Does the Major League Baseball Players’ Contract Require Arbitration Between Employees of the Same Club?

It is fairly common knowledge that all professional athletes who play in one of the major team sports is required to sign a standard player contract.  Those contracts have mandatary arbitration provisions to resolve all disputes.  In Costello v. Olson, 6D23-985 (Fla. App. Dec 08, 2023), the issue was whether the standard players’ contract requires arbitration of a dispute between employees of the same club.

The fact are tragic. Costello was a minor league baseball player who died of a cardiac arrythmia.  As explained by the Court:

An EKG measures the electrical signals in the heart and is designed to detect cardiac abnormalities. Costello’s EKG revealed such abnormalities and indicated that Costello required further evaluation before he could be cleared to participate in strenuous activities. Those abnormalities were later determined to be Wolff-Parkinson-White syndrome, a cardiac condition that is treatable but that can make participating in vigorous physical activity dangerous and potentially fatal. Despite Costello’s EKG showing clear abnormalities that required further evaluation and that should have caused Dr. Olson to conclude that Costello had Wolff-Parkinson-White syndrome, Dr. Olson marked Costello’s health report as “Normal” with “No Further Action Necessary.” After Dr. Olson cleared Costello for continued participation in baseball, Costello returned to spring training in Ft. Myers.

Later in 2019, the Twins sent Costello to New Zealand to play in a developmental league called the Australian Baseball League. On the morning of November 19, 2019, Costello was found dead in his hotel room from a cardiac arrythmia. An autopsy examination found cardiac abnormalities that were consistent with Wolff-Parkinson-White syndrome.

Costello’s estate sent Dr. Olson a pre-suit demand letter as required by Florida law.  In response, Dr. Olson filed an action to compel arbitration pursuant to the Major League Baseball Players’ Contract.  Interestingly, minor league players sign a contract that incorporates the arbitration portion of the Major League Players Contract.   The “Minor League Uniform Player Contract (‘Player Contract’) signed by Costello […] expressly incorporated a Major League Agreement (‘MLA’)…”

The Major League Baseball Players’ Contract contains the following arbitration language:

All disputes and controversies related in any way to professional baseball between Clubs or between a Club(s) and any Major League Baseball entity(ies) (including in each case, without limitation, their owners, officers, directors, employees and players), other than those whose resolution is expressly provided for by another means in this Constitution, the Major League Rules, the Basic Agreement with the Major League Baseball Players Association, or the collective bargaining agreement with any representative of the Major League umpires, shall be submitted to the Commissioner, as arbitrator, who, after hearing, shall have the sole and exclusive right to decide such disputes and controversies and whose decision shall be final and unappealable.

In denying mandatory arbitration under the Players’ Agreement, the Court ruled as follows:

Thus, by its plain terms, the arbitration provision applies to disputes that are related in any way to professional baseball and that are between either: (1) two or more Clubs; or (2) one or more Club(s) and one or more Major League Baseball entity(ies). Both “Clubs” and “Major League Baseball entity(ies)” include their respective owners, officers, directors, employees and players. It is undisputed that that the Twins are a Club. The MLA includes a list of the thirty Major League Baseball Clubs, one of which is the Twins.

The trial court found that Dr. Olson was an employee of the Twins and performed his services for Costello in that capacity. Neither party challenges that finding on appeal.  Thus, as found by the trial court, this is a dispute between a player of a Club and an employee of the same Club. It is an intra-Club dispute. By its plain terms, the arbitration provision does not encompass Plaintiffs’ claims. This is not a dispute between two or more Clubs. This is not a dispute between a Club (or employees or players of a Club) on the one side and a Major League Baseball entity (or employees of a Major League Baseball entity) on the other side.

Because Plaintiffs’ claims do not fall within the scope of the arbitration provision relied upon by Dr. Olson, the trial court erred as a matter of law by granting Dr. Olson’s motion to stay and compel arbitration.

Jeffrey Skatoff is a Florida probate attorney.  To have Mr. Skatoff review your case free of charge, please go to his website.

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