In the eight years since the farm team players filed their Complaint, many of the threshold issues have been resolved. Most importantly, the Court determined that the California players are “employees” who perform “work” and are thus entitled to the protections of California wage and hour laws. The further implications of this decision remain to be seen.
Farm Team System Paid Starvation Wages
From the outset, the lawsuit has focused squarely on the farm team system. The minor leaguers alleged that the reserve clause in their contracts, which allowed teams to retain the contractual rights to players for their entire careers. effectively permitted the franchises to depress wages.
For 100 years, all major league baseball teams have used an extensive “farm system” to develop players. Each franchise stockpiles around 150 to 250 minor leaguers. At any given time, the franchises collectively employ around 6,000 minor leaguers in total in hopes that some will eventually develop into major league players.
According to the initial Complaint, most minor leaguers earn between around $3,000 and $7,500 for the entire year despite routinely working over 50 hours per week, The total hours may be as much as 70 hours per week during the roughly five-month championship season. The players routinely receive less than minimum wage and there is no overtime pay. The players also receive no salaries during spring training, even though they are often required to work more than 50 hours per week. Similarly, they are not paid during instructional leagues or winter training.
The defendant league and franchises raised a number of procedural arguments bearing on whether the players could be treated as a class for the purpose of a class action lawsuit, and whether the MLB, itself, could be held liable as a joint employer. Their substantive argument, though, was essentially that playing baseball in the minor leagues was not a job. Rather, it was more akin to education and training for which no wages need be paid or entertainment, which is generally governed by contract.
Court Reduces Issues – What Remains?
In February 2020, the Northern District bifurcated the individual claims from the class and collective claims. The individual claims will be tried at a later date. Secondly, the Court held that the minor league players are employees who perform work under the law and are thus entitled to the protections of California wage and hour laws. Finally, it determined that the MLB could be held liable as a joint employer. The Court ruled in favor of the California players on threshold liability issues and wage statement claims.
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- Whether the defendant league and franchises’ conduct was willful;
- The amount of work and resulting damages for minimum wage and overtime violations;
- Whether any of the defendants are entitled to wage credits;
- Whether, for the federal Fair Labor Standards Act (FLSA) claims, the defendants’ seasonal and amusement exemption bars any recovery;
- Liquidated damages, prejudgment and post-judgment interest, attorneys’ fees and costs as permitted by law for all classes and the FLSA collective;
- An updated amount of wage statement penalties under California Labor Code Section 226 to take into account the 2021 California League season;
- Waiting time penalties under California Labor Code Section 203; and
- Injunctive or declaratory relief to award to the class after the jury reaches its verdict; and
- The penalties to award under California’s Private Attorneys General Act for defendants’ violations of Labor Code Sections 201-204, 208, 226, 510, 558, 1194, and 1197.
The California players seem poised for a solid victory, at least in principle. Questions remain, however, about the further implications for other athletes, including student athletes in California. In addition, the decisions could have implications for as other young workers, whose employment may be misclassified as education and training.