While baseball fans and courtroom voyeurs might long for a public legal showdown between Astros owner Jim Crane and former general manager Jeff Luhnow, attorneys say the more likely outcome of their contract dispute over Luhnow’s firing is a quiet, secretive resolution behind the protective wall of private arbitration.
Three Texas attorneys were united on that point of view Monday after examining the 18-page breach of contract lawsuit filed by Luhnow against the ballclub before Texas 125th District Judge Kyle Carter.
Luhnow alleges that Crane violated his contract by firing him in January after he was suspended for a year by Major League Baseball commissioner Rob Manfred. Crane’s decision, Luhnow says, denied him benefits that include $22 million of his $31 million contract plus bonuses and a guaranteed slice of the ballclub’s profits.
While the bulk of the complaint alleges a plot by the Astros and MLB to scapegoat Luhnow as the villain of the 2017-18 sign-stealing scandal, attorneys say its most critical point is in the 34th of 43 paragraphs, which says Luhnow is required to submit contract disputes to arbitration “by the commissioner or the commissioner’s designee.”
“Jeff Luhnow will have a very difficult time defeating the arbitration agreement clause,” said Rogge Dunn, a Dallas attorney who has represented former Orioles manager Buck Showalter, Texas Tech University and a former Baylor University Title IX oversight director in employment law cases.
Luhnow’s attorneys say it would be a “complete sham” for Manfred to have a key role in arbitrating disputes in which he is a central figure. The lawsuit asks Carter to submit the case to a jury or to appoint an arbitrator of his own choosing.
“His point is that this is an inside deal,” Dunn said. “The commissioner will protect the owner and scapegoat me, and he also gets to appoint the arbitrator, who will know on whose bread is being buttered.”
Mike Muskat, a partner with the Houston firm Muskat, Mahony & Devine, said Texas law is “very favorable toward enforcement provisions,” which decreases the prospect Luhnow can avoid an arbitration proceeding in which MLB gets to pick the arbitrator.
“I’ll give (Luhnow’s attorneys) credit for a creative argument, but the law is pretty solid,” Muskat said. “There’s a pretty high hurdle to avoid arbitration based on the selection of the arbitrator.”
See here for the background, and there’s a copy of the lawsuit embedded in the story. I’ll say this much, if Luhnow turns this into a crusade against mandatory arbitration clauses in employment agreements, even if it’s for the most self-interested of reasons (*), I will regain a modicum of respect for him. He’s right that this kind of forced arbitration is a scam that greatly benefits employers – and businesses in general when we’re talking about other types of service agreements – but the fight needs to be bigger than this. You can do it, Jeff!
(*) Money is very much the motivating factor here, as there’s over $30 million at stake. If the Astros can fire Luhnow for cause, instead of firing him for being a loser, as is the case most of the time when managers/GMs are canned, then they don’t owe him any of the money he was to be paid in his contract. Whatever else you may think of Luhnow, he’s not an idiot.