GRIEVANCE AND SALARY ARBITRATION IN BASEBALL
I. INTRODUCTION
Under the collective bargaining agreement (CBA) between Major League Baseball (MLB
or “the League”) and the Major League Baseball Players Association (MLBPA or “Union”), most
disputes between a Player and his Club, a Player and the League and between the Union itself
and the League are decided through the grievance arbitration process detailed in the CBA.
Additionally, as will be detailed below, the MLBPA, like all of the Unions in the 4 major
professional sports, has gradually assumed jurisdiction and control over the certification of
agents, disputes between players and agents and, most recently, over disputes between
agents. This paper will to provide an overview of the grievance arbitration system in baseball,
both under the collective bargaining agreement and these MLBPA Regulations, and will also
discuss MLB’s unique salary arbitration system.
II. GRIEVANCE ARBITRATION UNDER THE MLB CBA
The most recent collective bargaining agreement between Major League Baseball and
the MLBPA broadly defines a “Grievance” as “a complaint that involves the existence or
interpretation of, or compliance with, any agreement, or any provision of any agreement,
between the Association and the Clubs or any of them, or between a Player and a Club.” (Article
XI A (1) (a)). Only matters relating to MLB’s Benefits Plan and the Agreement with the Union
regarding dues check-off are exempted from this broad definition and all “grievances” are
subject to the grievance arbitration procedure detailed in the CBA.
Although the MLB Benefits Plan and the dues check off agreement are only exceptions
to grievance arbitration that listed, the CBA also states that “notwithstanding” this grievance
definition, the Commissioner retains the power to act in the “best interests of the game” to
discipline Players for actions “involving the preservation of the integrity of, or the maintenance of
public confidence in, the game of baseball.” (Article XI A (1) (b)). Where the Commissioner
decides to exercise this “best interests of the game” authority, the disciplined Player is entitled
to “just cause” review of the Commissioner’s decision. (Article XII B). While the language of the
CBA provides that the disciplined Player’s challenge to the Commissioner’s decision is subject
to the same procedures as all other grievances, the Player’s challenge is heard by the
Commissioner himself and not an independent arbitrator. (Article XI A (1)(b)). This language,
on its face, would appear to make the Commissioner in baseball the judge and jury in “best
interests of the game” cases. The parties appear to have recognized this possible interpretation
of the language, because in Attachment 1 to the CBA, the Commissioner “assures” the players
that his “best interests” powers do not give the Commissioner the power to negate a Player’s
rights under the CBA. This Attachment, which was also present in the expired CBA, suggests
that a Player can secure review from an independent arbitrator when he files a grievance
challenging “best interests” discipline meted out by the Commissioner. (See also John Rocker
decision discussed below).
The CBA also exempts from grievance arbitration claims by Players under paragraph
3(c) of the Uniform Player’s Contract (UPC). Under paragraph 3©, “the Player agrees that his
picture may be taken for still photographs, motion pictures or television at such times as the
Club may designate and agrees that such pictures shall belong to the Club and may be used by
the Club for publicity purposes in any manner it desires”. This clause goes on to provide that
“the Player further agrees that during the playing season he will not make public appearances,
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participate in radio or television programs or permit his picture to be taken or sponsor
newspaper or magazine articles or sponsor commercial products without the written consent of
the Club, which shall not be withheld except in the reasonable interests of the Club or
professional baseball.” Hence, where a Club uses a Player’s name or likeness in a
“commercial” manner, as opposed to promoting the Club or for publicity purposes, the Player
could file suit claiming the Club and/or League violated his right of publicity. The line between
‘promotional” or “publicity” activities and “commercial” activities under paragraph 3© has been
the subject of some litigation, but remains, at best, a murky area (See Shamsky v. Garan, Inc.,
632 N.Y.S. 2d 930 (N.Y.Sup.Ct. 1995)) and is beyond the scope of this paper.
In addition to establishing somewhat different procedures to handle grievances
challenging discipline by the Commissioner under his “best interests” powers, the CBA also
establishes “Special Procedures” for challenges to fines or suspensions imposed on a Player
“for conduct on the playing field or in the ballpark.” (Article XI C). Examples of such
conduct include charging the mound, intentionally throwing at a hitter and bumping an umpire.
