Two Major League Baseball clubs – the San Francisco Giants and Miami Marlins – are under investigation by the U.S. Department of Labor for possible federal wage law violations. The investigations come amid wider concern about questionable pay practices throughout professional baseball, according to interviews and records obtained by FairWarning under the Freedom of Information Act.
Labor Department spokesman Jason Surbey confirmed the investigations of the Marlins and the Giants but would not give details. However, emails reviewed by FairWarning show that possible improper use of unpaid interns is a focus of the Giants probe. It is the Labor Department’s second recent investigation of the Giants over pay practices involving lower-level employees.
The Giants declined comment when contacted for this story, but the day after publication the team issued a statement confirming the probe involves the internship program.
“The Giants have an established, highly sought-after internship program where students have the opportunity to gain real world experiences while earning school credit,” the statement said. “In the past, interns were paid monthly stipends in addition to receiving school credit. Interns now are paid at or above minimum wage on top of receiving school credit.”
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A Marlins spokesman said the club does not believe “that any of the Marlins’ current labor practices are improper. . . . We can confirm that the Marlins have been and will continue to cooperate fully with the Department of Labor.” Major League Baseball officials could not be reached.
Officials with the department’s Wage and Hour Division announced in August that the Giants had resolved the prior case by agreeing to pay $544,715 in back wages and damages to 74 employees. Many were clubhouse workers the agency said were paid at a daily rate of $55 but who sometimes worked so many hours that they got less than minimum wage and no overtime. The federal minimum wage is $7.25 per hour.
In announcing the settlement, Susana Blanco, director of the San Francisco district office of the Wage and Hour Division, said she was “encouraged that the Giants acted to resolve this issue” but disappointed “to learn that clubhouse workers providing services to high-paid sports stars weren’t making enough to meet the basic requirements of minimum-wage law.”
The Giants also were found to have improperly classified some workers as exempt from overtime pay, including clubhouse managers and video operators at both the parent team and its minor league affiliates.
The Giants in June also reached a $500,000 settlement in a private class action suit on behalf of security guards, who had claimed they were owed back pay for overtime and for working through breaks and meals.
According to a Sept.12 memo from the baseball commissioner’s office to presidents of the 30 Major League clubs, the Labor Department concluded from the first Giants investigation that questionable pay practices “are endemic to our industry.” Following a series of discussions and emails between the Wage and Hour Division and baseball officials, the league office summoned representatives of all Major League clubs to attend a meeting with labor officials in Orlando, Fla., next month.
The meeting was scheduled after the agency urged the commissioner’s office to take action on what an email described as the “catalog of issues” raised by the Giants case. The issues included improperly exempting certain employees from overtime pay and paying daily rates that might fall short of the minimum wage depending on the number of hours worked.
Another issue was unpaid interns. This “was not part of the completed investigation” of the Giants, an email said, “but . . . has subsequently been raised.”
Unpaid internships, which are especially prevalent in industries such as entertainment, media and professional sports, have generated growing controversy and some successful private litigation. According to Labor Department guidelines, unpaid internships are proper only when designed for the education of the interns, and not to benefit the employer or displace regular workers.
Major League Baseball does not control employment practices of individual clubs. But since the Giants case, the Wage and Hour Division has leaned on the commissioner’s office to help bring teams into compliance. Much of the contact has been between George Ference, Wage and Hour’s regional administrator in Philadelphia – the nearest regional office to the baseball commissioner in New York – and Rob Manfred, chief operating officer for the league.
An Aug. 8 email from Ference asked Manfred about “the specific steps that MLB plans to take” to ensure “compliance with issues uncovered in the Wage Hour investigation of the San Francisco Giants.” In a follow-up email on Aug. 12, Ference wrote: “What I need to be able to do is explain . . . exactly how we are working collaboratively to ensure that other franchises are moving toward compliance.”
Ultimately, they scheduled a presentation by Labor Department officials during next month’s meetings of baseball owners and general managers in Orlando.
“Each club must send at least one representative to the DOL presentation,” said the memo from Manfred and Dan Halem, MLB’s senior vice president and general counsel. “In the interim,” the memo said, “we strongly suggest that each club consult with its employment counsel . . . to ensure compliance.”