Former minor league baseball players are one step closer to gaining class certification of their wage and hour lawsuit against 22 Major League Baseball (“MLB”) franchises. The players allege that the franchises have been paying them less than minimum wage, denying them overtime pay, and requiring them to train during off-season without any pay. They contend the MLB and its clubs violated the FLSA, as well as similar state wage and hour laws in eight states by paying them a total of only $3,000 to $7,000 over the course of a five-month season despite workweeks of 50 to 70 hours.

On July 13, a California federal district court denied a motion by the baseball franchises to dismiss the high-profile suit for failure to pay minimum wages and overtime pay under the Fair Labor Standards Act and state wage and hour laws, allowing the players to proceed to discovery “to determine whether certification is appropriate and whether the proposed class representatives have standing to represent the various proposed classes.” Senne v. Kansas City Royals Baseball Corp., No. 3:14-cv-00608 (N.D. Cal. July 13, 2015).

On May 2, the court dismissed claims against eight of the MLB franchises, finding they did not have sufficient contacts with California, where the suit is pending, to establish personal jurisdiction over them. In the July 13 ruling, however, the court denied Defendants motion to dismiss stating that “the named plaintiffs who are proposed as class representatives of the various state classes seek to represent unnamed plaintiffs who were employed by these other franchise defendants on the basis that they suffered a similar injury.  As to these claims, the court ruled that it is appropriate to defer addressing the question of standing until after class certification.” (Senne, p. 25). As a result, the players have established sufficient standing to pursue discovery by claiming that at least one of the named plaintiffs was denied minimum wages or overtime pay from each of the remaining 22 defendants, and that at least one of the named plaintiffs was employed in each of the states for which the players assert state wage and hour violations.

The franchises have yet to reveal their defense to the specific claims; however, they may argue the players are exempt from FLSA’s minimum wage and overtime requirements because they are employed by a “seasonal amusement or recreational establishment.” Employees of establishments that operate for up to seven months per calendar year, or whose average receipts for any six months of the calendar year are not more than one-third its average receipts for the other six months of the year, are exempt from the FLSA’s minimum wage and overtime requirements.

Rulings on the applicability of the exemption to non-player employees in baseball have been inconsistent.  In 1998, members of the Cincinnati Reds maintenance staff sued the team, demanding overtime pay. An Ohio district court initially ruled in favor of the Reds, describing the team as “an amusement or recreational establishment” that played its games during a season that lasted seven months or less. That decision was overruled when the United States Court of Appeals conducted a detailed accounting analysis of the team’s operation and determined that the Reds did not qualify for a seasonal exemption.

The Detroit Tigers won a similar lawsuit in 1997 when bat boys sought overtime pay for their work in excess of 40 hours in a week. The Tigers claimed the seasonal exemption as a defense and were successful as the court recognized that Tiger Stadium only operated on a seven-month schedule, making its operation seasonal.

The Sarasota White Sox, a former minor league franchise in the Florida State League, also won a lawsuit by claiming a seasonal exemption in 1995 when a groundskeeper sued for overtime. The court ruled that the team played in a six-month season and made 99 percent of its revenue during that time period.

The question of whether the franchises will be safe from potentially significant wage and hour liability in this latest litigation may be a close call.

 

 

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Photo of Gregg E. Clifton Gregg E. Clifton

Gregg E. Clifton is a Principal in the Phoenix, Arizona, office of Jackson Lewis P.C. He is Co-Leader of the Collegiate and Professional Sports Practice Group and serves as the editor of the firm’s sports law blog.

Mr. Clifton has extensive experience in…

Gregg E. Clifton is a Principal in the Phoenix, Arizona, office of Jackson Lewis P.C. He is Co-Leader of the Collegiate and Professional Sports Practice Group and serves as the editor of the firm’s sports law blog.

Mr. Clifton has extensive experience in the collegiate and professional sports world. He has advised numerous professional franchises on general labor and employment issues, including Title III ADA regulatory compliance and wage and hour issues. He serves as lead counsel for several Major League Baseball teams in their salary arbitration matters and has represented NCAA and NAIA collegiate clients regarding rules compliance, investigatory matters and in disciplinary hearings. In addition, he has handled Title IX investigations and compliance issues for NCAA and NAIA member institutions. Mr. Clifton has also worked extensively in the area of agent regulation and enforcement in professional and college sports and regularly provides counsel on issues relating to NCAA and NAIA amateurism issues and athlete eligibility questions. He has also served as an expert witness in matters involving sports agents’ work and responsibilities, as well as athlete compensation issues.

Prior to joining Jackson Lewis, he spent six years as Chief Operating Officer and Vice President of Team Sports for Gaylord Sports Management. He also served as President of the Athlete and Entertainment Division for famed sports attorney Bob Woolf’s firm, Woolf Associates, in Boston.

Mr. Clifton began his career as an Associate at Jackson Lewis where he focused his practice on traditional labor law. He continues to counsel clients in the areas of collective bargaining negotiations, representation cases, arbitrations and National Labor Relations Board matters.

Mr. Clifton frequently serves as an expert speaker to law schools, including Harvard University, Boston College, Hofstra University and Arizona State University, and bar associations regarding sports law issues, including agent regulation and salary arbitration. He is also often cited as an expert source in national news media for his commentary and opinion on legal issues in sports.