Curt Flood, Collective Bargaining, and the Struggle for Free Agency

1. Curt Flood, Collective Bargaining, and the Struggle for Free Agency Artemus Ward Department of Political Science Northern Illinois University aeward@niu.edu

2. Introduction • We will discuss how the owners and the commissioner were finally checked by the first successful union of players. • Their battles, symbolized by the case of player Curt Flood, led to unprecedented player gains and ultimately the end of the reserve system. • Yet through it all, labor strife remained, as did baseball’s antitrust exemption when the U.S. Supreme Court once again refused to overturn it.

3. Major League Baseball Players Association • Major league players had attempted to unionize since the early days of the organized game. The first union, the Brotherhood of the 1880s, disappeared in the ashes of the Players League. The League Protective Players’ Association only lasted from 1900-02 during the AL’s war with the NL. Attorney David Fultz started the Baseball Player’s Fraternity in 1912 and it lasted through the Federal League era until 1918. Lawyer Robert Murphy led the 4th union—the American Baseball Guild—for one season in 1946. But in the 1950s the Major League Baseball Players Association (MLBPA) was finally able to sustain a player’s union. • Created in 1953 to deal primarily with working conditions and player benefits—namely pensions—it had only a part-time executive director, Frank Scott, and after 1960 a part-time legal consultant, Judge Robert Cannon. • Representatives selected by each team met 3 or 4 times a year, and there was an association president, a position initially held by pitcher Bob Feller. • In its early years, it largely followed the owners’ agenda. Judge Cannon was seen as too close to the owners, aspired to be commissioner, and he himself saw his role as an intermediary between the owners and the players rather than an advocate for the players. In his testimony to Congress in 1964 he said: “We have it so good we don’t know what to ask for next.” • By 1965 the MLBPA decided to hire a full-time director and a year later chose Marvin Miller, a labor economist who had worked for the United Auto Workers and the United Steel Workers union. • Miller set about transforming the MLBPA into an organization that could counter the commissioner and the owners. In order to do that, he would need solidarity among the players. He said that the “players were not only ignorant about unions, they were positively hostile to the idea: they didn’t know what a union was, but they knew they didn’t want one.” Robert Cannon Marvin Miller

4. Koufax and Drysdale Holdout • The top two pitchers for the Los Angeles Dodgers—Sandy Koufax and Don Drysdale—were dissatisfied with their 1965 salaries. • Before the 1966 season began, Koufax and Drysdale met separately with Dodger GM Buzzie Bavasi to negotiate their contracts for the upcoming year. After Koufax's meeting, he met Drysdale for dinner and complained that Bavasi was using Drysdale against him in the negotiations, asking, "How come you want that much when Drysdale only wants this much?" Drysdale responded that Bavasi did the same thing with him, using Koufax against him. • In response, the pitchers formed a two-person negotiating team and hired an entertainment lawyer to represent their salary interest. They asked for a combined $1 million over three years. • Dodger president Walter O’Malley was outraged, vowing that he would never bargain with an agent. • After a short holdout, where the players made money from acting and other appearances, the players received substantial raises: Koufax’s salary nearly doubled to $125,000 and Drysdale got $115,000. • The actions of the star pitchers exemplified the growing unrest among the players with regard to the reserve clause and their relatively low salaries.

5. Early Commissioners • After Landis’ departure in 1944, there were three commissioners prior to 1968. • Happy Chandler (1945-1951) was viewed by many as a “player’s commissioner,” establishing a player pension fund and shepherding the racial integration of the game. But he served only one term as owners were not happy with his player-friendly stance. • Ford Frick (1951-1965) was a long-time baseball executive (he was NL president from 1934-51) and an owner’s commissioner. He supported team movement at an unprecedented level during his tenure, presiding over the expansion of baseball, the establishment of multiple national television contracts, a league draft and college scholarship system, and the introduction and growth of baseball on the international level in countries such as Japan, Central America, Holland, Italy and Africa. • William D. Eckert (1965-1968) had no baseball experience but had been a general in the U.S. Air Force and possessed a master’s in business administration. He helped streamline baseball’s organization, stabilized franchises with bigger stadiums and long-term leases, and continued to promote baseball internationally. But Eckert was in over his head as the players organized under Marvin Miller and he was powerless to stop them as his health deteriorated. Ford Frick William Eckert

