Major League Baseball’s (Minor) Problem

BY: JACOB BLOOM

Minor league baseball players make less per-hour than what the federal minimum wage mandates.[1] Yes, you read that correctly. Major League Baseball, which grossed a record $10.7 billion dollars of profit in 2019[2], does not feel the need to pay many minor leaguers a wage of $7.25 per hour of labor. Additionally, many of these athletes are not paid at all during their off-season and spring training.[3] How is any of this legal?

The Sherman Anti-Trust Act outlawed the predatory business practice of “wage fixing” in almost every business practice conducted in the United States. However, in 1922, the Supreme Court decided it would be prudent to provide an exemption for professional baseball in the infamous case of, Federal Baseball Club v. National League, 259 U.S. 200 (1922). Here, Supreme Court Justice Oliver Wendell Holmes established that the business of baseball is “purely state affairs". As a result, baseball was not to be considered interstate commerce, and therefore was exempt from the Sherman Anti-Trust Act.

With 32 professional teams in 17 states, one would only assume that in the following ninety-nine years, the holding of Federal Baseball Club would be overturned, right? Well, in 1953, the Supreme Court decided to reaffirm the holding of Federal Baseball Club. In Toolson v. New York Yankee, 346 U.S. 356 (1953), the court established that since Congress had not provided legislation on the matter, Major League Baseball would continue to be considered exempt as to the Sherman Anti-Trust Act.

The legal sequence of decisions rendered in Federal Baseball and Toolson, came to an end in Flood v. Kuhn, 407 U.S. 258 (1972). The court for the first time admitted that the basis for major league baseball’s antitrust exemption was tenuous, and that baseball was in fact engaging in interstate commerce. However, this admittance was worthless. In a 5-3 decision, the court stuck with the legal doctrine of stare decisis and upheld the exemption.

Where are we now? Major League Baseball players rejoiced after Congress passed the Curt Flood Act of 1998. The Act granted MLB players the same antitrust privileges and protections as their contemporaries in other professional sports. The analysis should stop there, right? Wrong. The Act only provided such protections to major league baseball players. Conversely, minor leaguers could still be subjected to wage fixing. You know, akin to those employed by the robber barons during the turn of the 20th century? This allows professional baseball team owner’s to directly collude together, with the goal of limiting the wages and salaries of minor league baseball players.

Subsequently, Miranda v. Selig, 860 F.3d 1237 (2017) was filed with the intent to prove that major league baseball owner’s open collusion with the goal to suppress wages is a clear violation of antitrust laws. What was made of this bottom of the ninth effort? The ninth circuit decided to uphold the antiquated established precedent, and the Supreme Court declined to hear the case.

After Miranda, legal experts believe that the Supreme Court wants nothing to do with this issue. “They basically said, we just don’t want to deal with this,” stated Sam Ehrlich, professor of sports law at Boise State University.[4]

However, maybe is it possible that the tides are starting to change in the favor of minor leaguers? Enter NCAA v. Alston, 594 U.S. (2021). Alston was the unanimous decision reached this past June, where the Supreme Court declared the NCAA’s limiting benefits provided to student-athletes “extinguishes the free market in which individuals can otherwise obtain fair compensation for their work”. Justice Gorsuch maintained that by limiting education-related compensation that college athletes were receiving from their schools, the NCAA was in clear violation of the Sherman Act.[5]

The court’s decision in Alston included some ever-so-subtle mentions to baseball’s antitrust exemption as well. In reference to Federal Baseball Club, the court reasoned, “that ‘exhibitions’ of ‘baseball’ did not implicate the Sherman Act because they did not involve interstate trade or commerce—even though teams regularly crossed state lines (as they do today) to make money and enhance their commercial success.”

Is the court’s sentiment in Alston not clearly an open invitation to litigants to raise the issue? Virtually all other professional sports leagues in the U.S. operate while not being privileged to such an antitrust exemption. Why should Major League Baseball be legally allowed to continue to operate like this? Supreme Court Justice Brett Kavanaugh recently stated in Alston that, “the NCAA is not above the law”, and I do not see how the MLB is either.

Writing this during the celebration of Labor Day, I cannot help but to feel disgruntled with the fact that thousands of minor leaguers have had no choice but to accept such unlivable wages for decades. Ten minor league baseball teams play this Labor Day. Ironically, many players will make below federal minimum wage for their efforts due to a decision rendered before Lou Gehrig’s rookie season. Hopefully, it will not take another century for Congress, and or the Supreme Court, to ensure fair wages for minor league baseball players.

Jacob Bloom is a 3L at Hofstra Law School. He can be found on Twitter @bloom_jacob.

[1] https://www.washingtonpost.com/sports/2021/07/16/minor-league-baseball-player-pay-low/ [2] https://www.cnbc.com/2019/12/22/report-mlb-revenue-for-2019-season-a-record-10point7-billion.html [3] https://www.washingtonpost.com/sports/2021/07/16/minor-league-baseball-player-pay-low/ [4] https://www.washingtonpost.com/sports/2021/07/16/minor-league-baseball-player-pay-low/ [5] https://www.jdsupra.com/legalnews/ncaa-v-alston-the-beginning-of-the-end-9351737