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Friday, July 15, 2022

MLB to pay $185 million in settlement with minor league players over minimum-wage and overtime allegations

Major League Baseball will pay $185 million to settle the federal class-action lawsuit filed by minor league players who sought pay for minimum-wage and overtime violations by teams, pending a judge approving the settlement, according to a document filed in California court Friday.

The suit, filed in February 2014 by former Miami Marlins minor leaguer Aaron Senne and two other retired minor league players, was settled May 10, three weeks before it was set to go to trial. Thousands of other players will be eligible to receive part of the $120,197,300 due to players, with the rest going to attorney’s fees and other costs.

As part of the settlement, MLB will issue a memo that allows teams to pay minor league players during spring training, and extended spring training and instructional leagues in Florida and Arizona. Teams previously had been blocked from doing so.

RoyalsRetro (AG#1F) Posted: July 15, 2022 at 09:50 PM | 22 comment(s) Login to Bookmark
  Tags: minor league pay

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   1. Gold Star - just Gold Star Posted: July 16, 2022 at 02:04 AM (#6086902)
Wow, good on ya for suing. Nothing changes unless money is at stake.
   2. Fancy Pants Handle struck out swinging Posted: July 16, 2022 at 05:06 AM (#6086904)
The fact that lawyers are sucking out over a third of the award is obscene.
   3. Ron J Posted: July 16, 2022 at 10:19 AM (#6086909)
#2 Dunno. How much do you think they'd have got with no legal representation? Bearing in mind that MLB would certainly have professionals representing them.

I have no doubt that they were overpaid this time, but it's really a matter of degree. I'm sure they were working on contingency and there's always some degree of risk in that. And the really big lawyer payouts almost invariably come when they were working on contingency.
   4. It's regretful that PASTE was able to get out Posted: July 16, 2022 at 11:06 AM (#6086911)
I can hardly believe I'm saying this about nearly two hundred million dollars, but: that's chump change, for settling a suit of this magnitude. Six million bucks per team, the cost of one year of a journeyman player's services. After taxes and fees, each of the thousands of players involved will end up with... $15,000, $20,000 maybe?
   5. Pat Rapper's Delight (as quoted on MLB Network) Posted: July 16, 2022 at 11:45 AM (#6086914)
MLB: "We really hope we don't have to turn our Rookie and Foreign Rookie leagues into 'partner leagues,' but we're going to have to find this money from somewhere so all options have to be on the table."
   6. RoyalsRetro (AG#1F) Posted: July 16, 2022 at 12:36 PM (#6086919)
Allows teams to pay? Not requires teams to pay?
   7. Walt Davis Posted: July 16, 2022 at 05:03 PM (#6086951)
#4 ... that's as much a comment on the US min wage as on the size of the settlement. The case is that they were paid less than min wage and not paid overtime. At $7.25/hour, you'd have to be underpaid by 140 hours just to get to $1,000. Work an entire year (52 weeks, 40 hrs/week) for free and you'd be owed $15,000.
   8. ReggieThomasLives Posted: July 16, 2022 at 05:59 PM (#6086969)
So they are to pay minimum wage and overtime going forward now, right? This has to be a massive increase for most minor leaguers if true. Sets base salaries at least $1,500 a month depending upon state. I know that doesn’t seem like much but that’s nearly 4x the $400/month I think some were paid.
   9. Walt Davis Posted: July 16, 2022 at 09:12 PM (#6086991)
I'm not sure I read the article correctly, but it sounded like this deal only covers California players and all players during spring training and instructional leagues (which sounds like it was unpaid "training"). As AG#1F (going retro on Retro) notes, the article text says teams are now "allowed" to pay players for those extra hours. Four years ago, your friends in Congress actually passed a law that said minor-leaguers are EXEMPT from Federal min wage and overtime laws. (I'm not sure that terrible law did anything other than re-affirm long-existing terrible law and court findings about seasonal workers, interns, trainees, etc.)

