Monday, August 31, 2015
The district court granted MLB an initial victory in the Chen case last year, determining that FanFest was not subject to the FLSA and therefore was immune from the federal minimum wage and overtime requirements. Now, in a recent decision issued earlier this month, MLB has scored yet another victory with the Second Circuit Court of Appeals affirming the trial court’s finding that the FLSA does not apply to FanFest.
However, while the Chen decision certainly represents an important decision with respect to the rights of FanFest volunteers, the appellate court’s recent opinion appears unlikely to have a significant impact on the other minimum-wage lawsuits pending against the league. Therefore, the various lawsuits challenging both MLB’s minor league and scout pay practices remain very much alive despite the recent rulings in the FanFest case.
The appellate court based its recent decision in the FanFest case on a relatively obscure provision in the FLSA, Section 213(a)(3), which states that seasonal “amusement or recreational establishments” — typically those that operate seven months or less per year — are not subject to the law’s minimum wage or overtime provisions.
In particular, MLB had argued that the 2013 FanFest at issue in the case qualified as a seasonal establishment under Section 213(a)(e) since it lasted five days, and clearly provided patrons with amusement or recreational services. Thus, MLB argued, FanFest was immune from the FLSA’s minimum wage and overtime requirements.
Tuesday, July 07, 2015
Who would ever believe teams would collude to suppress pay?
In a new class action lawsuit filed last week in New York federal court, former Kansas City Royals scout Jordan Wyckoff contends that MLB teams have unlawfully agreed not to compete with one another for the services of their amateur and professional scouts. As a result, the suit – Wyckoff v. Office of the Commissioner of Baseball – asserts that a number of MLB scouts currently make less than the minimum wage and are not paid overtime, even when working more than 40 hours in a given week.
Wyckoff alleges that these practices not only violate the FLSA, but that they fail to comply with both federal and state antitrust law as well.
Wyckoff’s complaint (available here) begins by accusing MLB and its teams of forming an illegal conspiracy to decrease the competition for scouts. In particular, the lawsuit contends that MLB prevents its teams from negotiating with or hiring away any scout currently under contract with another franchise, unless that team has expressly granted the scout permission to talk with other clubs. Wyckoff asserts that teams will typically only grant permission in cases where the new franchise would be giving the scout a promotion (such as by hiring another team’s area scout as one of its cross-checkers), and alleges that even then teams have been known to fire a scout simply for requesting permission to talk to another club.
Similarly, the lawsuit also notes that whenever a high-level executive is hired away from one franchise by another — such as when the Padres hired A.J. Preller from Texas last year — the two teams will often agree that the departing executive will not bring other employees (including scouts) with him from his former employer.
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