The current collective bargaining agreement between Major League Baseball and the Major League Baseball Players Association is set to expire at 11:59 p.m. ET on Dec. 1. It is expected that MLB will institute a lockout following the CBA’s expiration, and the lockout could threaten the 2027 season. Sportico’s Michael McCann, who is an attorney and a law professor, breaks down the potential legal fallout of a lockout in two parts. Below is Part I, which analyzes the outlines of the labor dispute and the legal questions confronting MLB and management. Part II, which will run on Monday, will look more closely at the player and labor side of the legal question.
1. What’s the Dispute About?
At the core, the disagreement between MLB and MLBPA is about money, and who gets it.
MLB contends cost controls are needed to bridge the wide gap between teams that spend massive amounts of money on payroll and those that spend comparatively little. According to Spotrac, the New York Mets’ player payroll this year is $328 million, while the Cleveland Guardians’ is $80 million. MLB has reportedly proposed a salary cap and salary floor of $245 million and $171 million, respectively. In other pro sports leagues, there are salary caps and maximum salaries, which are depicted as helping to promote fair play and leveling the playing field.
MLB also seeks such measures as caps on the length of player contracts so they can’t extend beyond five years (for a player joining a new team) or six years (for a player staying with their team). The league also proposed an increase of the minimum MLB salary from $780,000 to $1 million and requiring that players be at least 20 years old and two years removed from high school before signing contracts with MLB organizations.
The union insists these and other demands would harm the sport, saying MLB seeks to “reduce player compensation by billions of dollars” as well as “eliminate fundamental rights with a salary cap” and “destroy the amateur entry process.” Along those lines, the MLBPA says a cap system would “eliminate the free market” as part of a desire to suppress player salaries and maximize the profits of teams and owners.
2. How Can a Lockout Be Legal?
Even if on the surface they appear to be unfair to players, lockouts are legal when they’re in support of a legitimate bargaining position.
A lockout is when an employer refuses to allow employees to work and thus be paid. It is intended to pressure union members into acquiescing to management’s demands. MLB players will literally be “locked out” of showing up at spring training facilities and ballparks to perform their employment contracts. To mitigate the financial impact, players’ associations usually create a lockout fund that pays players a portion of their salary during a work stoppage.
MLB seeks changes to its economic relationship with the union. The U.S. Supreme Court has held that lockouts are permissible when they bring “economic pressure to bear in support of” a “legitimate economic position.”
Lockouts can become illegal and deemed unfair labor practices if they interfere with employees’ rights to collectively bargain.
Although it didn’t garner as much attention as the current dispute, MLB locked out players on Dec. 1, 2021. The lockout lasted three months and eight days. It led to a shortened spring training and a delayed opening day, but the entire 162-game schedule was played. The NFL, NBA and NHL have all turned to lockouts this century.
3. Does a Lockout Have to Happen on Dec. 1?
No.
A lockout, just like a strike, is a choice.
When a CBA expires, many provisions, including those governing wages and medical benefits, continue. In fact, they could continue for years during what is coined the “status quo period.” This period is mandated by labor law and the National Labor Relations Board and during it, a league can’t unilaterally impose new rules for wages, hours and other working conditions.
In my work in law, I was part of a labor-management dispute during which the status quo period lasted for years. Things functioned as normal. It is not uncommon, at least outside of sports, for a CBA to expire and for not much to change until a new CBA is negotiated.
Even in pro sports, leagues and players’ associations have operated for years in status quo. Most notably, U.S. Soccer and the U.S. Men’s National Soccer Team went years (2018 to 2022) between the expiration of one CBA and agreement on a new one. The team played games and operated as usual during that stretch.
Status quo continues until a new CBA is reached or the parties reach an impasse after good-faith bargaining.
4. Could MLB and the MLBPA Operate in Status Quo?
Yes, but don’t expect that to happen.
MLB seeks substantial changes to the economics of baseball, including a salary cap, max contracts and other features that MLBPA opposes. MLB does not want to continue with the terms of a current CBA, aka the status quo. That said, if the two sides are close to a deal as Dec. 1 nears, MLB could postpone a lockout.
5. How Discouraging Is It That the Sides Appear Far Apart?
It’s not a good sign that MLB seeks major changes and that the MLBPA appears steadfastly opposed, but don’t forget there’s a lot of time in between now and Dec. 1.
The league and union are waging a battle to shape public opinion, with the league asserting the changes it seeks would make MLB more like other major pro leagues, and players saying already-wealthy owners just want more money. A lot of that discourse, including what will be depicted as news in media stories about the negotiations, is noise and hyperbole. The two sides will bargain behind closed doors, and away from journalists and influencers, and eventually reach a compromise both can live with.
Along those lines, recall the recent labor dispute last year involving the WNBA and WNBPA. The two sides seemed far off, and both were very PR-conscious. The dispute lasted months, but they reached a deal without any games being lost.
6. Could MLB Teams Lay Off Scouts and Other Personnel?
MLB teams can always make staffing decisions, lockout or not. A lockout could eventually lead to a lengthy cessation of business operations, which might lead teams to lay off or furlough employees, or reduce employees’ pay. During the COVID-19 pandemic, MLB teams engaged in all those employment reduction practices.
