MAJOR LEAGUE BASEBALL PLAYERS ASSOCIATION,
Facts of the Case
In 2007, the MLBPA and the MLB entered into a Collective Bargaining Agreement (the
“CBA”) that incorporated the MLB Policy on Anabolic Steroids and Related Substances (the “Policy”). The Policy prohibited MLB players from using a number of Prohibited Substances, including a variety of performance enhancing drugs including Clomiphene. The Policy provided for a standard of strict liability stating, “this Policy adopts an approach of strict liability, meaning that a positive test result will not be excused because a player was unaware he was taking a Prohibited Substance.” Any player who violated the policy for the first time would be subject to a 15-25 game suspension. Additionally, the Policy provided that Players subject to disciplinary action may appeal the suspension to a neutral arbitrator, whose decision would be “the full, final, and complete disposition of the appeal and will be binding on all parties.”
The MLB also provided players the opportunity to contact the “MLB Supplement
Hotline” (“Hotline”) to obtain “confidential and accurate information” about certain over-the-counter products, including their ingredients, effects, and adverse reactions. The memorandum announcing the Hotline stated: “Although we strongly discourage the use of supplements of any kind and for any reason, we understand that an informed decision is the best one.” The memorandum went on to state “You and you alone are still responsible for what goes into your body. Using the Hotline will not excuse a positive test result.”
In 2007, the MLB and Dr. John Larson, the Policy‟s Independent Administrator, learned
that some bottles of SpeedShot, an energy-boosting supplement claiming to provide five hours worth of energy, contained Clomiphene, an ingredient not listed in its list of ingredients. The MLB notified the MLBPA that Mega Energy Products, SpeedShot‟s distributor, had become a banned company with which teams and players were prohibited from doing business. The MLBPA notified all players, through their agents, that the company that distributes SpeedShot has been added to the list of prohibited energy-boosting supplement companies and that players were prohibited from endorsing any of their products. In addition, Dr. Larson sent a memorandum to all players reminding them of the dangers posed by Energy-Boosting Supplements and urging them not to take any energy-boosting supplements.
Despite these general warnings against the use of energy boosting supplements, five
players, Kevin Wilson of the Minnesota Twins, Pat Wilson of the Houston Astros, Manny Rogers of the Boston Red Sox, Al Peterson of the St. Louis Cardinals, and Bradly Melton of the
Florida Marlins, took SpeedShot during the preseason. All five players tested positive for Clomiphene and were suspended for fifteen games pursuant to the Policy.
All five players submitted their suspensions to a neutral arbitrator, pursuant to the terms
of the Policy. During the arbitration proceedings, the players did not dispute their positive tests or the presence of Clomiphene in their system. The players admitted that they were aware of the warnings regarding energy boosters, the Hotline, and the Policy‟s rule that each player is responsible for what is in his body. The players argued, however, that their positive results should be excused because Dr. Larson and the MLB knew, as of September 2007, that at least some SpeedShot shots contained Clomiphene—an undisclosed banned substance—and did not specifically advise MLB players of this fact. The players argued that the sanctions should be lifted because, notwithstanding the explicit and repeated warnings about the dangers of energy-boosting supplements and the Policy‟s strict liability rule, the Policy created a fiduciary duty that required the MLB to give a more particularized warning about SpeedShot once it was found to contain Clomiphene.
After a full hearing, the arbitrator upheld the suspensions pursuant to the Policy‟s strict
liability rule. The arbitrator found that there was no genuine dispute regarding each player‟s positive test. The arbitrator further ruled that the Policy enforces a rule of strict liability—a rule that players alone are responsible for what is in their bodies; that supplements are used at the player‟s own risk, and each player clearly understood what the rule meant. Moreover, the arbitrator found that the Policy did not articulate or impose an obligation to issue specific warnings about specific products.
Kevin Wilson, of the Minnesota Twins, then filed suit against the MLB, Dr. Larson, the
Consulting Toxicologist, Dr. Ray Finkle, and Adam Birch, the MLB‟s Vice President of Law and Labor Policy in Minnesota state court. The complaint alleged that the Policy violated Minnesota‟s Drug and Alcohol Testing in the Workplace Act (DATWA). The state court granted Wilson a temporary restraining order barring his suspension. This temporary injunction, however, applied only to Wilson as the other four suspended players were not employed in the state of Minnesota and thus could not obtain protection from that state‟s employment laws. The MLB then removed the case to federal court, where it was consolidated with an action brought by the MLBPA seeking to vacate the arbitration awards under the LMRA.
