the dispute. When they refused, he ruled in favor of the players. MLB promptly fired Seitz and appealed his decision to the U.S. District Court for Western Missouri which upheld Seitz’s ruling, and the Eighth Circuit Court of Appeals, which affirmed the District Court’s decision (532 F.2d 615 [8th Cir. 1976]).
 
Two other arbitrators were unilaterally dismissed by MLB for ruling against the teams in the infamous collusion cases. First Tom Roberts – once – then George Nicolau – twice – found that the owners colluded against free agents during the three off-seasons after the 1985, 1986 and 1987 seasons. Owners and players eventually agreed to settle all three collusion cases for $280 million, plus interest, but MLB summarily fired Roberts after his decision in Collusion I and Nicolau was terminated after he ruled in Collusion II and III.
The list of arbitrators removed by MLB doesn’t end there. Owners also fired Richard Bloch, who reduced suspensions against several players for using cocaine in the 1980’s, and Raymond Goetz who overturned Commissioner Bowie Kuhn’s 1980 suspension of Texas Rangers’ pitcher Ferguson Jenkins for possession of illegal drugs in Toronto.
It should be pointed out that it is common practice in collective bargaining agreements to give either side the right to fire independent arbitrators. Therefore, it hardly benefits the arbitrator to lean too far to one side or the other in their decisions. While MLB hasn’t always terminated an arbitrator immediately after an adverse ruling, history suggests that ultimately, termination is in fact the consequence of decisions that go against the league. Of course, that’s never the stated reason for terminating an arbitrator.
 
When Rob Manfred, MLB’s executive vice president for labor relations, first notified Das that he was being removed, he declined to comment publicly. However, three days later, speaking after the owners’ quarterly meetings, Manfred explained the decision to fire Das this way: “Shyam served for 13 years. That’s a very long time. He’s a very high-quality arbitrator. We made a decision to exercise our contractual right to make a change. There’s nothing more to that.” Those comments beg the question: If Das is such a “high-quality” arbitrator, then why terminate him?
 
Manfred’s comments sound eerily similar to a statement made in 1995 by John Westoff, then a lawyer with MLB’s Player Relations Committee. After notifying Nicolau that his nine-year term as the independent arbitrator was over, Westoff said, “It was not a reaction to any specific decisions. We just felt it was time to move on.” Manfred, who was the owners’ lead labor negotiator in 1995, added, “We were at the point in our relationship where we thought it was good to have someone with a fresh eye.” Translation: Nicolau ruled against us once too often and we hope his successor will be more inclined to see things our way.
 
The statements by Westoff and Manfred were mild – and almost certainly inaccurate – compared to Manfred’s comments immediately after Das announced his decision in the Braun case. The arbitrator ruled that the collector violated the drug policy protocol agreed to by MLB and the MLBPA when he stored Braun’s specimen in his basement for 48 hours before sending it to the lab for analysis. In Das’ opinion, such action violated the language in the drug policy, which states “absent unusual circumstances, the specimens should be sent by Fedex to the laboratory on the same day they are collected.”
Manfred said that while MLB agreed with the process of allowing a neutral third party to review disputes, “MLB vehemently disagrees with the decision…” Of course, Manfred contradicted himself. If you respect the process, you must also respect the decision, even when you disagree with it.
 
Das is a well respected graduate of Harvard and Yale University Law School and has served on a number of high-profile arbitration cases. He hasn’t commented publicly on his firing, perhaps because he has other pressing issues to deal with. As the arbitrator for the NFL since 2004, he was busy preparing for a grievance hearing in the New Orleans Saints bounty case at the time he was terminated by MLB.
 
MLB’s response to Das’ decision was similar to its reaction throughout the 40-plus years baseball has had an independent arbitrator: Shoot-the-messenger. If Das is as “high-quality” as Manfred claimed, he almost certainly saw it coming.
 
Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is a Professor and Chair of the Sport Management Department at SUNY Cortland and teaches the Business of Sports at the University of Wyoming. Jordan can be reached at jkobritz@mindspring.com.
 


 

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