Minimum Wage in the Minor Leagues: Is Minor League Baseball Exempt from the Requirements of the Fair Labor Standards Act?

Posted on by Ellen Horne

Major League Baseball (MLB) is currently defending itself in a lawsuit brought by former Minor League baseball players.1 The plaintiffs allege, among other things, that the MLB has violated the Fair Labor Standards Act (FLSA) by failing to pay Minor League players minimum wage and overtime pay.2

 

Currently, every MLB team has at least six Minor League affiliate teams, or one in every level of the Minor League system.3 The MLB team pays the salaries of all of a Minor League affiliate’s players and coaches, while the owner of the affiliate team focuses on the operations side of the team—managing the stadium, selling tickets, and promoting the team.4 In Senne v. Kansas City Royals Baseball Corp., the plaintiffs claim that most Minor League players make only $3,000 to $7,500 per season, putting them well below the federal poverty level, despite consistently working 50- to 70-hour weeks.5 Players are not paid at all during mandatory “spring training” prior to the start of the Minor League season.6 Though the Major League Baseball Players Association (MLBPA) is considered one of the strongest unions in professional sports, the union does not represent Minor League players, so they miss out on some of the protections afforded to players in the minor leagues of other professional sports.7

 

One of the central questions in the current lawsuit concerns the nature of the business of Minor League Baseball. Section 213(a)(3) of the Fair Labor Standards Act allows an exemption for seasonal employees of an “amusement or recreational establishment.”8 The MLB and other professional sports organizations have long claimed to be covered by this exemption, and the MLB has stated that Minor League Baseball is not intended to be a career, but a “short-term seasonal apprenticeship in which the player either advances to the Major Leagues or pursues another career.”9

 

There is little case law on the subject, but the Sixth Circuit has struck down the argument that a Major League Baseball franchise qualifies for the “seasonal employee” exemption under §213(a)(3).10 An entity seeking to qualify for the seasonal exemption must show either that it operates fewer than eight months out of the year or that its average receipts from any six months out of the year were less than 33% of its average receipts from the other six months of the year.11 In Bridewell v. Cincinnati Reds, the Sixth Circuit concluded that the Cincinnati Reds did not qualify for the exemption because the team’s receipts in the off-season were more than 33% of its in-season profits and, by virtue of its 120 year-round employees, the team operated year-round.12 The Eleventh Circuit, on the other hand, has held that a Minor League Baseball franchise can qualify for the seasonal employee exemption.13 In Jeffery v. Sarasota White Sox, it made no difference that the plaintiff in the case was employed year-round because “the critical question is whether or not [the] [d]efendant’s business is truly seasonal.”14 The court found that the Minor League franchise team did not operate for more than seven months out of the year, despite employing some staff year-round.15 For the many players who play for a Minor League team but whose salaries are paid by the affiliate MLB organization, it is unclear how the Ninth Circuit will rule on the issue, and what effect a change in the law might have on the business of Minor League Baseball.

 

 

 

  1. Senne v. Kansas City Royals Baseball Corp., 315 F.R.D. 523, 529 (N.D. Cal. 2016). ↩

  2. Josh Leventhal, MLB States its Defense in Minor League Players Lawsuit, Baseball America (June 11, 2014), http://www.baseballamerica.com/minors/mlb-states-its-defense-in-minor-league-players-lawsuit/#IKRX8yBoYj5IvxrJ.97. ↩

  3. Mark Stanton, “Juuuussst A Bit Outside”: A Look at Whether MLB Owners Can Justify Paying Minor Leaguers Below Minimum Wage Without Violating the Fair Labor Standards Act, 22 Jeffrey S. Moorad Sports L.J. 727, 740 (2015). ↩

  4. Id. ↩

  5. Zachary Zagger, Minor League Teams Take Swing At Blocking Wage Claims, Law 360 (June 30, 2016, 10:09 PM), http://www.law360.com/articles/812797/minor-league-teams-take-swing-at-blocking-wage-claims. ↩

  6. Id. ↩

  7. Ted Berg, Many Minor League Baseball Players Earn Less Than Minimum Wage, USA Today (March 8, 2015, 6:40 PM), http://ftw.usatoday.com/2015/03/minor-league-baseball-players-lawsuit-mlb-mlbpa. ↩

  8. Lucas J. Carney, Major League Baseball’s “Foul Ball’: Why Minor League Baseball Players Are Not Exempt Employees Under the Fair Labor Standards Act, 41 J. Corp. L. 283, 301 (2015). ↩

  9. Blair Kerkhoff, MLB, Congress Strike Back at Minor-League Ballplayers Suing for More Pay, The Kansas City Star (June 30, 2016, 7:19 PM), http://www.kansascity.com/sports/mlb/article87033022.html#storylink=cpy. ↩

  10. Bridewell v. Cincinnati Reds, 68 F.3d 136, 138 (6th Cir. 1995). ↩

  11. Carney, supra note 8 at 301. ↩

  12. 68 F.3d at 138. ↩

  13. Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593 (11th Cir. 1995). ↩

  14. Id. at 594 (citing Brock v. Louvers and Dampers, Inc., 817 F.2d 1255, 1259 (6th Cir. 1987. ↩

  15. Id. ↩

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