July 30, 2014

A Bitter Cup of Coffee: Postscript

May 4, 2011 by · 1 Comment 

On Thursday, April 21, Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) announced, with much fanfare, that they would be giving all those men who played in “The Show” from 1947-1979, who had more than one day of service credit but less than four years, and who were therefore unable to qualify for MLB pensions, payments of up to $10,000 each for the next two years, depending on their respective lengths of service. The issue of these inactive, non-vested retirees was why I was on the “Legal State of Our National Pastime” panel at  Baseball & The Law: America’s National Pastime symposium held on Monday, April 11 in the Dean Alexander Moot Courtroom at Albany Law School.

As the author of the book widely credited with helping spur MLB to pay these men the monies they’re about to receive, I’ve naturally been asked what I thought about the announcement quite a bit over the last week or so. Admittedly, I have mixed emotions about it. Obviously, given the continuing national recession in this country, there are very few people nowadays who would turn up their noses at an extra $10,000 per year. But that pales in comparison to what some of these men could have received if they were just restored back into pension coverage.

Take Tom Bruno, for instance. A native of Chicago who pitched for the St. Louis Cardinals, Kansas City Royals and Toronto Blue Jays, Bruno finished his career having accrued three years and 161 days of service. He fell one game short of meeting the vesting requirement. One game. Based on a report which indicated that the average baseball retiree was making $30,000 in 2006, you know what a onetime retroactive check would be worth to a guy like Bruno?  If you answered, “$900,000,” you’ll realize why I’m not so impressed that he’s getting $10,000.

For the record, Major League Baseball is a $7 billion industry. Today’s player makes, on average, $3.3 million. You know what the most Tom Bruno ever made was? Only $65,000. These days, men like Ryan Howard ($125 million over five years), Matt Holiday ($120 million over seven years) and A-Rod ($27.5 million per year) are commanding what some would perceive are ridiculously obscene salaries. And part of the reason they’re able to earn that kind of money is due to men like Bruno, who frequently went without checks during work stoppages because he realized that a union is supposed to go to bat, not only for future players, but for past players as well.

Many of the former ballplayers affected by this situation are not exactly household names. Three of the most famous are Pat Darcy, the Cincinnati Red hurler who gave up Carlton Fisk’s dramatic game-winning homer in Game 6 of the 1975 World Series, David Clyde, the flame throwing lefthander and Texas Ranger bonus baby and former Chicago Cub Jimmy Qualls, who memorably broke up Tom Seaver’s bid for a perfect game on July 9, 1969.

So why did these men find themselves on the outside looking in anyway? Good question.  Realistically, under the union’s previous Collective Bargaining Agreement (CBA) with the league, all these men had no expectation they were ever going to get a pension in the first place. They played during a time when you needed four years service to qualify for an annuity. If you didn’t have four years service credit, you weren’t eligible. Period. End of discussion.

Let me give you a quick history lesson.

For your information, the player’s pension fund was established on April 1, 1947. You had to be on an active major league roster on that date to qualify for a pension. At that time, the rules stipulated that you only needed five years to retire. So remember the date. You’ll see why it’s so important later on.

Twenty-two years later, that threshold was lowered to four years. Therefore, effective 1969, all you needed was four years to qualify for a pension. Again, keep that little morsel tucked away in your memory banks.

Now to the heart of the matter: on October 30, 1979, MLB’s Players Relations Committee formally advised the players union that it intended to terminate the 1976 CBA on December 31 of that year, which it was contractually obligated to do.  The thorny issue of direct compensation of free agents was the hot button topic.

As far as the negotiations between the two sides, historian Robert F. Burk writes that the owners’ negotiator, Ray Grebey, utilized what he referred to as stalking horses in dealing with the players union and its executive director, Marvin Miller, in 1980.  According to Burk, these pseudo proposals included a salary scale on pre–free agent players and the elimination of salary arbitration.

What was the purpose of such ruses? Burk explains that Grebey’s main objective was to boost free agent compensation. His plan required each club that signed a top tier free agent to compensate the loser by swapping it a major leaguer. Each club would be allowed to protect fifteen players from this fate.

