Nationals all-star Bryce Harper’s unique contract could lead to a grievance hearing

Jonathan Newton/The Washington Post - Bryce Harper, shown at the 2013 All-Star Game, could find himself on the opposite side of a legal dispute with the Nationals next offseason.

As the Washington Nationals seek to augment a roster core they believe is built for long-term success, an unusual and previously unreported aspect of outfielder Bryce Harper’s contract remains unresolved.

Harper, the No. 1 overall selection in the 2010 draft, reached an oral agreement on his current deal less than a minute before the Aug. 16 midnight deadline to sign picks. The five-year major league contract, rare for a draftee, called for Harper to be paid $9.9 million, including a signing bonus of $6.25 million. However, the Nationals insisted that the contract not contain a clause that would allow Harper to opt out of the contract terms and into baseball’s lucrative salary arbitration system once he was eligible; Harper’s agent, Scott Boras, was equally adamant that the virtually standard opt-out clause be included.

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Days later, the Nationals presented a final written contract that did not contain an opt-out clause. Anticipating the possibility that Harper, at the time 17, could reach the majors sooner than expected, Boras and the Harper family refused to sign it.

At that time, Major League Baseball and the players association took the unusual step of interceding with a compromise: a letter of agreement stating that, if Harper qualified for salary arbitration before he reached the end of the contract, a grievance hearing would determine whether he could opt out of his contract.

Boras and two other people familiar with Harper’s contract confirmed the unusual arrangement. It means that, barring some resolution in the interim, Harper and the Nationals could find themselves on opposite sides of a legal dispute next offseason.

“We reached an agreement with MLB and the MLBPA memorializing that Bryce only signed with the Nationals on the condition that his rights were preserved,” Boras said. “So, as planned when the issue arises, we will proceed under the terms of that agreement.”

Under normal circumstances, players qualify for salary arbitration after accruing three full seasons of major league service time. Among the players with between two and three years in the majors, the top 22 percent in service time are eligible for arbitration early. Following the 2014 season, Harper almost certainly will be among this latter group, known as “Super Two” players.

In the arbitration process, an independent panel hears from both the player and his team, then decides on the player’s one-year contract value based on service time, the salaries of comparable players and any special awards. Most players and teams agree to a new salary before a hearing is held. Either way, practically speaking, the process usually means huge raises for players.

In the case of Harper, the 2012 National League rookie of the year and a two-time all-star, his draft deal calls for him to earn $1.5 million in 2015. Presuming he remains healthy and continues to perform at projected levels in 2014, he could land a 2015 salary between $4 million and $7 million through arbitration were he eligible. Were Harper to get hurt or decline in performance, he likely would make less.

Harper’s contract ends after 2015. At that point, his salary would be determined through arbitration regardless. But because the arbitration system factors in previous seasons’ pay, Harper’s losses would compound each season until he is eligible for free agency after the 2018 season.

The path around

Since Harper signed his deal, the issue has remained on the back burner and has never entered the public eye. Now that it’s clear Harper almost certainly will remain in the majors and thus be eligible for arbitration after 2014, the sides have recently discussed the issue. Several scenarios could keep the issue from reaching a grievance hearing, and both Harper and the Nationals have reasons to want an amicable solution.

In the least seismic case, the Nationals — not wanting to alienate a potential franchise player — could simply grant Harper his arbitration rights or negotiate a new salary as if he had them. That course of action, while possible, seems unlikely.

On a grander scale, each side could use the unresolved issue as motivation for a new, longer-term agreement. The two sides share an amiable relationship and could reach an agreement — short term or long term — as early as this offseason to circumvent the possibility of a legal confrontation.

One day this summer, Boras held court with reporters at Nationals Park and floated an abstract case for the Nationals to sign Harper, one of his many clients on the Nationals roster, to an unprecedented long-term contract.

For Harper, signing such a deal before the arbitration issue was resolved would mitigate the risk of playing the 2015-2017 seasons for less than market value. For the Nationals, negotiating a long-term deal with a potential superstar well before he’s eligible for the open market would be a decided advantage.

General Manager Mike Rizzo declined to comment on Harper’s situation, citing team policy not to discuss contract specifics. Former team president Stan Kasten, who led Washington in the Harper negotiations and is now part of the Los Angeles Dodgers’ ownership group, also declined to comment.

Boras declined to discuss specifics of Harper’s contract but expressed confidence Harper will receive the money he deserves.

An exceptional case

Harper’s situation is unusual for many reasons. The vast majority of drafted baseball players do not have the chance to bargain for a salary. They can negotiate signing bonuses — which can range from several hundred dollars to millions — but they then play for standard minor league salaries. If and when they are promoted to the majors, they play for the league minimum, typically with incremental raises each season until they are eligible for arbitration.

Harper is one of only about 50 players ever to have been given a major league contract straight out of the draft. (In fact, the sport’s most recent collective bargaining agreement, negotiated in November 2011, prohibited giving major league contracts to draft picks going forward.) In these rare cases, the contracts supercede the normal progression toward arbitration eligibility.

In almost all these situations, an opt-out clause is negotiated unless the span of the contract is so short that such a clause is unnecessary. In 2011, the Nationals signed No. 6 overall pick Anthony Rendon, also a client of Boras, to a major league contract that included a clause that allowed him to opt out of his deal in favor of arbitration.

How the issue will be resolved in Harper’s case will be less conventional and remains to be seen. More than three years since celebrating his signing as if it were a walk-off home run, the Nationals still count Harper at the center of their long-term plans. His contract will have a significant impact on how those plans play out.

 
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