The Unique Game of Baseball Arbitration – Foley & Lardner LLP

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Here’s one venue where it plays out differently—win or lose: Every February, the salaries of certain Major League Baseball (MLB) players are decided by three-member arbitration panels. The defining characteristic is that the panel must choose either the salary proposed by the player or the salary proposed by the team. Winner takes all. No splitting the baby.
On a designated date, the team and the player trade proposed salary numbers. At the hearing, they are locked into those num­bers. The panel must decide which is the most appropriate. The primary criteria are the quality of the player’s contribution to the team during the past season, the length and consistency of the player’s career contribution, the player’s past compensation, comparative baseball salaries, the player’s injury history, and the team’s recent performance.
The hearing is short. Each side has one hour to present its case in chief. Although the rules are flexible, typically each party walks the panel through a detailed presentation. Each side ana­lyzes the player’s recent and career performance, and how that performance compares with that of other players who played the same or similar roles on their teams and who, when their salaries were determined, had the same level of seniority (called “service time” in MLB). Generally speaking, starting pitchers are compared with other starting pitchers, shortstops with other shortstops, and so on.
The player goes first. Unlike traditional trials or other arbitra­tions, the presentation is almost entirely argument. No evidence. With rare exception, there are no interruptions or objections. Once both sides have presented, there’s a short break. Each side quickly (read here, “frantically”) prepares its 30-minute rebuttal. Again the player goes first. Occasionally, there is brief sur-rebuttal. Regardless, after a half day, the case is fully submitted. The panel typically rules within 24 hours, announcing only which party has prevailed, with no opinion or explanation of its reasoning.
The hearing process is intense, challenging, and exhilarating. Each side tries to convince the panel that its proposed salary should prevail. Each contends that the player looks more like its “comps”—its evidence of the comparable data—than like the comps used by the other side.
While dramatically different from a jury or bench trial, these unique presentation and decision-making dynamics provide valu­able insights for traditional trial lawyers in traditional settings.
Unlike salary arbitration hear­ings, trials are typically not an all-or-nothing exercise. Juries and judges can accept certain claims and reject others. They can find in favor of a plaintiff on liability, yet award no or only nominal damages. They can throw out both parties’ damages calculations and instead come up with an award that they believe to be fair. 
As a result, trial lawyers and their clients face a great tempta­tion to hedge their bets and present alternative “even if” argu­ments on both liability and damages. It’s not uncommon to see both parties offer multiple damages models for consideration. Yet, clients and practitioners often seem surprised when the jury reacts by doing rough justice, reaching a verdict that represents some composite of the various arguments and theories presented, instead of giving either side a complete victory.
That dynamic doesn’t work in salary arbitration. The panel has no discretion to find a middle ground. There is no strategic benefit to presenting alternative analyses that dilute the core argument. Moreover, presenting the entire case in one hour is challenging. It requires laser focus. The best approach is to de­velop the strongest points and present them as compelling the inescapable conclusion that your position is the right one.
That should almost always be the approach in traditional liti­gation as well. Consistently focusing the fact finder on the best arguments conveys confidence and conviction, and avoids dilu­tion and confusion. It also saves time. Judges and juries love that. Simplify the case; streamline the testimony; avoid extraneous exhibits. If the jury or judge won’t accept your best argument, what suggests they would accept arguments B or C?
Trial lawyers must have the experience, judgment, and, most of all, confidence to make those tough choices. Present only those arguments that most effectively advance the case. Jettison the alternative arguments. Quiet the attendant noise. Trying the case as if it’s all-or-nothing will give the client the single best chance of achieving a complete victory. As the grizzled manager Lou Brown told the fire-balling closer “Wild Thing” Vaughn in the classic baseball movie Major League, “Forget about the curve ball, Ricky; give him the heater.” So go with your best stuff.
Inexperienced or inadequately prepared trial lawyers often lose the forest for the trees, focusing on individual issues, pieces of testimony, or discrete exhibits, without thinking enough about the big picture. Over the course of a trial—short or long—juries are unlikely to remember who won each isolated skirmish, much less to connect the fragmented dots to indicate the correct verdict. Fact finders don’t keep score, inning by inning. Rather, from a mass of evidence, conflicting versions of events, and competing arguments, they try to divine the truth to reach a result that they think is fair and right.
Salary arbitration hearings have fewer trees. An arbitrator may consider only the six identified factors. Nothing else. Still, there are a dizzying number of potentially relevant statistical measures. Position players are evaluated for both their defensive, fielding performance and their offensive, hitting performance. Offensive performance can be measured in lots of ways—consistency (bat­ting average), plate discipline (strikeouts and walks), and power (extra base hits, home runs, slugging percentage), among others.
Similarly, there are a large number of potential comps for each player. In just the modern era, there have been over 15,000 MLB players. One player may look a lot like another in one statistical category but very different in another. Assessing individual statis­tics in isolation is just not very helpful. And it is time-consuming.
