The Work

November 22, 2011 6:45 PM

As MLB and Players Strike Labor Pact, A Look at Union's Legal Bills for Last Five Years

Posted by Brian Baxter

It turns out that labor peace in a major U.S. professional sports league can be achieved without lockouts or litigation.

Major League Baseball, once known for its fierce collective bargaining battles, announced Tuesday that it had reached a new collective bargaining agreement with the union representing players. The deal expands to ten the number of teams that will qualify for the postseason playoffs and includes a provision to eventually test players for the use of human growth hormone.

Howard Ganz, cohead of the sports law group at Proskauer Rose in New York, advised the league on its negotiations with the Major League Baseball Players Association. The players union, as well as owners of the league's 30 teams, must still ratify the accord in order for it to take effect once the current collective bargaining agreement expires on December 11.

Ganz, who did not immediately respond to a request for comment on the negotiations, is also currently working with cocounsel at Skadden, Arps, Slate, Meagher & Flom in representing the National Basketball Association in that league's ongoing collective bargaining battle. (Proskauer also served as outside labor counsel to the National Football League when it reached a deal with its rebellious players union over the summer.)

Robert Manfred, Jr., MLB's executive vice president for labor relations and human resources and a former partner at Morgan, Lewis & Bockius, took the lead for the league in negotiating with players. Thomas Ostertag serves as the league's general counsel, while former Proskauer partner Daniel Halem is general counsel for labor.

MLB's office in New York is full of Am Law 200 alums, with former Baker & Hostetler partner Jimmie Lee Solomon serving as executive vice president for baseball development, while ex-Kelley Drye & Warren associate Tim Brosnan serves as executive vice president of business. Earlier this year, former MLB chief operating officer Robert DuPuy rejoined Foley & Lardner as a partner in New York.

Michael Weiner, a former general counsel for the MLBPA who took over as executive director two years ago, did not respond to a request for comment on whether the union used outside counsel for its negotiations with the league. An MLBPA spokesman also did not respond to a request for comment.

Hammering out a new labor pact absent the kind of conflict that has plagued other professional sports leagues can only help MLB polish its public image, which suffered badly over the past decade as allegations about players' rampant use of steroids and other performance-enhancing drugs leaked out in magazine stories, books, newspaper reports, and federal investigations. The inclusion of blood testing for HGH in the new five-year labor deal, which will last through 2016, reflects a collective effort by management and players to put that sad era behind them.

While the quick resolution of the current contract talks between Major League Baseball and its players should keep the related legal bills relatively low this year, The Am Law Daily has the breakdown on how much the players union has spent on outside and in-house over the past five years.

Federal law requires that all labor unions in the country make annual LM-2 filings with the U.S. Department of Labor. The Am Law Daily reviewed the past five years of those filings—data for 2011 is not yet available—to get a sense of the MLBPA's legal expenses. (Click here for a similar report on the NBA from September.)

Beginning in 2006, when the league and the union signed their last labor pact, through December 2010, the MLBPA spent more than $4.7 million on outside legal and lobbying fees.

As one might expect, the Labor Department filings show in line-item breakdowns that some of those fees were incurred as a result of a league-mandated investigation into the use of performance-enhancing drugs led by DLA Piper chairman emeritus George Mitchell, Jr.

Mitchell, who returned to DLA earlier this year after serving a two-year stint as the Obama administration's special envoy to the Middle East, released the results of his inquiry in December 2007. (The work done by DLA lawyers in compiling the report was the subject of a March 2008 feature story in The American Lawyer.)

The MLBPA's top billers that broke the $100,000 mark for legal and lobbying services over the past five years are: Steven Fehr ($2.7 million), Polsinelli Shughart ($2 million), Keker & Van Nest ($705,396), Sidley Austin ($639,754), Hemenway & Barnes ($361,937), Hunton & Williams ($309,685), lobbyist Kevin McGuiness ($257,120), Coleman & Balogh ($249,232), Sideman & Bancroft ($240,279), Jolley, Walsh, Hurley, Raisher & Aubry ($224,783), Farrell & Reisinger ($168,703), Cozen O'Connor ($111,518), Bredhoff & Kaiser ($108,550), and Baker Botts ($101,646).