But the pandemic was different from a labor dispute in key ways. There was no certainty on when the pandemic would end or how the sports world would operate in the months and years afterward. That’s not true of a labor dispute, which could end at any time with an immediate return to normal business. Eliminating front office jobs that would need to be filled again might not be a smart move, since it would mean cutting ties with seasoned and skilled employees.
7. Could Congress or the President Force MLB to End the Lockout?
No.
Neither Congress nor the president has the authority under federal law, the U.S. Constitution or case precedent to compel a private sports league to end a dispute with its unionized players.
This is not President Ronald Reagan firing air traffic controllers. Nor is this the NLRB, under President Barack Obama, suing Boeing for plans to relocate a plant from Washington to South Carolina.
This is a labor dispute involving a sports league and its players. It will end when the league and players figure out a solution.
8. Could Congress or the President Pressure the Sides to Reach a Deal?
Sure, and that probably will happen to some degree.
Baseball has a storied history in our country, most teams have taxpayer-funded stadiums, and many jobs, including people employed at restaurants and bars near ballparks, could lose business if games are missed in 2027. The prospect of a lost season would aggravate some members of Congress and their constituents.
Congress has also shown an affinity for weighing in on sports disputes—consider the airtime members of Congress receive when sermonizing on the state of college sports. They are no doubt aware that major sports and news media will cover whatever they say.
But there’s some risk for Congress to weigh in too aggressively on a private sports league dispute featuring billionaire owners and millionaire athletes—the average MLB player salary is $5.34 million. This isn’t a labor dispute involving steel workers, auto plant assembly-line employees or teachers. Baseball is an entertainment product that, while popular, is not essential to the economy.
That concern seems especially true at a time when many everyday Americans face real-time, real-world concerns like higher grocery and gas prices and rising housing and education costs.
9. What Could Congress Actually Do?
The big card held by members of Congress is threatening MLB with rescinding what’s left of MLB’s antitrust exemption. This is a familiar playbook.
In Federal Baseball Club v. National League (1922), the U.S. Supreme Court held that professional baseball is exempt from antitrust scrutiny. The ruling has long been criticized as out of step with basic understandings of the law, and the court later refused to extend the exemption to other sports, including football, basketball and boxing.
Decades later a baseball player, Curt Flood, challenged the exemption, but in 1972, the Supreme Court upheld the exemption under the doctrine of stare decisis. That phrase refers to the idea the court must adhere to precedent, and precedent from 1922, even if arguably wrong, must be followed. The court added that Congress and the president could use the lawmaking process to repeal or reduce the scope of the exemption.
A quarter century later, Congress passed, and President Bill Clinton signed into law, the Curt Flood Act. The act narrowed the scope of MLB’s antitrust exemption, most notably by eliminating the exemption’s application to MLB players’ employment. The exemption continues for certain other topics, including minor league baseball, the amateur draft, franchise relocation and ownership sales. MLB has argued the exemption has benefited fans, since owners can’t threaten a league with an antitrust lawsuit to relocate.
Congress could introduce legislation to repeal the remainder of the exemption. Whether there would be sufficient political support is unknown, but Congress could use that threat to urge MLB to strike a deal with the MLBPA.
For the most part, however, the antitrust exemption doesn’t play a meaningful role. The Curt Flood Act means the exemption no longer applies to MLB players’ employment—the topic of the lockout.
10. Could MLB Challenge the MLBPA in the Legal System?
Yes, and there’s a playbook for that.
In February 2011, a month before the NFL CBA would expire and the NFL would lock out players, the league filed an unfair labor practice charge (ULP) with the NLRB. The NFL claimed the union was not bargaining in good faith.
The NBA, which locked out its players later in 2011, similarly filed a ULP with the NLRB against the NBPA. The NBA portrayed the NBPA disclaiming interest as a sham to facilitate players suing via antitrust law. The NBA also separately sued the NBPA in the Southern District of New York.
The NLRB investigates ULP charges over a period of months and ultimately issues a recommendation to a regional director, whose decision is reviewed by the NLRB (yes, a lot of steps). The NLRB could issue a complaint and seek an injunction from a federal judge.
MLB could adopt a similar strategy in hopes of obtaining leverage for its bargaining with players (and MLBPA could do the same), though ultimately these maneuvers would likely be slow moving and not resolve the fundamental dispute.
11. Could MLB Impose Terms Like a Salary Cap Without Union Consent?
MLB tried that strategy during the players’ strike in 1994-95, and a federal judge rejected it. (More on that in Part II.) That said, MLB could declare an impasse, meaning it believes it made its best, final offer to the union. MLB could then try to impose the terms in that offer. MLBPA, however, would file a ULP charge against MLB and insist the union and league are engaged in good-faith bargaining.
12. Can Mediation Get the Two Sides Talking?
Yes.
The Federal Mediation and Conciliation Service (FMCS), a neutral, government entity, has been used by leagues and players’ associations in past labor disputes. FMCS involves both sides in a dispute presenting their arguments to a mediator, who proposes a resolution. The proposal is not binding; it is only a recommendation to the two sides.
In 2022, the league proposed to the union that they use FMCS, but MLB said the MLBPA denied the request. During the 2012-13 NHL lockout, the two sides used FMCS, and recommendations by mediator Scot Beckenbaugh were thought to help the NHL and NHLPA find a solution.
Stay tuned for Part II of McCann’s breakdown, which will run on Monday.
