MLB Gets Antitrust Claims Tossed In Scout Wage Suit

Law360 09/30/2016

A New York federal judge on Thursday dismissed federal and state antitrust claims brought against Major League Baseball by scouts over alleged wage suppression, saying they were prohibited by an antitrust exception that courts have applied to professional baseball.

Former Kansas City Royals scout Jordan Wyckoff and former Colorado Rockies scout Darwin Cox had argued that the exception should not apply to their claims because scouts do not directly participate in the business of baseball, but U.S. District Judge Paul G. Gardephe disagreed.

“The employment relationship between scouts and franchises is central to the ‘business of baseball,’” Judge Gardephe said. “Scouts play a critical role in directing talent to the franchises, and the quality of the players is largely what determines success on the field as well as success in the ‘business of baseball.’ Because scouts’ work has a direct and critical effect on the selection of players who will participate in the games that the public will watch, their role cannot be categorized as ‘wholly collateral’ or ‘incidental’ to the business of professional baseball.’”

The scouts' claims brought under New York State’s Donnelly Act also cannot survive because they are pre-empted by the federal exception, Judge Gardephe said.

Wyckoff kicked off the suit in July 2015, accusing the Office of the Commissioner of Baseball and all 30 MLB teams of agreeing not to poach baseball scouts in order to keep wages down. He also accused the teams of paying scouts less than minimum wage and failing to pay overtime as they worked more than 60 hours per week in peak season.

Rival teams are prohibited from cold-calling prospective employees, and scouts hoping to switch teams can only negotiate a switch if they or the rival team gets permission first from their current team, Wyckoff said. Teams typically deny that permission unless the rival team plans to promote the scout to a higher position, and it is not unusual for a team to fire an employee or not renew his annual contract just for asking permission, he claimed.

MLB and its teams urged Judge Gardephe to throw out the antitrust claims, arguing scouting is part of the “business of baseball” and therefore isn’t subject to antitrust law.

In their motion, the MLB and the teams pointed to the U.S. Supreme Court’s long-standing rule protecting the business of baseball from antitrust claims. Specifically, MLB teams use scouts to help them decide which players to draft or pursue through free agency, the defendants said. Therefore, they said, Wyckoff and Cox can’t get around the antitrust exemption, which has been recognized by the Supreme Court since 1922.

The scouts are represented by Stephen M. Tillery, Garrett R. Broshuis and George A. Zelcs of Korein Tillery LLC, Christopher M. Burke, Judith S. Scolnick and Thomas K. Boardman of Scott+Scott Attorneys At Law LLP, Michael Dell’Angelo, Sarah Schalman-Bergen and Patrick F. Madden of Berger & Montague PC and Robert C. Maysey of Warner Angle Hallam Jackson & Formanek PLC.

The Office of the Commissioner of Baseball and 29 Major League Baseball teams are represented by Elise Michelle Bloom and Adam Michael Lupion of Proskauer Rose LLP, and Thomas Edward Gorman, John W. Keker, Robert Adam Lauridsen and Elliot Remsen Peters of Keker & Van Nest LLP. The Baltimore Orioles are represented by the Keker & Van Nest team.

The case is Wyckoff v. Office of the Commissioner of Baseball et al., case number 1:15-cv-05186, in the U.S. District Court for the Southern District of New York.

John W. Keker

John W. Keker

(415) 391-5400
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Elliot R. Peters

Elliot R. Peters

(415) 676-2273
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Adam Lauridsen

Adam Lauridsen

(415) 773-6686
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Thomas E.  Gorman

Thomas E. Gorman

(415) 676-2292
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