6. Commissioner Bowie Kuhn • A former Wall Street lawyer, Kuhn served as legal counsel for Major League Baseball owners for almost 20 years. In 1966 he successfully defended the league’s transfer of the Milwaukee Braves franchise to Atlanta in an antitrust lawsuit in the Wisconsin state courts. He was named commissioner in 1969 and held the office through 1984. He was elected to the baseball Hall of Fame in 2008 nine months after his death. • A number of episodes under Kuhn’s watch demonstrate the power of the commissioner’s office. For example, In 1970, he suspended star Detroit Tigers pitcher Denny McLain indefinitely (the suspension was later set at 3 months) due to McLain's involvement in a bookmaking operation, and later suspended McLain for the rest of the season for carrying a gun. He barred both Willie Mays (in 1979) and Mickey Mantle (in 1983) from the sport due to their involvement in casino promotion; neither was directly involved in gambling, and both were reinstated by Kuhn's successor Peter Ueberroth in 1985. • In 1977 Kuhn battled the brash new owner of the Atlanta Braves Ted Turner. Turner admitted that he had made remarks at a cocktail party about acquiring Giants star Gary Matthews, at a time when Kuhn had ordered owners not to speak about potential free agents. Kuhn concluded that Turner’s statement was not in the “best interest of baseball” and fined Turner, suspended him from baseball for one year, and penalized his club with the loss of a draft choice. Turner sued but both the trial and appellate courts refused to grant Turner relief, emphasizing the limited-extent of judicial review over baseball and the commissioner’s office. Bowie Kuhn Ted Turner

7. Collective Bargaining • Marvin Miller and the MLBPA began discussions with the commissioner’s office that would lead to the first of a series of Basic Agreements. These agreements would not only redefine the relationship between baseball’s owners and players but would seriously undermine one of the basic operational tenets of professional baseball that had persisted since the days of A.G. Spaulding: the idea that team owners had an unassailable monopoly on deciding what was “in the best interests” of baseball. • The starting point for this process was the Basic Agreement of 1968 or the Collective Bargaining Agreement (CBA), which was revised in subsequent years. It not only established the credibility of Miller and the MLBPA but it included provisions on issues such as pension benefits and union dues which were already in place as well as new issues such as salaries, scheduling, and preseason and postseason stipends. • But perhaps the most important provision of the CBA was the creation of “a Grievance Procedure, the purpose of which is to set forth an orderly and expeditious system of handling and resolving all grievances.” The actual procedure for the “arbitration” of players’ grievances was spelled out at length and listed the “rights” of both parties. It meant that, for the first time, players could get a “fair hearing” for their grievances. Initially, the commissioner was the final arbiter of all grievances. By 1970 both the players and owners set up a three-member, arbitration panel consisting of an owner’s representative, a players’ representative, and an “impartial arbitrator” who would be agreed on by both sides. And while all decisions would technically be 2-1 votes, the neutral arbitrator would always be the deciding vote. For the first time in baseball history, the commissioner would no longer have the final word on player disputes. • However, the one issue that the owners refused to include or make subject to collective bargaining was the reserve clause. But a joint study committee on the reserve system was established by the agreement and meetings were held on the matter beginning in April 1969. Still, as the years progressed, nothing ever happened on this issue as owner’s repeatedly rejected any MLBPA proposal to modify the reserve system.

8. Curt Flood • Curt Flood was an outstanding CF for the St. Louis Cardinals. After a strong season in 1969 he asked Cardinal owner—and Anheuser-Busch Brewing Co. president—August “Gussie” Busch for a $30,000 raise above his $90,000 salary. Busch was incensed; he denied the raise and privately vowed retribution. Flood was informed that he had been traded to the Philadelphia Phillies. • But Flood wanted to stay in St. Louis and sent a letter to Commissioner Kuhn asking him to nullify the trade: “After twelve years of being in the major leagues, I do not feel I am a piece of property to be bought and sold irrespective of my wishes I believe that any system which produces that result violates my basic rights as a citizen.” • Kuhn denied the request and said that Flood had two choices: play for the Phillies or not play at all. Flood sat out the 1970 season—despite the Phillies $100,000 salary offer—and with the help of the MLBPA filed an antitrust suit in federal court requesting free agency. Flood and the MLBPA hired former Supreme Court Justice Arthur Goldberg but they lost at both the trial and appeals court before the U.S. Supreme Court agree to review the case.