The United States District Court for the Southern District of Tulania, granting the MLB‟s
motion for summary judgment, found that Wilson and the MLBPA‟s DATWA claims were pre-empted by § 301 of the LMRA. The court based its decision on its finding that Wilson‟s DATWA claims were “inextricably intertwined” with the terms of the CBA. Additionally, the district court concluded that the MLBPA‟s argument—that the MLB and Dr. Larson violated public policy by failing to disclose that SpeedShot contained Clomiphene—failed because Dr. Larson warned players about the energy boosting supplements in general. The court determined that Dr. Larson‟s decision not to provide an ingredient-specific warning was within his discretion. The court further decided the MLB had no duty to specifically inform players when
an energy booster supplement is found to contain a banned substance. Therefore, the court granted the league‟s motion for summary judgment and upheld the arbitrator‟s suspensions.
Wilson and the MLBPA appealed to the United States Court of Appeals for the
Fourteenth Circuit alleging that the district court incorrectly granted the League‟s motion for summary judgment. The Circuit court, agreeing with Wilson and the MLBPA, found that Wilson‟s DATWA claims were not preempted by § 301 of the LMRA because a court need not look into the terms of the CBA but only compare the MLB‟s actions when drug testing and disciplining the players with the terms of DATWA. Furthermore, the Circuit Court found that the arbitrator‟s award violated public policy because it sanctioned and encouraged breaches of fiduciary duty which jeopardized the health of the MLB players and upheld suspensions for actions that were the direct result of the League‟s and Dr. Larson‟s own misconduct.
The MLB has petitioned this court for certiori on the same two questions decided below.
This Court granted certiorari on those questions; no other issues are properly before the Court.
Relevant Statutes Section 301 of the Labor Management Relations Act
Section 301 of the LMRA provides that “suits for violation of contracts between an
employer and a labor organization representing employees in an industry affecting commerce…may be brought in any district court of the United States having jurisdiction of the parties.” 29 U.S.C. § 185(a). Federal law governs the resolution of labor disputes under Section 301. SeeTextile Workers v. Lincoln Mills, 353 U.S. 448, 456 (1957). Accordingly, “a suit in state court alleging a violation of a provision of a labor contract must be brought under § 301 and be resolved by reference to federal law.” Allis-Chambers v. Lueck, 471 U.S. 202, 210 (1985). Likewise, “when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a § 301 claim…or dismissed as preempted by federal labor-contract law.” Id. at 220.
Minnesota’s Drug and Alcohol Testing in the Workplace Act
The Drug and Alcohol in the Workplace Act, Minn. Stat. § 181.950, establishes certain
procedures for an “employers” drug and alcohol testing of “employees” in Minnesota. The statute applies to testing for specified drugs, including cocaine, marijuana, and methamphetamines. Id. §§ 152.01(4), 152.02, 181.950(4)-(5), 181.951(1)(a). DATWA lists minimum information requirements for the contents of employers‟ drug policies. Id. § 181.952 subdiv. 1. Pursuant to DATWA, the drug policies of Minnesota employers must provide:
(1) the employees or job applicants subject to testing under the policy; (2) the circumstances under which drug or alcohol testing may be requested or required; (3) the right of an employee or job applicant to refuse to undergo drug and alcohol testing and the consequences of refusal; (4) any disciplinary or other adverse personnel action that may be taken based on a confirmatory test verifying a
positive test result on an initial screening test; (5) the right of an employee or job applicant to explain a positive test result on a confirmatory test or request and pay for a confirmatory retest; and (6) any other appeal procedures available.
Id. § 181.952 subdiv. 1(1)-(6). DATWA also sets forth criteria that a testing laboratory must meet in order for an employer to use its services. Id. § 181.953 subdiv. 1.
The Act expressly provides that its terms “shall not be construed to limit the parties to a
CBA from bargaining and agreeing with respect to a drug and alcohol testing policy that meets or exceeds and does not otherwise conflict with, the minimum standards and requirements for employee protection provided in” the Act. Id. § 181.955(1). In addition, the Act authorizes random drug and alcohol testing for “professional athletes if the professional athlete is subject to a CBA permitting random testing but only to the extent consistent with the collective bargaining agreement.” Id. § 181.951(4).
