MLB to pay $185 million in minor league salary dispute

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Fans cheer as the Binghamton Rumble Ponies play the Hartford Yard Goats at Dunkin’ Donuts Park in Hartford, Conn. Yehyun Kim/The New York Times

Major League Baseball has agreed to pay $185 million to settle a class-action lawsuit brought by thousands of current and former minor league players over past wage claims.

The agreement, filed Friday in the U.S. District Court for the Northern District of California, is the latest step in a general reorganization of minor league baseball that has included the takeover of the minor league system by 30 major league clubs and the downsizing and reorganization of teams and leagues. Now MLB will have to implement a new payment system for minor leaguers.

The class includes roughly 23,000 players, and the average payout will be only about $5,000 to $5,500 per player, according to language in the settlement. It’s hardly a big win for individual players, but the real significance of the deal could be how minor league players are compensated going forward, which will depend on MLB.

After much pressure over the years, MLB has spent the last two seasons working on a process to increase minor leaguers’ salaries, provide housing and health care, eliminate club dues and improve general conditions, including travel and food.

“Change is in the air,” Garrett R. Broshuis, a former minor league pitcher in the San Francisco Giants organization and now a partner at Korein Tillery and co-counsel for the plaintiffs, said in an interview Friday. “Things are getting better, and this case is a big reason for that. There is still work to be done, and there are people watching to make sure it gets done. This proposed resolution is a big step in the right direction.”

Under the proposed agreement, which has yet to be approved by the judge in the case, MLB must formally notify all clubs that they can no longer prohibit teams from paying players during spring training, extended spring training or any non-season work period, which includes the regular season and playoffs.

In the past, players were not paid for any time spent outside the regular season, including time spent practicing in the offseason, and their pay, after all their time was accounted for, was generally below minimum wage. MLB argued that the players were akin to interns — such as those in art, music and theater — who temporarily aspired to break into the major leagues, where they would be well paid. The average time spent in the minor leagues, according to MLB figures, was roughly 2 1/2 years and thus not a permanent employment option.

Regardless of the validity of the argument, it struck some as callous for an industry that reaps billions in revenue.

Broshuis, who is not part of the player class, spent six years in the minors and vividly recalled the hardships of life in the minor leagues. He remembered seeing eight Latin American teammates living in a three-room apartment with no furniture, only air mattresses.

“Those things change, and that’s long overdue,” Broshuis said. “We started this case for the first time more than eight years ago, and the problems were not discussed enough and they lasted too long. Now the teams pay for accommodation and they’ve got rid of things like clubhouse fees, which was a big problem for the players.”

Broshuis, whose company would earn 30% of the payout, under the terms of the settlement, or $55 million plus an additional $5 million in fees, said that without the pressure from the lawsuit, few of those changes would have been implemented.

Now, as MLB works on a new compensation system, it will do so unilaterally because minor league players are not represented by the Major League Baseball Players Association or any other union and there is no bargaining unit to negotiate with. The settlement could help ensure that there is no return to the inequities of the past, but exactly how the situation with minor league players will play out next could be complicated, especially with teams in numerous states.

Paying by the hour could be complicated to implement because players spend so much time on the field for matches, training, travel and relaxation. Most players work hard to prepare for a big league career and may balk at the hourly restrictions on the time they can spend practicing.

“We’re only in the second year of a major overhaul of the 100-year-old player development system, and we’ve made great strides in improving the quality of life for minor league players,” an MLB spokesperson said in a statement. “We are proud that the lower leagues are already receiving significant benefits.”

That includes $450 million in annual bonuses for first-year players, tuition and meal assistance.

With the downsizing of the minor leagues, there are now fewer players to pay. The cost of the settlement is approximately $6.2 million per major league club.

“We are pleased that we were able to reach a resolution,” the statement said, “but we cannot comment on the details until the agreement is officially approved by the court.”

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