With certain exceptions, a Player’s appeal from any fine or suspension in such cases is heard
by the Senior VP, Standards and On-Field Operations, who works out of the Commissioner’s
office. Such hearings are expedited and do not follow the same procedures as other grievances
(Article XI C (1)(a)-(c)), unless the fine exceeds $10,000 and/or the suspension exceeds 10
days. In those situations, the same procedures applicable to appeals from “best interests”
discipline taken by the Commissioner are applicable. (Id.)
In a 1996 grievance case involving Montreal Expos player Larry Walker, the question
arose whether a player suspended for on-field behavior should be paid his salary during his
suspension. Larry Walker was suspended by the Commissioner for 4 days for charging the
mound. After paying Walker under protest, the Expos filed a grievance to recoup the pro-rated
portion of Walker’s salary. Chairman Zumas found that the Commissioner had “exclusive
jurisdiction” over such on-field discipline and because of the long-standing “practice” of paying
players during such suspensions, he denied the Club’s grievance so that Walker WAS paid
during his 4-day suspension. The new CBA appears to “reverse”, in part at least, the Walker
decision, as it contains a clause providing that for certain egregious “on-field” conduct, the
discipline can include a suspension WITHOUT pay. (Article XII E(3)(c).) In that circumstance,
the Player can file a grievance under the same procedures applicable to non-Commissioner
actions so that the suspension without pay will receive “just cause” review by an independent
arbitrator. (Id.)
III. CASE LAW UNDER BASEBALL’S GRIEVANCE ARBITRATION SYSTEM
Under traditional labor law principles formulated by the United States Supreme Court in
the Steelworkers Trilogy cases, absent “positive assurance” that the parties did not intend the
complaint to be heard in the grievance arbitration process, the complaint will be subject to
grievance arbitration under the collective bargaining agreement. Application of these principles
to baseball has meant that Arbitrators and not the Courts have resolved some of baseball’s
biggest and most significant issues, including free agency (Kansas City Royals Baseball Corp.
v. Major League Baseball Players Ass’n, 523 F.2d 615 (8th Cir. 1976) and the free agent
collusion cases in the late 1980’s.
Application of traditional labor principles to baseball has also led to case law confirming
that a grievance Arbitrator will be given great deference when the losing party challenges that
Arbitrator’s decision in the courts. In Major League Baseball Players Ass’n v. Garvey, 532 U.S.
504 (2001), the United States Supreme Court, in the strongest terms, reaffirmed the general
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principle that the decisions of an arbitrator are rarely disturbed. The Court held that absent
dishonesty, fraud or manifest disregard of the law (meaning “willful inattentiveness of governing
law”), an Arbitrator’s factual findings will not be disturbed even where those factual findings are
“improvident, even silly”. Id. at 509. Moreover, in those “rare instances when an arbitrator’s
procedural aberrations rise to the level of affirmative misconduct”, the court should remand,
rather than reverse the Arbitrator’s findings. Id. at 510.
IV. ARBITRATOR IMPOSED LIMITS ON REVIEW OF MANAGEMENT DECISIONS
While the Supreme Court in Garvey made it clear that courts should defer to an
Arbitrator’s rulings in a grievance arbitration matter filed under MLB’s CBA, Arbitrator’s
themselves have limited their own review of certain adverse actions taken by a Club against a
Player. As such, where a Player claims his contract was terminated or that he was optioned to
the minor leagues for reasons other than “skill and ability”, in a series of grievances filed by
Players, the Arbitrators have held that so long as there was a rational, good faith basis for the
Club’s decision to terminate the contract or option the Player to the minor leagues, the Club’s
decision would not be disturbed. Examples include a case involving a Cleveland Indians
catcher, Andy Allanson, who argued that his contract was terminated due to his Union activities.