Section 301 Preemption Issue Background
Section 301 of the LMRA “mandates resort to federal rules of laws in order to ensure
uniform interpretation of collective-bargaining agreements, and thus to promote the peaceable consistent resolution of labor-management disputes.” Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 404 (1988). “Uniformity in the interpretation of collective bargaining agreements is considered essential to the federal scheme favoring collective bargaining.” Anderson v. Ford Motor Co., 803 F.2d 953, 955 (8th Cir. 1986). Consequently, Section 301‟s preemptive power covers any state law claim that is “inextricably intertwined with consideration of the terms of the labor contract” or “substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract.” Allis-Chambers, 471 U.S. at 213, 220. The Supreme Court has established that Section 301 does not preempt state law claims merely because the parties involved are subject to a CBA and the events underlying the claim occurred on the job. See Allis-Chalmers, 471 U.S. at 211. Petitioner (MLB) May Argue: DATWA Predicates Relief On Interpretation And Application Of The CBA And Its Drug-Testing Policy And Thus The Two Are So “Inextricably Intertwined” As To Lead To Section 301 Preemption
The statute expressly provides that “parties to a collective bargaining agreement can
bargain and agree” to a drug-testing policy as long as that policy “meets or exceeds, and does not otherwise conflict with DATWA‟s minimum standards.” Minn. Stat. § 181.955(1). Wilson‟s claim thus cannot succeed “without interpreting certain terms of the collective bargaining agreement,” to determine whether the terms of the Policy “meet or exceed” DATWA‟s threshold. Gore v. Trans World Airlines, 210 F.3d 944, 951 (8th Cir. 2000).
For example, the court would have to analyze the rules under the Policy for challenging a
positive test result to decide whether Wilson properly exhausted his claim, as mandated by DATWA. See Minn. Stat. § 181.956(1). In addition, the court would have to analyze and define the nature of both the player‟s rights in arbitration and the Independent Administrator‟s review following a positive test to see if they meet or exceed DATWA‟s requirement of an opportunity to “explain the positive test.” See Minn. Stat. § 181.953(6).
Because DATWA commands courts to analyze and interpret the twenty-seven pages of
the Policy so that it can meaningfully compare them to the numerous requirements in DATWA‟s twenty-four separate subdivisions, the DATWA claims are “inextricably intertwined with consideration of the terms of the Policy” and are therefore preempted. Lueck, 471 U.S. at 213; Zupanich v. United States Steel Corp., No. 08-5847, 2009 U.S. Dist. LEXIS 44504, at *8-9 (D. Minn. May 27, 2009)(“[T]he plain language of the statute requires the Court to examine the CBA to determine whether the agreement negotiated by the parties resulted in conditions that are not more favorable to employees. As such, the claim is inextricably intertwined with the CBA.”). II. District Courts Throughout The Country Have Found Section 301 Preemption In Cases Concerning Similar Circumstances Involving The NFL And Its CBA.
In Stringer v. National Football League, 474 F.Supp.2d 894, 910 (S.D Ohio 2007), the
United States District Court for the Southern District of Ohio held that a wrongful-death suit arising from death of player in hot weather conditions was preempted because the suit intertwined with collective bargaining agreement provisions regarding certification of team trainers and responsibilities of team trainers and physicians. Furthermore, in Holmes v. National Football League, 939 F.Supp. 517, 527 (N.D. Tex. 1996), the District Court for the Northern District of Texas found that a claim for invasion of privacy arising from mandatory participation in the league‟s drug-testing program was preempted because an analysis of the CBA was required to determine whether the test was authorized. III. Allowing State-by-State Litigation Would Make It Impossible For The MLB To Maintain A Single, Nationwide Policy Against The Use Of Prohibited Substances By MLB Players
Congress enacted Section 301 precisely because “[t]he possibility that individual contract
terms might have different meanings under state and federal law would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements.” Teamsters v. Lucas Flour, Co., 369 U.S. 95, 103 (1962). By the same token, the already difficult process of collectively bargaining for and enforcing prohibited-substance policies, which are so critical to the integrity of professional sports, “would be made immeasurably more difficult by the necessity of trying to formulate contract provisions in such a way as to contain the same meaning under two or more systems of law which might someday be invoked in enforcing the contract.” Id. at 103-04. Neither Minnesota nor any other State has the right to use its domestic laws in a way that has the practical effect of regulating the physical condition and terms of competition in each of the two dozen other States in which players play. See Healy v. Beer Institute, Inc., 491 U.S. 324, 336 (1989)(“The critical inquiry is whether the practical effect of the regulation is to control conduct beyond the boundaries of the State.”).
