Major League Baseball players rejoiced when the last Collective Bargaining Agreement was ratified in 2022, guaranteeing fully guaranteed one-year contracts for arbitration-eligible players.
However, the San Francisco Giants have utilized a loophole, placing third baseman J.D. Davis on unconditional release waivers, cutting ties with him just weeks after an arbitration hearing granted him a $6.9 million salary.
There was a huge loophole in the CBA. It was a matter of time before a team exploited it. The Giants were that team. J.D. Davis, suddenly out nearly $6 million, was the ensnared party. https://t.co/7VQbsbej1s
— Andrew Baggarly (@extrabaggs) March 11, 2024
The provision in the CBA excludes arbitration salaries determined through a hearing from full guarantees. Consequently, the Giants only owe Davis approximately $1.1 million in termination pay, equal to 30 days’ pay.
The move has stirred controversy, with some viewing it as ruthless, while others see it as a pragmatic decision well within the team’s rights under the CBA.
Giants president of baseball operations, Farhan Zaidi, stated that attempts were made to trade Davis, but with no success. Davis was placed on outright waivers, hoping another team would claim him and expedite the process.
Zaidi defended the decision, saying, “Everything we’ve done in this case is well within our rights as a team. And that’s recognized. It’s very cut and dried in the CBA.”
The Giants’ exploitation of the CBA’s rules, and whether it was premeditated, is now under scrutiny. The team adopted an industry-wide “file-and-trial” policy, ceasing negotiations after the deadline for exchanging salary figures, which deterred negotiations from reaching the hearing stage.
Davis’s agent, Matt Hannaford, disputed claims that the Giants negotiated in good faith, revealing that the team’s offer was received just an hour before the filing deadline and was “hundreds of thousands” less than their filing number. Despite Davis stating he would have accepted the Giants’ filing figure, negotiations did not resume.
Zaidi maintained that the Giants “negotiate all our arbitration cases in good faith,” stating that Davis could have accepted the club’s offer before the exchange of figures.
While Davis is now an unrestricted free agent, industry sources suggest it’s unlikely he would have grounds to file a grievance. The Giants, by releasing Davis 17 days before the season opener, saved additional termination pay costs.
The move echoes past instances where arbitration-eligible players were released before the season opener. The Giants’ decision has raised questions about the exploitation of CBA rules and may prompt future revisions in player negotiations.
For now, the Giants have significantly reduced their payroll obligations, standing approximately $13 million below the first luxury tax threshold of $237 million. Zaidi dismissed concerns about the impact on the team’s reputation, emphasizing the organization’s treatment of players and communication.
