Baseball Arbitration: An ADR Success

by Jeff Monhait ’12
This article was originally published in the Journal of Sports & Entertainment Law at Harvard Law School
 

Major League Baseball’s salary arbitration system strikes a unique balance during a player’s first six major league seasons between teams completely controlling players and players earning their fair market value. Critically, the system resolves the issue of player salaries prior to, or, at the latest, early in spring training. This system developed somewhat serendipitously over more than a century of court battles, labor negotiations, and back room deals. Despite this ad hoc history, Major League Baseball’s salary arbitration system successfully handles and resolves these salary disputes.

Scholars who specialize in dispute resolution have developed a wealth of research on the processes designed to handle a recurring group of disputes. A survey of seminal literature in this field allows for a distillation of the key traits that contribute to the success of a given system. Baseball’s salary arbitration system comports with many of the recommended traits found in an effective dispute resolution system. While there remains an open debate as to whether the players should receive more or less of the revenues the sport generates, baseball’s salary arbitration system promotes the resolution of salary disputes without substantial disruption, and does so in a way that participants view as fair.

To read the full article, please go to the Journal of Sports & Entertainment Law’s website