Could a legislative loophole help Mike Trout reach free agency ahead of schedule?
It took virtually no time whatsoever for the New Jersey native to quickly become a household name among sports fans, and his immense skills and versatility on both sides of the ball have led him to either win the MVP, or finish runner-up in MVP voting in every season he's played, excluding his 40-game debut in his rookie year.
The New York Yankees are a team building for the future, with considerable payroll coming off the books in the next two seasons. Many expect MLB's winningest franchise to splurge on a blue-chip free agent at some point after the 2017 season, and Trout is undoubtedly a name high on the list of every big league front office.
According to a recent exploration by Nathaniel Grow for FanGraphs, a hidden legal loophole could potentially open the door for Trout to enter free agency ahead of the MLB-mandated six-year requirement.
Grow explains how:
"A relatively obscure provision under California law - specifically, Section 2855 of the California Labor Code - limits all personal services contracts (i.e., employment contracts) in the state to a maximum length of seven years. In other words, this means that if an individual were to sign an employment contract in California lasting eight or more years, then at the conclusion of the seventh year the employee would be free to choose to either continue to honor the agreement, or else opt out and seek employment elsewhere."
Here's how the law applies to major leaguers:
"Under the law, the player would be legally obligated to honor his contract for the first seven years, but after that would have the right to opt-out at anytime. As long as the player remained happy with the terms of his agreement, he would continue to receive the salary specified in his contract. However, should the player choose to opt-out after seven years, he would once again become a free agent."
This stipulation could have a "significant impact" on the way California-based MLB teams (of which there are five) are forced to operate. It would also greatly influence the decision-making of a team's roster construction, with a much greater chance of losing players to free agency than elsewhere in the country.
The good news for players like Trout, however, is the fact that California ballplayers might have a built-in advantage in negotiations and salary discussions, thanks to the added leverage of Section 2855. Trout stands to benefit more than any potential free agent, because his earning potential is off the charts.
What's most intriguing for a much larger group of players, ones who may not sign long-term extensions like Trout's, is the legal precedent that's been established by Section 2855 in terms of the seven-year maximum term.
Grow clarified this hidden benefit:
"California courts have applied the provision to cases in which an employee was bound by a series of one-year renewable option contracts cumulatively extending eight or more years. Put differently, Section 2855 does not just apply to a single contract lasting more than seven years, but applies whenever an employer has a contractual right to its worker's services for a total of eight or more years, even if transpiring under a series of multiple contracts."
Here's why that matters to minor leaguers:
"This interpretation could have a significant impact on professional baseball. Under current MLB rules, teams potentially control their players for a total of up to 13 years - seven in the minor leagues, and six in the major leagues - before the player will receive the right to free agency. In theory, then, Section 2855 could allow any player employed by a California franchise to opt-out after spending seven seasons in the organization, across both the major- and minor-league levels.
So to bring this all back to square-one, how does this affect Mike Trout's ability to negotiate a potentially record-breaking new deal for himself? Well, Trout was drafted in 2009 by the Angels, and has thus reached the seven-year threshold for service time in the organization. Based on Section 2855 in the labor code, he should be allowed to opt out of whatever current contract he is under -- even a voluntarily signed extension, which is what Trout agreed to in 2014 -- and seek a completely new contract.
From here, the potential legal entanglements are messy. MLB owners would almost certainly fight players seeking to use Section 2855 to their advantage, while the Players' Union and California court system would also likely have to get involved in any sort of dispute. Owners of the five California teams would be forced to drastically alter their approach to promoting prospects and doling out contracts, even though less than 15% of big leaguers would actually be affected by the use of the provision.
At any rate, the prospect of seeing Mike Trout break out of his contract with the Angels to become the most highly sought-after and highly paid free agent in baseball history is mouth-watering. Bryce Harper reportedly is seeking a $400 million deal when he hits free agency, so it's not difficult to envision a scenario in which Trout becomes baseball's first half-billion dollar player.
The Yankees will stand pat with the young emerging core of homegrown talent entering 2017 -- a group of players Trout called "impressive" late last season -- but they'll certainly be keeping a keen eye on the developments with Trout, and Section 2855.