By Jordan Kobritz
Buried on page 1,967 of a 2,232-page federal spending bill passed in March 2018 was a provision titled “Save America’s Pastime Act.” It exempts Minor League Baseball (MiLB) players from the Fair Labor Standards Act (FLSA), which essentially guarantees employees the federal minimum hourly wage and overtime pay when they work more than forty hours in a week.
It’s debatable if Major League Baseball (MLB) – which pays the salaries of MiLB players – with estimated revenues of $10 billion in 2017 needed “saving” at the time. But MLB didn’t want to pay its Minor Leaguers minimum wage and overtime pay during the season, nor any wage at all during spring training or for time spent in post-season play or in instructional leagues.
In an effort to bolster its case to Congress, MLB recruited MiLB team executives to lobby their Senators and Representatives, the underlying threat being if MLB was forced to comply with the FLSA, they would require teams to pay a portion of the increased cost.
The impetus behind the Save America’s Pastime Act was the Senne case, brought by three former MiLB players who maintained they had been underpaid in violation of FLSA requirements. Passage of the bill gave MLB a huge win, at least on the federal level, but left intact those portions of the suit that were based on minimum wage laws which exist on the state level.
Last week, it was the plaintiffs’ turn to taste victory. The Supreme Court refused to hear an appeal by MLB, which let stand a 9th Circuit U.S. Court of Appeals ruling granting a request for Class action status. The decision allows all affected players to join as plaintiffs, rather than bring individual lawsuits against MLB.
Senne now focuses on recouping wages for time spent in Spring Training and post-season instruction in Florida and Arizona, and for those MiLB players who played on teams in California.
Unlikely as it may have seemed in 2018, last year MLB made a commitment to increase the salaries of Minor Leaguers from 38% to 72%, depending on their level of play, beginning in 2021. But rather than force MiLB teams to contribute to the increase directly, MLB instead is taking over the Minors and at the same time moving to eliminate 42 – or 25% – of the MiLB teams. While many of the communities whose team will be contracted may lose their connection to professional baseball, the savings will effectively cover MLB’s announced pay increase.
In fairness to MLB, they no longer have a $10 billion/year industry, thanks to the pandemic. MLB teams are expected to lose between $100-200 million in revenue this year and the prospects for a rebound in 2021 are uncertain, at best. Should MLB lose the Senne case, teams could be on the hook for tens-of-millions of dollars in back pay and interest to upwards of 15,000 players.
While a final decision in Senne may be years away and the plaintiffs’ success is hardly guaranteed, whenever David (MiLB players) takes on Goliath (MLB), any victory is welcome.
Jordan Kobritz is a non-practicing attorney and CPA, former Minor League Baseball team owner and current investor in MiLB teams. He is a professor in the Sport Management Department at SUNY Cortland and maintains the blog, sportsbeyondthelines.com. The opinions contained in this column are those of the author. Kobritz can be reached by email at jordan.kobritz@cortland.edu.