The purpose of the Policy is to enforce a single uniform standard of player conduct that
ensures an even playing field for all players and protects the integrity of the game. Fair competition could not exist if a patchwork of state laws imposed different rules and policies for the use of prohibited substances every time players crossed into or out of a jurisdiction to play. In this case, for example, while the Minnesota law claims allowed Wilson to keep playing despite an admittedly positive test, four other teams in other jurisdictions played without the help of one of their players who also testing positive after taking SpeedShot. Such disparate enforcement of the prohibited substances Policy threatens the fairness and integrity of the athletic competition on the playing field, threatens to distort the results of games and League standings, and is obviously unfair to those players who do not wish to use these substances.
The Supreme Court, in Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 404
[I]f the resolution of a state-law depends upon the meaning of a collective-bargaining agreement, the application of state law…might lead to inconsistent results since there could be as many state-law principles as there are States…[and] is pre-empted and federal labor-law principles—necessarily uniform throughout the Nation—must be employed to resolve the disputes.
The unique and necessarily national character of the rules governing nationwide athletic competition means that federal law—“necessarily uniform throughout the Nation,” Lingle, 486 U.S. at 406—can govern the interpretation and enforcement of the Policy and prevent “[f]ragmentation of the league structure on the basis of state lines.” Partee v. San Diego Chargers Football Co., 668 P.2d 674, 678 (Cal. 1983). IV. The Policy Tests For Numerous Substances That Are Not Even Subject to DATWA’s
DATWA applies to testing for specified drugs, including cocaine, marijuana, and
methamphetamines. Id. §§ 152.01(4), 152.02, 181.950(4)-(5), 181.951(1)(a). The substances covered by the statute do not include energy boosters, performance enhancing drugs, or Clomiphene, the substance at issue here. Id. Consequently, Wilson cannot argue for protection from DATWA as it does not apply to employers testing for the substance in question. Respondant (Wilson and MLBPA) May Argue:
I. Wilson’s DATWA Claim Does Not Require Interpretation of the CBA
Section 301 preempts a state law claim if its “resolution…depends upon the meaning of a
collective-bargaining agreement.” Lingle 486 U.S. at 405-06. “[T]he Supreme Court has distinguished those which require interpretation or construction of the CBA from those which only require reference to it.” Superior Waterproofing, 450 F.3d at 330; see also Livadas v. Bradshaw, 512 U.S. 107, 124-25 (1994)(holding there was no section 301 preemption because a wage rate provision of the CBA only had to be referenced to compute the proper damages). “Rather, the crucial inquiry is whether „resolution of a state-law claim depends upon the meaning
of a [CBA].‟” Id. (quoting Lingle, 486 U.S. at 405-06). The MLB does not point to a specific provision of either the CBA or the Policy that must be interpreted.
The Court would not be required to interpret the terms of the CBA, but instead it would
have to compare the facts and the procedure that the MLB actually followed with respect to its drug testing of Wilson with DATWA‟s requirements in order to determine if Wilson is entitled to prevail. See Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 261, 266 (1994) (“[P]urely factual questions‟ about an…employer‟s conduct…do not „requir[e] a court to interpret any term of a [CBA].‟” ); see also Thompson v. Hibbing Taconite Holding Co., No. 08-868, 2008 U.S. Dist. LEXIS 87045, 2008 WL 4737442, *1, *4 (D. Minn. Oct. 24, 2008)(holding that a terminated employee‟s multiple DATWA claims alleged “violat[ions] [of] such non-negotiable state law rights [which] d[id] not require an interpretation of the CBA, and would not be preempted under the LMRA.”). II. The United States Court of Appeals for the Tenth Circuit Has Ruled in an Analogous Case That Section 301 Did Not Preempt An Employee’s Claim Brought Under Oklahoma’s Standards for Workplace Drug and Alcohol Testing Act In Karnes v. Boeing Co., 335 F.3d 1189 (10th Cir. 2003), a former employee
brought an action against his employer, Boeing, under Oklahoma‟s Standards for Workplace Drug and Alcohol Testing Act. Id. at 1192. The court observed that “in order to establish a violation of this section, [the plaintiff] must show that Boeing (1) discharged him based on his drug test, and (2) failed to confirm the result through a second test. Neither inquiry requires the court to interpret, or even refer to, the terms of a CBA.” Id. Therefore, the court found that the state statutory claim was “clearly independent of the CBA and…not subject to § 301 preemption.” Id. at 1194.
