Time to Repeal All of Baseball's Antitrust Exemption

Under a little-known provision of the current collective bargaining agreement, Major League Baseball’s owners and players agreed jointly to lobby Congress to repeal Organized Baseball’s antitrust exemption in the context of labor disputes. Unfortunately, their efforts may actually strengthen other aspects of this absurd exemption.

Antitrust lawyers roll their eyes whenever baseball’s unique antitrust immunity is discussed. This immunity was never intended by Congress, but comes from a 1922 Supreme Court decision in Federal Baseball Club of Baltimore v. National League, a lawsuit arising out of the collapse of the Federal League.

In Federal Baseball, the Court ruled that organized baseball wasn’t subject to the antitrust laws because even though players and fans alike crossed state lines for baseball, the games themselves weren’t “interstate commerce.” Silly as the holding of Federal Baseball sounds in its own right, it soon became downright ridiculous after the Court held that vaudeville, boxing and even pro football were interstate commerce. Yet Federal Baseball remains the law of the land.

Fifty years later, when the Court heard Curt Flood’s challenge to the reserve clause, the majority opinion didn’t even pretend that Federal Baseball was correctly decided. Without actually using the term “wrong,” the Court described Federal Baseball as an “exception,” an “anomaly,” and an “aberration” -- then reaffirmed it! The majority reasoned that because Congress had rejected numerous attempts to bring baseball under the antitrust laws, it had implicitly approved the decision; the dissenters retorted that Congressional silence “should not prevent us from correcting our own mistakes.”

The long Congressional silence may soon end. On July 31, the U.S. Senate unanimously approved the “Curt Flood Act of 1998,” a bill designed to give major league players the same rights under the antitrust laws enjoyed by NFL and NBA players. If enacted into law, the bill would give the players another weapon against hard-line owners: if the owners declared an impasse in labor negotiations and sought to impose their own terms, the players could force them to back down by decertifying their union. (The NFL Players’ Association used this tactic to win free agency.)

That a bill which so obviously favors one side in a single private labor dispute could win the unanimous approval of the Senate shows just how the owners’ conduct during the 1994-95 labor dispute offended lawmakers. The Curt Flood Act was co-sponsored by Republicans Orrin Hatch of Utah and the Senate’s official fossil, 95-year-old Strom Thurmond of South Carolina, neither known to back unions in any other context.

But while it would remove baseball’s antitrust exemption for major league labor negotiations, the Curt Flood Act would for the first time recognize the exemption for every other aspect of Organized Baseball. Other sections of the Act state that it does not affect baseball’s antitrust status with respect to any of the following:

– Minor league players;

– The amateur draft;

– The minor-league reserve clause;

– The Professional Baseball Agreement, which governs relations between the majors and the minors;

– Anything else to do with the minors;

– Expansion;

– Franchise relocation;

– Franchise ownership;

– Network broadcasting agreements; or

– The employment of umpires or other non-players.

Finally, just in case some loophole was left unclosed, major league players are the only people given standing to sue under the Act.

So long as Congress says nothing at all about baseball’s unearned antitrust exemption, a future Supreme Court might finally be willing to correct its mistake. By repealing one piece of the exemption and expressly leaving the rest intact, though, Congress would implicitly approve the exemption as never before. The players’ victory could mean that any future competing league will find itself unable to assert antitrust claims available to any similar business in any other industry. Congress should repeal all of baseball’s antitrust exemption, not just this small part.

Copyright © 1998 Doug Pappas. All rights reserved.
Originally published in the August 1998 issue of Boston Baseball.

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