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For the first time in years, there is serious discussion about a work stoppage in baseball. Players have said there is a “100 percent” chance that there will be a strike in 2021 if nothing changes. Elsewhere, reports suggest that 65% of players feel that a strike is necessary to regain past losses. To understand what these statements mean, it is necessary to place them in the context of the machinery that guides labor-management relationships in the United States. This article will give you a brief introduction to strikes, lockouts, and based on this, assess if a work stoppage is likely in Major League Baseball.
Collective Bargaining: The Basics
A Collective Bargaining Agreement (CBA) is a contract between a labor union and an employer. The CBA will outline the rules of the workplace – how people are paid, when they are allowed to work, vacations, sick days, etc. As with many employment contracts, CBAs will only cover a set period of time. Normally, CBAs will last between three to six years, although some unions are experimenting with longer agreements. The current MLB contract will expire on December 1, 2021.
If MLB and the Major League Baseball Players Association (MLBPA) do not agree to a new CBA by December 1, 2021, that does not mean that work stops in baseball. After December 1, 2021, the MLBPA and MLB can continue negotiating for as long as they please. In this situation, life goes on as usual and the terms of old CBA remain in place. This is common in many industries; in fact, some contracts will continue for years following the expiration of an agreement. After the deadline passes, however, it becomes much more likely that a work stoppage may occur.
Tony Clark, head of the MLBPA
Virtually all private sector union-management relationships operate under the National Labor Relations Act (NLRA). Under the NLRA, both employers and unions can call for a work stoppage. When an employer prevents employees from engaging in work, it is called a “lockout.” In this scenario, the employer prohibits union members from entering the workplace – sometimes even literally chaining the workplace doors closed. When a union causes a work stoppage it is called a strike. In this scenario, union members withhold their labor from their employer. Often this is accompanied with union members picketing outside of the workplace.
Who initiates the work stoppage influences what rights both parties have during the work stoppage. Crucially, it influences what types of replacement workers can be used while the union members are either striking or locked out. If the union calls for a strike due to economic reasons (e.g., they could not reach an agreement over wages), management is allowed to hire replacement or permanent workers. In this case, union members are not guaranteed to receive their jobs back when the work stoppage ends. Yet if an employer initiates the work stoppage (e.g., lockout), union members are usually able to receive unemployment benefits and are allowed to return to work after the lockout is over. In this scenario, employers cannot hire permanent replacement workers.
Since there are very few baseball games taking place in December, players will have very little reason initiate a work stoppage. Instead, if one does occur, it is more likely that MLB locks out the players and uses the time between December and April to put pressure on the MLBPA to accept a deal. If the players would like to end the lockout and accept management’s last, best, and final offer, they can submit it to a vote of the membership. Should it receive 50% +1 votes, those terms become the new CBA and union members can return to work.
Is This Likely to Occur?
The contract ratification process influences how likely a work stoppage is in MLB. Nearly 40 percent of players in MLB earn close to the league minimum. The average MLB player’s career lasts 5.6 years. Loosely reading these numbers suggests that losing a season would mean that almost half the league would forego 18% of the income they could earn from playing baseball.
The discussion around a work stoppage in baseball usually focuses on the free agency market. It appears that teams have come to the conclusion that signing players deep into their 30s is no longer a winning bargain. Due to this, free agents are having a hard time signing the same contracts that were routine only a few years ago. Yet it is important to remember that each player only has one vote in the contract ratification process. Additionally, veteran free agents are a small group of the overall bargaining unit. The MLBPA will need 50%+1 votes in order to ratify a new contract. MLB, when designing its bargaining strategy, will understand that they can go a long way to reaching an agreement by offering benefits to the 40% of players who are working for the league minimum. It is worth noting that these players at the bottom of the pay scale may be the ones who could be hurt the most during a strike.
Furthermore, the basic economics of baseball are good. In 2018, for the sixteenth consecutive year, MLB set record revenues. Research suggests that management will use some of those gains to buy labor peace and avoid long-term harm to the business and an adversarial relationship with the union. Furthermore, since the union signed a poor CBA in the last round of bargaining, it creates more room for management to give back some of its gains in order to prevent a strike. Walton and McKersie’s A Behavioral Theory of Labor Negotiations, one of the foundational texts of labor-management relations (one that Rob Manfred no doubt had to read while he was an undergraduate at the ILR School), argues that maximizing gains at the table can put a labor-management relationship at risk; ceding some of MLB’s previous wins would allow baseball to continue operating at record-profitability and avoid a potentially catastrophic outcome for both sides.
That said, collective bargaining is both economic and psychological. On the one hand, bargaining is about dividing value between management and labor. But on the other hand, parties get locked into positions. Disputes emerge at the table that were not present going into bargaining. Perhaps unexpected outside events influence the tenor and position of the parties. Just imagine in your own life – have you ever gotten locked into an argument that you knew you were sort of wrong but didn’t want to give up? That happens in bargaining, too.
At the moment, there is good evidence that there are serious issues with free agency. There also appear to be problems related to the arbitration system because teams are working together in a way that may keep salaries down. These are not insubstantial challenges to resolve and have sparked serious discussion among players about a work stoppage. While these are serious challenges, MLB is not the first union-management partnership to run into rocky times. At the end of the day, there are several billion dollars to divide up – and the figure is getting larger by the year. Will either side achieve a perfect deal? No. But will they be able to find a deal that they can both live with? At the moment, that seems like a reasonable outcome.
