MLB Points to Win Over Minor Leaguers in Attempt to Cut Off Scout’s Appeal

Former Kansas City Royals scout Jordan Wyckoff, and former Colorado Rockies scout Darwin Cox, have sued Major League Baseball for unlawfully suppressing scout’s wages. In September, 2016, the bulk of their suit was dismissed by a New York district court after it was ruled that the scout’s federal and state antitrust claims were barred by the so-called baseball exemption. The exemption was set forth in a 1922 U.S. Supreme Court decision, and it covers employees who are essential to the “business of baseball.”

On July 7, 2017, the MLB pointed to a ruling last month by the Ninth Circuit which upheld the baseball antitrust exemption. The Ninth Circuit case, Miranda v. MLB, affirmed a district court ruling which held that minor league players are exempt from federal antitrust law. The appeals court ruled that the players failed to state an anti-trust claim because Congress explicitly exempted minor league baseball from those laws in the Curt Flood Act of 1998. The act is named after Curt Flood, who sued the MLB for free agency in 1970. In 1998, after a season-ending strike in 1994, the Curt Flood Act was passed which specifically removed the exemption for major leaguers, but expressly kept it alive for other claims.

Unlike the minor leaguers, the scouts in this case, Wyckoff v. MLB, have argued that the exemption does not apply because their work, evaluating potential prospects and producing reports for team front offices, is not essential to the “business of baseball.” The league disagreed, and argued that the “statutory section covers the scouting-employment relationship in this case because it exempts the ‘relationship’ between the MLB, the clubs, and ‘individuals who are employed in the business of organized professional baseball.’”

In the MLB’s response to the scout’s opening brief in their appeal to the Second Circuit, they stated “Plaintiff’s complaint admits that scouts help build the team that plays on the field and argues that MLB and its clubs are the only entities in the United States that employ the scouts. If scouts are not a part of the business of baseball, then it is difficult to understand what business they are in.”

Wyckoff filed suit in July 2015, and accused 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. Rival Teams are prohibited from cold-calling prospective employees, and scouts can only negotiate with a new team if they get permission from their current team first. Teams typically deny that permission unless the new team plans to promote the scout to a higher position, and scouts are routinely fired or do not have their contract renewed just for asking for permission.

The case is set for oral argument on August 24, 2017.

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