MLB to pay $185 million settlement in minor league pay dispute

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 broader minor league baseball reorganization that included the adoption of the minor league system by the 30 major league clubs and contraction Reorganization of teams and leagues. Now MLB needs to come to a new system to pay minor leagues.

The class includes about 23,000 players, and the average payout is only about $5,000 to $5,500 per player depending on the language in comparison. It’s hardly a godsend for the individual players, but the real meaning of the agreement may lie in how minor league players will be compensated going forward, which will be up to MLB

After much pressure over the years, MLB has spent the last two seasons working on a process to increase salaries for minor league players, provide housing and health care, eliminate clubhouse dues, and improve general conditions, including travel and catering to improve.

“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 why. There’s more to be done, and there are people watching to make sure they get 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 ban teams from paying players during spring training, extended spring training, or any off-season work hours, which includes the regular season and the playoffs.

Historically, players have not been paid for time spent outside of the championship season, including time spent in the off-season, and their pay has generally been below minimum wage after accounting for their total time. MLB has argued that players resembled trainees — like those in art, music and theater — who temporarily aspired to break into the big leagues, where they would be well paid. According to MLB information, the average playing time in the minor leagues was around two and a half years and was therefore not a permanent employment option.

Regardless of the merit of the argument, some found it callous from an industry that makes billions in revenue.

Broshuis, who is not of the player class, spent six years with the Minors and vividly recalled the rigors of minor league life. He recalled seeing eight teammates from Latin America living in a three-bedroom apartment with no furniture, just air mattresses.

“These things are changing and it’s long overdue,” Broshuis said. “We first brought this case over eight years ago and the issues have not been discussed enough and have existed for far too long. Now teams are paying for accommodation and have gotten rid of things like clubhouse fees, which has been a big problem for the players.”

Broshuis, whose firm would receive 30 percent of the payout, or $55 million plus an additional $5 million in fees, under the terms of the settlement, said few of those changes would have happened without the pressure caused by the lawsuit.

Now that MLB is working 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 entity to negotiate with. The settlement may help avoid the injustices of the past, but exactly how the minor-league players’ situation will unfold could be very complicated, particularly for teams in a number of states.

Implementing an hourly wage could be tricky as players spend so much time at the stadium playing, training, traveling and relaxing. Most players work hard to prepare for a big league career and might object to hourly limits on the time they can spend training.

“We are only in our second year of a major overhaul of the 100-year-old player development system and have made great strides to improve the quality of life for minor league players,” an MLB spokesman said in a statement. “We’re proud that minor league players are already receiving significant benefits.”

This includes $450 million in annual contract awards for first-year players, tuition assistance and meals.

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

“We are pleased that we were able to reach a solution,” the statement said, “but we cannot comment on the details until the agreement has been formally approved by the court.”

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