‘Complex’ $185 million Major League Baseball deal closes minor leaguer pay saga

SAN FRANCISCO (CN) — Major League Baseball will pay big in a sprawling class action over whether minor leaguers qualify as year-round employees, after a federal judge repudiated the league's contention that they're seasonal workers.

Arron Senne, who played for a Miami Marlins farm team in Jamestown, New York, first filed a lawsuit eight years ago against then-Commissioner Bud Selig and 30 major league clubs accusing them of violating the Fair Labor Standards Act. He claimed minor league players earn a meager $3,000 to $7,500 per season and are not paid overtime or compensated for off-season work, including spring training.

In March 2022, U.S. District Judge Joseph Spero awarded the class of minor league players nearly $1.9 million in penalties, finding the league failed to comply with California wage statement requirements. He also found Major League Baseball separately liable for violating Arizona’s record-keeping law.

Spero ruled MLB exercises significant control over hiring and firing, players’ schedules and setting minimum salaries, which supported the players’ contention that MLB is a joint employer with minor league teams under federal labor laws. He also declined to apply the “amusement exemption” to the players' federal and Florida, Pennsylvania and Maryland state law labor claims, rejecting MLB's argument that they shouldn’t be paid for time spent playing at training facilities considered to be amusement or recreational establishments. 

Spero gave preliminary approval to the parties’ settlement for a total fund of $185 million — including incentive awards of $15,000 for each class representative and $7,500 for named plaintiffs — in August 2022. After objections came in, the court held a final fairness hearing in February.

In a 36-page order released Wednesday, Spero said that he would approve the final settlement and motions for attorney fees, overruling all objections to the deal. He noted that after more than 20,000 people were given notice, there was a “huge response” to the settlement with 13,106 calls of interest.

The judge also awarded $55.5 million specifically for attorneys’ fees and $4,654,538.33 in litigation costs. One objector had challenged the plaintiffs’ request to use 30% of the common fund on attorneys’ fees, saying “57,072.7 hours spent by over 30 attorneys was excessive, unnecessary, and duplicative.”

Spero said that in common fund cases, the 25% benchmark for fee awards is merely a “starting point for analysis." He said the plaintiffs’ attorneys devoted 54,988 hours to the case and “achieved exceptional results for the class," creating a settlement fund that is “about 89% of the class members’ unpaid wages on their class claims.”

He added, “The settlement also secures meaningful and significant injunctive relief for the class."

Spero said the class attorneys had to work hard for their clients. 

“Plaintiffs secured these results despite facing far more risks than average. This case was very complex and required a high level of skill on the part of class counsel. It involved nearly 70 parties and multiple state and federal laws in an unsettled area of law. It required a complex method of estimating hours worked in the absence of time records. It required the ability to overcome procedural motions and to conduct complicated and extensive discovery. It required deft appellate advocacy and the ability to distill the case for summary judgment and to prepare," Spero wrote.

Spero also granted the requests for incentive awards and to set aside $995,000 for settlement administration expenses. 

Both sides must meet and file a joint proposed judgment per Spero’s order. Attorneys representing the players and Major League Baseball did not respond to emails seeking comment.

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