Grebey also demanded provisions requiring arbitrators to base pay rulings on players’ seniority, continues Burk, and insisted on barring multiyear pacts to players with four years’ or less big league service. In exchange, he offered to make anyone in the future with major league experience eligible for the pension.

According to Burk, Miller feared that Grebey’s proposal for immediate pension eligibility was a gambit intended to divide the union by currying favor with younger players not eligible for free agency. Consequently, he was more open to an alternative compensation idea of additional monetary payments to teams losing free agents.

Whether Miller agreed to soften his position on the matter of direct compensation because he feared a divided union is beside the point. The players were now eligible for health benefits after only one day of service and a pension after 43 days – roughly one-quarter of a season. The problem? The proposal was never made retroactive.

According to attorney Ronald Dean, an attorney based in Pacific Palisades, California, a Fellow of the College of Labor and Employment Lawyers and a Charter Fellow of the American College of Employee Benefits Counsel; “Under the Employees Retirement Income Security Act (ERISA) of 1974, it is perfectly permissible to make an amendment retroactive even if it then vests those who were previously unvested.”  Named by the National Law Journal as one of the top forty benefits lawyers in the country, Mr. Dean was trial and appellate counsel in fifteen published Ninth Circuit Court of Appeals opinions involving ERISA issues.

Now let’s fast forward to 1997, when something occurred that changed the entire dynamic of this issue. At MLB’s meeting in Scottsdale, Arizona, the executive council created a pension plan for about 85 black players who didn’t play in the majors long enough to qualify for a pension or who did not have the opportunity to play in the majors at all.

Later that same year, the council also gave pensions to a group of non-black players who retired before 1947, the year the pension plan began. Interestingly, one of their biggest supporters was MLB Commissioner Allan “Bud” Selig. “It’s categorically unfair,” he told Dave Anderson, the Pulitzer Prize winning columnist of the New York Times.  “In the next labor contract, there should be a provision” for the pre-1947 players, Selig stated. So, in October 1997, men like Dolph Camilli, the 1941 National League Most Valuable Player, started drawing quarterly payments of $2,500.

Strictly speaking, these so called pensions weren’t really pensions. Even MLB acknowledged the distinction. “Baseball is very proud of its support of Major League Baseball players and other members of the baseball family,” said Rich Levin, the spokesman for the league in 2000. “In 1997, the major league baseball clubs established two separate supplemental benefit plans to assist former players. To date, over $2,000,000 has been paid to former players under these two benefit plans.”

Make no mistake, many employers do offer supplemental benefit plans but, as that term implies, they supplement something else. What these players got was more akin to a life annuity, which is a predetermined payout amount until the death of the annuitant. And these payments didn’t include survivor benefits or health insurance, which pensions typically provide.

Let’s also not forget that neither the pre-1947 players not the veterans of the Negro Leagues paid union dues . . . which the men I wrote about obviously did.

To be eligible for their payments, the black players had to either play in the Negro Leagues for at least one season before 1948 or play a combined four years in the Negro leagues and the major leagues before 1979.

Of course, African Americans had been unofficially barred from the game until 1947, the year Jackie Robinson broke the color barrier. Now, after years of both overtly and covertly discriminating against black ballplayers, MLB was attempting to change its evil ways.  And really, who would argue with the rationale for doing so?  Long before that historic evening in November 2008, when this country elected its first African–American president, baseball had too often mirrored society’s segregationist attitudes about race relations.

The price tag associated with this magnanimous gesture?  It amounted to annual payments of between $7,500 and $10,000 per player.

Baseball’s then chief labor executive, Randy Levine, justified the disbursement of the monies by noting that “Baseball wants to take care of those who contributed so much to its past as it grows in the future.”

That future got even brighter for the veterans of the Negro Leagues in 2004, when Selig agreed to pay pensions to more of these ballplayers on the grounds that baseball had not been totally integrated until 1959, when the Boston Red Sox became the last team to field a black player, Pumpsie Green.

“This is an important step toward solving a terrible inequity,” said United States Senator Bill Nelson, a Florida Democrat who successfully lobbied Selig about the supposed narrowness of the 1997 requirements. “These are some guys who really need and deserve help.”

The terms of the agreement weren’t exactly the same as with the 1997 group of ex Negro Leaguers. Players who never played in the major leagues were given the option of electing to choose pensions totaling $375 per month ($4,500 a year) for life or $10,000 a year for four years.

