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New York Law School 5th Annual Sports Law Symposium

By [Monday, January 27th, 2014]

REGISTER HERE FOR THE 5TH ANNUAL NYLS SPORTS LAW SYMPOSIUM

Contact:  Jacqui Lamer or Tony Iliakostas

NYLS Symposium

If found to be A-Roid, is Yankees Contract Void?

By [Sunday, November 17th, 2013]

RodriguezBY TREVOR KILDUFF, NYLS ’15

Alex Rodriquez (A-Rod) is quite the mercurial figure; he either inspires fervent admiration or deep-seated distaste.  At no time has that statement been truer than now.  A-Rod is in the midst of appealing a 211 game suspension handed down by Major League Baseball (MLB) for his alleged use of performance-enhancing drugs (PEDs) and his connection with  Biogenisis.  The suspension raises the issue of the future of A-Rod’s contract with the New York Yankees.  If the suspension is upheld, then the Yankees are going to look to void A-Rod’s contract, a contract that still has 4 years and $114 million left on it.

While this may seem like a dream come true to Yankee fans and the organization itself, that is exactly what it is, a dream.  There is no MLB precedent for voiding a players’ contract for PED use.  The MLB drug policy for PEDs provides for a 50-game suspension for a first violation, a 100-game suspension for a second violation, and permanent suspension (lifetime ban) for a third violation.  However, the drug policy does not permit voiding a player’s entire contract when, as in A-Rod’s case, he has never tested positive for PEDs, and is being disciplined for the first time.

The Yankees may try to void the contract by relying on helpful language in the MLB Uniform Player Contract, the mandatory agreement between each player and his team.  Paragraph 7(b)(1) allows a team to terminate a contract

  • if  the Player shall at any time . . . fail, refuse or neglect to conform his personal conduct to the standards of good citizenship and good sportsmanship or to keep himself in first-class physical condition or to obey the club’s training rules.

Paragraph 3(a), titled “Loyalty,”  further states

  • The Player agrees to perform his services hereunder diligently and faithfully, to keep himself in first-class physical condition and to obey the Club’s training rules, and pledges himself to the American public and to the Club to conform to high standards of personal conduct, fair play and good sportsmanship.

The team could rely on this language to show that A-Rod breached his contract by “failing to obey the club’s training rules” prohibiting use of PEDs.  The team could also claim that the use of PEDs go against ‘the standards of citizenship and good sportsmanship.”  While this argument relies on sound logic it is unlikely to be successful due to the fact that no MLB contract has ever been successfully voided on the grounds that PED use violated these contract provisions.

The Yankees could also argue that A-Rod’s use of PEDs made him more injury prone.  The UPC’s “Player Representations” include that, “The Player represents that he has no physical or mental defects known to him and unknown to the appropriate representative of the Club which would prevent or impair performance of his services.”  It has been proven that using PED’s can lead to physical impairment, and in particular weakening of the tendons.  This argument may hold some weight because of the medical proof behind it coupled with the fact that A-Rod has in recent years suffered through a series of serious injuries, most notably his hip.  Again however this argument is still weak because A-Rod’s hip injury has been linked to a congenital deformity and he regained his health sufficiently to return to his usual roster position with the Yankees at the end of the 2013 season.  His previous health issues, once fully resolved, are likely to be immaterial when evaluating whether the Yankees owe him the remaining money on his contract.  Again, no contract in baseball history has been successfully voided due to health concerns from steroids.

What also helps A-Rod’s case in this situation is that all MLB players are represented by the MLB Players’ Association.  This union is considered the most powerful union in professional sports and has been able to stop or reverse the decision to void contracts in a number of circumstances, some being more serious than even the use of PEDs.  For example: Lamarr Hoyt, a pitcher for the Chicago White Sox during the 1980’s.  He was arrested three times for drug-related incidents.  After his third arrest MLB imposed a lifetime ban from baseball and the White Sox attempted to void his contract.  However, after the initial ruling of a lifetime ban the case went before an arbitrator who reduced the ban to 60 games, and reinstated his contract.  The arbitrator was swayed by the findings of psychiatrist Dr. Thomas Rodgers who diagnosed Hoyt’s drug episodes as the result of a sleep disorder known as intractable insomnia.  While the Hoyt situation is not necessarily analogous to A-Rod’s case, it does help to show how difficult it is to void a player’s contract, no matter what the infringement.

The only contract of an MLB players that has been successfully voided over the last 30 years was that of Shawn Chacon, when he was with the Houston Astros.  The incident that led to the voiding of Chacon’s occurred in 2008.  Chacon was trying to speak to Houston Astros General Manager, Ed Wade.  Wade asked Chacon to have the conversation with him in private in his office, and Chacon refused.  This led to a heated argument that culminated in player Chacon grabbing GM Wade by the neck, forcibly throwing him to the ground and not allowing him back to his feet.  As a result of this physical confrontation, the Astros voided Chacon’s contract.  The MLBPA’s appeal of the club’s action was rejected.  So short of choking your employer it is very difficult to void a player’s contract.

