October 8, 2013

Analyzing A-Rod's Arbitration Case

What Both Sides Will Say

by Eugene Freedman

Week one of Alex Rodriguez’s disciplinary hearing has come and gone, with another week likely still remaining to be scheduled around the arbitrator’s other commitments at some point in the near future.

In order to prevail in the hearing and have discipline upheld, Major League Baseball must prove its case that Alex Rodriguez violated the Joint Drug Agreement between baseball and the Major League Baseball Players Association, and that the violation warrants the 211-game suspension it proposed.

MLB’s lawyers don’t have to prove their case to the media, who would quickly convict A-Rod of snatching the Lindbergh Baby if it were included in the charges. Some writers used unreasonable hyperbole in recent months, comparing A-Rod to mass murderers and war criminals. Fortunately for Rodriguez, they won’t be involved in the process.

Nor does MLB have to prove its case in the court of public opinion, where even many Yankees fans would prefer that A-Rod’s suspension be upheld, regardless of whether it relieved the team of his salary.

Instead, the case must be proven before Arbitrator Frederic Horowitz, who has been hearing discipline cases, among other types of labor-management disputes, for 25 years. There is a three-member panel, but Horowitz is its only neutral member. He is joined by MLB and MLBPA representatives who really don’t add anything to the process.

The Arbitrator will not be interested in hyperbole. He will be interested in whether MLB can prove, by a preponderance of the evidence, each of the individual charges levied against A-Rod, and if so, what the appropriate remedy is for each.

Hearing Process
The logistics of the hearing are like any other discipline hearing under any collective bargaining agreement between a union and an employer. Appendix A to the Parties’ Collective Bargaining Agreement lays out the process for the hearing. The employer, who bears the burden of proof in discipline cases, makes the first opening statement, followed by the union’s. Sometimes the union’s statement can be deferred until after the employer’s case. What’s curious in this case is that A-Rod has his own legal team, separate and apart from the Union’s legal team. I will address that in my next column.

Then, the employer puts on its case-in-chief to prove each of the charges through witnesses and other evidence. The employee’s counsel cross-examines the employer’s witnesses, and there is a chance for re-direct and re-cross of witnesses. When the employer’s case is concluded, the employee’s defense counsel may present a case. Because the burden of proof is on the employer in a disciplinary case, the employee does not have to put on a case. After each party’s case-in-chief, there is an opportunity for rebuttals to be presented.

Appendix A of the parties’ Collective Bargaining Agreement references briefs but doesn’t require them. This is not uncommon. Generally, arbitrators will allow a party to make a verbal closing argument if it wishes, or it may request to submit briefs. We don’t know what will happen in this case, although the expedited response time requirements for the arbitrator favor closing arguments.

All in all, the arbitration process will be very unlike normal court procedures. The rules of evidence are not enforced; arbitrators admit all evidence and “give them the appropriate weight” rather than excluding things based upon objections. The process is usually very relaxed compared to the formality of Federal court proceedings.

Arbitrators generally dislike true adversarial hearings, and they really aren’t purposeful in labor-relations. Traditional courtroom antics will not go over well. After all, labor arbitrations are generally between people who have ongoing and continuing relationships before, during, and after the hearing. They may have a dispute about the instant matter, but they have to work together in the future. That isn’t true with A-Rod’s legal team.

The Charges
MLB’s press release announcing the suspension stated:

Rodriguez's discipline under the Joint Drug Prevention and Treatment Program is based on his use and possession of numerous forms of prohibited performance-enhancing substances, including Testosterone and human Growth Hormone, over the course of multiple years. Rodriguez's discipline under the Basic Agreement is for attempting to cover-up his violations of the Program by engaging in a course of conduct intended to obstruct and frustrate the Office of the Commissioner's investigation.

Presuming these constitute the full charges, the Arbitrator will have several to consider. And they will all be treated separately.

MLB must prove each element of the charge by a preponderance of the evidence.

Charge 1: Use and Possession of Prohibited Substances
This charge has two elements: use/possession, and that the specific substance is prohibited under the JDA.