In rejecting Allanson’s grievance, the Arbitrator found that the Club had a rational basis for
concluding Allanson should be released due to his lack of skill and ability. In another case
involving a pitcher for the Toronto Blue Jays, Dennis Lamp, the Arbitrator denied Lamp’s claim
that the Blue Jays released him during the season so they could avoid paying certain
performance bonuses he was likely to earn had he remained on the Club for the entire season.
Here again, applying limited review of management’s “baseball judgment”, the Arbitrator found a
“rational basis” for the Team’s decision to release the player and denied the grievance.
Arbitrators have not applied the same deference to management’s decisions in so-called
“injury grievances”, which are the most common grievance filed by players under the CBA. In
these cases, the Player claims that his contract was terminated or that he was optioned to the
minor leagues (where the rate of pay would be far lower assuming he had a split contract)
because he was “injured and unable to play” at the time of the termination or option. In these
cases, the Arbitrator will weigh what is often conflicting medical evidence, along with conflicting
testimony from the Player and the Club about the severity of his injury. If the Arbitrator
concludes that at the time of the termination or option, the player was “injured and unable to
play”, he will sustain the grievance and order the Club to pay the player the amount due under
his contract plus interest.
V. DISCIPLINE FOR OFF-FIELD CONDUCT
Under the UPC signed by all players on the 40 man roster, the Player makes a
“pledge...to the American public and to the Club to conform to high standards of personal
conduct, fair play and good sportsmanship” (UPC at 3(a)). A Player can be suspended or have
his contract terminated if he violates this contractual provision. (UPC at 7(b)(1)). These socalled “morals clauses” pose difficult jurisdictional and substantive issues. From a jurisdictional
standpoint, the CBA provides that while BOTH the Club and the Commissioner have the power
to discipline a Player for off-field conduct that violates his “morals” clause,, the Club can only
proceed with its discipline “when the Commissioner defers the discipline to the Club.” (Article XII
B). Even after the grievance process has begun, the Commissioner has the power under the
CBA to transfer jurisdiction from the standard procedures applicable to Club imposed discipline
to himself and this “jurisdictional” decision is not subject to review. (Article XI A(1)(b)).
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From a substantive point of view, the issue raised in such cases is whether the off-field
conduct of the Player in the particular case warrants the discipline imposed. In the John Rocker
case, the Commissioner exercised his “bests interests” power to suspend Rocker for all of
spring training until May 1, 2000 WITH PAY. He also ordered Rocker to make a $20,000
contribution to the NAACP and to participate in diversity training. This discipline was based on
Rocker’s racist, anti-foreigner and homophobic statements during the off-season that appeared
in a Sports Illustrated article. The MLBPA, on behalf of Rocker, filed a grievance, arguing that
the discipline was without “just cause”. The case was heard by a Panel consisting of a
representative from the Commissioner’s office, the MLBPA and an independent arbitrator,
Chairman Shyam Das.
Applying the “just cause” standard of review, Chairman Das initially rejected the Union’s
claim that “off-duty speech” could not be the basis for discipline either under the UPC or under
the Commissioner’s “best interests” power. While recognizing that “speech may require special
consideration when cited as misconduct”, Chairman Das reasoned that a player’s First
Amendment right to “speak his...mind regardless of the offensive or hateful nature of the speech
does not, under a just cause standard, necessarily preclude an employer from appropriate
disciplinary action where such speech, even if off-duty, has a negative impact on the employer’s
business.” He concluded that “the mark must be set high both with respect to the offensive
content of the speech and the harm caused by the speech”, but that this high mark had been
met with regard to Rocker’s comments; therefore, the Commissioner did have just cause to
discipline him. Chairman Das went on, however, to assess whether the discipline was
“reasonably commensurate with the offense” and on this question, concluded that even though
the suspension was with pay, it was disproportionate to the offense. Chairman Das therefore
reduced Rocker’s suspension from 73 days to 14 and reduced the charitable contribution he
was required to make from $20,000 to $5,000. He did sustain the requirement that Rocker
receive diversity training. Chairman Das cited the far lesser penalties that had been given to
players involved in Pittsburgh’s drug trials in the 1980’s in support of his conclusion that the
Commissioner’s discipline lacked “proportionality”.
