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Cardozo Journal of Conflict Resolution

Abstract

In recent years, the contracts awarded to Major League Baseball ("MLB") players in free agency have been astronomical. In the 2023 offseason, Shohei Ohtani signed the largest contract in American sports history, a ten-year $700 million contract with the Los Angeles Dodgers. In the previous year, MLB teams spent over $3.5 billion on free agents. However, before a player is eligible for free agency, he can undergo a process called final offer arbitration ("FOA"). In this system, if a player and his professional baseball team are unable to reach an agreement for the player's salary for the upcoming season, the case will be sent to a group of independent arbitrators. Both sides will present an offer concerning the player's value and the arbitrators will select one of the offers. A player is usually eligible for arbitration after three years of MLB service time and barring a contract extension with his team, will be eligible for FOA until his sixth year in the league. However, while FOA arbitration has been utilized by MLB to solve labor disputes since 1974, it has been called by MLB players "an incredibly flawed process, one that isn't very good for the game" and an "off-putting" process.

This Note will provide an overview of MLB arbitration including under what circumstances a player is eligible for arbitration, who are the arbitrators, what criteria are used to determine a player's salary, and any eligibility exceptions. Additionally, the Note will proffer a detailed history of the relationship between MLB players and their teams and how the FOA became the mode of arbitration in the MLB. Finally, the Note will also elucidate numerous issues concerning the use of FOA in baseball and propose the use of a different system to solve these problems using an alternative dispute resolution method called "Early Neutral Evaluation" ("ENE").

Disciplines

Dispute Resolution and Arbitration | Law

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