Similarly to Karnes, the court here would not be required to interpret or refer to
the terms of the CBA in order to determine if the MLB violated the provisions of DATWA. III. DATWA Does Not State That An Employee Who Is A Party To Such A CBA Cannot Bring A Claim Under DATWA, But Affects the Number of Possible Claims an Employee Has Against His or Her Employer
DATWA expressly addresses CBAs. Subdivision two of § 181.955 mandates that
DATWA applies to all CBAs in effect after passage of the law in 1987. Seeid. § 181.955 subdiv. 2. Subdivision one, however, provides that DATWA “shall not be construed to limit the parties to a collective bargaining agreement from bargaining and agreeing with respect to a drug and alcohol testing policy that meets or exceeds, and does not otherwise conflict with, the minimum standards and requirements for employee protection….” Id. § 181.955 subdiv. 1.
Where there is a CBA that is at least as protective as DATWA, the number of possible
claims an employee has against his or her employer will be affected. Where the employer complies with DATWA but not with its CBA that provides greater protection, the employee could have only a claim for breach of contract. Where the employer does not comply either with
DATWA or its CBA that provides equivalent or greater protection than DATWA, the employee could potentially have two claims, a claim for breach of contract and a DATWA claim. IV. Section 301 Does Not Allow the MLB and MLBPA To Contract For Things That Are Illegal Under Minnesota State Law
The Supreme Court of the United States has stated: [T]here [is not] any suggestion that Congress, in adopting § 301, wished to give the substantive provisions of private agreements the force of federal law, ousting any inconsistent state regulation. Such a rule of law would delegate to unions and unionized employers the power to exempt themselves from whatever state labor standards they disfavored. Clearly § 301 does not grant the parties to a [CBA] the ability to contract for what is illegal under state law. In extending the pre-emptive effect of § 301 beyond suits for beach of contract, it would be inconsistent with congressional intent under that section to preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.
Allis-Chalmers, 471 U.S. at 211-12. Therefore, the argument that Section 301 requires uniformity in CBA‟s throughout the country is incorrect. Section 301 does not allow the MLB to circumvent the state laws of its choosing simply because it had negotiated a CBA.
The United States Court of Appeals for the Ninth Circuit has rejected a similar argument.
In Cramer v. Consolidated Freightways, Inc., 255 F.3d 683, 695 n.9 (9th Cir. 2001)(en banc), the employer, a large trucking company, “argue[d] that the terms of the CBAs affecting employees in multiple states should supersede inconsistent state laws.” Id. at 688, 695 n. 9. The Ninth Circuit observed, “This contention overreaches, however, because the LMRA certainly did not give employers and unions the power to displace any state regulatory laws they found inconvenient.” Id. at 695 n.9.
The Arbitration Award Issue Background
A court‟s authority to reverse an arbitration award for failure to comply with the Policy is
“exceptionally narrow.” Coca-Cola Bottling Co of St. Louis v. Teamsters Local Union No. 688, 959 F.2d 1438, 1440 (8th Cir. 1992). Courts must afford an arbitrator “an extraordinary level of deference” and must confirm the award as long as “the arbitrator was even arguably construing or applying his authority.” Stark v. Sandburg, Phoenix & von Gontard, P.C., 381 F.3d 793, 798 (8th Cir. 2004). However, “if the [Policy] as interpreted by the arbitrator violates some explicit public policy, [the Court is] obliged to refrain from enforcing it.” W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (1983). The relevant public policy “is to be ascertained „by reference to the laws and legal precedents and not from general considerations of public interests.‟” Id. (quoting Muschany v. United States, 324 U.S. 49, 66 (1945)). The question is not whether any behavior by the parties to the Policy violates public policy, but rather whether the
Policy itself violates public policy. MidAm. Energy Co. v. Int’l Bd. Of Elec. Workers Local 499, 345 F.3d 616, 620 (8th Cir. 2003). If the Policy does violate an explicit public policy, the Court is obligated to refrain from enforcing it. W.R. Grace, 461 U.S. at 766.
