MLS’s CBA negotiations: federal mediation, salary cap and steps toward free agency

Following the expiration of the Collective Bargaining Agreement (CBA) between Major League Soccer (MLS) and the Major League Soccer Players Union (MLSPU) on 31 January 2015, both parties entered into negotiations in an attempt to agree to a new CBA prior to the start of the 2015 season on 6 March.

After weeks of negotiations, the parties appeared to be at an impasse and decided to enlist the help of the Federal Mediation and Conciliation Service (FMCS),¹ the same organisation that helped the parties negotiate an agreement during the last round of collective bargaining in 2010.

With the help of federal mediators, the parties were able to reach an agreement in principle on 4 March, just two days before the season was scheduled to begin, thereby avoiding the first work stoppage in MLS history.²

This article explores the legal basis of collective bargaining in the US (i.e. why an agreement needs to be reached and on what points); the role of the FMCS in helping the MLS and the MLSPU negotiate the terms of their CBA (and avoid a work stoppage); and the CBA’s two key issues: free agency and the salary cap.  Finally, the author examines if there was ever any real risk of a strike.

Collective bargaining

Collective bargaining is the process by which employers and employees, the latter of which are usually represented by a trade union, negotiate working conditions. Under §8(d) of the National Labor Relations Act (NLRA), both the management of a business (here, MLS) and workers union (here, MLSPU) are legally required to bargain in good faith “with respect to wages, hours, and other terms and conditions of employment.”³

The National Labor Relations Board (NLRB) and the courts have determined which “terms and conditions of employment”are mandatory subjects of bargaining and which are permissive, or voluntary, subjects of bargaining. As noted by Glenn Wong, a sports lawyer, arbitrator, professor, and the current president of the Sports Lawyers Association, “in the professional sports industry, mandatory subjects of bargaining would include the college draft, the salary cap, a limitation on roster size, and health and safety issues.”⁴

Conversely, examples of permissive subjects of bargaining would be the ticket allotment each player receives for friends and family or how the players will travel on flights (economy, business, or first class).⁵

The FMCS’s role in assisting CBA negotiations

Background

The FMCS, created by Congress in 1947 through the Labor Management Relations Act of 1947 (better known as the Taft-Hartley Act),⁶ is an independent United States government agency that offers dispute resolution services in an effort to “promote collective bargaining, strengthen labor-management relations, and enhance organizational effectiveness.”⁷

In the context of collective bargaining, federal mediation is a “voluntary process occurring when a third-party neutral assists the two sides in reaching a collective bargaining agreement.”⁸

It is worth noting that:

• “FMCS mediators are in touch with both parties even before negotiations actually begin. The contact is triggered by the legally-required notice of intent to open a collective bargaining agreement.”⁹
• “Mediators may make suggestions and offer procedural or substantive recommendations with the agreement of both parties. However, they have no authority to impose settlements. Their only tool is the power of persuasion.”¹⁰

Since 2010, the FMCS has mediated collective bargaining negotiations in the United States in Major League Soccer, the National Football League (NFL), National Hockey League (NHL), and National Basketball Association (NBA). Unlike arbitration, which may be mandatory and where a neutral third-party is brought in to render a decision on a dispute, which then becomes binding on the parties, mediation is voluntary and non-binding but can facilitate the parties reaching a contractual resolution to their dispute.