Minor League Baseball and the Supreme Court Load the Bases for College Athletes

by Adam Drapcho, Associate Member, University of Cincinnati Law Review Vol. 91

I. Introduction

On September 6, 2022, minor league baseball players shocked the baseball world by announcing that minor leaguers had voted to unionize.¹ Minor leaguer players’ push to unionize was bubbling below the surface of the sport for years. Players in the lower levels of the richest baseball league on the planet were subject to poor living conditions and wages below the poverty line.² With recent blockbuster unionization movements from Amazon and Starbucks employees,³ along with the unionization of the National Basketball Association’s minor league equivalent,⁴ the momentum was finally there for the minor league baseball unionization movement to cross home plate.

This monumental vote will change the lives of thousands of baseball players. Combined with a recent Supreme Court decision, it also has the potential to reach beyond baseball and inspire college athletes to follow in their footsteps.⁵ This article first provides background on the circumstances that led to the long-awaited step of unionization in the minor leagues, followed by a discussion of the legal parallels between minor leaguers and college athletes. Finally, the article analyzes how the parallels between the two situations may incentivize the NCAA to defy conventional wisdom and voluntarily recognize a union to protect itself from future antitrust lawsuits.

II. Background

Baseball fans have long been aware of the grueling path that minor league players have to endure to make it to “the show”. People often think of the hours in the batting cages, the long bus rides for away games, and the years spent wondering if the dream of being in the big leagues will ever come to fruition. However, many players were often subject to more than just the typical grind of an athlete with a dream. Recent reports uncovered players struggling to survive on their low wages, which were often straddling the poverty line.⁶

The tide began to shift in 2014 when a class of players sued Major League Baseball (“MLB”), alleging that the MLB violated the minimum wage and overtime provisions of the Fair Labor Standards Act.⁷ In Senne v. Kansas City Baseball Corp., a class of players attempted to undercut the MLB’s minor league pay structure by alleging that they were paid below minimum wage, not paid overtime, and not paid at all during the offseason despite mandatory training.⁸

Using federal wage laws to go after the MLB was a creative attempt to get around the league’s antitrust exemption that it has enjoyed since 1922.⁹ The Supreme Court granted the MLB an antitrust exemption on the basis that baseball games were intrastate commerce and do not fall under federal antitrust legislation.¹⁰ After many years of weakening the exemption, the Curt Flood Act of 1998 essentially gutted the exemption relating to major league players and their rights under antitrust legislation.¹¹ However, the Curt Flood Act upheld the exemption for minor league players.¹² This meant that if minor leaguers wanted to challenge their employment conditions, antitrust law was still not a viable legal basis to rely on.

While the case was ongoing, the MLB slowly began to implement improvements. The MLB reorganized the minor league system by decreasing the number of teams and grouping the remaining teams in leagues with smaller geographical footprints.¹³ The change resulted in reduced travel and modest pay increases.¹⁴ Some teams responded to the pressure generated by the lawsuit by providing housing or housing stipends for players.¹⁵

In July of 2022, the players were handed a huge victory when the parties in Senne announced that they had come to a $185 million settlement.¹⁶ The payout for each individual is not as eye-popping as the headline number, but the announcement was a momentum boost that had the players’ effort to improve working conditions rounding third base and heading for home.¹⁷ Shortly after the settlement was approved by a judge, the players voted overwhelmingly to unionize.¹⁸

College athletes find themselves in a similar situation to minor leaguers. Many college athletes are compensated just a fraction of the value they provide for their schools, and any compensation cannot be paid through salaries because of their status as amateurs.¹⁹ However, a recent Supreme Court decision has the potential to shift the landscape of college athletics. In NCAA v. Alston, the Supreme Court held that the NCAA violated the Sherman Antitrust Act when it restricted the education-related benefits a student athlete may receive.²⁰ The holding was narrow – it solely addressed education-related benefits because that was the only antitrust violation at issue before the Court.²¹ However, Justice Kavanaugh’s concurrence did not exactly disguise its coverage in inviting further antitrust lawsuits challenging the NCAA’s amateurism rules.²² He also suggested that these issues could be avoided through collective bargaining, hinting at the nonstatutory labor exemption as a solution to compensate athletes and protect the NCAA from antitrust law.²³

The nonstatutory labor exemption grew out of an issue created by collective bargaining agreements that necessarily restrict competition.²⁴ This created a conflict between two public policies – meaningful collective bargaining and free competition.²⁵ In response, the courts developed the nonstatutory labor exemption, which shields certain restrictions contained in collective bargaining agreements, such as pay and hours, from antitrust laws.²⁶ This exemption gives labor and employers the ability to agree to certain terms that would otherwise be considered antitrust violations.²⁷ In the next section, this article discusses why the NCAA may consider collectively bargaining with student athletes to invoke this antitrust exemption.

III. Discussion

A successful antitrust lawsuit striking at the heart of the NCAA’s amateurism rules would raise a host of complex practical issues.²⁸ The NCAA would be left scrambling to figure out which athletes would get paid, how much they would be paid, whether athletes of all sports qualify, and more. If college athletes begin to make a serious push towards collective bargaining, the NCAA could take Justice Kavanaugh’s advice and consider hashing out an agreement with the athletes and use the nonstatutory labor exemption to shield itself from future antitrust litigation.

