Labor Dispute Resolution Essay

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Labor Relations

A collective bargaining dispute was recently settled between Major League Soccer (MLS) and its players, on the eve of the 2015 season. The league had just finished averting a dispute with its officials, who formed a union in 2012, when the dispute with the players arose (Parker, 2014). The MLS Player's Union (MLSPU) and MLS had just seen their prior five-year deal expire, and the union was seeking more flexibility for its members. The structure of Major League Soccer is that the league owns all of the contracts for the players. The teams are franchises, and negotiate deals with the players, but ultimately the league has final say over player movements. This restricts the rights of the players with respect to free agency. Soccer players in Europe, where several leagues act as competitors with MLS for playing talent, players enjoy full free agency when their contract ends. In MLS, their last team retains their rights when their contract expires. The team has to specifically allow the player to leave. The players had other grievances as well, including the salary cap that the league imposes. The combination of the salary cap and the lack of true free agency restricts the ability of players to earn fair market value for their services, should they choose to play in North America. In the U.S. And Canada, MLS is the only fully-profession soccer league, and many other countries have restrictions on the number of foreign players that can limit a player's ability to negotiate overseas for better terms than would be offered in MLS. Thus, the players and the league were in dispute over the content of the new collective bargaining agreement (Brenner, 2015).

The underlying cause of the dispute therefore is the de facto monopoly that MLS has, and the way that it exploits this to drive down player salaries. Players theoretically can play overseas, but in most countries there are quotas or visa rules that limit the number of foreign players. In North America, only Liga MX in Mexico can offer comparable salaries to MLS -- the other leagues are minor pro-or semi-pro. Individual clubs negotiate salaries with their players in MLS, but are bound to the league's salary cap, and they retain player rights.

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Thus, if a player does not like the terms of the deal his club is offering, he does not have the right to negotiate with another team, even if he is out of contract. This limits the ability of players to bargain with clubs for a better deal. The lack of true free agency lies at the heart of the contract dispute in this collective bargaining round.

The salary cap was another issue. There are three exceptions to the salary cap allowed per team. As a result, the average salary is MLS is $292,000 while the median salary is $92,000. Thus, a team is typically composed of three high-priced players with the others earning at or below the median. Six players accounted for over one-quarter of total salary in 2014 (Cohen, 2015). The cap was set at a level lower than in comparable soccer leagues or in other North American pro-sports leagues (Cohen, 2015).

The players sought to resolve the dispute by threatening to withhold their labor. The MLS is responsible for the marketing of the league, and had signed a number of television deals globally, including a high profile deal for live matches in the UK. The league therefore had considerable financial incentive to reach a deal before a strike delayed the start of the season (Carlisle, 2015). This was the primary point of leverage for the players. A prolonged strike could have been met with scab players -- this would have resulted in the quality of the play in the league suffering and would have created ill-will that could convince high profile players to avoid the league.

That said, a prolonged strike would not have served the existing players well. They have an interest in a strong MLS that can continue to attract top talent, as this attracts sponsors and fans. Growth of the league is imperative for the players, because the salary cap will grow, giving the players increased salaries. The league, for its part, realized as well that many of the players were not going to be able to afford a prolonged strike. Many players earn less than $100,000 per year, and would not have been able to move to any….....

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