So no, minor-leaguers are still pretty screwed. Near as I can tell (not a lawyer, just an untrained loudmouth), teams just need to be more careful about meeting state law. Probably the more important change has been MLB's decision to provide room and board.
   10. Tom Goes to the Ballpark Posted: July 16, 2022 at 09:52 PM (#6086996)
I can hardly believe I'm saying this about nearly two hundred million dollars, but: that's chump change, for settling a suit of this magnitude. Six million bucks per team, the cost of one year of a journeyman player's services. After taxes and fees, each of the thousands of players involved will end up with... $15,000, $20,000 maybe?
This is a class action suit so a huge portion of the settlement is going to the lawyers. The players will probably end up with something like $5K on average.
   11. Walt Davis Posted: July 16, 2022 at 10:11 PM (#6086998)
Since we've been talking deferment and backloading in the Soto thread ... while I agree that $60 M to the lawyers is a LOT of money, at least one of these guys has worked on this for about 10 years (or so he claims). I assume it's not all he's worked on in that time but it's a long time to wait to get paid. I have no idea obviously how many hours divided up among how many lawyers -- I assume $60 M is still a very, very comfortable payday on a per-hour basis for all concerned but it is a long time. I suppose contingency suits are also a bit like pop music or TV shows or baseball -- sometimes one big hit can provide enough for a lifetime but only a handful get hits regularly and most never get a hit.

And of course in a settlement, everybody involved knows the lawyers will be taking their $60 M cut. The plaintiffs knew they were getting just $120 M. It's not like a jury awarded $180 M thinking it would all go to the players. There obviously are agency issues with the plaintiff's lawyers having an incentive to get the deal done but (a) it's the same incentive the plaintiffs have vs. the risk of a trial and (b) they're still incentivized to maximize the setllement/risk ratio.
   12. Fancy Pants Handle struck out swinging Posted: July 17, 2022 at 06:47 AM (#6087029)
#2 Dunno. How much do you think they'd have got with no legal representation? Bearing in mind that MLB would certainly have professionals representing them.

If the award had been 180k, I might agree with you. There is a zero percent chance lawyers put in 60m of work on this case. Do you think they worked 100,000 hours on this case? That's like 50 work years. And that would still be over a million per year.

And it is not like there is some lucky sod here at the other end getting the rest of the 180m. It's being syphoned of of poor schlubs who were already being paid less than minimum wage for their work. It's borderline criminal exploitation. Just because it is lawyers using the legal system, doesn't make it any better than MLB using wage theft.
   13. Ron J Posted: July 17, 2022 at 07:23 AM (#6087030)
#12 Wrong way to think of it. There are a lot of losing contingency suits (or winning suits where nobody suits). In other words, these payouts serve to subsidize other suits. Legislate against percentage based payouts and you'll make things much worse overall.

Yes, the system is seriously screwed up. What you're thinking about will make things worse.
   14. McCoy Posted: July 17, 2022 at 07:40 AM (#6087031)
The plaintiffs didn't have to agree to this kind of payday for the lawyers. They could have always paid them on an hourly rate. . .

Or found lawyers that would have taken less. . .
   15. Ron J Posted: July 17, 2022 at 08:45 AM (#6087033)
#14 Well I'm sure that you can find lawyers willing to take the case on an hourly basis -- if they judge it likely they'll win quickly. Or if they're getting regular payments when the suit (inevitably) takes substantial time.

But the people involved in this lawsuit (almost definitionally) probably don't have that kind of money available. And that's going to limit their options. They wouldn't be able to pay the lawyers if they lost. (Or at least not easily or in a timely manner).

I suspect this is the kind of thing DMN could make a comment from actual expertise. Not sure what field he's in, but I'm pretty sure he was in employment law at one point.

Given the nature of the case it's possible it could have attracted some people willing to take the case pro bono (or pick up outside funding). Didn't happen.



   16. Fancy Pants Handle struck out swinging Posted: July 17, 2022 at 10:00 AM (#6087038)
Yes, congratulations, they had no other choice that to accept these terms from the lawyers. The people who got screwed out of even making minimum wage, had to accept getting screwed again, just to recoup a fraction of what they were owned. While rich lawyers make millions off their backs, so that they can get a few thousand. That is in fact the problem.

#12 Wrong way to think of it. There are a lot of losing contingency suits (or winning suits where nobody suits). In other words, these payouts serve to subsidize other suits.

Cute, but wrong. Any lawyer worth their salt, will be able to rather quickly assess whether a suit has a high chance of winning, or a high chance of a quick settlement. They don't take losing cases, so very, very few cases actually get subsidised in this manner.
   17. Fancy Pants Handle struck out swinging Posted: July 17, 2022 at 10:07 AM (#6087039)
I suspect this is the kind of thing DMN could make a comment from actual expertise. Not sure what field he's in, but I'm pretty sure he was in employment law at one point.

