Former Kansas City Royals scout Jordan Wyckoff and ex-Colorado Rockies scout Darwin Cox urged the Second Circuit on August 24, 2017 to narrowly construe Major League Baseball’s long-held antitrust exemption to only those functions essential to the holding of actual professional baseball games. The three-judge panel was skeptical of the scouts’ oral arguments.
The dispute came up on appeal after the class action suit on behalf of 1,600 scouts was dismissed in September 2016 by the U.S. District Court in Manhattan. The complaint alleged that MLB’s 30 teams colluded to reduce competition by agreeing not to cold-call or otherwise recruit each other’s scouts without their employers’ permission, and misclassifying scouts as exempt from federal wage-and-hour laws. The judge held that baseball scouts’ roles were central to the “business of baseball” because of their critical effect on the selection of players, thus falling within the anti-trust exemption. MLB’s attorney commented that the “district court judge correctly applied binding precedent from this court and the U.S. Supreme Court.”
Wyckoff claimed that MLB rules that prohibit employees of one MLB team from negotiating employment deals with rival teams prevent scouts from getting better contracts and violate the Sherman Act and New York’s Donnelly Act by restricting competition between teams. Though the rules only explicitly apply to players, coaches, managers and umpires, MLB applies the terms more broadly to include scouts, according to the complaint, filed in July, 2015.
The Second Circuit admitted that the exemption is somewhat of an “anomaly,” but questioned whether the scouts are unessential and even if they are, whether the court can even read an exception into the exemption.