VI.. EXPANSION OF GRIEVANCE ARBITRATION UNDER 2010 MLBPA REGULATIONS
Citing the need for greater control over the conduct of agents and their representatives,
the MLBPA adopted sweeping new regulations in 2010 which, among other things, brought
nearly all disputes between a player and his agent and an agent against another agent under
the “grievance arbitration” procedures set forth in the regulations. Enactment of these new
regulations all but insures that claims by one agent that another agent intentionally interfered
with that agent’s existing contract with a player, as well as the enforceability of a restrictive
covenant in an agent’s contract with an Agency,, will be decided through MLBPA’s grievance
arbitration process. The new regulations also, for the first time, attempt to regulate the activities
of “recruiters” of players as well as individuals who provide “Client Maintenance Services” on
legal, accounting and financial matters. The regulations have received very little attention to
date, but are almost certain to result in numerous arbitration cases in the future.
VII. SALARY ARBITRATION
The new CBA continues baseball’s unique salary arbitration process. Under this
system, all players with 3 or more years of major league service time, but less than 6 years of
service time (the years of service that entitles a Player to become a free agent), are entitled to
have their salary for the upcoming season decided by a panel of 3 Arbitrators. Additionally, the
top 22% in terms of major league service time of players with 2 or more years of service time
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(so-called “Super 2” players) are also arbitration eligible. The new CBA increased the number
of Super 2 players who will be arbitration eligible, as under the prior CBA only the top 17% of
the 2+ service class were arbitration eligible. Since the salaries of first-time arbitration eligible
players rise anywhere from a couple hundred thousand dollars to 20 times their pre-arbitration
salary (Ryan Howard was awarded $10 million, up from $690,000, when he became a Super 2
first-time eligible player), the addition of even 5-10 additional players to the eligibility pool under
the expanded definition of a Super 2 player is a significant and under-publicized “win” for the
MLBPA.
The CBA sets forth the procedure for filing for salary arbitration and the date the Club
and the Player exchange salary figures. A Hearing is then scheduled before a Panel of 3
Arbitrators who are required to choose EITHER the Club’s salary number OR the Player’s salary
number. The CBA sets forth the criteria the Arbitrators should use in determining which of the 2
proposed salary numbers is closer to the player’s “value” when compared with other
“comparable” players. (Article VI F).
In recent years, the number of cases that have actually gone to hearing has markedly
declined. In 2013, not a single case went to hearing and in 2011, only 3 cases went to hearing.
One of those cases involved Pirates pitcher Ross Ohlendorf who, despite a 1-12 won loss
record in the preceding season and a career won-loss mark of 13-25, asked the Arbitrators to
award him a salary of $2,025,000. The Pirates offered $1.4 million so that the mid-point
between the 2 proposed salary numbers was $1,712,500. Apparently, the Arbitrators
concluded, based upon the salaries of other comparable players, that Ohlendorf’s proposed
salary figure was closer to his value; therefore, he was awarded his salary figure of $2,025,000.
Unfortunately, the attorney who tried this case for the Pirates was yours truly.
VIII. CONCLUSION
As the above discussion reflects, the law of baseball has often been determined by
Arbitrators under the collectively bargained grievance arbitration process. Additionally, due to
baseball’s unique salary arbitration process, the growth in player salaries has, in part at least,
also been the result of a collectively bargained for system that places the amount of a player’s
salary in the hands of Arbitrators. The MLBPA’s expansion of its jurisdiction to virtually all
matters relating in any way to agents who represent the Union’s membership (the players) will
only serve to further the importance of the grievance arbitration process in setting the “rules of
law” that govern the “sport” of baseball.
LARRY A. SILVERMAN
DICKIE, McCAMEY & CHILCOTE, P.C.
2 PPG Place, Suite 400
Pittsburgh, PA 15222
[email protected]
412-392-5322
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