M.L.B. to Pay $185 Million Settlement in Minor League Wage Dispute

Major League Baseball agreed to pay $185 million to settle a class-action lawsuit brought by thousands of current and former minor league players over past wage claims.

The agreement, which was filed Friday in the U.S. District Court for Northern California, is the latest step in a general reorganization of minor league baseball that included the takeover of the minor league system by the 30 major league clubs and the contraction and reorganization of the teams and leagues. Now M.L.B. will have to arrive at a new system to pay minor leaguers.

The class includes roughly 23,000 players, and the average payout will be only about $5,000 to $5,500 per player, according to the language in the settlement. It is hardly a windfall for the individual players, but the real significance of the agreement may be in how minor league players are compensated in the future, which will be up to M.L.B.

After a great deal of pressure over the years, M.L.B. has spent the last two seasons working on a process to increase pay for minor league players, provide housing and health care, eliminate clubhouse dues and improve general conditions, including travel and food.

“Change is in the air,” Garrett R. Broshuis, a former minor league pitcher in the San Francisco Giants organization and now a partner at Korein Tillery and a co-counsel for the plaintiffs, said in an interview Friday. “Things are getting better, and this case is a big reason for that. There is still more work to be done, and there are people watching to make sure they will get done. This proposed resolution is a big step in the right direction.”

Under the proposed agreement, which still needs to be approved by the judge in the case, M.L.B. must formally notify all clubs that they can no longer prohibit teams from paying players during spring training, extended spring training or any work period that is not during the championship season, which includes the regular season and the playoffs.

In the past, players were not paid for any time spent outside of the championship season, including time spent working out during the off-season, and their pay, once all of their time was accounted for, was generally below minimum wage. M.L.B. has argued that the players were similar to apprentices — like those in art, music and theater — temporarily aspiring to break into the major leagues, where they would be handsomely compensated. The average time spent in the minor leagues, according to M.L.B. figures, was roughly two and a half years and therefore not a permanent employment option.

Regardless of the validity of the argument, it came across to some as callous from an industry reaping billions in revenue.

Broshuis, who is not part of the class of players, spent six years in the minors and vividly recalled the hardships of minor league life. He remembered seeing eight teammates from Latin America living in a three-bedroom apartment with no furniture, only air mattresses.

“Those things are changing, and it is long overdue,” Broshuis said. “We first brought this case over eight years ago, and the problems were not discussed enough and had been going on far too long. Now, teams are paying for housing and have gotten rid of things like clubhouse dues, which was a major problem for players.”

Broshuis, whose firm would earn 30 percent of the payout, according to the terms of the settlement, or $55 million plus an additional $5 million in fees, said that without the pressure brought by the lawsuit, few of those changes would have been implemented.

Now, as M.L.B. works on a new system of compensation, it will do so unilaterally because minor league players are not represented by the Major League Baseball Players Association, or any other union, and there is no bargaining unit with which to negotiate. The settlement may help ensure that there is not a return to the inequities of the past, but exactly how minor league players’ situation will proceed could be very complicated, especially with teams in a number of states.

An hourly wage could be complicated to implement because players spend so much time at the ballpark for games, training, travel and relaxation. Most players work hard to prepare themselves for big-league careers and may object to hourly limits on the time they can spend working out.

“We are only in the second year of a major overhaul of the 100-year-old player development system and have made great strides to improve the quality of life for minor league players,” an M.L.B. spokesman said in a statement. “We are proud that minor league players already receive significant benefits.”

Those include $450 million in annual signing bonuses for first-year players, college tuition assistance and meals.

With the contraction of the minor leagues, there are now fewer players to pay. The cost of the settlement is roughly $6.2 million per major league club.

“We are pleased we were able to come to a resolution,” the statement said, “but are unable to comment on the details until the agreement is formally approved by the court.”