In attempting to help the former Negro League players, one might suggest that MLB had become the equivalent of the circus contortionist, bending over backwards, forwards, sideways and every which way but loose to ensure that past wrongs had been righted.  However, while the lords of baseball had no problem doing the right thing for these African American ballplayers, they showed absolutely no similar inclination to help the pre-1980, non-vested players.

Therefore, believing that they were the victims of racial discrimination, as a result of the favorable treatment accorded the Negro League veterans, former Chicago White Sox catcher Mike Colbern, former New York Met infielder Al Moran and Ernie Fazio, the first player ever signed by the expansion Houston Colt .45’s — the team name was later changed to the Astros — were the lead plaintiffs in a class action lawsuit filed in October 2003 against MLB that alleged that their Title VII rights had been violated. Title VII of the Civil Rights Act of 1964 specifically prohibits employment discrimination based on race, color, religion, sex, or national origin.

In addition, the suit contended that team owners conspired to fund the pension benefits for the former Negro Leaguers knowing that the white players who had played similar lengths of time in the big leagues had not received the same benefits.

Though he found the players’ case “sympathetic,” U.S. District Judge Manuel Real in March 2004 ultimately granted MLB’s motion for a summary judgment, agreeing with the Commissioner’s Office that the payments for the former Negro players “were not tied to any MLB employment relationship, rather, they were conferred as charitable donations.” The league also said the players waited too long to raise any legal objections.

Not surprisingly, the players appealed Real’s ruling and, on December 6, 2005, the Ninth U.S. Circuit Court in California heard oral arguments from both sides. Less than six months later, on May 22, 2006, the court of appeals for the ninth circuit upheld the lower court’s decision.

Writing for the three-judge panel, Justice Stephen Reinhardt indicated that the players had failed to establish a prima facie case of discrimination, given that the enactment of the Negro League Plans did not constitute an adverse employment action and given that the two groups of players are not similarly situated.

“Even if appellants had made such a prima facie showing, we would conclude that Major League Baseball has provided a legitimate, non-discriminatory and non-pretextual reason for their decision to implement the Plans,” he continued. “The plans were adopted for the specific purpose of providing benefits to those who had been discriminated against by being denied the opportunity to play MLB and to qualify for MLB benefits.”

As of October 18 – 24, 2009, which the United States Congress had declared as “National Save for Retirement Week,” only 874 of the 1,053 players named in the class-action lawsuit were still alive. That’s why my book is titled A Bitter Cup of Coffee: How MLB & The Players Association Threw 874 Retirees A Curve.

Look, we don’t live in a perfect world, and this is far from a perfect solution to this problem. What was announced on April 21, 2011 doesn’t provide health insurance coverage, nor will any player’s spouse or loved one receive a designated beneficiary payment after the man passes. So in my estimation, this is only a partial victory for the affected men.

Granted, the affected retirees don’t have a legal leg to stand on. They weren’t vested in the pension fund. But morally? Morally I found the position of both the league and the union reprehensible, especially since both the pre-1947 players and the veterans of the Negro Leagues were receiving monies.

Am I elated that these men are at long last finally going to receive some type of payment for their time in the game?  Of course. This was a wrong that should have been righted years ago. In fact, I’ve said on numerous occasions that this whole disgraceful chapter in labor relations was a terrible inequity and injustice that stained baseball’s history.

While the announcement is a step in the right direction, I continue to hope that both the league and the union will ultimately restore these men into pension coverage. And, if in some small way my book shed some light on this issue, I couldn’t be more pleased.

A Bitter Cup of Coffee is available by visiting Gladstone’s website at http://www.abittercupofcoffee.com or via Word Association Publishers by calling toll free 1-800-827-7903.  If you have any questions or comments for Mr. Gladstone, please feel free to contact him at abittercupofcoffee@gmail.com.

Editor’s Note: The above article was originally posted on the Albany Government Law Review Fireplace blog.  Special thanks to Kevin Rautenstrauch for allowing us to reprint it.

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  1. [...] A Bitter Cup of Coffee: Postscript (Seamheads). Doug Gladstone discusses recent changes in the distribution of pensions to an earlier generation of big-league players. [...]



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