The Truth About MLB Free Agency

My friend, Murray Chass, (www.murraychass.com) has posted an article in the New York Times that properly describes the history of MLB free agency. I was involved in this matter as well. The historical error often cited in this matter is that the Flood v. Kuhn Supreme Court case was important, and, as Flood lost the case, it was important only in that it gave MLB a false sense of security in the court process. The Jim “Catfish Hunter” case is also erroneously cited, but that was a breach of contract case and had nothing to do with labor law.

The error in the Messersmith/McNally case was that MLB did not understand the role of the arbitrator, Peter Seitz, and the deference shown arbitrator decisions by federal courts. Baseball always thought it could have a decision overturned if it was adverse to them. MLB was wrong.

Arbitration is a contractual relationship between the parties where they agree that a conflict will be decided by an arbitrator according to rules that are, in the case of labor matters, collectively bargained. This agreement controls the outcome and it can be reversed only if the arbitrator can be shown to have acted badly by not disclosing conflicts of interest, bias, or a flagrant disregard of the law. The test is whether “the decision draws its essence from the contract.” Not a hard test, as history has proven.

None of these factors were present in the Messersmith/McNally case and Peter Seitz’s decision that created free agency was upheld by the federal court of appeals sitting in Kansas CIty. The rest is history, but MLB’s failure to understand labor law would again bite it when it failed to properly declare impasse in 1994, the year of no World Series, that lead to then Judge Sonya Sotomayor’s decision against it in a labor case in March 1995.

We are now looking at the arbitration of the Alex Rodriguez 211 game suspension and will find out if anything has been learned.