Use will be somewhat difficult to prove. MLB’s own testing regime, held out as the best in sports, will likely be used by A-Rod’s legal team as exculpatory evidence. They may be able to introduce A-Rod’s negative tests through cross-examination of MLB’s witnesses, or they can call MLB’s own program administrators as A-Rod’s witnesses. So MLB must also prove how A-Rod was able to beat the test if it intends to prove use—effectively undermining its own testing program.

Because MLB doesn’t have a positive test, the case will be built upon witness testimony and documentary evidence provided, presumably, by those same witnesses. Credibility will play a major part in whether these charges can be proven. Given MLB’s case against Biogenesis and Anthony Bosch, Bosch’s prior public statements, plus reports of MLB’s payment for records and testimony, A-Rod’s team will likely focus on Bosch’s credibility.

Arbitrators make credibility findings all the time, but relying on someone who may have been paid handsomely for his testimony—if the reports are true—will significantly undermine Bosch’s credibility, and therefore MLB’s case. There may be other witnesses to bolster the case who have not been paid and who do not have an obvious personal conflict of interest.

If there is no one who can testify to administering or observing A-Rod take a particular substance, the charge would have to made on possession. In the past there have been reports of A-Rod’s cousin acting as an intermediary. Delivery to the cousin would likely not be considered sufficient proof unless he too would be testifying against A-Rod. That said, reports seem to confirm that A-Rod and Bosch and his associates did have personal contact.

In either scenario, MLB will also have to prove that the substances involved were on the prohibited list. Normally I would assume that anyone running an anti-aging clinic was just a snake oil salesman, but several players involved with Bosch have already tested positive for prohibited substances, so he was in fact selling the real thing, at least sometimes.

Charge 2: Multiple Violations
One of the things MLB stated in its press release is that A-Rod used or possessed multiple substances, specifically hGH and testosterone, and that the use and/or possession took place over several years. While this may be titillating information for the press and fans to show A-Rod has been doing this a while and will do just about anything, it is close to irrelevant under the JDA.

Section 7(L) of the JDA, entitled “Notice of Violation,” states:

If the notification requirements of Section 3.G are satisfied, a Player will not be disciplined for a second or subsequent violation involving a Prohibited Substance that occurred prior to the time that he Player received actual notice of his first positive test result or non-analytical positive for the same Prohibited Substance, provided that he Player’s discipline for his first violation was not overturned or rescinded.

MLB can’t stack violations and cite prior years of use if this is the first time it has brought discipline against A-Rod. It can’t discipline him for a second violation if it never notified him of or disciplined him for the first violation. While some may not agree with this provision, it is necessary in a system of progressive discipline. Considering that the first offense is a 50-game suspension, the second is 100 games, and the third is a permanent ban (with caveats for return), it would be improper to wait until three violations for MLB to bring the first charge and seek a permanent ban. I can’t imagine that seeking 100 games for multiple violations in this first discipline will succeed.

The section on multiple substances in the JDA relates only to when a player tests positive for multiple types of substances: performance enhancing, stimulant, or for “drugs of abuse.” Even if it’s multiple performance-enhancing substances, the first offense is a 50-game suspension.

While A-Rod admitted to use prior to the current testing regime being in effect, that’s not considered a prior violation. Specifically, the JDA states, “a positive test result prior to the first 2006 spring training voluntary reporting date shall not be considered in determining the number of times that a Player has tested positive under the Program.” While this is not directly on point, it relates to intent of prior use (even admitted use), in the progressive discipline scheme.

Charge 3: Attempt to Cover Up His Violations
This is another relatively tricky charge. We don’t exactly know what A-Rod is alleged to have done other than failing to participate in the investigation.

There are reports that Rodriguez attempted to buy his Biogenesis records. Of course, MLB did buy those records, so if A-Rod’s conduct was improper, wouldn’t MLB’s be as well? After all, if there was a true doctor involved, A-Rod would have had a legal right to his own medical records, and his employer would not. But there was no real doctor, at least that I’m aware of, and technically these weren’t medical records.