9. Flood v. Kuhn (1972)Justice Harry Blackmun delivered the opinion of the Court • The Supreme Court voted 5-3 to uphold the 1922 Federal Baseball decision and reject Flood’s claim. • After an unnecessary and sentimental opening section recounting baseball’s past, Justice Harry Blackmun’s majority opinion called baseball’s antitrust exemption an “aberration” and an “anomaly” and said flatly that “Professional baseball is a business and is engaged in interstate commerce.” • Yet he noted that congress had failed to pass antitrust legislation revoking baseball’s exemption. Hence, the Court said that the 1922 Federal Baseball decision and its progeny such as Toolson, should be respected based on the principle of stare decisis. He said there is “merit in consistency even though some might claim that beneath that consistency is a layer of inconsistency.” In short, these long-standing precedents must be followed and applied to current cases because baseball’s antitrust exemption has been tacitly agreed to by congress through their refusal to undo it—something Blackmun called “positive inaction.” • The Court also seemed to suggest that baseball’s reserve system was exempt from state antitrust laws under the reasoning that state regulations that unduly burden interstate commerce were unconstitutional, even if, as in this case, Congress had not acted. In other words, as long as Congress and the Supreme Court had seen fit to exempt baseball from antitrust laws, no individual state or states could remove that exemption and regulate the game.

10. Flood v. Kuhn (1972)Justices William O. Douglas, Thurgood Marshall, and William Brennan dissenting • In dissent, Justice Douglas (joined by Brennan) said that with regard to the Court’s commerce clause jurisprudence Federal Baseball is a “derelict in the stream of law that we, its creator, should remove.” He said that baseball “is today big business that is packaged with beer, with broadcasting, and with other industries.” He chided Blackmun’s flowery opening section: “This is not a romantic history baseball enjoys as a business. It is a sordid history.” He concluded: “While I joined the Court’s opinion in Toolson v. New York… I have lived to regret it; and I would now correct what I believe to be its fundamental error.” • In his dissent Justice Marshall (also joined by Brennan) explained that the Court regularly overruled precedents it determined to be in error and should do so here. He further explained that it made no sense to leave baseball outside the reach of federal law when basketball, football, and hockey were covered. Finally, he said the reserve system “virtually enslaved” Flood and “some 600 baseball players” since the Court’s decisions in Federal Baseball and Toolson. Furthermore, congress never acquiesced to the reserve system. • After Flood was announced, the New York Times commented: “The only basis for the judge-made monopoly status of baseball is that the Supreme Court made a mistake the first time it considered the subject 50 years ago and now feels obliged to keep on making the same mistake because Congress does not act to repeal the exemption it never ordered.” William O. Douglas Thurgood Marshall

11. The Finley-Hunter Case • A former steelworker from Gary, Indiana, who made millions by marketing group insurance to physicians, Charles O. Finley purchased the Kansas City A’s in 1960, five years after the team had moved west from Philadelphia. He again moved the team further west to Oakland in 1968. • He was innovative and controversial first in Kansas City when in 1965 he signed 59-year-old Satchel Paige to pitch one game. In Oakland he upped the ante: he dressed his players in garish uniforms, brought his mule to functions, used an orange baseball, was responsible for the American League’s adoption of the designated hitter in 1973, and convinced baseball to play weekday World Series games at night to maximize television exposure and advertising revenue. • But he is most important because his stinginess produced the first free agent and because he attempted to sell his best players at the height of their careers. • Jim “Catfish” Hunter was a star pitcher for Finley’s A’s. Hunter wanted half of his $100,000 salary to be paid to an investment company which funded an annuity for his retirement. Finley refused to pay because the team could not deduct the $50,000 as a business expense. Hunter filed a grievance against Finley for violating his contract under the collective bargaining agreement between the owners and the players. Since 1970, the collective bargaining agreement had provided for the arbitration of unresolved differences between owners and players. Peter Seitz, the “neutral” arbitrator, found in favor of Hunter under a provision in his contract which read “The Player may terminate this contract…if the Club shall default in the payments to the Player.” Hunter was awarded free agency and signed a multi-million dollar contract with the New York Yankees making him the only player in baseball to be playing with a multiyear contract in 1975.

12. Labor Arbitration and the End of the Reserve System • Notwithstanding the Flood case, the MLBPA had shown increasing solidarity and strength. For example, in the winter of 1968-1969, all of the players refused to sign their contracts until Miller and Kuhn had negotiated changes in MLB contributions to the players’ pension fund. At the start of the 1972 season, Miller and the MLBPA organized the first successful players’ strike, again over the pension fund issue, which delayed the opening of the season. • Then on the heels of the Finley-Hunter case, the Player’s Association launched a full frontal attack on baseball’s reserve system. • Historically, the principal effect of MLB’s antitrust exemption was that the teams could continue to employ the reserve system, binding players to their existing teams for life. MLBPA pushed for unrestricted free agency. • Compromises were reached. The new Basic Agreement of 1972 allowed veteran players—those with 10 years in the same league and 5 years with the same team—the right to “veto” a trade to a particular team. In addition, players with two years with the same team could go to salary arbitration where a neutral arbitrator would rule for either the team’s contract offer or the player’s contract demands based on what comparable players received. The result has been that salary arbitration has protected baseball—unlike other sports—from player “holdouts” because of contract disputes. • But arbitration led to the undoing of the reserve system. In 1975 pitchers Dave McNally and Andy Messersmith had their contract disputes heard by arbitrator Peter Seitz and on December 23, 1975 he ruled in favor of the players. The standard contract said: “the Club shall have the right…to renew this contract for the period of one year at the same terms.” Owners claimed that each renewal of a contract also renewed this one-year option clause, which the club could then renew again and again. Instead, Seitz ruled that an unsigned player could only be reserved for one year and one year only. After that he was a “free agent.” Hence McNally and Messersmith were free to negotiate with the team or teams of their choice for the best terms they could arrange.