David is a libertarian. I can tell you what he thinks, without asking him. Two (or more) people entered into a contract, and therefore it is definitionally fair. People who are not developmentally stunted or lawyers (but I repeat myself) should reject that framing out of hand.

Of course, David would also claim there should be no minimum wage, and that minor leaguers knew the deal when they agreed to it.
   18. JJ1986 Posted: July 17, 2022 at 10:36 AM (#6087040)
I'm pretty sure Garrett Broshuis (former minor leaguer and one of the lawyers) was the driving force behind the whole suit. He likely approached the plantiffs and not the other way around.
   19. Ron J Posted: July 17, 2022 at 12:13 PM (#6087045)
#17 Not what I meant. More about the likelihood of finding somebody competent to litigate this and willing to work for an hourly fee with payment contingent on winning.

   20. . . . . . . Posted: July 17, 2022 at 12:14 PM (#6087046)
Cute, but wrong. Any lawyer worth their salt, will be able to rather quickly assess whether a suit has a high chance of winning, or a high chance of a quick settlement. They don't take losing cases, so very, very few cases actually get subsidised in this manner.


Tell me you’ve never worked contingency or known someone who worked contingency without telling me. You’re dead wrong. It is virtually impossible to assess the merits of a case with more than rudimentary precision AT THE INITIAL STAGE WHERE YOU TAKE IT ON and by the time you can assess it after discovery you’re already into the case for an enormous amount of time and, for true contingency types, money that you had to spend out of pocket. My ex-FIL had years of basically no income after expenses.

After discovery, yeah, the value of a case is sort of obvious, and that’s why there are so many settlements after discovery but before trial, but trial is less than half of the cost (often much less) so it doesn’t solve the problem of most cases being money losers or break even.

If you want high risk cases to be pursued on behalf of poor plaintiffs - I’m not talking about assembly line horseshit PI, but real cases with real risk of losing but a real chance at a big payout - you need big contingency fees - you can argue over whether it should be 20% or 40% or whatever, but no serious person thinks it should be significantly lower than the current US practice.

There’s also a related issue. Just to use an example from a few weeks ago from my practice, two lawyers told my friend his claim was worthless and wouldn’t take the case. I say, bullshit, they’re idiots. Let me make a call for you. I brush up my knowledge and confirm my memory is correct, call the other side on his behalf, voila, he gets $3M. Keep in mind he was literally about to write it off and get a goose egg. I spent maybe 5 hours working on it, though it was only because I’ve done this for 15 years and I’m very good at it that I knew the magic way to frame it to get a good settlement offer for the client. How much should I charge?
   21. Ron J Posted: July 17, 2022 at 12:16 PM (#6087047)
#16 They're not getting screwed again. They're getting less than you think is fair but more than they'd have got without competent legal representation.

And I call bullshit on the second part of your response. Plenty of class action suits fail.

EDIT: Coke to 20 who makes my point with actual experience to back it up.
   22. Walt Davis Posted: July 17, 2022 at 04:45 PM (#6087082)
What do you think is "fair" here? The arguments made by the plaintiffs were basically (a) spring training and instructional leagues are "work" and therefore subject to min wage laws; (b) Showing up at the ballpark at noon for drills and not leaving until 11 pm after that night's game is an 11 hour workday (plus usually a 6-day work week) subject to min wage and overtime laws; (c) State min wage laws/standards apply too.

But those arguments still only apply from mid-Feb when spring training starts through early Sept when minor-league seasons wrap up (and maybe the AZ Fall League). 32 weeks, 40 hours a week, $7.25/hr is not quite $9300. But they were paid something, sounds like at least half of that, some more than that. We might be talking around $4,000-$4,500 for each affected player per season.

What years are covered? How many players? How many work hours? It would be nice if the article clarified some of these points. We do get this at the very end of the article: The suit divides the class into three groups: players who participated in spring training or extended spring training in Florida starting Feb. 7, 2009, Cal League players from Feb. 7, 2010 on and players from Arizona spring training and extended after Feb. 7, 2011.

So that's a lot of years but for most players it covers just the 6-10 weeks of spring training (extended). It covers the entire season only for Cal League players. Per the article, the judge had earlier declared they are year-round not seasonal employees -- which is interesting -- but the settlement doesn't seem to pay them for their non-seasonal "work" hours.

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