New York law governs this issue because the Policy is part of the MLB Collective
Bargaining Agreement, which states that to the extent that federal law does not govern, New York State law will govern the CBA. Petitioner (MLB) May Argue I. The Policy Does Not Violate Any Explicit Public Policy
In order to reverse and arbitrator‟s award, the Policy, as interpreted by the arbitrator,
must violate some specific public policy. W.R. Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (1983). The relevant public policy must “be ascertained „by reference to the laws and legal precedents and not from general considerations of public interests.‟” Id. There is no specific public policy, as defined in the laws and legal precedents of the state of New York, that are violated in this instance. II. Larson and the League Did Not Have a Fiduciary Duty to Issue Product Specific Warnings Regarding SpeedShot
Larson testified that had a player called him to inquire specifically about SpeedShot,
Larson would have told that player that SpeedShot contained Clomiphene. In addition, Larson‟s decision to not issue a product specific warning concerning SpeedShot does not violate his duties to players. Larson testified that he decided to send a general warning about energy-boosting supplements rather than about SpeedShot in general because the whole energy-boosting supplements industry is a problem. Thus, Larson exercised his discretion under the Policy to educate players, and did so in a general way because he believed that all energy-boosting supplements, not just SpeedShot, carried potential risks. Under the terms of the Policy, the decision to issue warnings regarding the Policy was Dr. Larson‟s to make. Absent a showing that the decision was outrageous or without any foundation, the MLBPA and Wilson cannot establish that the decision constituted a violation of any fiduciary duties Larson may have had.
While a specific warning might have been preferable to the MLPBA and players, it is not
a breach of fiduciary duties to tell players only that energy boosters are risky and that players should not rely on any supplement‟s list of ingredients because that list might be incomplete. The MLB‟s decision regarding the general warning to give players was not unreasonable. III. The Administration of the Hotline Did Not Confer on the MLB a Duty to Issue Product Specific Warnings Through the Hotline, the MLB was attempting to tell players what they already knew:
that players should not take energy-boosting supplements. MLB players are adults. They have been warned repeatedly not to take energy-boosting supplements because such energy boosters may cause a positive test for a banned substance; yet, these players completely disregarded these
warnings. In Walton-Floyd v. United States Olympic Comm., 965 S.W.2d 35 (Tex. Ct. App.—Houston [1st Dist.]) a Texas state court found that the USOC did not voluntarily assume a duty under state law through the operation of a hotline service available to athletes to check to status of all medications as to the list of prohibited substances. Similarly to Walton-Floyd, the MLB did not voluntarily assume a duty to issue product specific warnings when it created its Hotline. IV. If the MLBPA Wants Product Specific Warnings, It Is Free To Negotiate for Such Warnings in the CBA
The MLBPA is free to bargain for a clause that requires the MLB to inform players
specifically when any supplement is found to contain a banned substance not listed as an ingredient. The Policy as written, however, does not contain such a requirement. Consequently, the MLB does not assume such a duty unless such a duty is negotiated for in the next CBA.
Respondents (Wilson and MLBPA) May Argue I. The Arbitrator’s Suspensions Sanctioned Behavior That Threatens the Health and Safety of Players, Which is Clearly in Violation of Public Policy
Courts have frequently ordered arbitration awards to be vacated on public policy grounds
where, as here, an award would sanction behavior that threatens health and safety. See, e.g., Delta Air Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 861 F.2d 665, 674 (11th Cir. 1988)(affirming vacation of award ordering reinstatement of pilot who had been discharged after flying passenger plane while intoxicated); Iowa Elec. Light & Power Co. v. Local Union 204 of Int’l Bd. of Elec. Workers (AFL-CIO), 834 F.2d 1424, 1428 (8th Cir. 1987)(affirming vacation of award ordering reinstatement of nuclear power plant machinist discharged for deliberately violated federally mandated safety regulation). II. The Arbitrator’s Suspensions Violate Public Policy Because They Sanction the MLB’s Knowing and Intentional Breach of a Fiduciary Duty
Existence of a Fiduciary Duty “A fiduciary relation exists between two persons when one of them is under a duty to act
or give advice for the benefit of the other upon matters within the scope of the relation.” Lumbermens Mut. Cas. Co. v. Franey Muha Alliant Ins. Servs., 388 F.Supp.2d 292, 305 (S.D.N.Y. 2005). In order to determine if a fiduciary duty exists, New York courts conduct a fact-specific inquiry “whether a party reposed confidence in another and reasonably relied on the other‟s superior expertise of knowledge.” Lumbermens, 388 F.Supp.2d at 305.
