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Minor league baseball players sue over wages and contracts

The class action alleges that Major League Baseball and its teams conspire to violate antitrust laws and keep minor league salaries artificially low.

(CN) — Major League Baseball and its 30 franchise teams are the target of a class action that claims they conspire to keep the salaries of minor league players artificially low and unfairly restrict players from negotiating their contracts.

The proposed class, which is led by plaintiff Daniel Concepcion, could include thousands of minor leaguers.

In a 59-page complaint filed in Puerto Rico federal court Monday but released Tuesday, the class alleges that the MLB and its major league baseball teams act as a cartel to keep minor league players’ salaries below market rates.

The MLB exploits minor leaguers by “paying anti-competitive, fixed salaries below minimum wage, by not paying overtime wages, and by often paying no wages at all,” the complaint states.

The league allegedly inserted a “reserve clause” into players’ contracts that allows teams to retain the contractual rights to players for seven years. The clause restricts players' ability to negotiate with other teams for their baseball services and limits the compensation they receive, according to the lawsuit.

The clause leaves players with “nonexistent contractual mobility," the class says.

The complaint claims that most minor leaguers earn less than $16,000 per calendar year, with some earning less than $12,000 annually. Players are allegedly only compensated during the roughly five-month championship season but are still required to perform professional services on a calendar year basis. Minor league players are not paid during the annual spring training or during other training periods, the complaint says.

Minor leaguers have no union or collective bargaining agreement. The complaint alleges that efforts to unionize have been unsuccessful due to fears of retaliation.

“Defendants reap huge financial rewards as a result of their monopsony power and restraints on competition. The minor league players who have no union, no collective bargaining, and no free agency, are at a competitive disadvantage and need the protection of the antitrust laws to stop the financially superior defendants from continuing to give the minor league players the short end of the bat,” the lawsuit states.

The alleged pattern of exploitation extends to the MLB’s decision to reduce the number of minor league teams and the number of players the teams will employ.

The complaint alleges that the league’s decision to eliminate 40 of the 160 minor league teams effective November 2021 serves to “further reduce competition in the payment of minor league players.”

The actions undertaken by the league as a monopsony – the sole buyer of the players’ labor – violate the Fair Labor Standards Act, antitrust laws and Puerto Rico labor laws, the class alleges.

The plaintiffs have asked the court to find that the judicially created “business of baseball” exemption to the Sherman Antitrust Act is unconstitutional. The exemption was created as part of a century-old U.S. Supreme Court ruling which found that baseball is not subject to the Constitution's commerce clause.

A separate lawsuit filed against the MLB in December also challenged the baseball exemption.

The MLB did not immediately respond to a request for comment Tuesday afternoon.

The class is seeking unpaid minimum wages and overtime wages, as well as damages under the Fair Labor Standards Act and Puerto Rico labor laws.

The plaintiffs demand an injunction requiring the league to pay compensatory damages for all noncompetitive wages, an order preventing the continuation of allegedly unlawful policies and an order blocking the enforcement of the contract clause which restricts players’ movement and compensation.

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