By Christopher R. Deubert, Senior Writer
Major League Baseball’s (MLB) collective bargaining agreement with the Major League Baseball Players Association (MLBPA) does not expire until after the 2026 season. Nevertheless, the rhetoric is heating up in advance of the 2025 season. In a wide-ranging January interview, MLB Commissioner Rob Manfred referred to the possibility of a league-imposed work stoppage – a lockout – as a “positive.” Tony Clark, Executive Director of the MLBPA, rejected Manfred’s statement and has since said he expects MLB to impose a lockout. The possibility of a work stoppage raises the question of whether the MLBPA would, for the first time in its history, pursue the “nuclear option” of decertifying the union and pursuing antitrust litigation.
A World Series Missed and Remembered
The specter of the 1994 players strike continues to hang over the relationship between MLB and the players union. That year, the players walked out on August 12, 1994 after extensive negotiations between the parties failed to produce a new collective bargaining agreement governing the sport. As a result, there was no World Series for the first time since 1994, drawing considerable public anger.
Principally at issue then – as now – was team owners’ desire to implement a salary cap similar to those that then existed in the NFL and NBA. The teams believed that such a cap was necessary to restrain player salaries to reasonable levels and to ensure competitive balance among the teams. By comparison, the MLBPA has generally argued that any competitive balance issues are the result of lower payroll teams’ disinterest in winning.
In December 1994, with the parties’ negotiations ongoing, MLB announced that it would unilaterally impose a salary cap and eliminate salary arbitration, an important process by which players with generally between three and six years of experience can meaningfully increase their pay.
In response, the MLBPA filed a complaint with the National Labor Relations Board (NLRB) arguing that the league’s conduct constituted an unfair labor practice in violation of the National Labor Relations Act, the federal law governing labor relations. The NLRB agreed with the players’ position and, in March 1995, sought an injunction in federal court prohibiting MLB from unilaterally making changes to the terms and conditions of players’ employment.
On April 3, 1995, Sonia Sotomayor, then-Judge for the United States District for the Southern District of New York and today a Supreme Court Justice, granted the requested injunction. Judge Sotomayor ordered MLB and its clubs to restore the terms and conditions of the expired 1990 collective bargaining agreement – under which the players had offered to continue playing – and to bargain in good faith with the MLBPA about changes to the agreement.
Judge Sotomayor’s decision saved the 1995 season, which began on April 25. The parties then played the 1995 and 1996 seasons without a revised collective bargaining agreement, before finally agreeing to one in December 1996.
Since then, MLB and the union have successfully negotiated new collective bargaining agreements on multiple occasions without the loss of games, despite an offseason lockout from December 2, 2021 to March 10, 2022.
The “Nuclear Option”
The 1994-95 work stoppage was perpetuated in part by the players’ inability to utilize legal arguments made by other players unions in disputes with their leagues.
Those arguments revolve around a concept known as the non-statutory labor exemption. The non-statutory labor exemption protects employers from potential antitrust liability for rules and policies they have collectively agreed on and which restrain a relevant labor market if those rules and policies were agreed to by a union which represents the employers’ employees.
In sports, the leagues want to restrain the player labor markets in a variety of ways, including through maximum salaries, salary caps, free agency restrictions, player drafts, and more. These restrictions are likely only legal if they are negotiated with the players. This tension between antitrust law and labor law is generally what compels both parties to negotiate comprehensive collective bargaining agreements governing the sports’ operations and which create a partnership between teams and players to grow the revenue pie they have agreed to share.
In the 1980s and 1990s, a series of cases between NFL players and the NFL established that the non-statutory labor exemption no longer applies if the union ceases to be the players’ designated representative for purposes of collectively bargaining with the league. This process is generally referred to as union decertification.
If the union decertifies, players may bring a class action lawsuit against the teams challenging the various restrictions on their labor market as antitrust violations. Such a prospect is concerning to the leagues since damages under antitrust law are tripled.
This exact series of events played out in the early 1990s. The NFL players decertified the NFLPA as their bargaining representative and then filed a class action lawsuit against the NFL and its teams. The eventual settlement of that case in 1993 brought about free agency in the NFL for the first time and included a payment to players of $200 million. The NFL got a salary cap in return.
The NFL players reformed their union after that settlement but employed the same strategy in 2011 after the league locked out the players. That same year, the National Basketball Players Association also disbanded as part of filing antitrust lawsuits amid failed labor negotiations. In each instance, the parties eventually reached a new collective bargaining agreement, dismissed the lawsuits, and agreed to the reconstitution of the unions – a necessary element for the application of the non-statutory labor exemption to the rules the leagues wish to impose.
The idea of unions voluntarily giving up their authority seemed so extreme, that it has been referred to as the “nuclear option,” including by former NBA Commissioner David Stern.
The Disarmament and Rearmament of MLB Players
Yet, the nuclear option was unavailable to MLB players in 1994 because of baseball’s historic but “aberrational” exemption from antitrust law, as described by the Supreme Court.
In the Federal Baseball case of 1922, the Supreme Court infamously ruled that baseball was not interstate commerce and therefore was exempt from antitrust scrutiny. The Supreme Court reluctantly upheld this exemption in cases in 1953 (Toolson) and 1972 (Flood), despite having previously refused to extend it to other sports and acknowledging the errors of Federal Baseball.
Consequently, MLB players historically did not have the potential to sue the league and its clubs for alleged antitrust violations like their compatriots in the NFL and NBA. The absence of this option meaningfully diminished the players’ leverage during labor negotiations with the league. Moreover, the clubs were likely emboldened in their negotiating positions by knowing that the players could not resort to antitrust litigation.
Congress recognized that this disparity in bargaining power, which was the result of an antiquated legal decision that most everyone agreed was generally incorrect, contributed to the 1994 strike that caused so much public consternation. Therefore, in the Curt Flood Act of 1998, Congress repealed the exemption insofar as it concerned MLB players but left it alone with regard to other areas of baseball (the scope of which continues to raise questions).
As a result, in all collective bargaining negotiations since 1998, MLB players theoretically had the option of decertifying the union and pursuing an antitrust class action lawsuit.
DEFCON What?
Perhaps more than ever before, it seems possible that the MLBPA will consider the nuclear option. MLB and its owners seem once again determined to obtain a salary cap. The union’s wherewithal to resist the cap has become almost part and parcel of its identity and there has never been any indication that the players are prepared to give in now.
Moreover, consider the potential role of Bruce Meyer, MLBPA’s Deputy Executive Director. Meyer, during his time at the law firm of Weil, Gotshal & Manges LLP, was an integral part of the legal team that led the NFL players’ groundbreaking decertification and litigation in the 1980s and 90s.
Meyer’s colleague in those battles was Jeffrey Kessler, the leading athlete-side litigator, now at Winston & Strawn LLP. Kessler regularly represents the MLBPA in litigation (including in a recent case concerning the scope of the union’s over agents), and has been involved in every past decertification effort by players unions. As labor negotiations unfold, Kessler and Meyer will almost certainly discuss the possibility of the nuclear option for the MLBPA. F
While the nuclear weapon analogy may seem overheated, consider that Commissioner Manfred describe an off-season work stoppage as compared to an in-season one as “like using a .22 (caliber firearm), as opposed to a shotgun or a nuclear weapon.” Clark later expressed his disapproval of Manfred’s analogy. We’ll see though whether the MLBPA ultimately responds in kind.
Deubert is Senior Counsel at Constangy, Brooks, Smith & Prophete LLP