And even then, attacking your boss doesn’t necessarily justify voiding your contract; just ask Latrell Spreewell, a basketball player for the Golden State Warriors who choked his coach at the time, P.J. Carlesimo.  At first the Golden State Warriors looked to void his contract and David Stern (NBA commissioner) agreed.  However, an arbitrator reduced this discipline to 7 months without pay and Spreewell was able to obtain the rest of the money left on his contract.  The arbitrator in the Spreewell case, John Feerick, explained his ruling based on the fact that the lifelong ban for Spreewell had no precedence, and was harsh and unfair.  While it occurred in a different sport, Mr. Feerick’s decision bodes well for A-Rod.  It shows that arbitrators do not take the issuance of lifetime bans lightly and, when no precedent exists for a ban, it will be difficult to uphold one.

PED use goes against what the principles of fair play and good sportsmanship that the MLB and the Yankees strive to promote.  However that fact should not be enough to allow the Yankees to void A-Rod’s contract when there is no legal precedent in any sport for such an action.  The fact that nearly every lifetime ban of a professional athlete has been reversed will embolden an arbitrator to relieve the player of such a penalty, as well as to reinstate any contract the team attempts to void.  While A-Rod’s use of PEDs is inexcusable, the Yankees will not and should not be successful in any attempt to void his contract based on the dearth of legal precedent and inconsistency with the disciplinary options in the MLB’s drug policy.

Is Banning Alex Rodriguez Under the “Best Interests” Clause Really in Baseball’s Best Interest?

By [Thursday, August 1st, 2013]

MLB.ARodAny moment now, the Commissioner’s Office of Major League Baseball will (finally) levy suspensions relating to the Biogenesis scandal. While it appears many players will follow the lead of Ryan Braun and accept their suspensions for violation of the Joint Drug Program, Alex Rodriguez has publicly announced he will not. Since Rodriguez doesn’t want to figuratively play ball with MLB, it has been rumored the Commissioner’s Office could ban him under Article XII.B of the Basic Agreement: “The Best Interests of Baseball Clause.”

The clause permits Bug Selig, the commissioner, to discipline a player “for just cause for conduct that is materially detrimental or materially prejudicial to the best interests of baseball including, but not limited to, engaging in conduct in violation of federal, state or local law.” If a player is disciplined under the “Best Interests of Baseball” clause, he is not afforded the opportunity to exercise the appeal process under the Joint Drug Program. Under the drug program, a first time offender, which Rodriguez would be, is entitled to an automatic stay if the Players Association files a grievance and an arbitrator rules. If MLB disciplines Rodriguez under Article XII.B, any chance of delaying a penalty until the arbitrator rules would be eliminated.

However, is banning Alex Rodriguez under the “Best Interests” clause really in baseball’s best interest? David Cornwell, the high-powered attorney who has already had success overturning drug violations issued by Major League Baseball, represents Alex Rodriguez and has declared that Rodriguez’s objective is to play in the majors again. Cornwell will likely argue that a commissioner decision to ban Rodriguez is a blatant circumvention of the drug program. While the commissioner’s office no doubt has strong powers and would likely be within its authority to suspend Rodriguez under Article XII.B, the union would likely file a grievance.

Though the MLBPA likely wouldn’t be thrilled about standing behind Rodriguez, it certainly would be interested in fighting on behalf of all players for future collective bargaining agreements. Union head Michael Weiner won’t lightly accept the suspension under the “Best Interests” clause, as it would establish a dangerous precedent. This is a delicate situation for MLB as it currently is experiencing years of labor peace. If Commissioner Selig were to take such an extreme measure, could this lead the union to reopen the collective bargaining agreement?

Pursuant to Article XI of the Basic Agreement, the union can reopen the agreement by giving MLB 10 days’ written notice at any time for the “purpose of providing an orderly and expeditious procedure for the handling and resolving of certain grievances and complaints.” This means that if the union believes the commissioner is overreaching with his resolution of the Biogenesis scandal, the union can reopen the Basic Agreement. Accordingly, serious legal battles would be on the horizon and there would likely be a screeching halt to labor peace. Is that truly a road that MLB wants to travel down?

Cornwell’s argument would likely be that since Rodriguez has never failed a non-baseline test and has never been penalized, it would be an incredible leap to go from no suspension to a lifetime ban. MLB’s drug policy imposes a 50-game suspension for the first positive steroid test result. It takes three positive test results to impose a lifetime ban. . . . unless the commissioner’s office chose to exercise its power under the “Best Interests” clause.