With only an hour to put on a case, MLB salary arbitration forces both discipline and focus. The emphasis must be on the forest, on developing thematic elements that tell the story of why the proposal is market-based and fair, and how the other proposal ignores market realities and overreaches. The effec­tive advocate relies on statistical categories and comps to tell the story comprehensively and persuasively, and to explain why other statistics, while perhaps less supportive when viewed in isolation, shouldn’t influence the result.
Discipline and focus are equally important in litigation. The best trial lawyers craft the evidence into stories that make juries want to rule for their clients. Every piece of testimony, every ex­hibit should tell an important part of that story and reinforce the key themes. Anything that does not clearly and directly advance those themes should be left out.
A trial lawyer should explain why the desired verdict is not only legally and factually correct but also morally right and fair. Introduce the theme in opening statement, to provide the frame­work within which to process the evidence as it comes in. In clos­ing argument, show how the evidence, including the opposing party’s evidence, resonates with the stated theme. Connect the dots. Don’t talk about issues, testimony, or exhibits in isolation. Instead, weave the story.
Every case comes with its own terminol­ogy. Complex cases are littered with medical diagnoses, engineer­ing concepts, accounting principles, corporate strategies, finan­cial terms, and industry-specific phrases comprising a unique and arcane vocabulary. All cases, it seems, offer up acronyms—lawyers love those linguistic shortcuts.
In the years that a lawyer lives and breathes a case before trial, this complex parlance becomes second nature and easily rolls off the tongue. We lawyers of course also speak our own  language. We call the parties “plaintiff” and “defendant,” rather than by their names. We ask whether a witness “had occasion to meet” someone, rather than asking whether the witness “ever met” so and so.
The audience—judge or jury—will not know obscure indus­try terms or be fluent in legalese. No one can listen carefully to a witness’s answer if still trying to decipher the question. How can the jury follow and accept evidence and argument that it doesn’t understand? When we trial lawyers use industry and legal jargon, we erect unnecessary communication barriers that make it harder for us to connect with the jury or judge. But isn’t that already hard enough? 
Jargon and acronyms are endemic in baseball. Anyone who follows the sport knows that there has been an explosion in ad­vanced metrics, analytics, and complex statistics. Historically used statistics that are familiar to the casual fan—batting average (BA), runs batted in (RBIs), home runs (HRs), and earned run average (ERA)—have been largely replaced by a bevy of novel measures like WAR (wins above replacement), DER (defensive efficiency ratio), LIPS (late-inning pressure situation), FIP (field­ing independent percentage), and dozens more.
But baseball isn’t rocket science; it’s much more complex. The typical arbitration panel is closer to a jury than to the analytics wizards who now populate MLB team front offices. Although most arbitrators have heard multiple salary arbitration cases, they typically are traditional labor arbitrators the rest of the year, unlikely to have kept up with rapidly evolving baseball analytics.
It’s the practitioner’s job to translate the complex statistics on which the team or player relies into plain language and explain what those statistics really reveal about the player’s performance day to day. Simply reciting acronyms and numbers—no matter how compelling to someone who already understands them—is not effective or persuasive.
What’s needed is a straightforward explanation of what the statistic measures. For example, FIP is a statistic used to evaluate pitchers. It measures run prevention, using variables that are seen as entirely within the pitcher’s control—home runs, strikeouts, and walks—while eliminating the variable of other defensive factors not within the pitcher’s control. So that’s the what of it.
It’s equally important, though, to explain the why—why that statistic is important to the case. Using the same example, FIP may show that a pitcher performed well despite runs being scored in his appearances, if it was poor fielding by other defenders rather than the pitcher’s own performance, that permitted those runs to be scored. The jargon does not convey that. The practi­tioner must do so.
Traditional trial lawyers also must focus on straightforward and effective communication. The job is to explain complex con­cepts in ways that others can understand. We have many tools to do that—among them, stories, analogies, pictures, demonstrative exhibits. One helpful practice is to rehearse an opening statement or a closing argument in front of a spouse, a college roommate, staff personnel, or anyone else who is not a lawyer. If they can’t follow what’s being said, there’s a problem.
Most trial lawyers use storytelling tools to some degree. But truly mastering that skill requires constant self-discipline and self-awareness, to avoid the habit of using industry jargon or legalese. Focus on establishing and continually fostering a true connection with the audience. All that starts by using a common and familiar language. So lose the jargon.
At their core, trials are credibility bat­tles. The party that the jury finds to be the most candid and be­lievable typically wins. Yet, we trial lawyers focus too much on witness credibility and not enough on our own. As the narrator of the client’s case, we are relied on to offer an honest and cred­ible story. But lawyers often overreach and embellish, sometimes badly, calling into question their own credibility in the process.
