MLB antitrust exemption ruling in scout lawsuit makes players union even more crucial

The already broad exemption to federal antitrust laws that MLB has enjoyed for decades got another ruling in its favor on Thursday, which should send a message to players that giving up power in exchange for money could actually end up costing them.

As two former professional baseball scouts recently found out, there’s almost no exception to the legal power of the MLB antitrust exemption. The question is: will MLB players heed the warning?

In July of 2015, two ex-scouts who worked for the Colorado Rockies and Kansas City Royals organizations filed a lawsuit (paywall) against MLB in a New York federal court. The scouts argued that MLB’s 30 franchises illegally colluded to keep scouts’ wages low and deprive them of overtime pay by agreeing not to compete for the services of scouts employed by particular teams.

The crucial question in the suit was whether or not providing scouting services for MLB teams is part of the business of baseball. If the court determined that it was a separate industry, the plaintiffs stood a chance. If the court found that scouts were involved in baseball’s business, that would invoke the antitrust immunity that MLB has enjoyed for decades.

The court ruled that scouts were indeed part of baseball’s business, and that exemption from antitrust laws resulted in the suit being dismissed (paywall) per MLB’s request. After the scouts appealed to the United States 2nd Circuit Court, that court issued a ruling affirming the lower court’s decision on Thursday.

What the court has essentially said is that if scouts want better working conditions, it’s on them to negotiate those terms with MLB and the 30 teams. As daunting a task as that sounds for a profession that has been made somewhat obsolete by the growth of analytics and big data, that’s the legal status quo. This should sound an alarm for another group involved in the business of baseball that already has a robust union: the players.

While these scouts consult with their counsel over whether or not to appeal the 2nd Circuit Court’s ruling to the United States Supreme Court, players and their counsel had better take notice of what’s just happened. It’s true that in nearly any other industry, several individual companies operating in the same business collectively agreeing not to try to hire each other’s employees who perform the same function and thus deprive those employees of opportunities to advance their careers would probably be illegal collusion. In baseball, MLB gets to do that.

While MLBPA’s stellar negotiations of past collective bargaining agreements and other activities have resulted in baseball players receiving higher annual average salaries than most other professional athletes, the balance between the owners and themselves is about much more than just dollars. Power is much more valuable.

Unfortunately, that’s what the MLBPA has recently ceded. MLB Commissioner Rob Manfred revealed in February that owners can unilaterally make rule changes as early as next season thanks to the terms of the current CBA. Additionally, the loose application of the league’s domestic violence policy in the Jeurys Familia suspension of April without the union even as much as making a statement about possible overreach by Manfred is troubling.

While matters like whether or not a pitch clock will be brought to MLB and whether Familia got a suspension that he probably deserved regardless of whether the policy was correctly applied may seem like small matters in comparison to things like guaranteed contracts and player pensions, MLB players must be cognizant of the proverbial slippery slope.

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Thursday’s ruling should act as a sobering reminder that giving up power can result in unintended and perhaps undesirable consequences. If the players look to the law for relief, there will be none. The judges will simply say that they had their “day in court” when they were at the bargaining table and handed over their agency.