Legal Perspective On Major League Baseball Scandal

Baseball commissioner Robert Manfred said in a statement that both Seeley and Weinberg "have substantial experience investigating baseball operations matters." They serve under senior vice president and general counsel Giles Kibbe.

The Astros investigation began shortly after a former player levied allegations of digital sign stealing against the team last November. The use of any technology to decode an opposing team's pitching signs during a game violates MLB regulations. The Astros' players stole pitching signs from opposing teams in 2017 and 2018, using electronic replay equipment.

Manfred said the league's Department of Investigations, which Seeley heads, interviewed 68 witnesses, including 23 current and former Astros players. It said some witnesses were interviewed multiple times.

The investigators also reviewed tens of thousands of emails, Slack communications, text messages, video clips and photographs. The Astros fully cooperated with the investigation, producing all requested electronic communications and making all requested employees available for interviews, Manfred noted.

Certain Astros employees provided their cellphones to be imaged and searched, Manfred's statement said. He added that he "afforded the Astros and their employees the opportunity to submit evidence relevant to this matter and present any arguments to me and my staff."

In the end, Manfred found that Astros management had failed to establish a culture of compliance and were held accountable for the sign stealing. He suspended Astros general manager Jeff Luhnow and field manager A.J. Hinch, both for one year. He also suspended an assistant general manager for misconduct unrelated to the stealing, but as part of what Manfred saw as the broken Astros culture. The Astros fired all three men.

Luhnow claimed he had no knowledge of the sign stealing, while Hinch said he had known but did not report the stealing up the chain of command and did not order the players to stop it. Manfred said Luhnow should have known and that Hinch should have spoken up. Both men were responsible for making sure their club was in compliance with the rules, the baseball commissioner said.

Manfred fined the Astros a record $5 million, the highest fine allowed in baseball. He also made the club forfeit its next two regular first-round player selections and two regular second-round selections in upcoming drafts.

The probe also centered on Red Sox manager Alex Cora, who had been the bench coach in Houston in 2017 and had knowledge of the cheating. The Red Sox remained under investigation for allegedly stealing signs in 2018, under Cora.

Manfred's report said both the Red Sox and Cora would be dealt with when that investigation is complete. Without waiting for those results, the Red Sox announced Cora was let go.

None of the announcements from the Astros or the Red Sox mentioned any specific exit packages for the employees.

Los Angeles attorney David Marroso, a sports and entertainment litigator at O'Melveny & Myers, told Entertainment Law & Finance sibling publication Corporate Counsel: "This type of [employee termination] action against coaches and team leaders isn't common, but it isn't unheard of, either — and litigation can follow," especially when there is no compensation package.

Marroso said that in a similar case that settled in 2019, a former basketball coach at the University of Louisville was dismissed after a recruiting scandal. He sued, settling for no money but having his employment file changed to "resignation" instead of "termination."

The Red Sox statement indicated the team and Cora had reached a mutual agreement. The Astros announcement did not include a similar statement. However, Hinch issued a statement saying he was disappointed by the timeline of events and accepted the commissioner's decision.

If litigation were to ensue, Marroso explained, "In this case and these circumstances, it could be important whether the Astros negotiated 'integrity of the game' or morals clauses with Hinch and Jeff Luhnow and the language of those clauses in their employment contracts."

These clauses, Marroso noted, "give organizations wide latitude to fire somebody for cause and not have to pay the remainder of their contract."

He added that disappointed fans have brought lawsuits in other scandals where the fans felt cheated. He cited the 2015 Manny Pacquiao-Floyd Mayweather Jr. so-called "Fight of the Century" when Pacquiao later revealed he was fighting with an injured shoulder. Marroso helped lead the legal team that defended Pacquiao from a flood of class action suits. He said no disappointed fans have ever won this type of suit, but he anticipated some fans would sue over the Astros' scandal.

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Sue Reisinger is a Senior Reporter at ALM. Based in Florida, she covers general counsel and white collar crime. She can be reached at [email protected].