When a lawyer’s opening statement promises the jury that it will hear certain testimony or see certain exhibits, which then never are introduced during the trial, credibility is lost. When a lawyer tries to lead a witness on direct, or twists the language of an exhibit during cross, credibility is lost. When a closing argu­ment mischaracterizes what everyone in the courtroom heard or saw, credibility is lost.
Lawyers often defend themselves as zealous advocates, not liars. Being zealous, however, is no substitute for being persuasive and effective. That requires honesty and candor. If we are not seen as the truth tellers, then why would our clients be believed?
At first blush, the salary arbitration process seems ripe for overreach and embellishment by counsel. The entire presen­tation is argument. The parties do not exchange presentation materials, only salary proposals, before the hearing. In a salary arbitration, unlike an appellate argument, there is no evidentiary record to cabin the issues or how they are presented. Objections and interruptions are rare. Usually, each party is permitted to say whatever it wants to say.
In practice, however, the process imposes tremendous dis­cipline. At the beginning of the hearing, the parties exchange presentation materials. Small armies of highly talented and ex­perienced lawyers and analytics gurus scurry to their respective war rooms. They scrutinize the other party’s case to prepare rebuttal arguments and exhibits. If a presentation misstates or mischaracterizes an important fact, cherry-picks a set of statistics or time period, or just gets something wrong, it is nearly certain that will be highlighted immediately and prominently in rebuttal.
As counsel present the entire case and are the only witnesses, so to speak, the lawyers’ credibility with the arbitration panel is paramount. The process demands accuracy, precision, and candor. It leaves little room for overreach or embellishment, at least to win.
Traditional trials do not present these same dynamics, but trial lawyers would do well to act as if they do. Except in egregious cases, we litigators likely don’t face immediate correction from the judge or opposing counsel of every exaggeration. But, to be sure, the jury will do any necessary correcting through its verdict.
Preserving credibility as trial counsel is essential. If there’s a serious question about the admissibility of a piece of evidence, leave it out of opening statement. Don’t make a promise to the jury that you may not be able to keep. Let the witnesses testify. Cross-examine the opponent fairly and on truly material points. Deal with the actual evidence in closing. Don’t sell out to mere zealous advocacy. Be the truth teller. You’ll win more trials.
Given the high cost of trials and the years it takes to get there, by that point, at least one side sees, and often both see, the issues as black and white. We are right; they are wrong. Odds are the jury will see lots of gray.
Perhaps channeling our clients’ certitude, we trial lawyers sometimes lose that perspective. We believe, incorrectly, that to win the case, we must prevail on every issue. We fail to give any ground or cede on anything, no matter the surrounding facts or the issue’s relative strategic importance. That takes attention away from our most compelling arguments, makes us appear unreasonable, and wastes time. The ability to choose the right battles is an essential skill. It’s hard, if not downright impossible, to be right about everything.
Baseball arbitration exemplifies this basic principle. In most cases, the player has no perfect comp. (When he does, the parties typically settle.) As a result, each of the parties typically relies on multiple comps and often engages in a midpoint analysis. The midpoint is the dollar value that lies in the middle of the player’s proposed salary and the team’s proposed salary: If the player proposes a $2 million salary and the team propose a $1 million salary, then the midpoint would be $1.5 million. The player argues that he looks more like the comparable players whose salaries are above the midpoint. The team argues that the player looks more like the comparable players whose salaries are below the midpoint. Everything is relative.
The strategy is not to dismiss entirely the other party’s comps. Indeed, it would be rare for a party to use a comp that bears no similarity whatsoever to the player and his performance; to do so would waste time and compromise credibility. Rather, the strategy is to be more right than the other side—to show that the player looks more like your comps than the other side’s comps. In the end, the panel’s decision comes down to just that evalua­tion: which side is more right about the salary analysis, a subject with many variables and, thus, one that is fundamentally gray.
Juries, too, likely see the trial issues as fundamentally gray. They expect that both parties have some good reason to be in court. Unlike the trial lawyers, they have not lived with the issues and the evidence for years. Unlike the clients, they do not have a financial or emotional investment in the case. They expect both sides to have something to say. They see their job as ascertaining who is more right and finding a result that is fair.
Skilled trial lawyers recognize that dynamic and pick battles wisely. They concede issues when it would look unreasonable not to do so. They understand the other side’s perspective and what motivates it, and they craft their examinations and arguments with that in mind. They know that to win a trial, they don’t have to be right, just more right.
When I was preparing for my first salary arbitration hear­ing, I anticipated something akin to a long summary judgment hearing and wondered about the unique setting and how that would affect things. I quickly came to appreciate that success would require me to summon skills I had developed as a trial lawyer. In the end, those few hours I spent in that first hearing, and the many hours I have spent in each baseball arbitration hear­ing since then, made me a much better trial lawyer, and still do.
Perhaps not a home run, perhaps not a perfect game, but a win in any scorebook.

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