MLB Will Pay Minor League Baseball Players $185 Million to Settle a Wage and Hour Class Action Lawsuit

On August 26, 2022, Chief Magistrate Judge Joseph C. Spero of the United States District Court for the Northern District of California (the “Court”) preliminarily approved a $185 million settlement (the “Settlement”) between classes of minor league baseball players (“minor leaguers” or “Plaintiffs”) and Major League Baseball and its 30 member Clubs (“MLB” or “Defendants”) in a wage and hour class action lawsuit that proceeded for more than eight years.

In 2014, 40 former and current minor leaguers filed a complaint against MLB, individually and on behalf of all those similarly situated, under the Fair Labor Standards Act (“FLSA”) and the wage and hour laws of multiple states. The FLSA is a federal law that establishes minimum wage and overtime pay standards. Plaintiffs claimed that Defendants violated the FLSA by failing to pay them during spring training, extended spring training, and instructional leagues because they are “employees” who are “working” during those periods. Plaintiffs also alleged that while they were paid during the championship season, their wages were sometimes below minimum wage, and they were never paid overtime. Defendants raised the seasonal amusement or recreational establishment defense, which provides an exemption from the minimum wage and overtime pay provisions of the FLSA.

Plaintiffs successfully obtained a collective class certification under the FLSA and four class certifications under the state laws of Arizona, California, and Florida. Although Plaintiffs received favorable outcomes on several issues in summary judgment, they would have been awarded significantly less sizable damages if Defendants were to prevail on their seasonal amusement or recreational establishment defense and their attack on Plaintiffs’ damages model. Considering the risks and expenses associated with the arduous and complex seven-week trial that would have ensued, both parties agreed to participate in mediation to reach a settlement.

After a vigorous and strenuous eight-year battle and a series of mediation, MLB has agreed to establish a $185 million non-reversionary settlement fund to pay for Plaintiffs’ court-approved court costs, attorney fees, class representative incentive rewards, class member damages, and Defendants’ penalties under the California Private Attorney General Act. MLB has also agreed to rescind any contractual prohibitions against the MLB Clubs paying minor leaguers wages outside of the championship season, and to issue a memorandum to the Clubs advising that they must compensate minor leaguers in compliance with wage and hour laws in effect in Arizona and Florida during spring training, extended spring training, instructional leagues, and the championship season in those states, including any minimum wage laws that apply.

If the Court ultimately grants final approval of the Settlement, class members could expect to recover almost 90% of their alleged unpaid wages, which would amount to an anticipated average award of approximately $5,000 to $5,500 per class member. This is a substantial amount given that most of the minor leaguers were only paid roughly $3,000 to $10,000 a year. Plaintiffs express that “this is a historic outcome for current and future minor league baseball players; it eliminates the main barrier towards ensuring that they are paid for the work that they do.”

Updates will be posted to this blog as the matter progresses. The case caption is Senne, et al. v. Major League Baseball, et al., No. 3:14-cv-00608, filed in the Northern District of California, San Francisco Division.

The legal team at Miller Shah LLP has extensive experience representing wage and hour matters. If you have any questions regarding this subject or this post, please contact Chiharu Sekino (cgsekino@millershah.com) or Shuping Li (sli@millershah.com). The Firm can also be reached toll-free at (866) 540-5505.