13. The Owners Fight BackKansas City Royals Baseball Corporation v. Major League Baseball Players Association (1976) • Following the Messersmith and McNally ruling, the owners immediately fired Seitz. But rather than have a new arbitrator review the decision, they made a strategic miscalculation by attempting several unsuccessful appeals of the arbitration ruling in federal court. • In Kansas City Royals Baseball Corporation v. Major League Baseball Players Association (1976) a federal judge ruled in favor of the players’ association. The court said that the arbitration panel did in fact have jurisdiction to hear the grievances and had not exceeded its authority by formulating the remedy of free agency. A month later the court of appeals affirmed the decision. • But the owners imposed a lockout in 1976 before MLB and the Players Association reached a collective bargaining agreement in July that granted free-agency rights to players with six years of major league experience. Marvin Miller understood that the chaos of total free agency would drive down players’ salaries, with players bidding against players. By limiting free agency to certain players, Miller cleverly decreased the supply of available free agents in any one year. As a result, clubs bid against clubs for the available talent. Players’ salaries doubled the next year and tripled over the next five years. • A young Kansas City lawyer, Donald Fehr, represented the MLBPA in the court action. Marvin Miller was so impressed with Fehr that he hired him full-time for the MLBPA and when Miller retired in 1983 Fehr took over as head of the Players’ Association. • The Messersmith decision was of enormous historical importance. It marked the beginning of the professional sports revolution in labor relations and provided substantial economic power to baseball players and their union. It opened the floodgates of free agency, and player salaries skyrocketed in the new free market. • When combined with salary arbitration, free agency led to a tenfold increase in player salaries over the next decade. Peter Seitz Donald Fehr

14. Player Salary Bargaining Rights • Under the collective bargaining agreement (CBA), baseball players have three different levels of salary bargaining rights. • Junior players without sufficient major-league service to qualify for salary arbitration are bound to the “antebellum” reserve system; they either accept their club’s offer, at or above the minimum salary set in the CBA, or leave the game. • Players eligible for salary arbitration have considerably more bargaining power, and as a result, the salaries of players who reach that level almost double. • Those who have qualified for free agency let the market of competing clubs determine their salaries. For some, it brings unimaginable riches.

15. Continuing Labor Strife • Despite the Messersmith and McNallydecision, the struggle between the owners and players over labor matters continued. • There were player strikes in 1980, 1981, and 1985. The owners succeeded in 1985 of increasing the eligibility period for salary arbitration from two to three years. The owners and the commissioner colluded against free agents from 1985-1987. There was an owner lockout in 1990. The 1994 strike was by far the longest and bitterest, lasting 232 days and causing the cancellation of the end of the regular season, playoff games, and the World Series. All took place before or during negotiations over a new agreement between MLB and the MLBPA, and all involved in some fashion free agency, free-agent compensation, salary arbitration, and salary caps. • Despite the gains made on labor issues, baseball’s antitrust exemption encompassed other issues that in the long run were just as vital to the well-being of the business of baseball such as league expansion and the awarding and switching of franchises, broadcast revenues and rights, and the construction of new stadiums and the replacement of older ones.

16. Conclusion • The establishment of the MLBPA and its head Marvin Miller transformed the game through collective bargaining with the owners. • Curt Flood’s unsuccessful challenge to the reserve system helped paved the way for free agency. • By creating an arbitration system for labor disputes, MLB and the MLBPA set the stage for the end of the reserve system. Arbitrator Peter Seitz’s decision in the cases of Messersmith and McNally marked the end of the reserve system and the flowering of free agency.

17. Bibliography • Abrams, Roger I. 1998. Legal Bases: Baseball and the Law. Philadelphia, PA: Temple University Press. • Flood v. Kuhn, 407 U.S. 258 (1972). • Goldman, Robert M. 2008. One Man Out: Curt Flood versus Baseball. Lawrence, KS: University Press of Kansas. • Kansas City Royals Baseball Corporation v. Major League Baseball Players Association, 409 F. Supp. 233(1976), appeal 532 F. 2nd 615 (1976).