A fiduciary relationship existed because the Players reasonably relied on Dr. Larson‟s
and the MLB‟s superior expertise and knowledge in administering the Policy as the authoritative source of information on potentially harmful ingredients in dietary supplements banned by the Policy. Dr. Larson expressly promised in a memorandum sent to all players that he would “continue to provide MLB Players with information on the subject throughout the year.” Dr.
Larson failed to live up to that duty by withholding critical information he learned about SpeedShot that was directly relevant to the health of MLB players. By declaring itself and Dr. Larson the authoritative sources of information about all supplements, the MLB undertook a duty “to give advice for the benefit of [MLB Players] upon matters within the scope of the relation,” and the players reasonably relied on the MLB and Dr. Larson‟s superior expertise and knowledge about the safety of energy-boosting supplements. Furthermore, the Policy also advises players that the Policy‟s administrators will make a “special effort to educate and warn players about the risks involve dint he use of supplements.”
In Grandon v. Merrill Lynch & Co., Inc., 147 F.3d 184, 189 (2d. Cir. 1998), the court
exclaimed that “the duty to disclose generally arises when one party has information that the other party is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.” Additionally, in Callahan v. Callahan, 127 A.D.2d 298, 300 (N.Y. App. Div. 1987), the court stated that the “duty to disclose may arise where a fiduciary or confidential relationship exists or where a party has superior knowledge not available to the other”.
As their fiduciaries with respect to information about dietary information, Dr. Larson and
the MLB owed the players the duty to disclose all material fact they knew within the scope of that relationship, especially facts about banned substances, which would endanger a player‟s health. In this case there is no dispute that Dr. Larson and Mr. Birch knew that Speedshot contained a banned substance years before the players were tested. Further, it is indisputable that they both deliberately withheld this vital health information from the players.
Dr. Larson deliberately chose not to inform any MLB player or the MLBPA about these
critical facts that threatened the health of MLB players because he feared that MLB players might then in the future come to expect that he would notify them about other harmful banned substances in energy-boosting supplements. This fear of personal liability caused Dr. Larson to conceal his knowledge about the ingredients in SpeedShot from the MLB players and also from the MLBPA. In addition to Dr. Larson, Mr. Birch, the Vice President of Law and Labor Policy at the MLB, also knew of the banned substance in SpeedShot because Dr. Larson told him about it. Birch, however, did nothing to inform the MLB players or the MLBPA. III. The League Breached a Fiduciary Duty To the Players When Its Hotline Gave Inaccurate Information Concerning the Presence of Banned Substances in SpeedShot In 2007, after the discovery that SpeedShot contained Clomiphene, Birch had asked the
Hotline about how many calls it had received regarding SpeedShot, yet did not tell the Hotline to dispense any more information about SpeedShot other than the fact that while it was not on the banned substance list, players should avoid taking any energy supplement because the label might not list all its ingredients. While the information that the Hotline gave the inquiring player concerning SpeedShot was undisputedly accurate, the Hotline should have informed the player and any subsequent player inquiring about SpeedShot about the presence of Clomiphene in
SpeedShot once the MLB was aware that SpeedShot did in fact contain a banned substance. One of the players only commenced using SpeedShot after the MLB Supplement Hotline advised him that SpeedShot was not on the banned substances list. IV. Had either Dr. Larson or any MLB official informed the Players that SpeedShot contained a banned substance, the players would not have taken it, would not have risked their health, and would not have been suspended
The case law in this area is weak, but there is an opportunity for students to make creative
arguments here. Feel free to apply your own policy judgments.
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