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January 18, 2011 at 9:49 PM

Trying to void an MLB contract: Three case studies

ponson.jpg

(Sidney Ponson pitches for the Orioles in a game in September of 2004, a year before the Orioles tried to get out of his contract. Photo by Associated Press).

No matter how egregious an offense by a baseball player, voiding his contract is no easy task, a testament primarily to the strength of the Major League Baseball Players Association. In fact, it’s virtually unprecedented for a team to get completely out of a contract because of an off-field transgression, though teams have been able to earn some small victories over the years.

Geoff Baker’s story on Milton Bradley‘s arrest today quotes a former general manager saying that it would take specific language in Bradley’s contract for the Mariners to be able to avoid paying the remaining $12 million he is owed.

“It depends on the guarantee language,” the person told Geoff. “If the guarantee language includes a felony conviction, it allows the contract to be converted to a non-guaranteed form if that player is convicted of a felony.”

Generally, when teams have tried to void contracts in the past, they have relied on paragraph 7(b)1 of the uniform player’s contract, which states that a contract can be voided if a player “shall fail, refuse, or neglect to conform his personal conduct to the standards of good citizenship and good sportsmanship or keep himself in first-class physical condition.”

Paragraph 3 (a), furthermore, states that “The player agrees to perform his services hereunder diligently and faithfully, to keep himself in first-class physical condition and to obey the club’s training rules, and pledges himself to the American public and to the club to conform to high standards of personal conduct, fair play and good sportsmanship.”

Sounds pretty straight forward, but the union has been able to fend off attempts to invoke that clause.

Here are three examples:

1) Denny Neagle, Rockies. In early December of 2004, Neagle was cited in Lakewood, Colorado on suspicion of soliciting a prostitute. A woman in his car told police Neagle had paid her $40 for oral sex. It was the second brush with the law for Neagle, who had signed a five-year, $51-million contract with the Rockies before the 2001 season and given them a combined 17-23 record in the first three years. In 2003, he had been charged with driving under the influence.

The solicitation incident occurred on a Friday. The following Monday, the Rockies terminated Neagle’s contract, and tried to get out of paying the remaining $19 million they owed him by citing section 7(b)1 of the uniform contract. Neagle was due to make $10 million in 2005 and had a $9 million buyout of a $12.5 million team option for 2006.

The players assocation immediately filed a grievance to overturn Neagle’s termination. The case was heard in May of 2005 by arbitrator Shyam Das, and the two sides reached a settlement. The Denver Post reported that the Rockies had to pay Neagle “roughly $16 million” of the $19.5 million he was seeking to regain. The newspaper said the settlement was reached during a recess in the hearing, following the testimony of Rockies president Keli McGregor. So while Neagle got most of his money, the Rockies did recoup about $3 million for their efforts.

2) Sidney Ponson, Orioles. The Orioles also invoked the “personal conduct” clause when they attempted to void the final year of Ponson’s three-year, $22.5 million deal he had signed in January of 2004. The move followed a series of incidents involving Ponson, who spent 11 days in jail in Aruba, where he is from, after allegedly punching a judge during a fight on Christmas day, 2004. Ponson was arrested on a charge of drunken driving in Fort Lauderdale, Fla., less than a month later. On Aug. 25, 2005, he was again arrested for drunk driving.

The Orioles released him and refused to pay him the remaining $11.2 million he was owed. Again, the union filed a grievance, and the case was finally scheduled to be heard in December of 2008 – more than three years later. Again, Shyam Das was to be the arbitrator, but the two sides agreed to a settlement before the hearing began. The Baltimore Sun said that the two sides signed a confidentiality agreement, and quoted a source who called the final value “mutually agreeable.” In a 2010 article, the New York Times said that in the settlement, “Ponson received much of the salary he was owed under his contract.”

3) Francisco Rodriguez, Mets. In August of last year, Rodriguez was arrested for assaulting the father of his girlfriend after a Mets game at Citi Field. He was charged with third-degree assault, a misdemeanor in New York state. Rodriguez suffered a torn ligament in his right thumb, believed to have occurred during the altercation. The Mets put Rodriguez on the disqualified list and declined to pay him for the remainder of the season. Rodriguez’s contract called for him to be paid $11.5 million last year, $11.5 million this year, with a $3.5 million buyout of a $17.5-million team option for 2012.

The union, predictably, filed a grievance, but ultimately backed off, and the Mets were able to avoid paying Rodriguez about $3 million over the final two months of the season. The rest of his contract — $15 million, between his 2011 salary and the buyout — became non-guaranteed when he was put on the disqualified list. But it is believed the Mets, in exchange for saving the remainder of K-Rod’s 2010 salary, agreed to pursue no further action against his contract if he fulfilled his legal obligations. So far, he has done so. For now, the Mets are calling Rodriguez their closer for 2011, and the two sides are trying to mend fences. But it will be interesting to see what happens if his hand injury continues to be a problem — would they again try to claim Rodriguez breached his contract?

As you can see, in each case, the team was unable to completely void the player’s contract despite a legal transgression — but managed to get some sort of contract relief (though the extent is not known in Ponson’s case).

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