Malpractice Case Reveals Limits of MLB Arbitration Clause

Jan 26, 2024

By Christopher R. Deubert, Senior Writer

Ryan Costello was a promising young baseball player.  After being drafted in the 31st round of the 2017 MLB Draft by the Seattle Mariners, and later traded to the Minnesota Twins, he worked his way through the clubs’ A and AA affiliates.  Sadly, his career was cut short when he was found dead in his hotel room in November 2019 while in New Zealand preparing to participate in the Australian Baseball League.  His parents’ efforts to obtain justice for his death first had to contend with MLB’s arbitration clause.

A Missed Diagnosis

In February 2022, Costello’s parents sued Dr. David Olson, a Twins’ team doctor, in Florida state court alleging his medical malpractice led to Costello’s death.  Specifically, Costello’s parents allege that as part of a 2019 spring training physical, an electrocardiogram (EKG) revealed that Costello had cardiac abnormalities.  Further, Costello’s parents claim that Costello should have undergone more testing before being allowed to participate in any strenuous activities.  Nevertheless, Dr. Olson allegedly marked Costello’s health report as “Normal” with “No Further Action Necessary,” clearing Costello to return to spring training.

Costello’s parents claim that the abnormalities were later determined to be Wolff-Parkinson-White syndrome, “a cardiac condition that is treatable but that can make vigorous physical activity dangerous and potentially fatal.”  Indeed, Costello’s death was apparently caused by a cardiac arrythmia, a condition connected with Wolff-Parkinson-White syndrome.

The MLB Arbitration Clause

Dr. Olson moved to compel the action to arbitration according to the arbitration provision in the Major League Agreement (MLA), also known as the Major League Constitution.  The MLA was incorporated by reference into Costello’s minor league player contract. 

Before going further, it is important to understand the context of this arbitration provision.  Major league players have long been unionized and, as a result, negotiate collective bargaining agreements governing the terms and conditions of their employment, including relevant arbitration clauses.  Minor league players did not unionize until 2022 and did not have a collective bargaining agreement until 2023 (and which is not yet publicly available).  Consequently, prior to that point, minor league players were subject to the terms unilaterally imposed by MLB, its major league clubs, and their minor league affiliates.  Some of those terms, like the arbitration provision, are included in the MLA, which is simply an agreement among the 30 MLB clubs.

The arbitration provision at issue stated as follows:

“All disputes and controversies related in any way to professional baseball between Clubs or between a Club(s) and any Major League Baseball entity(ies) (including in each case, without limitation, their owners, officers, directors, employees and players), other than those whose resolution is expressly provided for by another means in this Constitution, the Major League Rules, the Basic Agreement with the Major League Baseball Players Association, or the collective bargaining agreement with any representative of the Major League umpires, shall be submitted to the Commissioner, as arbitrator, who, after hearing, shall have the sole and exclusive right to decide such disputes and controversies and whose decision shall be final and unappealable.”

Major League Constitution, Art. VI, Sec. 1.

Consequently, as explained by the District Court of Appeal of Florida, “the arbitration provision applies to disputes that are related in any way to professional baseball and that are between either: (1) two or more Clubs; or (2) one or more Club(s) and one or more Major League Baseball entity(ies).”  Christopher v. Olson, 2023 WL 8502753, at *2 (Fla. App. Dec. 8, 2023).  Importantly, the court reiterated that “[b]oth ‘Clubs’ and ‘Major League Baseball entity(ies)’ include their respective owners, officers, directors, employees and players.”  Id.

The Courts’ Decisions

The trial court granted Dr. Olson’s motion to compel, relying on Wolf v. Rawlings Sporting Goods Co., 2010 WL 4456984 (S.D.N.Y. 2010), in which the Southern District of New York, applying the same arbitration provision, also granted a motion to compel arbitration.  In Wolf, a former minor leaguer sued MLB, Minor League Baseball and a variety of other parties after his skull was fractured by a pitch that he said was the result of a defective helmet.

In a December 8, 2023 decision, the District Court of Appeal of Florida, Sixth District, disagreed and reversed.  In its reading, the present action “is a dispute between a player of a Club and an employee of the same Club.  It is an “intra-Club dispute” and such disputes are not within the scope of the arbitration provision.  The court also differentiated Wolf, asserting that the claims there “plainly fell within the scope of the arbitration provision.”

The case was remanded to the trial court for further proceedings.

The Missing Defendant?

Notably, Costello’s family did not sue the Twins.  Such claims are typically barred by workers’ compensation statutes, which generally provide the exclusive avenue for resolving disputes over workplace injuries, including deaths.  It is unknown whether Costello’s family is pursuing a workers’ compensation claim through either the Florida or Minnesota workers’ compensation divisions.

Future Claims Preempted?

The claims by Costello’s family are notable for preceding the collective bargaining agreement between minor league baseball players and MLB.  Had a collective bargaining agreement been in place, Dr. Olson may have tried to argue that Costello’s family’s claims were preempted by the agreement, a common defense by sports leagues and teams against tort claims by players.  The success of that argument would depend in part on the scope and depth of the agreement’s provisions concerning medical care.  The more extensive they are, the more likely that tort claims against medical staff could be required to be decided according to the dispute resolution provisions in the agreement.

* * *

The still-to-be disclosed collective bargaining agreement covering minor league players likely contains a dispute resolution provision that will supplant reference to the Major League Constitution.  Nevertheless, the Costello case is another reminder of the importance of drafting broad arbitration agreements in the employment context, particularly in light of increased judicial scrutiny.

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