At the end of the day, the threat of a lifetime ban for Rodriguez could be nothing more than a scare tactic to leverage Rodriguez into accepting a plea bargain for the rumored 150 game suspension baseball really seeks. This appears to be the more logical explanation, because banning Rodriguez for life does not seem to be in baseball’s best interest.

What is the MLB Players Association’s Duty in the Biogenesis Scandal?

By [Saturday, July 27th, 2013]

mlbpaOn July 22, 2013, Major League Baseball issued its first suspension in connection with the ongoing Biogenesis scandal when it reached an agreement with Ryan Braun to ban the 2011 NL MVP for the rest of the 2013 season. Several days before the suspension was levied, Major League Baseball Players Association Executive Director Michael Weiner issued the following statement:

“I can tell you, if we have a case where there really is overwhelming evidence, that a player committed a violation of the program, our fight is going to be that they make a deal. We’re not interested in having players with overwhelming evidence that they violated the (drug) program out there. Most of the players aren’t interested in that. We’d like to have a clean program.”

His statement the union has made it abundantly clear it will not protect performance enhancing drugs (PED) users; but does it have a fiduciary duty to do so?

Interestingly enough, the word “fiduciary” does not appear even once in either the 2012-2016 Basic Agreement between MLB and the MLBPA or the collectively bargained for Joint Drug Program. While the union professes to assist players with grievances, the word fiduciary is also absent from the players association website. Accordingly, it appears the union does not appear to have an express fiduciary duty to defend players found to have violated the Joint Drug Program. However, based upon the union’s past conduct, might there be an implicit one?

It wouldn’t be far-fetched to envision the union at a time in the not-so-distant past getting ready to brace itself against MLB’s intentions in the Biogenesis scandal and refuse to budge. When the steroids scandal came to light in the late 1990’s and early 2000’s, then-union chief Donald Fehr was notably reluctant to agree to random drug tests, despite the revelation of rampant use throughout the game. Instead, his main interest was protecting the privacy of the players. Though drug testing was implemented in the 2002 Basic Agreement, it was not until 2005 that MLB had the prerogative to issue suspensions.  This means the union held its ground for several years before it agreed to allow players to be suspended for PEDs.

Further, the union has vehemently protested and appealed suspensions levied against players who actually failed drug tests for PEDs. The union has insisted on every due process protection for players suspended for failed drug tests, and pushed players to exercise their collectively bargained appeals process if there was any basis to argue the failed test was a mistake. Importantly, it welcomed back each of those players with open arms.

Though Weiner states the union will pursue arbitration for those players who fail to reach agreements with the commissioner’s office and are ultimately suspended, it’s evident the union is taking a different approach to Biogenesis. The union not only doesn’t intend to fight for players with “overwhelming” evidence against them; it seems receptive to MLB punishing the players however the commissioner’s office deems appropriate.

This become all the more intriguing when one looks at the Section 7.A of the Joint Drug Program, which limits how long a player can be disciplined for violating the program “through the possession or use of a Performance Enhancing Drug.” The discipline calls for a 50-game suspension for the first violation; 100 for the second; and permanent suspension from MLB for the third. Braun’s recently agreed to an arbitrary 65-game suspension, which includes a 50-game suspension for his connection to Biogenesis and an additional 15 games for his actions during the grievance that overturned his positive test for testosterone from October 2011.

Though a 65-game suspension does not appear anywhere in the Basic Agreement or the Joint Drug Program, Weiner said he was “deeply gratified to see Ryan taking this bold step” because it “vindicates the rights of all players under the Joint Drug Program.” This is an enormous departure from the union doing everything its power to protect players suspected of drug use the way it did as recently as the last decade. The union always cautioned the media and fans to wait until all of the facts became available and the formal process to play out before passing judgment. Now, it is encouraging players to negotiate their own fate.

This begs the question of what if a player wants to fight despite falling into the “overwhelming evidence” category? Luckily, we may not have to wait long to find out the answer to this question. Despite rumors of Alex Rodriguez attempting to make a deal with MLB, he has indicated he plans to appeal any suspension. The appeal will present the union with quite a dichotomy. Though not having an express fiduciary duty to do so, the union has previously stood behind players who have failed formally administered tests for PEDs and encouraged them to exercise their rights under the Basic Agreement. Arguably, they’ve essentially assumed a duty to continue to do so.

With impending suspensions on the horizon stemming from evidence procured through what some may consider questionable methods, will the union follow precedent and stand behind those players exercising their collectively bargained right to an appeal or will it continue to demonstrate a lack of interest?

