Baseball is the only major sport in the United States with a general exemption from antitrust law. The Supreme Court carved out the exemption in Federal Baseball Club v. National League, which held that the Sherman Antitrust Act did not apply to professional baseball. The Supreme Court has since upheld the exemption in both Toolson and Flood, citing preservation of precedent, the reliance interests of professional baseball, and decades of Congressional inaction on the issue. In 1998, the federal government passed the Curt Flood Act, which placed employment matters of Major League Baseball players under antitrust law jurisdiction. Minor League Baseball players, however, were explicitly left unprotected. The act allowed Major League Baseball to lobby Congress to place the half-page Save America’s Pastime Act into the 2232-page Omnibus Spending Bill of 2018, exempting minor leaguers from federal minimum wage laws.
Following SAPA, most Minor League Baseball (MiLB) players made $7,500 a year, with minimum salaries at the lowest levels of $290 per week. Reports of the poor living conditions and lack of access to healthy food MiLB players faced would repeatedly surface throughout the next four years. In 2022, the Judiciary Committee sent a letter to MLB requesting information about how baseball’s antitrust exemption impacts “competition in the labor market for minor league ballplayers, as well as the operations of minor league teams.” While minor-leaguers pushed Congress for revocation of MLB’s antitrust exemption, their solution ultimately came from unionization. The first MLB Players Association collective bargaining agreement involving minor-leaguers included pay increases of more than double previous baselines, guaranteed payments, and improved benefits.
While the pressure from Minor League players to change antitrust law has largely subsided, former Minor League affiliate teams have filled the void. The Tri-City ValleyCats and the Norwich Sea Unicorns allege that their severance of affiliation with the Minor Leagues by the MLB is illegal on antitrust grounds via anti-competitive restructuring. The teams are represented by law firm Weil Gotshal & Manges. The clear Supreme Court precedent in Federal Baseball led the United States Court of Appeals for the Second Circuit in New York to dismiss the case despite support in an amicus brief by the DOJ. An attorney for the minor league teams does not see this as a defeat, with the lawsuit “designed to be fast-tracked to reach the nation’s highest court.” On September 18th, the teams petitioned the Supreme Court for review.
While the Supreme Court declined to hear a 2015 challenge to baseball’s general antitrust exemption, recent developments suggest a greater willingness to hear the case. Justice Samuel Alito has written on the topic in the Baseball Research Journal, acknowledging the widespread criticism and recent support of the antitrust exemption. In 2016, Justice Neil Gorsuch, writing for the Tenth Circuit, characterized Federal Baseball as “surviv[ing] indefinitely even when surrounded by a sea of contrary law.” In 2021, The Supreme Court struck down the NCAA’s long-standing athlete payment rules on antitrust grounds. Gorsuch, in the majority opinion, acknowledged the baseball exemption as an inconsistent aberration in antitrust law, with Kavanaugh’s concurrence stressing that sports leagues are not “above the law.”
An answer by the Supreme Court is not expected until 2024.