Unlike the MLB, the NCAA is not protected by an antitrust exemption.²⁹ In fact, it now has a target on its back with the threat of antitrust litigation essentially endorsed by a Supreme Court Justice.³⁰ However, the nonstatutory labor exemption is a potential lifeboat for the NCAA. If the NCAA opens itself up to a labor agreement with college athletes, it would be able to bring restrictions that are currently vulnerable to antitrust challenges under the umbrella of the exception. The NCAA could potentially retain its most valuable restrictions through a compensation structure with college athletes that allow both sides to accomplish their goals. Admitting that athletes are employees would be a significant concession for the NCAA, but it may be the organization’s best chance to keep itself protected from antitrust challenges.

IV. Conclusion

Minor league baseball players had faced low wages and poor conditions for almost the entirety of MLB history. Whispers of unionization had spread as the MLB’s revenue exploded with little tickling down to the minor leaguers. The players finally took action against the MLB with a major lawsuit aimed at increasing pay,³¹ and the resulting settlement provided the last boost the players needed for a successful union vote. College athletes have found themselves in a similar situation with even more leverage. A Supreme Court Justice has openly suggested that the NCAA’s definition of amateurism violates antitrust laws, and that collective bargaining may be the best way for players to receive their fair share of a university’s revenue.³² Because of the nonstatutory labor exemption and its ability to insulate the NCAA from future antitrust litigation, college athletes may find a more willing negotiating partner than they previously thought.

Cover Photo by Chris Chow on Unsplash

Adam Drapcho

Adam Drapcho is a Citations Editor for the 2023-2024 academic year. After working for the City of Cincinnati's Law Department, the Cincinnati Public School’s Office of General Counsel, and Lazarus & Lawson, he is interested in labor and employment law and government law. In his free time, Adam likes to root on the Cleveland Guardians, Ohio State Buckeyes, and Cincinnati Bearcats.

References

1
Jeff Passan, Majority of Minor League Baseball Players Turn in Union Authorization Cards, Paving Way for MLBPA Membership, ESPN (Sept. 6, 2022), https://www.espn.com/mlb/story/_/id/34534778/majority-minor-league-baseball-players-vote-support-union-paving-way-mlbpa-membership-sources-say.
2
Brittany Ghiroli, Cockroaches, Car Camping, Poverty Wages: Why Are Minor-Leaguers Living in Squalor?, The Athletic (Aug. 5, 2021), https://theathletic.com/2750280/2021/08/05/cockroaches-car-camping-poverty-wages-why-are-minor-leaguers-living-in-squalor/.
3
Beverly Banks, Minor League Baseball Union Is ‘Game Changing,’ Experts Say, Law360 (Sept. 15, 2022, 9:55 PM), https://www.law360.com/articles/1530870/minor-league-baseball-union-is-game-changing-experts-say.
4
Mike Vorkunov, How the NBA G League Union is Putting More Power in the Hands of its Players, The Athletic (Apr. 20, 2021), https://theathletic.com/2404327/2021/04/20/how-the-nba-g-league-union-is-putting-more-power-in-the-hands-of-its-players/.
5
Banks, supra note 3.
6
See Ghiroli, supra note 2 (describing players spending eighty percent of their income on housing, living in team clubhouses, sleeping in cars, and more).
7
Lauren Berg, MLB, Minor Leaguers Ink $185M ‘Starvation’ Wage Deal, Law360 (July 15, 2022, 11:30 PM), https://www.law360.com/articles/1512283/mlb-minor-leaguers-ink-185m-starvation-wage-deal.
8
Senne v. Kansas City Royals Baseball Corp., 105 F.Supp. 3d 981, 992 (N.D. Cal. 2015).
9
Banks, supra note 3. See generally Fed. Baseball Club, Inc. v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200 (1922) (holding that the then-separate American and National Leagues were exempt from antitrust legislation because baseball exhibitions were primarily intrastate commerce).
10
Fed. Baseball Club, Inc. v. Nat’l League of Pro. Baseball Clubs, 259 U.S. 200, 208 (1922).
11
Earl W. Kintner, Joseph P. Bauer, William H. Page & John E. Lopatka, Federal Antitrust Laws, § 74.2 (vol. 2, 2021).
12
Id.
13
Banks, supra note 3.
14
Id.
15
Id.
16
Berg, supra note 7.
17
Dorothy Atkins, MLB, Minor Leaguers’ $185M Wage Deal Gets Initial OK, Law360 (Aug. 19, 2022), https://www.law360.com/articles/1522835/mlb-minor-leaguers-185m-wage-deal-gets-initial-ok (“The average recovery for each class member would be $5,000 to $5,5000 . . . ”).
18
Passan, supra note 1.
19
Nat’l Collegiate Athletic Ass’n, 2021-2022 NCAA Division I Manual, NCAA Bylaws art. 12.1.2 (2021), https://web3.ncaa.org/lsdbi/reports/getReport/90008.
20
NCAA v. Alston, 141 S. Ct. 2141, 2166 (2021).
21
Id.
22
Id. at 2167-68.
23
Id. at 2168.
24
Brown v. Pro Football, 518 U.S. 231, 237 (1996).
25
Julian von Kalinowski, Peter Sullivan & Maureen McGuirl, Antitrust Laws and Trade Regulation, [Vol. 6] Ch. 54, § 54.03 (Matthew Bender, 2022).
26
Id.
27
Id.
28
Id.
29
Id.
30
Alston, 141 S. Ct. at 2168.
31
Berg, supra note 8.
32
Alston, 141 S. Ct. at 2168.

I. Introduction

II. Background

III. Discussion

IV. Conclusion

Author

References

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