Legal Implications of MLB’s Biogenesis Scandal

By [Saturday, July 13th, 2013]

RolloverThe media has recently had a field day with the Biogenesis scandal and the recurrence of performance enhancing drugs (“PEDS”) in Major League Baseball (“MLB”).  This has raised several questions:  What are the legal repercussions; what does this mean for baseball; what actions can teams take based on just the word of Anthony Bosch, rather than conclusive drug tests; and what does this mean for the players involved?

As a baseball fan, I remember when it came out that Barry Bonds used PEDs; I was heartbroken.  He had passed a Yankee on the all-time home run list, and an asterisk wasn’t going to change that fact.  He also soiled the integrity of baseball, whether or not I had realized it at the time.

Since 2007, there have been more rumors and reports of steroid use among baseball players, but none compare to that first one.  When news broke this summer that about 20 active players had allegedly used PEDs recently, I barely flinched; it’s old news.

Any day now, Major League Baseball is preparing to hand out 100 game suspensions to these 20 alleged users; the normal suspension for a first offence is 50 games.  This is based on the word and paperwork of Bosch, a man MLB has previously not trusted, rather than their own tests.  The scandal began when a Biogenesis employee leaked the information, rather than when MLB performed drug tests.

Player contracts include a clause on steroid use and its consequences.  But is MLB allowed to use inconclusive evidence to hand down these consequences?  Does that violate the terms of the contracts?  If the allegations are true, what does that mean for the players and their contracts with teams?  These players may also have a clause in their contracts designed to protect the public reputation of their teams.  As models’ contracts often include not appearing indecently in public while being the face of a company or designer, these players may (or should) have something similar in order to protect the integrity of the team while they are donning their uniforms.  If a player is wearing Yankee pinstripes, for example, and it is public knowledge that he is using PEDs, such drug use may tarnish the reputation of those pinstripes.  If such a clause exists in their contracts, these PED allegations would infringe on that contract.

But what if these allegations are not true?  This could lead to a defamation issue.  These players are getting their own names tainted by the people from Biogenesis, the media including the majority of sports talk show hosts both on TV and radio, the league, and the teams themselves.  If some or all of them turn out to be false allegations, the reputations of these players are tainted anyway just from having their names put out there as possible users, or as players who use the same facility, but for alternative reasons.

It’s hard to put aside the fact that some of the players named are known to have used PEDs in the past.  But the league should do something about repeat offenders.  In an episode of the sports law web-show Law and Batting Order I recently participated in a round table discussion on the Biogenesis scandal, I mentioned a drug rehab program that the courts implement.  It’s geared towards the rehabilitation of people charged with drug related crimes.  They get drug tested weekly, and if they test positive they spend some time in jail.  Now I’m not saying that baseball players should spend time in jail, but there are ways the league can monitor players who have used before to make sure they are not currently using.  And if they test positive, a punishment should come down on them immediately.

I personally have an issue with the government’s involvement.  Every sport has their issues, yet Congress seems to take it upon themselves to fix baseball.  It seems as though Congress has developed an almost paternal instinct when it comes to protecting baseball that started with exempting baseball from antitrust laws (for more on this, please see my “Baseball’s Antitrust Exemption” series, also on this blog).  Since then Congress has kept a watchful eye on baseball:  America’s prized pastime.  The exemption set out to protect the league from competition and also wound up giving the league room to play when it came to their standards by which to run the league.  Now that steroids and other PEDs have threatened the integrity of the game, Congress is again stepping into their role as daddy dearest.  They want to make sure MLB remains America’s prized pastime, and if anyone dares jeopardize that or threaten the way we look at the game, they have to deal with the law itself.  The league governs, but Congress is always watching.  When it comes to baseball, Big Brother really is watching.  If a player dares step too far over the line, they’re dealing with far more than league consequences.

The over-protection of baseball by Congress equates with my issue with the antitrust exemption (please see “Baseball’s Antitrust Exemption Part II” in this blog).  As I previously mentioned, every sport has their issues and every sport has their own way of dealing with it.  Even baseball has its own way of dealing with steroid allegations, visa vi the 100 game suspensions that are due to be imposed soon.  But Congress feels a need to step in with baseball; a need that we do not see with other sports so much.  Baseball is not the only sport in America, yet it is still treated like the favorite child.

I get Major League Baseball taking a stand against PEDs.  I almost get the 100 game suspensions to show that MLB will not tolerate any PED use.  But there are other ways the league can punish repeat offenders.  And there are ways MLB can take care of this on their own.  I don’t get why Congress doesn’t give them that chance.  I also don’t get why this information went public and MLB started talking about suspensions based off of a leak from the Biogenesis facility.  If MLB is so worried about PED use (as they should be unfortunately), then there should be a testing routine put into effect, whether random or regular, but either way mandatory.  More importantly, sanctions should be based on those results; based on conclusive evidence of drug use according to the league itself, rather than the word of a disgruntled employee.