Steven Fehr, of counsel at Kansas City, Missouri–based Jolley Walsh, has handled baseball-related work for players almost exclusively since 1980. Fehr, who was named special counsel to the union in March 2010, is the younger brother of former MLBPA executive director Donald Fehr, who stepped down two years ago, only to be elected head of the National Hockey League Players' Association in December 2010.

Boston's Hemenway & Barnes has advised the MLBPA primarily on state and local taxation issues for players, while Baker Botts represented the union last year in the Chapter 11 case of the league's Texas Rangers. Also advising the MLBPA in that matter was New York labor firm Cohen, Weiss and Simon, which was paid $90,360 for its services, according to union records.

Sidley Austin and San Francisco area–based Keker & Van Nest, Sideman & Bancroft, and Coleman & Balogh were all involved in litigation that reached the U.S. Court of Appeals for the Ninth Circuit related to drug test results for current and former players, according to our previous reports.

Hunton, which is listed as being paid for licensing direct expenses and professional services, was also the firm tapped by former St. Louis Cardinals slugger Mark McGwire during his 2005 testimony before Congress on the use of performance-enhancing drugs in baseball. McGwire later came clean about his steroid use, earning praise from his lawyer, Hunton partner Mark Bierbower.

Pittsburgh-based Farrell & Reisinger, formed by refugees of Dreier LLP, has handled work for such players like Alex Rodriguez and Francisco Rodriguez. (As a side note, the MLBPA paid $69,000 in August 2010 to Sheila Gowan, a partner at Diamond McCarthy serving as trustee in the dissolution of Dreier LLP.)

Others firms receiving payments from the MLBPA over the past five years include: Entwistle & Cappucci ($83,352), Patton Boggs ($75,913), Bingham McCutchen ($70,511), Simpson Thacher & Bartlett ($29,217), White & Case ($18,327), Richards Kibbe & Orbe ($15,978), Loeb & Loeb ($15,483), Cole, Schotz, Meisel, Forman & Leonard ($15,208), Horwood Marcus & Berk ($13,274), Rouse Hendricks German May ($12,000), Bien & Summers ($10,000), Mayer Brown ($8,960), Harness, Dickey & Pierce ($5,480), and Cohen, Weiss and Simon ($5,005).

Like his predecessor Don Fehr, current union executive director Weiner draws an annual salary of $1 million. While serving as general counsel, Weiner's salary was $765,000 per year, according to Labor Department filings. Last year the MLBPA hired former NHLPA general counsel and interim executive director Ian Penny as senior labor counsel. Penny's salary for the three-and-a-half months he was employed by the union in 2010 was $138,542, according to MLBPA records.

The MLBPA's chief labor counsel, David Prouty, was paid $520,000 in 2010, while senior counsel for business and director of business affairs and licensing Timothy Slavin received $380,000. Assistant general counsel Doyle Pryor and Robert Lenaghan were paid $420,000 and $380,000, respectively, in 2010.

After his retirement from the union in 2009, Don Fehr received more than $11.8 million in a compensation package for his 23 years of service as executive director. Gene Orza, a former associate general counsel and chief operating officer of the union, received more than $1.3 million in compensation in 2010, having announced his intention to step down before the 2011 season.

Orza made almost $700,000 in salary during his last year with the union, while another retiree, former Polinselli Shughart senior partner Judith Heeter, received $515,000 per year in her role as director of business affairs and licensing for the MLBPA. Heeter's final pay package in 2009 totaled $551,787.

The MLBPA's LM-2 filings also reveal the amounts paid to the top arbitrators employed by the union and the league to adjudicate salary disputes between players and their teams. Binding arbitration has always been unique to baseball's collective bargaining agreements, and has even given rise to its own legal definition.

The top arbitrators between 2006 and 2010 receiving payments from the union were Shyam Das ($161,127), Stephen Goldberg ($39,059), Elizabeth Neumeier ($38,582), Margaret Brogan ($27,353), Steven Wolf ($27,179), Elliott Shriftman ($24,064), Jack Clarke ($14,738), Richard Bloch ($14,422), Fredric Horowitz ($12,755), and Sylvia Skratek ($12,147). (The arbitrators are also paid by MLB.)

The MLBPA also hired arbitration expert Richard Shapiro as a consultant in December 2009. Shapiro drew a salary of $600,000 in 2010 and in the four years prior received $508,896 for his services as an outside adviser to the union.

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