Friday, February 2, 2007

CBA Supercedes Individual Player Contracts

Recently, there has been a lot of press about how MLB has voided Barry Bonds' latest contract with the San Francisco Giants. The question is why was this done? To understand, we need to start by looking at the history behind collective bargaining agreements.

The reason why similarly situated individuals come together (a bargaining unit) to form a union is because there is strength in numbers. Management can't tell one person that if he doesn't agree to a salary of peanuts, he can just hire someone else who will work for peanuts. If Management does do that, the group of workers can threaten to strike.

Typically, the union leaders work with management to create a collective bargaining agreement that neither side likes, but that both the employees and Management can live with. The CBA will have provisions for salaries, terms of employment and the time frame for which the CBA covers. Once these terms are agreed to by Management, it cannot hire anyone to work for them on terms inconsistent with such agreement. To do so would be a violation of National Labor Relations Act.

Collective bargaining agreements in the sports world are different from collective bargaining agreements in almost every other industry because when it comes to discussing salary, the CBA in sports leagues only sets a floor that Management can't go below and allows each player to negotiate his top salary.

However, like all CBAs, once terms of employment are established in the CBA, an employee (player) and management may not override those terms of employment with a side agreement. Many of the terms of employment for MLB are established through the Uniform Player's Contract. Specifically, Article III – Uniform Player's Contract states:
During the term of this Agreement, no other form of Uniform Player’s Contract will be utilized. Should the provisions of any Contract between any individual Player and any of the Clubs be inconsistent with the terms of this Agreement, the provisions of this Agreement shall govern. Subject to the limitations set forth in Article IV below, nothing herein contained shall limit the right of any Club and Player to enter into Special Covenants in the space provided in a manner not inconsistent with the provisions of this Agreement.

Now, despite all the hoopla surrounding Barry Bonds' steriod and drug problems, the contract was reportedly voided by MLB because it violated the CBA's provision with regard to promotional activies. That CBA provision states:
Baseball Promotion
3.(b) In addition to his services in connection with the actual playing of baseball, the Player agrees to cooperate with the Club and participate in any and all reasonable promotional activities of the Club and Major League Baseball, which, in the opinion of the Club, will promote the welfare of the Club or professional baseball, and to observe and comply with all reasonable requirements of the Club respecting conduct and service of its team and its players, at all times whether on or off the field.

While I am unaware of the exact language that the Giants put in the contract that was in violation of the CBA, it must have required an unreasonable amount public relations service time. Again, I have no proof, but it could only have been done for one of two reasons: 1) to try and make up for his tarnished image; or 2) to take advantage of Bonds breaking Hank Aaron's home run record.

Barry's contract also had provisions that would give the Giants the ability to terminate the contract in the event that Barry's legal troubles caught up with him. According to reports by the Associated Press, Barry's contract reads:
Player acknowledges and agrees that an indictment for any criminal act... is proper grounds for termination of this contract.

Player also acknowledges and agrees that he will not grieve, appeal or otherwise challenge any club action to terminate this contract as a result of player's indictment for any criminal acts [specified] ... nor will he cause or authorize any third party, such as the Major League Baseball Players Association, to grieve, appeal or otherwise challenge any club action to terminate this contract as a result of players' indictment for any [specified] criminal acts.

No official decision has been made with respect to these provisions, but this language also likely violates both the grievance procedure and the termination procedures established in the CBA. In particular, the language that states neither Bonds nor the MLB Players Association will appeal any club action to terminate the contract has little chance of surviving.

Technically, this contract is governed by the new Collective Bargaining Agreement which, as far as I know, has not been reduced to writing. Accordingly, my analysis has been base upon my reading of the CBA from 2002-2006. It is likely that the same provisions will be included in the new CBA.