Even if A-Rod did attempt to buy his own records, the charge has an intent component that MLB must prove. It also requires that MLB prove why A-Rod attempted to buy his records. In its own press statement, MLB outlined the charge that A-Rod “intended to obstruct and frustrate the Office of the Commissioner's investigation.” Intent to frustrate the investigation is a difficult proof point without an admission against interest. Any other intent in attempting to purchase his records undermines the charge.

Appropriate Penalty
Normally, an arbitrator must consider a host of factors when determining the appropriateness of a penalty: the nature and seriousness of the conduct; the notice or lack thereof to the employee of potential discipline for the conduct; the employee’s length of service, level of responsibility, performance record, and prior disciplinary record; and whether the discipline promotes rehabilitation. But in cases of discipline under the JDA, many of these things are irrelevant, at least for the underlying conduct.

The JDA already contains specific penalties for specific violations. Arbitrator Horowitz cannot mitigate a first offense for a performance-enhancing substance from 50 games to 25 games or fewer. The award must draw its essence from the CBA. And in the case of penalties, they are specifically provided. Similarly, he cannot endorse a penalty more severe than what is required in the JDA. As I mentioned above, first offenses for performance-enhancing substances are 50 games, second are 100 games, and third are permanent suspensions. A 75-game suspension for a first offense would not draw its essence from the agreement and would subject the award to reversal.

Additionally, there is a basic tenet in employee discipline that like offenses should receive like penalties.

Two other players have engaged in activities that that could be construed as attempting to obstruct and frustrate the investigation. Melky Cabrera created a fake website to cover up his positive test result last year. He received only a 50-game suspension for first-time use. There was no additional suspension assessed.

This year, Ryan Braun refused to answer questions during the investigation into his link to Biogenesis. He voluntarily accepted a 65-game suspension, including 50 games for a first violation and a presumed additional 15 games for lack of candor or failure to participate in the investigation. While that’s short of an intentional attempt to obstruct, even if it’s proven, I don’t see it as significantly different. MLB will be hard pressed to prove that it’s 146 games different.

Even so, 211 games is an arbitrary number. It was based upon the remaining games in the 2013 season, plus all of 2014. Even not knowing the evidence, it has a nearly zero chance of being upheld.

It also should be noted that there is no charge of sale or distribution despite many leaks to the contrary early in the reporting.

A-Rod’s Case
A-Rod will likely present a defense, even though he’s not required to do so. High-priced lawyers need to justify their fees and sometimes putting on direct witnesses to impress their client is a way to do so.

If it were my case, I would put A-Rod on the stand. I would have him admit to use and/or possession. I would have him talk about why he wanted his own records and why the reasons were not what MLB says his intent was. I would also have him be contrite, discussing his declining health, declining performance, and his desire to stay at the top of the game—even if it stems from hubris rather than an urge to help his team.

But I wouldn’t expect that defense tactic from A-Rod’s team. They’ve taken too aggressive a posture in filing a suit against MLB and making statements in the press to mount a traditional employee defense—“I did something bad and I’m sorry, but my employer is overreaching and I don’t deserve what they’ve proposed.”

Instead, as it would be with a criminal defense attorney (the type Rodriguez hired) the argument is that he’s not guilty. Different forum. Different risks. Different trier of fact. I just don’t see that type of defense as being pragmatic.

Likely Results
Realistically, the worst-case scenario for A-Rod is probably a 125-game suspension. That would be if MLB actually proves that A-Rod violated the JDA more than once, and that the second instance was after he received notice of the first. That would be the first 100 games, with an additional 25 games for impeding the investigation.

The worst-case scenario for MLB is for A-Rod to be completely cleared of the charges. While that seems unlikely, the resolution of the case may rest on the credibility of MLB’s witnesses, so it is possible.

But the most likely outcome is a 50-game suspension with some additional penalty for the obstruction. That would put the penalty somewhere between 65-85 games.

Eugene Freedman is Deputy General Counsel for a national labor union. He has a BS in Industrial & Labor Relations from Cornell University and earned his JD from University of Maryland.

Eugene Freedman is an author of Baseball Prospectus. Follow @EugeneFreedman
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