Over the past few years, some of the contracts that major league baseball players have received are mind-boggling: $252 million to Alex Rodriguez, $217 million to David Price, and $210 million to Max Scherzer, to name a few. Therefore, it might come as a surprise that major league baseball is facing a lawsuit claiming that they pay certain players too little.
The lawsuit alleges that minor league baseball players are being paid below minimum wage and are not receiving overtime pay, in violation of the Fair Labor Standards Act (FLSA). The FLSA requires employers to pay employees at least $7.25 an hour, although some states have raised the minimum wage above this. Certain employees are exempt from this requirement, but they must make at least $47,476 and work in managerial or executive positions or work in specific industries like agriculture or domestic service. The FLSA also requires employers to pay employees 1.5 times their hourly wage for each hour of overtime (i.e. more than 40 hours in a week) worked.
For those unfamiliar with baseball, the minor leagues are developmental leagues which consist mostly of younger players just out of high school or college. So, for example, a major league team like the Cubs will send a baseball player they just drafted out of high school to the minor leagues to learn how to become a better baseball player. While major league baseball players must receive at least $507,500, there either is no minimum salary for minor league players or it is very low. The lawsuit alleges that many minor league players receive an annual salary of around $3,300.
The lawsuit was initially filed in 2014 and is pending in federal court in San Francisco. In October, the judge presiding over the case allowed it to be brought as a collective action lawsuit, which means that the players have to opt-in in order to be plaintiffs in it.
Some minor league players have expressed concern that if they opt-in to the lawsuit, they may be demoted or released by their teams. If a team were to do this, it would be violating the law. It is illegal for an employer to take negative action against an employee for filing a lawsuit to receive minimum wage or gain the protection of any other employment law.
Major league baseball lobbyists are pushing Congress to amend the FLSA to make minor league baseball one of the occupations that is exempt from the law. Employers are not required to pay employees in a number of occupations minimum wage, including farm workers, those who care for the elderly, newspaper deliverers, and employees of seasonal or recreational occupations. While Major League Baseball has argued that minor league players are employed in a seasonal and recreational occupation, the minor league players are challenging this argument in their lawsuit, prompting Major League Baseball to lobby Congress to have the FLSA amended to specifically exempt minor league players.
Stay tuned to The Workplace Report for updates on this lawsuit.